Ireland: Socialist Party MP “sticks the boot in” against airline privatisation

Media highlights Joe Higgins’ opposition in parliament

The following two items deal with the Fianna Fail-led coalition government’s plans to privatise Aer Lingus, the state airline in Ireland. Following plans for its privatisation, the Aer Lingus management (who are publicly appointed officials running a state-owned company) announced that they wanted to compete for a management buy-out and had implemented new working practices in advance of selling the company off.
The idea that public appointees should make a huge financial killing – on the backs of further attacks on workers’ conditions which would undoubtedly flow from privatisation – sickened the majority of people in Ireland.
However, by the beginning of last week, the Fianna Fail leadership had realised the danger of allowing a management buy-out because of the anger that exists on this issue. This comes on top of falling support for the government and its very bad showing in the local elections, in June, this year.
The Irish Prime Minister, Bertie Ahern, was questioned in the Dáil (Irish Parliament) on Tuesday 5 October by Fine Gail and Labour (the two main opposition parties). They were, however, quite weak in their criticism of the Prime Minister and the government. During this debate, Ahern still argued that the management buy-out was an option.
On Wednesday morning, during question time for the Prime Minister, Joe Higgins, the Socialist Party TD (MP) gave voice to the anger of hundreds of thousands of Irish workers and young people on this issue. During the heated clash with Joe Higgins, Ahern was finally forced to admit that the government was no longer considering the buy-out option.
In the aftermath of the Dáil debate, the government has made it clear that they are shelving privatisation plans for Aer Lingus in the life of this government. There are also rumours that they are planning to do the same for privatisation of public transport.
Below are reproduced an article from the ‘Irish Independent’ newspaper explaining Joe’s role, and also a transcript of the Dáil debate between Joe Higgins and the Prime Minister.

Socialist Party MP "sticks the boot in" against airline privatisation

‘A ’land’ for Bertie . . . from hanging with Hector to hectoring on hangars’

He might have had an easy time "hanging with Hector" during the summer break but now he was back in the real world of bare knuckle political fighting.

Gene McKenna, Political Editor [Irish Independent]

If the Taoiseach did not already know it after a hectic week of controversy following his Cabinet and Junior Ministerial reshuffling, Joe Higgins was quick to remind him in the Dail yesterday.

And who better than the Socialist TD to get the Taoiseach on the back foot on the Aer Lingus management buyout.

The gloves are usually off when the Dublin West TD gets his chance to engage in verbal jousting with the Taoiseach. While others often pussy-foot, Higgins invariably puts the boot straight in and often goes over the top. So it was yesterday, as the two protagonists hopped off each other during animated exchanges which had the rest of the Dail spectating with relish.

They clashed during Leaders’ Questions as Higgins tried to pin the Taoiseach down – a difficult thing at the best of times – and finally winkled it out of him that he did not believe a management buy out was "appropriate".

But before that moment came, there were jibes flying from each of them and a definite impression created that there is not much love lost between them.

The exchanges never brought the kind of poisonous atmosphere which often characterised past Dail exchanges involving Charlie Haughey and Proinsias de Rossa or Haughey and Michael McDowell.

But there was a clearly-discernable "edge" there, nonetheless. As de Rossa and McDowell had the knack of doing with Haughey, Higgins seems to have a way of getting up Ahern’s nose.

At one stage, the Taoiseach remarked that Joe did not seem to know his Aer Lingus from his Aer Rianta as the Socialist TD had mentioned the Aer Rianta "Noel Hanlon watches" in the same sentence as the Aer Lingus buy-out proposal.

Higgins said he knew the difference all right and threw it back in the Taoiseach’s face that some of his own Ministers did not seem to know where they were half of the time, instancing how Brian Cowen "thought he was in Angola" during his stint at the Department of Health.

The Taoiseach was in danger of allowing himself to be drawn into an undignified street brawl as he said that if the Socialist TD believed Aer Lingus could stand up against the international airline market trend, then this confirmed his view that Higgins "lives in cloud cuckoo land".

After his stint in the Dail yesterday, the Taoiseach departed these shores for a nine-day working visit to Vietnam, Malaysia, Singapore and Bahrain.

His punishing schedule will ensure he will certainly see plenty of airports.

But he can comfort himself in the knowledge that there is only one Joe Higgins!

[First published in the Irish Independent, Thursday 7 October 2004]

Dáil Éireann

Leaders’ Questions; 6 October 2004.

Joe Higgins (Socialist Party): Why has the Government not dismissed the chief executive, the chief financial officer and the chief operations officer of Aer Lingus in the wake of the stunning conflict of interest in which they placed themselves in seeking the privatisation of the national airline so that they could purchase it themselves and, in the process, make an obscene financial killing? Have neo-liberal capitalist values so saturated the Government that it sees no difficulty with Aer Lingus executives, charged with protecting a crucial asset of the taxpayer, sitting in their offices and plotting how they can make it their private property? To facilitate that plot, they are intent on stripping the asset of 1,300 jobs and key core activities to make it more attractive for venture capitalists whom they want to purchase it. Does the Taoiseach [Prime Minister] agree that in any other jurisdiction, where even the loosest norms of even bourgeois ethics apply, such an outrageous conflict of interest would be dealt with by instant dismissal?

Was the Taoiseach amazed, perhaps he was gratified, that during the summer entire swathes of the media devoted acres to engaging in idle and useless speculation about his intended Cabinet reshuffle – which eventually amounted to no more than a hill of beans – and scarcely passed comment on this breathtaking conflict of interest in our national airline? Am I missing something, or is there a credibility chasm between media condemnation this morning about a number of €9,000 watches presented to departing Aer Rianta board members at public expense – the Taoiseach correctly stated yesterday that this is inappropriate and even a spokesperson for the Progressive Democrats engaged in sanctimonious condemnation of this action – and the deafening silence about a critical strategic public asset, our national airline which is worth €500 million, being speculated with by those charged with its protection and the protection of the taxpayer? Fianna Fáil and Progressive Democrat members of Cabinet appear to have no problem with this conflict of interest. Will the Taoiseach explain how this is the case?

The Taoiseach: I will answer the questions on Aer Lingus. Throughout is contribution, the Deputy confused that company with Aer Rianta. I am aware that he does not represent that area of the city and probably does not realise that they are two separate State companies.

Michael Ring (Fine Gael): Will the Taoiseach give the Deputy a watch?

Conor Lenihan (Fianna Fáil): Deputy Joe Higgins needs a compass not a watch.

The Taoiseach: The Government has not attempted to remove any of the individuals to whom the Deputy referred because they have worked with the trade unions and the staff to try to get Aer Lingus out of the difficult position in which it found itself. They have been successful in doing so in recent years. There are only two airlines in the world, and in Europe in particular, which are making money and both are Irish, namely, Aer Lingus and Ryanair. The staff of Aer Lingus has worked hard in that regard. Alitalia, Sabena and all of the other airlines are gone, going or are drastically cutting back on their operations. Only the airlines in this country are making profits. I give credit for that obviously to the management but mainly to the staff of Aer Lingus who have turned the position around into one of profit.

Mr. Willie Walsh will today outline to a committee of the House the difficulties facing the aviation business. These are immense, particularly as a result of the escalation of oil prices in the past year. This escalation has placed huge pressures on the cost-base of airlines because an enormous proportion of their cost structures are based on fuel. The astronomical increases, which have been much greater than anything predicted by economists – not to mention the airlines – have placed pressure on the company. Mr. Willie Walsh and his staff and, by extension, the Department and the Government are trying to work through these difficult times in international aviation. The company has been doing so in conjunction with the staff. It has meant pain for some staff due to reductions in the workforce. In far larger countries, however, it has not stopped at small or considerable losses of jobs, entire airlines have gone to the wall. The trade unions, management and staff have tried to retain the greatest number of jobs and, in addition, to expand and not reduce the business in these difficult times. Aer Lingus has sought new markets and routes in Europe. These developments are commendable and require our support in order that the company can try to overcome any problems. However, the international position remains difficult.

If Deputy Joe Higgins believes that Aer Lingus, a relatively small airline from an island country, can stand up against what has happened in the international market in recent years, he confirms what I have always believed, namely, that he lives in cloud cuckoo land. It is not possible to do that. We must try to deal with this situation as best we can and both the management and the unions are doing that.

Seamus Healy (Ind): What about the conflict of interest? The Taoiseach should answer the question.

Mr. J. Higgins: The Taoiseach is not hanging out with a soft-soaping Hector today, when any old answer might do. I inquired about a conflict of interest and the Taoiseach did not provide a reply. He accused me of confusing Aer Lingus with Aer Rianta. Admittedly, some members of the Cabinet have difficulty knowing where they were. When he was sent to the Department of Health and Children, the new Minister for Finance thought he was in Angola. I did not confuse the two. If a private company making a loss closed with 200 jobs lost, the air would be thick with gloom and the creation of task forces would be mooted. However, a publicly owned company that will make a profit of €90 million this year is proposing to savage 1,300 jobs and the political establishment and most of the media have not raised even a murmur. Is the Taoiseach aware that there is a callous and concerted strategy on the part of management at Aer Lingus to undermine and demoralise the company’s employees in many areas of its operations such as reservations, telesales and baggage handling by outsourcing their work and making life impossible for them in order that they will walk the plank and feel they have no option but to accept redundancy? This is all aimed at stripping down the airline so that speculators will move in and buy it and the management, charged with protecting the interests of taxpayers, will make millions in the process. Is there a conflict of interest?

The Taoiseach: The redundancies are regrettable but they are voluntary.

Mr. Healy: Is there a conflict of interest?

The Taoiseach: People have to—–

Mr. J. Higgins: They are not voluntary. Decent workers in Aer Lingus are being hounded out of their jobs. That is the reality.

An Ceann Comhairle: Deputy Higgins should allow the Taoiseach to reply without interruption.

Pat Rabbitte (Labour): Is there a conflict?

Mr. J. Higgins: Is there a conflict of interest? That is the question.

An Ceann Comhairle [Speaker of Parliament]: The Taoiseach is entitled to the same courtesy as Deputy Higgins was afforded to be heard without interruption. I ask the Deputy to resume his seat.

Mr. J. Higgins: I am entitled to the courtesy of an answer.

The Taoiseach: Yesterday I stated that I did not believe a management buyout was appropriate in the situation of Aer Lingus. I do not think that is a solution. While Aer Lingus has difficulties and aviation is having enormous difficulties there are now restrictions on investing capital. While in 1993 the State could give significant state aid, we cannot do that anymore. So the company—–

Ruairí Quinn (Labour): That is not true.

Emmett Stagg (Labour): The Government can.

An Ceann Comhairle: This is Deputy Joe Higgins’s question.

The Taoiseach: It is absolutely true. There is no possibility, as has been the case with Sabena and Alitalia in other countries, of the State investing under the old regime.

Mr. Quinn: If venture capitalists can invest the State can.

The Taoiseach: Deputy Quinn is talking about a different issue now.

An Ceann Comhairle: This is not Deputy Quinn’s question.

The Taoiseach: We cannot give State aid. I do not believe it is compatible with the mandate of Aer Lingus to have a management buyout.

Mr. Healy: Why is the management proposal still there?

The Taoiseach: We want to have a strong Aer Lingus in the future, which is what it is achieving. It is the only aviation company in the State sector along with the one in the private sector I mentioned earlier that is managing to turn things around. Yesterday Alitalia announced a workforce reduction of 3,000 and is in considerable difficulty of going under altogether. We are trying to avoid that. Deputies should not propose simple solutions suggesting that the aviation industry in this country can act differently from aviation in Australia, Canada, America or anywhere else in Europe. They should not try to feed that kind of nonsense to people.

Mr. Healy: Is there a conflict of interest?

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