The Luas Decision

Sir, - I was amused at the uncontested claim that it doesn't really matter what Luas will cost, since the sale of Telecom Eireann…

Sir, - I was amused at the uncontested claim that it doesn't really matter what Luas will cost, since the sale of Telecom Eireann will cover it. This is the art of spin at its best.

Economists never tire of repeating the old mantra that there is no such thing as a free lunch (when it is a question of pay or social welfare). But they do not contest the claim that selling state assets creates free money for the State. Could this be because of their bias towards private enterprise? The truth is that Telecom Eireann, like any other company, will sell for a figure roughly equal to its expected profit over the medium term (say 10 years). This profit would have gone to the Government as dividends if TE was not sold. That money will be raised in taxes in the coming years. Selling a profitable state company is not so much like "selling the family silver" as like a farmer selling some of his land to finance current or capital expenditure. It is no different from borrowing. The taxpayer will pay for Luas no matter what daft headline the Government's spin doctors manage to get into banner headlines. Tim O'Halloran,

Ferndale Road Dublin 11.