Brendan Howlin (Wexford, Labour)

Senator Marie-Louise O'Donnell rightly assigns the cause of our problems to the banks but I would not be quite so limiting. There was not only incompetent and greedy banks but there was also incompetent and greedy developers and political individuals in cahoots with both. There is enough awful blame to spread around. I refer to the Senator's specific point about manufacturing, which is a good one. I recall being in Government before and when we left Government in 1997 the economy was based on manufacturing, making and exporting goods that people wanted to buy. Then someone thought of the great wheeze in 2000 or 2001 that we did not need to make anything but instead just inflate the price of land. Our streets could be more valuable than the streets of Paris and we could all be rich. It was a national pyramid sale. Unfortunately, that pyramid has come crashing down and we are left with the reality now. Senator O'Donnell asks a very pertinent question as to what we will do with the money. As I have indicated, two thirds of the value of the assets sales will be used to retire debt. This is not a bad thing of itself, although people say it is a modest contribution to the mountain of debt. However, every modest contribution we need to make is good but we want to use as much as possible in order to leverage further private sector investment in job creation. An evaluation of proposals will be carried out.

I opened a conference for project managers this morning in the Aviva stadium. They were listening to a presentation on the Spirit of Ireland project, which most members of the Government will have heard. This is a significant project. It is a matter for others to make determinations on it. There are many extraordinary ideas and we need a proper evaluation of them and be open to listening to them.

Senator Brennan spoke about non-strategic assets and I can give him an absolute assurance - which may have been omitted in my contribution - that all the networks belonging to the electricity grid, ESB networks, including all the interconnectors, will remain in State ownership, 100% guaranteed.

Senator Higgins referred to the job loss figures that will be inevitable. I do not agree it is inevitable. We have given careful thought to what we should sell and I am very careful in this regard. To put it bluntly, a daft policy has been pursued for the past ten years, or the past five years at least and this was alluded to by a Senator. There was notional competition in the energy sector with two State companies actually vying with each other and one of them was not allowed to reduce prices. I ask what sort of competition it is when a company is legally debarred from reducing prices in order for another State company to be allowed to capture a share of the market. We were all offered 14% to switch from one State company to another and now we can get another 14% if we switch back. That was the previous Government's idea of competition. Our idea is in accordance with European competition law which would require the ESB to sell off some of its power generating capacity so that it would not be an overwhelmingly dominant player. We would sell off the generating capacity of BGE and have a strategic private player in the energy market. This would make for real competition. Hopefully, this will not mean a loss of jobs but rather it will create jobs because it would push down the price of electricity for everyone if there is real competition as opposed to the made-up competition that passed for competition during the previous regime.

This is the Government's specific strategy. Our plan hits a number of points. It will allow the ESB to continue as a vertically integrated State company because it would be downsized to meet competition law. We will need a European derogation from the directive in order to do this. Normally, the distribution and generation would be required to be disagregated but we are trying to hold it together. We think this will be possible and also to have a second significant player in the energy generating business in Ireland. As I said in reply to Senator Quinn previously, significant international players are interested in the Irish energy market but the proof of the pudding will be in the eating; expression of interest is one thing but putting significant cash on the table will be another. We will explore all those options.