Seán Sherlock (Cork East, Labour)

I refer to the taking into public ownership of Eircom. It was reported in the newspapers at the weekend that yet another private equity firm, Permira, has expressed an interest in taking over Eircom. The others are CVC Capital Partners Limited and STT. The asking price for Eircom is approximately €100 million but the debt mountain is in the region of €3.8 billion. If a private equity firm takes over Eircom lock, stock and barrel, I am not convinced we will see an increased rate of broadband penetration in this country. I am not convinced this would be the most effective way of ensuring the broadband provision and capacity required in order to make this country competitive with regard to rates available in Japan. A private equity firm will not ensure the rate of penetration will allow us to compete with other countries. They would concentrate on the most profitable areas and would not ensure the rural economy or society would be served in such a scenario.

The Labour Party sought to take Eircom into public ownership to ensure there is another suitable platform for investment in broadband. If we are to bail out banks, I do not see why we will not enter the fray and take Eircom in charge to ensure all rural exchanges that need to be upgraded are upgraded. There would be a multiplier effect and a positive net benefit to the rural economy. It would ensure some income is derived from other users through the unbundling of the local loop. It is important to debate this. It is not right to hand it over to private equity firms.

The current taxation regime has included increases to taxation and some will argue they were necessary. As a short, sharp solution we are increasing taxation on income and that is also stifling the economy because people are not spending. Are we not concentrating on ensuring greater efficiencies in public expenditure? Today I received the reply to a parliamentary question I tabled on the amount spent by the HSE on legal fees between 2006 and 2009, inclusive. The response was that, between barrister and solicitor bills, approximately €8.6 million has been spent in legal fees by the HSE to date.

The reason I was prompted to put down the question was because of a young couple who had to send a child to hospital and thought they were covered under private health insurance. It transpired that they were not covered and they were pursued vigorously for €5,000. I would hazard a guess that it probably cost the State a multiple of that €5,000 to pursue the family for those costs.

The point is that there must be a greater analysis of how we can achieve greater savings without adversely affecting people on lower incomes. It can be achieved with a little lateral thinking.

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