Sinn Féin - On Your Side

Labour turns it back on party’s anti-privatisation policy

21 September, 2011 - by Mary Lou McDonald TD

Sinn Féin Public Expenditure and Reform Spokesperson Mary Lou McDonald TD has tonight criticised the Labour party for turning its back on its own policy with regards to the semi privatisation of the ESB.

Deputy McDonald said:

“The ESB is self-financing, has paid 4.3 billion euro in taxes and dividends to the State over the last ten years and is an international leader in the energy sector.

“It can borrow substantial amounts on the markets to fund reinvestment in the company, a point of fact which makes it even harder to understand why any Government would sell off in part or in whole a stake in one of the States success stories – particularly in light of the Government’s own failure to re-enter the money markets.

“This is something Labour Minister Joan Burton acknowledged last year in an interview with Business and Finance where she said; ‘It seems to me an extraordinary proposition at a time when Ireland is doing so badly in terms of bond spreads that we would seriously want to sell into a depressed market State assets which themselves have a fund-raising capacity in terms of their own needs’.

“Minister Burton singled out the ESB for particular mention noting, ‘Given the difficulties that we are in at the moment with our bond spreads, it seems to me to be unwise to remove this strategic capacity.’

“There are other big questions to be asked as to how this fast-buck approach to selling off a stake in the ESB. The ESB committed to paying a dividend of €77 million to the Exchequer for 2010, despite reporting a pre-tax loss of €89 million.

“Does the Government really believe that such dividends will still be paid out to the State when the company is facing losses. Is the Labour party so naïve that it believes privateers’ raison d'etre is to ensure, above all other considerations, that the public purse gets its fair share of the pie?

“Extolling the virtues of the ESB and its achievements within the current ownership arrangements is all fine and well but everything will change and change absolutely if this Government sells off a stake in the company.

“Eircom has taught us that privatisation does not deliver first world infrastructure. Forfás tells us that Ireland is lagging at least three to five years behind competitor countries in terms of rolling out infrastructure capable of high speed next generation broadband.

“Serious questions have been raised across Europe on the effectiveness of policies based on liberalisation or privatisation measures in relation to investment measures. The EU has recognised this by changing its state aid rules to facilitate joint public-private investment in broadband infrastructure.

“Many European countries such as France, Germany and Belgium still retain sizable shareholdings in their national telecommunications companies for this very reason.

“Ironically it is the ESB that could best address the State’s broadband deficit through its existing infrastructure.

“Telling the people that the proceeds of the sale will be used for investment or job creation is to sell the people a pig in a poke. Even if the government secures the agreement of the troika to do so – it will be a fraction of the sale value. Real growth through job creation and a significant write down of bank debt is the only way forward.” ENDS

Connect with Sinn Féin