4 June 1998 Edition
Workers in struggle: Privatisation train set to roll
O'Rourke must have a public debate on sell-offs
There has never been a debate in Ireland about the privatisation process. Instead it is taken for granted that auctioning state utilities should be a fact of life
What will lead to less jobs, more wages and perks for executives, a worse service for consumers and the transfer of Irish resources into the hands of foreign multinationals? One answer - privatisation.
Planes, trains, phonelines, post offices and banks are all set to come under the auctioneer's hammer in the 26 Counties over coming months. Chief auctioneer is the minister for Public Enterprise Mary O'Rourke. In the past fortnight O'Rourke has been moving forward the process of privatising Telecom and TEAM Aer Lingus.
The logic behind selling off state assets is a two pronged one. One argument frequently used in favour of sell offs is that the public sector companies up for sale are inefficient and cannot be run properly in the public sector.
The second argument is an ideological one. Many of our public owned companies such as the ESB, Telecom and An Post have social market monopolies. Free market economics dictates that these markets must be competitive in that there must be more than one company operating in the market and all those companies must be owned by the private not the public sector.
In the case of the 26-County economy many of its public utilities were formed because the private sector refused to invest in these economic sectors. It was the state who made the investment and took the risk. Now after years of investment and with most public sector companies in profit they are ready for sell offs.
Already shares in Telecom have been sold to a foreign communications company at half the price paid by Telecom workers for their 15% share.
In the early 1990s Suicre Eireann was privatised, becoming Greencore. In 1991 some of the company's directors were shown to have used the privatisation process for their own private gain to the tune of £8 million.
The salaries of executive directors at Greencore and Irish Life, another privatised company, are tens of thousands of punts in excess of those they would have earned in the public sector for doing the same job. The wages of their workers have not increased by the same levels.
The impetus for privatisation programmes comes from two sectors. One is from the private sector itself who are anticipating asset stripping public sector companies. The other impetus is the European Commission who want the EU to be an open market economy and have demanded that the member states sell off their public sector assets.
Margaret Thatcher's Conservative government led the way in privatisation programmes, selling off every possible public utility including telecommunications, gas, electricity, airlines, steel companies, coal mines, railways, hospitals and even water services.
Between 1979 and 1995 the numbers employed in these industries fell by 80%. Privatised water companies had by April 1997 declared over £10 billion pounds in profits since privatisation, while 30% of the water supply was leaking through faulty pipes.
There has never been a debate in Ireland about the privatisation process. Instead it is taken for granted that auctioning state utilities should be a fact of life.
Last week TEAM Aer Lingus workers who voted against the sell off of their company to a Danish aircraft maintenance firm showed that there is still some opposition to the privatisation rollercoaster. The craftworkers were acting very much in their own interests rather than national ones. However the media reaction to the TEAM workers No vote showed clearly the bias in favour of relentless privatisation of state resources.
The TEAM workers met minister O'Rourke and asked that TEAM should remain part of Aer Lingus. She gave them a hearing. But at the same time O'Rourke has announced that she is speeding up the process of privatising Telecom and the company could be sold by next year. Now she should take a further step and initiate a public debate on the privatisation process.