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Privatisation of Aer Lingus 'classic Fianna Fáil stroke'

25 May, 2005


Sinn Féin leader in the Dáil, Caoimhghin Ó Caolain closing this evenings debate on Aer Lingus said, "The privatisation of Aer Lingus is being carried out in the manner of a classic Fianna Fáil stroke.

He said, "The final decision was a very long time in coming. There were many nods and winks to both supporters and opponents of privatisation. The whole Dublin Airport terminal saga was played out as a battle royal between the Progressive Democrats and Fianna Fáil in Cabinet.

"This allowed Fianna Fáil to give the impression with last week's Cabinet decision that they had won out over their PD partners by deciding that the second terminal would be built and owned by the Dublin Airport Authority. But the PDs have won because PD privatisation ideology is now Fianna Fáil ideology.

"No commercial case has been presented for the sale of the State's majority shareholding in Aer Lingus. The Government's previous claim that it cannot invest in Aer Lingus because of EU rules has been discredited.

"The Minister for Finance tried to have it both ways in his contribution. He recognised Aer Lingus as a strategic national asset. On that basis he promoted the Government's retention of a minority shareholding. But he staunchly defended privatisation, knowing that once the sell-off happens all bets are off.

"All of this has been dismissed by the Government as scare-mongering. But it was very noteworthy in the speech of the Minister for Finance last night that he made no reply to the points we made about the privatisation of Telecom Éireann. That was presented by the Government as a retention by the people of a strategic national asset through the public share offer. We warned at the time that privatisation would be against the public interest. We were dismissed as scare-mongers. But even the most vehement opponents of privatisation at that time hardly predicted the debacle that took place.

"As I stated at the outset the Government has bided its time. It waited until Aer Lingus was well back into profitability. The pig has been fattened and now it is being brought to the fair. We know what fate awaits it. Every Deputy in this House has a clear choice this evening. To let the axe fall and to sell off this national asset forever. Or to call a halt to the PD privatisation agenda which now dominates this Fianna Fáil/Progressive Democrats Government. " ENDS

Full text of speech - Check Against Delivery

Ba mhaith liom buíochas a ghabháil le gach Teachta a ghlac páirt sa díospóireacht seo, ach go háirithe leo siúd atá ag tacú leis an rún. Nuair a chualamar cine an Rialtais an seachtain seo caite ní raibh an dara rogha againn ach an dúshlán seo a thabhairt do gach Teachta seasamh go soiléir ar son nó in aghaidh Aer Lingus mar chomhlacht Stáit. Agus tá an rogha sin ag gach Teachta sa vótáil anocht.

I thank all the Deputies who have participated in this debate, in particular those who will support the motion. Deputies are being given a very clear choice tonight - for or against the sell-off and the sell-out of our national airline. There can be no fudging now and the difference between the Sinn Féin motion and the Government amendment is clear and stark.

The privatisation of Aer Lingus is being carried out in the manner of a classic Fianna Fáil stroke. The final decision was a very long time in coming. There were many nods and winks to both supporters and opponents of privatisation. The Aer Lingus Bill 2003 left the way open for the Government to make this decision but they held off. Public opinion was softened up over a very long period.

Then, as the Taoiseach's party continued to vacillate over the options on the development of Dublin Airport, they found a way to play down the momentous decision to privatise Aer Lingus. The whole Dublin Airport terminal saga was played out as a battle royal between the Progressive Democrats and Fianna Fáil in Cabinet.

This allowed Fianna Fáil to give the impression with last week's Cabinet decision that they had won out over their PD partners by deciding that the second terminal would be built and owned by the Dublin Airport Authority.

The PDs' daft and unworkable proposal was for a second terminal owned by private interests, and competing with the neighbouring first terminal - something which aviation experts assure us is unknown anywhere in the world. We are expected to believe because the PDs did not get all they wanted with regard to Dublin Airport that Fianna Fáil has won a great victory. But the PDs have won because PD privatisation ideology is now Fianna Fáil ideology. The PDs have got one of the prizes they always wanted - the privatisation of our national airline, Aer Lingus.

Unfortunately this sleight of hand on the part of the Government parties has been facilitated by many in the media who never question the economic dogma of the PDs and Fianna Fáil.

And let's be very clear about it. This decision is based on dogma. Those of us on the left who oppose privatisation are always accused of being purely ideologically driven. But in this case the ideology is all on the side of the privatisers because no commercial case has been presented for the sale of the State's majority shareholding in Aer Lingus. Yes, Aer Lingus is certainly going to need investment. But we know neither what funding is required by Aer Lingus to develop its business nor how much this sell-out by the Government will yield. The Government's previous claim that it cannot invest in Aer Lingus because of EU rules has been discredited. The disastrous decision of the Cabinet last week now closes down completely the option of State investment.

In his reply to the motion last night Minister Cowen provided no convincing rebuttal of the argument that in the case of Aer Lingus if it ain't broke don't fix it. This is a State company that has been returned to record profitability since the crisis of 2001. That is largely down to the sacrifices of the workforce, many of whom were laid off. The Irish taxpayer has invested in the company over decades and that investment has been repaid handsomely. The benefits in terms of tourism, business generally and the employment provided by Aer Lingus and the aviation industry are incalculable.

The Minister for Finance tried to have it both ways in his contribution. He recognised Aer Lingus as a strategic national asset. On that basis he promoted the Government's retention of a minority shareholding. But he staunchly defended privatisation, knowing that once the sell-off happens all bets are off.

Our most vital transport link to the rest of the world is to go from public ownership to the open market. We are told that the Government will retain strategic shares. We are told that the name of the company will be retained. But where are the guarantees? There will be absolutely nothing to stop multinational interests coming in and buying up the company and disposing of it as they please. They will not be concerned with the strategic transport needs of this country. They will not be concerned with maintaining direct routes from Ireland to destinations across Europe and the United States. They will be concerned only with the bottom line and if the short-term stripping of the company guarantees them the return they want then it is their interests, and not the long-term interests of this country, that will dictate the future of Aer Lingus.

Ultimately, there will be nothing to stop the company being forced along the Ryanair route with trade unions banned and standards lowered. You can be sure that potential buyers will challenge in the courts in Ireland and in Europe anything they see as a restriction or undue regulation.

Potential buyers will demand changes before they put their money into the company. They will demand the removal of any conditions laid down by the Government. The pressure will mount and they will get their way.

All of this has been dismissed by the Government as scare-mongering. But it was very noteworthy in the speech of the Minister for Finance last night that he made no reply to the points we made about the privatisation of Telecom Éireann. That was presented by the Government as a retention by the people of a strategic national asset through the public share offer. We warned at the time that privatisation would be against the public interest. We were dismissed as scare-mongers. But even the most vehement opponents of privatisation at that time hardly predicted the debacle that took place. The public lost out massively, the tycoons like Tony O'Reilly benefited personally to the tune of many millions and we have ended up with a sub-standard and over-priced telecommunications system.

I have previously raised the concern of Aer Lingus pensioners over the future of their pension entitlements and Deputy Morgan did so again last evening. The Minister for Finance replied that the pension fund was not in debt. But he added, very significantly, that this would be the case if there was a mandatory link to the consumer price index (CPU). I am assured by Aer Lingus workers that CPI increases have been paid in all but two

years in the five decades since the pension fund was set up in 1952. If CPI linking is now to be set aside the real value of the pensions of former Aer Lingus workers will be eroded. The hundreds of workers laid off in recent years had a right to expect that the pension arrangements so long in place would continue to apply. Last week's Cabinet decision has now thrown that into doubt. I urge the government at the very least to fulfil its obligations to these pensioners.

Loyalty to a publicly owned company, to a national airline, led many people to support Aer Lingus over the years, even at cost to themselves. They saw it as a contribution to the national economy. The Minister dismissed that as sentimentality and emotion. But this privatisation will mean that Aer Lingus will lose much of that public good will on which it has been able to depend for decades. Shame on those who scoff at citizen loyalty, an important element in both the survival and the success of Aer Lingus.

As I stated at the outset the Government has bided its time. It waited until Aer Lingus was well back into profitability. The pig has been fattened and now it is being brought to the fair. We know what fate awaits it. Every Deputy in this House has a clear choice this evening. To let the axe fall and to sell off this national asset forever. Or to call a halt to the PD privatisation agenda which now dominates this Fianna Fáil/Progressive Democrats Government. I welcome the support of the Labour Party for the motion. I am disappointed but not surprised at Fine Gael's support for privatisation. That has clear implications for future government formation which I will leave to another day.

In conclusion I appeal to Fianna Fáil backbenchers. Your party calls itself the Republican Party. In your new party newspaper 'The Nation' the Taoiseach states: "Fianna Fáil is the Republican Party. The concerns of working people have always been at the heart of our policies." Yet a Fianna Fáil led-Government is now proposing to sell out our national airline. Will you stand over that?

Call a halt and support the Sinn Féin motion.

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