UUP looks to stop any expansionist ESB moves

Ulster Unionist Party leader Reg Empey believes the British government should step in and prevent the Irish Republic’s Electricity Supply Board (ESB) if it puts in a bid to take over Northern Ireland Electricity.
The problem is that, at the moment, Northern Ireland Electricity’s parent company Viridian is the subject of a €2.4 billion takeover by Bahrain investment bank Arcapita and Empey fears the ESB might consider expanding its island business by buying stakes in Viridian if they come available.

Empey has warned that there would be political consequences if the semi-state ESB company, which is owned by the Irish Government, were to take over Northern Ireland Electricity. Unfortunately, the report doesn’t elaborate on what these consequences could be. Or perhaps the UUP, in an effort to save NIE from the vagaries of the free market, is now in favour of renationalising the company?

  • If the company in question were coming from any other country, Empey’s attitude would be described as narrow-minded xenophobia. In fact, that the company in question happens to come from the south makes his position even more ridiculous.

    Is his belief in the Union so weak that he feels that something so simple as this is a threat? If so, then why maintain such a tenuous link with Britain if it can only be maintained by the sort of backward protectionism he proposes?

    Sure why let the benefits of economies of scale such as lower bills for customers get in the way of a good 1930s-style unionist rant, eh…?

  • Billy

    El Matador

    Spot on. Many utility companies are owned or partly owned by multi-nationals based in foreign countries.

    This is free market economics. As you say, if this bid came from any other country, there wouldn’t be an issue. I must admit that I thought better of Reg Empey and I am disappointed in him.

    If this bid can provide benefits to customers via economies of scale etc then it is to be welcomed.

    Unless there is a valid economic or legal reason to block this bid, the UK govt should stay out and I firmly believe they will do so.

  • The Lighthouse Keeper

    It would bring a whole new meaning to the term “Power Sharing” though if the ESB were the sucessful bidder! 🙂

  • Surely this was an article in The Onion?

  • JR

    The more I hear from Reg the more right wing he sounds. Does he have insider trader knowledge. The ESB hasn’t even made an offer. This is scare mongering of the worse sort. It’s a free market the highest bidder wins. Now Reg do something useful like cutting ties between the loyal orders and the UUP.

  • darth rumsfeld

    the only unfair part of JR’s post is that the loyal orders have already dumped Reg!

  • Cormac

    Power to the people!

    😉

  • IJP

    Not content with merging with representatives of gangsterism, the Ulster Unionists now oppose free trade…!

    Dare I accuse these old-world protectionists of being somewhat “out of touch”?

  • Bob Wilson

    The British Govt have allowed Spanish companies to buy UK business (such as BAA inc Belfast City) using a Govt subsidy illegal under European law – which is apparently being closed down but is still operational.
    Okay so ESB is still part Govt owned (shame on PDs) but cant see why Govt would intervene – esp if its only Reg after all.
    This may be part of Reg’s cunning plan to oppose St Andrews and well… anything else and reposition the UUP as the ‘no’ party
    Next a leaflet on how the DUP betrayed NIE
    UUP welcome to oblivion

  • Bob wilson

    Sorry for clarification the subsidy if from the Spanish Govt – its some form of tax relief

  • ben

    CROSS-BORDER BODIES WITH ELECTRICAL POWER!
    CROSS-BORDER BODIES WITH ELECTRICAL POWER!

  • smcgiff

    Electricity is one of those things, in my opinion, that should remain nationalised. Even as a capitalist (generally speaking) I feel it’s one of the things you don’t want a purely ‘for profit’ organisation being in control of. Although the ESB would be a ‘for profit’ organisation within NI, it would have a Public company ethos. I don’t see how the people of NI would lose out.

    I do seem to recall that the ESB have expressed interest, so this is probably where Reg is coming from.

    But, it’s piss poor policy in my opinion.

  • Yossarian

    “Dare I accuse these old-world protectionists of being somewhat “out of touch”?”

    Where as the Alliance party has been finely tuned to what voters want for over 30 years…

  • Stalwart

    “Dare I accuse these old-world protectionists of being somewhat “out of touch”?”

    Thats very rich coming from a wine and cheese guzzling Alliance Party member. Hows the prostitute section of your health website now?

  • smcgiff

    ‘Where as the Alliance party has been finely tuned to what voters want for over 30 years…’

    They probably have, but who cares about policies when the religion of the politician takes primacy.

  • mnob

    smcgiff – public sector companies actually tend to be much more agressive when they operate outisde of their domestic market – the fact that ESB is public sector in ROI doesnt matter a jot in NI.

    I do think that Reg has lost the plot either a company is public sector or private. If its private (esp. if the government of the day has made money by selling them) then government or politicians have no right to interfere in their ownership (unless something illegal takes place).

    The UUP are moving further and further away from my thinking – I just wonder to whom they are moving. I’m finding it more and more difficult to find reasons to go back to voting for them.

  • Julian Robertson

    That’s the way to go Reg. Has noone else noticed the dastardly way those devious southerners have taken over the beer trade with their Guinness and Harp? And as for Kerry butter and Limerick ham, don’t get me started ….

    Membership form anyone?

  • Henry94

    Is unionist electioneering anything more than a contest to see who can scare the punters the most?

  • Stalwart

    “Is unionist electioneering anything more than a contest to see who can scare the punters the most?”

    If it is, I think Julian should probably win first prize…

  • Kloot

    And what about them southerners stealing wind originating from NI to power their wind farms.. an absolute disgrace!!

    LOL.

  • John East Belfast

    Surely all that Reg is doing is pointing out that a 95% foreign government owned organisation may be purchasing -what is arguably the most strategic industry within any developed country – namely the ability to generate power.

    That same organisation will of course act in the best interests of its shareholder – namely the Irish Government.

    Consequently strategic decisions about power generation could then become subject to political influence rather than economic – especially when that Government has no votes or accountability north of the border.
    Any private foreign owner will only be interested in profit and therefore there will be a limit on how much they will want to piss off their customer – this will not always be the primary concern of the 26 County Free State Govt.

    Not to mention the Monopoly implications for the island has a whole and lack of competition for us all.

    You could also include the bit about the ancient enmities between the peoples of these islands and the fact that only 7 years ago the Irish Govt aggressivley ‘laid claim’ to Northern Ireland.
    All these matters are only coming to a close by a series of historic treaties and compromises.

    Therefore having your Govt buy its neighbour’s power generation ability under these circumstances is insensitive to say the least.

    We know the reaction if similar transcations occurred in many other parts of the world and of course until the UK power companies were denationalised I suppose everyone would have no problem with the British Government buying ESB ? – Come of it – infact even if a British owned private company tried to acquire ESB there would be a considerable squeal.

    You could also say that if power generation was no big deal then why does the Irish Govt own 95% of theirs ?

    ie it is ok for the Irish to want to keep it in their own hands but Reg is a scaremonger if he tries to keep his country’s power at least in the hands of an honest broker who is only interested in profit.

    As for the bit about Free Trade this has nothing to do with orgainisations 95% owned by foreign and – lets face it and be honest – ‘hostile’ governments.

    Reg is only stating the bleeding obvious and I am amazed by the lack of rigorous understanding in the comments on this thread to the real issues involved

  • Kloot

    26 County Free State Govt.
    Its the called Republic of Ireland mate. Massive differences between the 2 entities, it wasnt just a name change.

    That same organisation will of course act in the best interests of its shareholder – namely the Irish Government.

    Eh, yes, same as Viridian acted in the best interests of its shareholders, am I Right. The NI public comes second either way. Capitalism!

    Consequently strategic decisions about power generation could then become subject to political influence rather than economic – especially when that Government has no votes or accountability north of the border.

    Viridian themselves already operate in the ROI and their prime objective is an all island power supply. Check out their website, it surprised me I must say.

    Not to mention the Monopoly implications for the island has a whole and lack of competition for us all.

    This is for the EU to decide. I can see what you are getting at though. Competition in the Electrical market has been a disaster.

    You could also include the bit about the ancient enmities between the peoples of these islands and the fact that only 7 years ago the Irish Govt aggressivley ‘laid claim’ to Northern Ireland.

    Definitely an issue, but you are assuming that the ESB is operating off of a political platform which is far from the case. The ESB operates more like a private sector company then any other public sector company in the ROI and is competes across the world for contracts.

    I suppose everyone would have no problem with the British Government buying ESB ? – Come of it – infact even if a British owned private company tried to acquire ESB there would be a considerable squeal.

    This I find funny, first of all its not the irish government that would be buying it. The ESB is a semi state.

    Secondly, I get my broadband from UTV, I turn on my Sky TV service at night. I make a phone call on my O2 network. My local news rag is owned by John Taylor (UUP). Could I or any other (bar the odd nutter) joe soap from the public give a damn, NO. Sure its probably likely that BA might put in a bid for Aer Lingus. And I still dont care. What I do care about is cheap and good service. We all capitalists after all these days.

    lets face it and be honest – ‘hostile’ governments.

    The hostility between the Irish government and the UK government is over. Time to move on. Its all capitalism these days.

  • Kloot

    As an addendum. I have every faith that should the ESB take over Viridian, that it would attempt to address the obvious political implications to the satisfaction of all concerned. Every company when it wishes to operate outside its home country has to be sensitive to the concerns of the target audience. It would be stupid not too.

  • darth rumsfeld

    yep there may well be an all-Ireland electrical system in a few years, but rest assured the next step will be to swallow it up in an all British isles electrical system and finally an all EU system . Big deal, if the prices are low enough.

  • Kloot

    darth rumsfeld

    Exactly. We are a tad late to be worrying about globalisation at this stage. Its a reality of the world we live it.

    Sure at the moment the ROI has or is trying to set up an interconector across the irish sea for gain access to the UK network and via that the european network. Im not afraid of that. Should I be ?

  • Elvis Parker

    Kloot – yes cos it means British electricity will be penetrating every house in Ireland. I beat they can listen to every word you say ….

  • Baldrick45

    My only concern is as a consumer. The two Gov’ts are still pursuing a Single Wholesale electricity market from Nov next year.

    The main thrust of this is to deliver a better deal to businesses and (in the longer term) consumers by promoting competition on an-all-island basis.

    Any move by ESB (reported on Radio Ulster this morning as being “under consideration by ESB”) seems to me to be a pre-emptive strike by ESB to defend it’s monopoly position in the face of Viridian’s attempts to break into the Southern market. (I believe Viridian are currently building a new state-of-the art power station in Dublin which would generate electrcity at a much lower unit cost than anything the ESB have on stream).

    While I broadly believe that “free market” economics work more efficiently than any other system, I would be concerned that the purchase of Viridian by ESB (as a semi state body) is an abuse of the free market and would only serve to let them screw the whole island with higher prices in the longer term from their current “state gifted” strong financial/customer base.

    ESB would seem to have not a lot to gain and potentially a lot to lose with the SEM so it would clearly be worth a lot to them to take out the opposition early….

    On a purely commercial basis, I don’t blame them for trying, but I think the long term implications for every consumer would be disasterous

    my 2c anyway….

  • Kloot

    Baldrick45

    Id have to agree with you there. It can be good for either side of the border to have one dominant company over electricity. But thats a consumer issue and now a political issue if you know what I mean

  • Kloot

    It can be good for either side of the border to have one dominant company over electricity.

    Should have read “it CANT be good”

  • aquifer

    Reg is certainly running on Empty. This ‘oor wee ulster’ act is getting embarrasing. Ironically enough, it could lose NIE 40% of its customers when ESB can enter the domestic electricity market next year.

    With the divergence of incomes in modern economies, a modern capitalist party should do quite well, but Reg remains determined to stand destiny up with this sectarian pavlovian protectionism. Trouble is, he is only drawing attention to how little is left of industrial ulster.

    Anglo saxon market capitalism and religious freedom won, Reg, lie back and enjoy double digit growth and stop embarrassing your constituents who have good jobs in NIE. If you keep quiet they might keep them, and if you don’t and they must shift jobs, ESB’s unions have a better record of looking after electricity workers than Ulster Unionism.

  • seedot

    In the south you definitely got the impression that BA was the preferred buyer for Aer Lingus over Ryanair. And there’s no point in talking about the Norwegian governments sweetheart deal in exploiting our gas resources and the norwegian taxpayers making a lot more than we will out of the Corrib gas fields.

    If this was a public sector company could see an argument – but as its already private sector can’t really see any logic, just good old fashioned tribalism.

    Is our money no good?

    Are we not the FDI that Mr Empey has tried to attract?

  • Setanta

    Any decision on a takeover would be ultimately down to the Competition authorities in Brussels on purely business and competition grounds – non story.

    I am, however, concerned about Reg making threats of “consequences” yet again – what exactly does he plan to do?

    Can we expect him to invade Clontibret any time soon? Or would he need to check if the tea shop was open first?

  • John East Belfast

    seedot

    “If this was a public sector company could see an argument – but as its already private sector can’t really see any logic, just good old fashioned tribalism.”

    ESB is a Public Sector Company – that is the whole point !

  • seedot

    Sorry John, could have been clearer. ESB is a public company but I was referring to NIE, which I may be wrong but had understood to be a private sector company. If this was currently owned by the people of northern ireland (through whatever state their taxes and votes formed) then I could see why it would matter if a company owned by another state took it over.

    But if NIE is already private then ESB is just one more source of investment. The Norwegian state oil company is currently building a pipeline to take free gas off the coast Ireland along with the company Royal Dutch Shell has become. The campaign against this pipeline has referred to the people of Norway getting gas that should be Irelands – but I don’t think this relates to “the ancient enmities between the peoples of these islands ” (unless Shell to Sea is a form of revenge on the Vikings) so much as the way privatisations work.

    There are probably arguments to made that elements of the electricity generation and supply should be a monopoly (at least the wiring) and under government/democratic control. But if yous wanted it back – we could hold a referendum ;-).

    I don’t think Viridian or any other corporate owner is giving NIE back. Course, if our government has its way, the ESB will be on the market block fairly soon anyway.

  • John East Belfast

    seedot

    I knew what you were referring to – I was simply trying to point out the irony in your post.

    If ESB was owned privately my only concern would be the competition issues – which is an important point in itself

    As it is ESB is owned by a foreign government and hence its policy will be subject to political interference and not just shareholder value.
    The voters for that government will not be NI consumers.

    As I said before Reg is only pointing out the bleeding obvious.

    Throw into the mix the sovereignty dispute on this island then you dont have to be too bright to realise that in such circumstances one sovereign govt purchasing the power generation of the other is a tad insensitive to say the least – especially at the minute when we are trying to tie down another Agreement.

    Think off North and South Korea, China & Taiwan, N&S Cyprus – not to mention the UK Exchequer buying ESB if it were for sale

    Too many people have been too quick on this thread to attack Reg without giving too much thought to the issues involved and I just think that is lazy.

  • seedot

    Totally agree John that there is much more involved here than the original commentators who criticised Mr Empey seem to accept.

    Working recently in Belfast I had occasion to visit a large number of call centres in te Belfast area – many with quite poor quality employment. I was told by a couple of people on seperate occasions that Reg Empey had attracted this type of industry – is this true?

    Apart from the economies of scale which would be an advantage (for ESB) there is also the hard engineering skills and traditions which are also present in Belfast and which are notably absent in much of the south. Personally I’d like to see this go through because I think if you were going to pick a group to take on the Irish state to prevent privatisation of the ESB, Northern Irelands electricity workers would be a good bet. They are not without, emm, experience.

    Whatever, the original warning from Mr Empey was by no means foolish. Do you think some form of state body should have a holding in NIE to prevent a takeover? Is there an ESOT which is significant?

  • John East Belfast

    seedot

    From my personal experience Reg is highly respected in NI Business Community for his efforts at championing NI Trade, Commerce and Industry
    and of course not least him being a major architect of the Belfast Agreement and the undoubted prosperity it has heralded for NI in recent years
    A lot of people have done very well.

    He endeavoured to attract all kinds of inward investment – including, but not soley, Call centres. Also CCs are not unique to NI.

    Regarding NI Electricity unions I cannot for a minute think why they would want to stop/care about ESB being privatised ?

    I also dont think Govts should own electricity generating companies but I do think it should be a highly regulated industry with the Govt ensuring the overall interests of its constituents are not cast aside.

  • seedot

    I honestly don’t know of Reg Empeys role in attracting inward investment – my comment was anecdotal and not based on any factual knowledge. It can be ignored and I apologise for any offence. And yes, there are call centres all over the island – but very different wage rates and conditions between individual centres.

    Perhaps the reported €130,000 salaries in the public sector, strongly unionised ESB would provide an incentive for NIE workers to oppose privatisation if they re-entered the public sector by the back door?

    I’m not sure how a company can actually be a private enterprise if a government can ensure the overall interests of its constituents by preventing it being sold on. Private sector owners generally like being able to liquidate assets.

    Final Q – what influence do you think the Irish govt. exercises through its semi state sector – other than fattening them up for privatisation?

  • Kloot

    Apart from the economies of scale which would be an advantage (for ESB) there is also the hard engineering skills and traditions which are also present in Belfast and which are notably absent in much of the south

    Tell me your not seriously suggesting that the south is lacking in engineering skills!

    He endeavoured to attract all kinds of inward investment – including, but not soley, Call centres.

    Call centres are useful in providing jobs for low skilled labour, but are not, in the long term, the kind of investment that NI should be looking for. They do little for stimulating entrepreneurship.

    Regarding NI Electricity unions I cannot for a minute think why they would want to stop/care about ESB being privatised

    Are they all not part of the same union, the ITGWU ?. Honest question here.

    I also dont think Govts should own electricity generating companies but I do think it should be a highly regulated industry with the Govt ensuring the overall interests of its constituents are not cast aside.

    Agreed, but then again it is!. Both sides of the border im sure.

    Think off North and South Korea, China & Taiwan, N&S Cyprus – not to mention the UK Exchequer buying ESB if it were for sale

    I honestly think Irish people would have no problem with a foreign company, or a foreign company semi state owning ESB as long as they didnt strip the company, they guaranteed quality service and kept costs down. And yes, the ESB is next on the list to go private, so they themselves will face the markets in time to come. Capitalism

    John, I think I understand where you are coming from. Your problem essentially is not that a foreign semi state is potentially going to purchase NIE, your problem essentially is that its the ESB thats potentially going to purchase NIE. You are worried that the Irish government will exercise political influence over the ESB. Fair enough. But I honestly dont think this is the case with the ESB. Its much more private sector in its outlook then most public sector companies.

    But again, this all comes back to the decision to privatise NIE. If the UK government didnt want to leave it open to market forces, then they should have kept it public.

  • darth rumsfeld

    “Dear Reg,

    Last year I flew to Turin for a visit. I could have flown BA but I went Ryan Air cos it was half the price. Flying to the states I always used to go out of Dublin, not Heathrow.Obviously the wifer and I thanked God when you arranged for flights from Nutt’s Corner Am I a Lundy?

    Yours worriedly

    A loyal son of Ulster

    P.S. I am a sprightly 82. Any chance of an Assembly seat in March? ”

    “Dear LSOU,

    I think I can answer your dilemma very simply. Do you vote UUP? If you do, then don’t worry about it. If you don’t then you should be very very ashamed, scared, and blame it all on Dr Paisley.
    Kind regards

    Reg

    P.S. On the assembly seat I’d suggest a bit of patience. We in the UUP believe in the importance of experience. Young whippernsappers like yourself would need to be District Master for a couple of decades to get the necessary experience before aspiring above your station.That’s unless you’re a millionaire , of course. We could be doing with a couple of them. “

  • Kloot

    Quality stuff there Darth..LOL

    Lets for a second take the politics out of this discussion and instead look at it from a business perspective.

    ESB, is by far the dominant electrical presence on the island of Ireland. They have cornered the market in 26 out of the 32 counties on the island. As a company, it makes absolute sense that they should attempt to ascertain a 32 county presence. A 32 county presence would allow for the optimal positioning of power stations, power lines, staff, etc, etc… the usual cost cutting stuff. In other words they can optimize their network at an island level. Thats just commercial sense.

    Now, say some company other than Viridian decides to buy. What would their reasons for this be. Is there a potential for market growth? well hardly, unless they had plans to expand into the ROI. Maybe they might purchase Viridian because of the revenue earned.. possibly. To me though, if I was buying Viridian, I would be buying it with the full knowledge that the ESB is extremely eager to have an all island presence, therefore, id be buying Viridian as a short term investment. Buy now, sit on it, wait for the price to go up and then eventually sell to the ESB at a higher market price.

    However, the problem always is, that politics and local concerns sometimes cannot be separated from economics.

    Any company that buys Viridian, will only have its shareholders interests at stake. So in the end does it really matter who is ripping you off!.

  • tok

    reg empey is acting like trimble at his worst trying 2 out dup the dup hes using any populist crap that comes to mind how come we havent heard from mr liberal economics esmonde birney crticisng him he seems to have an alacarte approach to the free market .
    Come on reg come out with some fresh Ideas rather than this S*** be a leader not a whimp