Decision to sell part of AIB described as ‘undemocratic’

Michael Noonan comes under strong criticism from trade union leaders over flotation

Michael Noonan said on Thursday that he plans to step down as Minister for Finance when the new taoiseach takes office. Photograph: Eric Luke

Michael Noonan said on Thursday that he plans to step down as Minister for Finance when the new taoiseach takes office. Photograph: Eric Luke

 

The Minister for Finance’s decision to sell part of Allied Irish Banks (AIB) has been described as “unacceptable” and “undemocratic”.

Michael Noonan has come under strong criticism from trade union leaders following his decision to trigger the start of the flotation of AIB, ignoring a Labour party motion to prevent the sale of 25 per cent that was passed in the Dáil on Thursday.

In a statement, the Department of Finance said as it was a private members motion it is not “legally binding on the Government”.

“The Government position remains unchanged. The Programme for a Partnership Government clearly allows the Minister to sell up to 25 per cent of AIB up to the end of 2018,” it said.

It added that any sale of AIB will be based on advice from Mr Noonan’s officials and advisers on market conditions and maximising value for the taxpayer.

The sale of an initial 25 per cent stake on the stock market, subject to global stock market conditions remaining favourable, could raise between €2.5 billion and €3 billion, according to analysts.

General secretary of the Irish Congress of Trade Unions (Ictu) Patricia King said: “There is something seriously wrong when the Government can divert massive financial resources from the sale of 25 per cent if its AIB holding to make a marginal impact on the national debt burden while almost 100,000 people languish on public housing lists across the country.”

“As we face the uncertainty of Brexit, the continuing scandal of low pay and precarious work, a dysfunctional health system and other urgent social and economic challenges, it defies belief that Fine Gael and its Independent allies would dispose of valuable public funds in such an unnecessary and wasteful manner,” Ms King added

SIPTU President Jack O’Connor said the decision to sell the shares is “absolutely indefensible”.

“Before any shares are sold, there should be a national debate as to whether it is right to sell them off at all, in any circumstances, because of their strategic potential in the context of an uncertain future,” Mr O’Connor said.

“If they are to be sold off, it should only be in order to realise the resources to address the scandalous housing crisis to which our banking system directly contributed.”

Labour party leader Brendan Howlin told Morning Ireland on Thursday a delay on the sale was “the sensible thing for our economy”

“The Government proposes simply to retire a tiny proportion of debt, one per cent of debt which would have no material impact on the wellbeing of the people,” Mr Howlin said.

“For the Minister for Finance to simply say ‘well that’s all well and good, we’re going to disregard it [THE MOTION]’, really underscores the complete incompetence of the current Dáil. If a resolution of the Dáil, however arrived at is meaningless, then the Dáil itself has no authority and that’s very worrying,” Mr Howlin added.

Mr Noonan said on Thursday that he plans to step down as Minister for Finance when the new taoiseach takes office.