Dáil debates

Wednesday, 14 September 2011

3:00 pm

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
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Question 6: To ask the Minister for Communications; Energy and Natural Resources his view that following the publication of the McCarthy Report on State Assets which recommends that ESB's assets be broken up, the Cahill/Frontier Economic report which recommends against unbundling, should be published prior to the comprehensive spending review being completed in order to ensure a full and informed public debate on the future of the States assets. [20325/11]

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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I am sorry Deputy McDonald cannot be with us because she has been asking me to do this for a long time. I have done it, but she is not here and I feel let down.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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You will get over it.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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I suppose so.

The report by Frontier Economics was undertaken under a process overseen by Mr. Fergus Cahill as independent chair. The report contains an assessment of costs, benefits and regulatory impact of the options for unbundling the electricity transmission assets set in the context of the EU third package and the all-island single electricity market.

The process allowed for input from the direct stakeholders and other stakeholders. The direct stakeholders were the management and the unions of ESB and EirGrid and the ESB employee share ownership trust, ESOT.

Both EirGrid and ESB have vital roles to play in delivering our national electricity infrastructure. In July this year, the Government decided the ownership of the electricity transmission assets is to remain with the ESB while the operation and development of the transmission system will continue to be the responsibility of EirGrid. Following that decision, the Cahill-Frontier report was published on 27 July 2011 and is available on my Department's website.

Additional information not given on the floor of the House.

More generally, the programme for Government commits to the sale of €2 billion of State assets. The report of the review group on the sale of State assets has also been published and will be an input into the Government's consideration of any such sales. In this regard, I refer the Deputy to my earlier answer to the question concerning proposals for any sale of the ESB.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Although Deputy McDonald is not in the Chamber, she will study the Minister's reply closely. It is an area in which she has a tremendous interest.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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As long as Deputy Colreavy shares her delight.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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The State's assets were put together at great cost to taxpayers, often when times were hard. A percentage of these are now to be sold off to privateers as part of the diktat of the EU-IMF-ECB troika which was agreed by the previous Government and is now pursued enthusiastically by the current Government. It is not democracy but dictatorship.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Could the Deputy put a question?

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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The troika may be clapping Ministers on the back but it is only because this Government is following the rules it set down and agreed by the previous Government.

Will the Minister facilitate a full public debate on the sell-off of our national assets which will include discussion about the impact of such sell-offs on essential services, employment and what remains of our economic independence? What happens next year or the year after when the troika demands more? What happens when the so-called low hanging fruit is all gone? What will be left to sell? What then will happen to the Minister's claim that only minority shares of State assets will be sold?

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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The subject matter of the question is the break-up of the ESB. The Cahill-Frontier report recommended against that. The memorandum that I brought for decision to the Government was to implement those recommendations and avoid the break-up of the ESB. I am happy my Government colleagues approved this.

Deputy McDonald, in particular, was calling on me over a period before the summer recess to do precisely that. I have done so. That is why I am so upset that she is not in the Chamber to welcome that decision. I presume she will be in touch later.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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That is totally the opposite to what she was calling for.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Deputy Colreavy broadened the original question of the sale of a minority stake. On the original question, I will be quite happy to facilitate a full debate on the issue, if the Deputy so wishes.

The Deputy also wants to know what will happen if the EU-IMF-ECB troika comes back for more. That is not a vista I want to contemplate. What has been imposed on us as it stands is very painful to meet. Deputy Colreavy does not think it is important we are seen to deliver on the severe targets set for us. The manner in which this Government has managed it so far, however, has brought relief. I cannot believe the Deputy is not reading the newspapers or watching reports on what is happening in Greece without realising the implications for any people or state that does not responsibly manage its economy. Far from coming back for more, there will be an acknowledgment by the troika of the heroic efforts being made by this Government to comply with the strictures placed on us.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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Why did the Minister oppose the deal last year when in Opposition?

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I must stop the Minister there because I want to allow two brief questions from Deputies Ó Cuív and Boyd Barrett.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Will the Minister confirm it is not legally possible for the EU-IMF-ECB troika to come back for more once the terms of the EU-IMF agreement are adhered to? Will he clarify for the benefit of Sinn Féin that if the agreement were not in place, then there would be severe cuts on social welfare, education and health budgets? Will he confirm the EU-IMF has made it abundantly clear that as long as the bottom line of the agreement is adhered to, they will be flexible as to how the programme is implemented?

Does the Minister agree lessons must be learned from past sales of minority shares in State bodies? The minute a minority share of a State company is sold off, the company's interest shifts from the national to the shareholders' interest. Pressure then mounts inexorably to sell more of the company until it is fully privatised. For example, in the case of Irish Sugar, we were guaranteed only a minority share would be sold while a golden shareholding would be retained by the State. We know, however, what happened to that company in the end.

The measure of people is not that they do not make mistakes but that they learn from their mistakes. In hindsight, I have come to believe some of the privatisations of State companies in the past were wrong. I am willing to learn from this, but it seems the Labour Minister opposite is not.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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This is question time Deputy Ó Cuív. I call on Deputy Boyd Barrett.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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I asked three questions.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I will pass over the irony of Fianna Fáil railing against privatisation.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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We set up all the State companies in question.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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As a State company, the ESB played a key role in transforming Ireland from a Third World country to a modern state. In any rational approach in dealing with the current economic crisis, is it not the case that a successful and profitable company such as the ESB should be kept in public ownership and investment be made in it to develop sustainable energy resources and so forth? This would allow us the energy independence, thus ensuring people would not have to be shivering with the cold this winter in their homes, afraid to turn on the heating because of fluctuations in energy market prices.

How does the EU and the IMF justify its insistence on the sale of State assets which could drive economic recovery? Will the Minister agree such sell-offs are actually attempts to asset strip this country, using the guise of the current recession which was caused by the bankers and bondholders in the first place? How can anyone construe an argument that a sale of even a bit of the ESB could possibly be good for this country?

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Deputy Ó Cuív asked me to confirm that it would be impossible for the troika to return when the EU-IMF deal runs out.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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No, I was referring to it being impossible returning within the four years of the deal.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Assuming Ireland can get back into the sovereign markets which is the purpose of the programme in the first place, I still hope that it will be the case. It depends, however, how we manage it in the remaining lifetime of the memorandum of understanding.

Deputy Ó Cuív is correct, even if our colleagues in Sinn Féin will not admit it, that the alternative would have been serious cuts in social welfare payments, the remuneration of gardaí, teachers, nurses and so on because of the woeful mismanagement of our economy by previous Governments. We are trying to correct that. Regarding Deputy Ó Cuív's point about a minority share, it depends on how that is implemented. I say to Deputy Boyd Barrett we are not handing over ownership of the ESB. The decision this morning was to sell a minority stake and there is no question of control passing out of the authority of the ESB. I am no fan of the deal foisted on us. In my view it was a bad deal and the people negotiating it did a bad job-----

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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The Minister said he would renegotiate it.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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-----but it was a deal not with the Government but a deal with a sovereign state and this Government has inherited it and we have to manoeuvre within it to achieve improvements. We have achieved a number of not insubstantial improvements and I hope, as news continues to break, there is the prospect for more flexibility ahead.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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We must move on to the next question, Minister. I call Deputy Boyd Barrett's Question No. 7.