Dáil Eireann

1. Deputy Richard Bruton asked the Minister for Finance the borrowing targets for the emergency budget; if the decision that 9.5% borrowing must be met is still in place; and the information that he will publish in advance to allow Dáil Éireann make the optimal choice in the budget. [12765/09]

Minister for Finance (Deputy Brian Lenihan): The restoration of Ireland’s public finances to a stable and sustainable footing presents a significant challenge, but one the Government is determined to meet. Already steps have been taken to meet this challenge but the deterioration in the domestic and international economy has demonstrated that there remains a need for further action.

Many countries are facing challenging budgetary positions. This week the European Commission, when opening the excessive deficit procedure for Ireland, also did so for Greece, Spain and France, while the UK and Hungary have had a procedure open for some time now. I have already stated current indications are that economic activity in Ireland will be very weak this year and the publication of today’s annual growth figures for last year underlines this point.

Lower levels of economic activity will obviously have implications for future tax revenue receipts and, consequently, the borrowing requirement. Internationally, the latest prediction by the IMF forecasts that global economic activity will contract by between 0.5% and 1% this year. This would be the first decline in activity in 60 years. For advanced countries, which constitute a large part of our export markets, GDP this year is projected to decline by over 3%

Our position as a small, open economy means that we attract a high degree of international attention, particularly from the markets on which we are increasingly dependent for borrowing because of our budgetary position. These markets need to have confidence that we will take the necessary budgetary measures to restore the public finances to a sustainable footing. We cannot look outward for solutions. The primary source of our recovery must be found from [946]within. We will have to adjust our cost base, improve our competitiveness, restore order to the public finances and revitalise the Irish economy.

The addendum to the stability programme update, published on 9 January last, forecast total tax receipts in 2009 of approximately €37 billion. However, in light of the continuing weakness in the Exchequer returns, my Department now anticipates that there could be a shortfall of up to €3 billion on this figure. This would mean that only €34 billion in tax receipts would be collected in 2009, representing a year on year decline of over 16%.

Additional information not given on the floor of the House.

The Government has already taken significant action to restore stability to the public finances and the supplementary budget will continue this process. Taking action now will ensure that confidence in our public finances can be restored and that we are positioned to take advantage of a recovery in the international situation when it occurs.

As the Taoiseach stated yesterday, in formulating the supplementary budget in the context of what is best for the economy, the Government will seek to be as close as possible to the general Government deficit target of 9.5% of GDP. Regarding the details of what will be presented in the supplementary budget, it is not the usual practice to speculate in advance on the content of any budget and I do not propose to deviate from this practice now.

However, the Government has sought to engage all parties in our efforts to address the difficulties in the public finances. With this in mind I have made my Department available to the Opposition on an unprecedented scale by arranging for officials to brief the main Opposition spokespersons on the latest available figures and on the emerging position. The Opposition has also been asked to submit any proposals it may have to the Department of Finance for costing by officials. I am open to considering what further information that can be made available can be put into the public domain in advance of the supplementary budget.

In that context, I have noted that during this week’s pre-budget debate Deputy Bruton outlined proposals on dealing with the structural deficit. I believe that there is some common ground between us and I would be happy to engage further with him in the next week.

Deputy Richard Bruton: Are the Government’s commitments to the EU couched in terms of the budget deficit or what is commonly known as the structural deficit, which makes allowances for the stage of the business cycle one is at? What information has changed which led the Taoiseach to withdraw from the commitment he was very categorical about in early March that 9.5% of GDP would be the borrowing target?

Will the Minister give the House more information than we have seen to date so that we can have an intelligent discussion about the options that face us? Will we see what happened on the last occasion, where the Minister came in with budgetary announcements and promptly had to do U-turns on many of them because they had not been subject to proper scrutiny or teased out?

[947]Deputy Brian Lenihan: The Government sought to engage all parties in the effort to address the difficulties in the public finances. With this in mind, I have made my Department available to the Opposition on an unprecedented scale by arranging for officials to brief the main Opposition spokespersons on the latest available figures and on the emerging position.

I am not briefed on the content of the briefings my officials give the Opposition parties. By convention, I am not made aware of what has been discussed by Deputy Bruton and my Department and I can assure him I have every confidence in the protocols it follows that it provides him with all the information it can regarding these matters.

The Deputy has only to request the information he seeks from my Department and it will be made available to him. The one item which cannot be disclosed to him relate to the preparations for the Government itself because the Government, under the Constitution, is entitled to confidentiality in the exercise of its deliberations. I do not know if the Deputy has made such a request because my Department does not disclose to me what its discussions with him have been. My Department cannot disclose materials to the Deputy which have been prepared for the consideration of the Government in the assessment of the options open to it.

Deputy Richard Bruton: Who does the Minister think he is fooling? He knows as well as I do that the so-called deliberative process is excluded from all of the rest of the House. His officials would throw a complete blanket over anything under discussion. Any of the options from an bord snip nua and any of the tax options will be excluded and we will not get any information.

I wrote to the Minister on 13 March and have had no reply to any of my requests for information. The notion that we are being brought in to engage in an intelligent debate is entirely spurious. We can go to the Department to get proposals costed, as we could in a general election. That is nothing. It does not tell us anything about the state of the economy. It does not give us the Minister’s revised forecasts for tax, the economy or spending projections. It does not tell us about the costs of different proposals which have been developed by Mr. McCarthy and his colleagues.

If the Minister wants an intelligent debate, that is the sort of information which should be here on the floor of the House. Let us subject it to scrutiny and try and make the best decisions.

Deputy Brian Lenihan: I have arranged for the Deputy to meet with myself and an official today so that information, in so far as it can be provided, will be provided. I am prepared to engage with him on a political basis regarding matters which cannot be disclosed by my officials. I cannot go beyond that at this stage. I received the Deputy’s letter earlier this week, I have been considering it and have arranged a meeting. I will endeavour to meet him and the Labour Party spokesperson, from whom I received a letter dated 23 March today, on the same basis. That is as far as I can progress this matter.

The Deputy mentioned in the House the day before yesterday the fact that in his estimation the structural deficit accounted for approximately 8% of the total borrowing requirement this year and that was the position in January. My Department is revising that estimate. None of these calculations stand still, as the Deputy, who is an economist, well knows. The calculations made in December are not relevant in April. The commitments made in the addendum in early January were based on a December analysis which, in light of the economic deterioration and the worsening economic conditions, no longer holds for today.

The science of economics is much like the science of meteorology. One is predicting future weather patterns. The patterns have changed since the addendum for growth was produced. Even this morning the disclosure that there was substantial economic decline in the latter part of last years changes our assessment of a number of positions, as the Deputy is well aware. I [948]am willing to discuss these matters with him and I am also willing to provide from within my Department the information which will enable him to make choices and options. I am prepared to discuss any choices or options he wishes to put to me.

2. Deputy Joan Burton asked the Minister for Finance if he will set out and explain the economic priorities he identified to a newspaper (details supplied) including his proposal to clamp down on crony capitalism as reported on 17 March 2009; and if he will make a statement on the matter. [12684/09]

Deputy Brian Lenihan: As regards economic priorities, there has been extensive discussion in the House of all aspects of the economic position. In my interviews with the media over the St Patrick’s Day period I did not say anything that I have not said before. As Deputies will know, Ireland has been the subject of much unfavourable comment in some foreign media and my concern was to counteract that by presenting a more balanced view of the Irish economy.

Regarding corporate governance, I explained my belief that the Government should tackle the issue of cross-directorships in financial institutions. By that I mean that situations where there appears to be a reciprocal distribution of directorships between companies, albeit not on a formalised basis, should be appropriately restricted and controlled to ensure that good corporate governance is not prejudiced. I also indicated a concern about the ability of financial institutions to select, as chairpersons, individuals who have had extensive executive responsibilities within the same institution. Again, this could lead to weaker governance and should be controlled.

I will be discussing the development of these ideas and how best they can be translated into practice with my Cabinet colleagues shortly. The Government will also, of course, be considering how these issues may be relevant beyond the financial services sector. These are important issues and require careful study.

In the meantime the Government has considered provisions to deal with certain specific things that have come to light, including new requirements in relation to loans to directors and connected persons. However I believe it is also necessary to consider the issue of corporate governance from a wider perspective.

I would favour a review to be carried out by the Company Law Review Group which would consider the revision of the existing combined code on corporate governance. Deputies might wish to note that the UK recently announced an independent review of bank corporate governance including the balance of skills, experience and independence required on boards, the effectiveness of board practices and the role of institutional shareholders in engaging effectively with companies and monitoring of boards.

Deputy Joan Burton: I thank the Minister for his reply. A front-page article in the international edition of the Financial Times on St. Patrick’s Day — exactly a year after the St. Patrick’s Day massacre in regard to Anglo Irish Bank shares — stated that Ireland is planning to introduce tough legislation to clamp down on “crony capitalism and excess bank lending” in the wake of the property bubble that has “hammered” its leading banks. The article refers to a statement by the Minister, Deputy Brian Lenihan, that there is a problem in all small countries in that there are “too many incestuous relationships” within their financial systems. This is an extraordinary statement for a Minister for Finance to make about his country’s banks.

Would the Minister include in his definition of “incestuous relationships” the relationship of Mr. Seán FitzPatrick to the Irish Nationwide Building Society in regard to the warehousing of loans of €122 million? Would he include in this definition a situation where the board of the [949]Irish Nationwide Building Society, even after it had been guaranteed by the taxpayer to the tune of billions of euro, paid out a bonus of €1 million to its chief executive officer and persisted with pension arrangements for this individual which appear to amount to some €27 million? We should bear in mind that one quarter of this pension will be tax free and that most of the pension arrangements involve further mitigation of tax, particularly in regard to estate duty taxes and inheritance taxes.

Deputy Brian Lenihan: I have a particular concern that large companies — particularly banks, for which I bear ministerial responsibility — are overly reliant on a small circle of persons for appointments to their boards. It is important, in the long-term interest of the companies themselves and in the interest of the public and stakeholders, that there should be an opportunity for new voices to be heard and fresh thinking to be deployed. Where a relatively small group is meeting and working together over time, an accepted way of working and viewing issues tends to become established. Many of us could produce examples from different areas of life where it was a newcomer or outsider who first identified something that was missed by all the insiders.

Clearly, in a relatively small company, the number of suitable people for promotion to senior positions will be always limited. However, I am of the view that we must do more to encourage boards to bring in those with a wider range of views and backgrounds. I am also of the view that alignments between bank directors and other companies — in other words, cross-directorships — are not helpful to the proper management of the banking system. That is why I have raised this specific issue. It is one of the lessons we must learn from the events we have witnessed in the past year.

The circumstances of the loan between Mr. FitzPatrick and the Irish Nationwide Building Society are under investigation by the regulator. We must await its report, which I have no doubt will establish the facts, as it has established the facts in regard to other matters. In regard to Mr. Fingleton’s pension arrangement and the payment to him of a bonus, we must distinguish between the two transactions. My Department is in correspondence with the Irish Nationwide Building Society on the matter of the bonus payment. I have also asked for further information about it. It seems the bonus arrangement was sanctioned before the guarantee was given but paid afterward. I want to be in a position to assess my options in regard to that bonus payment to see whether it can be recovered, first by the society itself, or, in the absence of a power in the society to do so, what options are available to me as Minister to deal with it on foot of the guarantee arrangement.

In regard to the pension fund, again, the full facts will have to be established. From the limited information available to me on the basis of such conversations as I have had with the two directors appointed at my request to the board of the Irish Nationwide Building Society, the value of the amount transferred into the pension fund in the first instance is substantially less than the figures quoted. The current value of the pension fund has substantially diminished with changes in stock values. That being said, this matter requires further examination and establishment of the facts before further assessment can be made of the options open to the institution and, in default of such an option, the options available to me as Minister for Finance.

Deputy Joan Burton: Does the Minister not agree that the best way to break up an incestuous relationship is to get rid of some of the parties to the relationship? Does the Minister accept that he has shown himself to be extraordinarily slow in bringing about change in the bank boards and that such change is a critical measure in terms of showing international bond holders that we are serious about bank reform?

[950]The Minister introduced the legislation guaranteeing the financial institutions at the end of September. Since then there has been much talk from both the Minister and the Taoiseach about due diligence. Some of us have even begun to believe it is a person. Where was the due diligence when it came to discovering that this chief executive officer and others had accumulated extraordinary entitlements at a time when they were coming cap in hand to the Minister, on behalf of the taxpayer, to bail out their institutions? Why did “due diligence” not step into the frame, from wherever she was, to point out that this guarantee arrangement is subject to an oversight, which is a common arrangement in business deals? Did the Minister have the benefit of legal advisers when he offered the guarantee and left himself absolutely naked in regard to the rights — very expensive rights from a taxpayer’s point of view — that were accumulated by the chief executive officers and board members not only of the Irish Nationwide Building Society but also of Anglo Irish Bank?

Deputy Brian Lenihan: I refute the Deputy’s assertion that there has been little change in the management of the six institutions which were guaranteed as and from 30 September 2008. In the less than six-month period since then, there has been a change of chairman or chief executive officer, or both, in five of those institutions. There have been substantial changes in the board of Anglo Irish Bank. This represents a significant amount of change in the leadership personnel of the six institutions in the period since the guarantee was given.

Deputy Joan Burton: There has been no change in the largest institution.

Deputy Brian Lenihan: I am not willing to get into personalities on the floor of the House. I am making the point that there has been substantial change in the board management structure of five of the six institutions since the guarantee was given. The Attorney General, the legal adviser to the Government under the Constitution, was present throughout the discussions on the guarantee. Lest there be further misrepresentation of my position, let it be clear that neither the chief executive officer of the Irish Nationwide Building Society nor the then chairman of Anglo Irish Bank made any representations to me whatsoever in connection with the guarantee.

3. Deputy Kieran O’Donnell asked the Minister for Finance when his attention was first drawn to the bonus payments being made to bank executives after the taxpayer guarantee was put in place; the steps he is taking to recover these bonuses; and his views on whether further changes at board and executive level are needed to restore confidence in the banking system here. [12766/09]

Deputy Brian Lenihan: I received the report of the covered institutions remuneration oversight committee, CIROC, on 3 March. It was common knowledge that remuneration levels for senior bankers based on salary, bonus, pension and other payments were high long before the Government guarantee. Some of the relevant material was in the public domain. The CIROC was established as part of the guarantee scheme for the covered institutions and its report has provided additional specific details in regard to remuneration levels in the banks. The committee reported that with the exception of the Irish Nationwide Building Society, where the chief executive officer was paid a prearranged incentive bonus of €1 million for 2008, no bonuses have been or will be paid to chief executive officers and senior executive management teams in respect of their performances in 2008-2009.

[951]Recent detailed disclosures in regard to the remuneration of the chief executive officer of the Irish Nationwide Building Society require investigation. I wrote to the acting chairman of the board on 12 March stating that I considered the payment of the bonus to be potentially a breach of the guarantee scheme and seeking an immediate reply as to what the board intended to do. While the reply to that letter indicated that the payment concerned was contractually committed before the Government guarantee, I have asked that the two directors appointed by the board nominated by me should review all these issues and that I should receive a report within one month. I have also requested the board to brief me next week on its plans for the society, including the review of management and board personnel.

Under the provisions of the guarantee scheme, two non-executive directors nominated by me were appointed to each of the covered institutions. In nationalising Anglo Irish Bank, I have ensured an overhaul of the board. Also, under the terms agreed on the recapitalisation of Allied Irish Bank and Bank of Ireland I can appoint up to 25% of the board members subject to the finalisation of the recapitalisation proposals announced in February. As the Deputy will be aware, there have been changes of chairperson and CEO in Anglo Irish Bank, Bank of Ireland, Irish Life & Permanent and EBS.

Deputy Kieran O’Donnell: Was this bonus paid prior to the appointment of the Government-appointed directors? Was the payment of the bonus brought forward to a date earlier than when the person in question was entitled to receive it? The year end for Irish Nationwide Building Society is 31 December and Mr. Fingleton would appear to have been paid the bonus well prior to that date.

It is unusual, as I see no great difference between this case and that of the CEO of Irish Life & Permanent, whose removal was far more forceful as the Minister indicated his expectation that the board would live up to its responsibilities. When it did not, the Minister asked the members to meet him and made certain that Mr. Denis Casey stood down. Why is the Minister not taking the same line with Mr. Fingleton? A Government guarantee scheme has been put in place but if it had not been, would Irish Nationwide have been able to pay the bonus?

Deputy Brian Lenihan: The Deputy asked a number of interesting questions. With regard to the position of the two directors appointed to the board of the society at my request, neither held the office of director at the time of the payment of the guarantee or execution of whatever arrangement was arrived at to promise the bonus.

Deputy Kieran O’Donnell: When will the bonus be paid?

Deputy Brian Lenihan: I do not have the date to hand in my brief today. On receipt of detailed information I will be in a position to advise the Deputy. He will appreciate I do not have the information at this stage. The two directors were not members of the board at the time when any payment was made, so they are entirely strangers to this transaction.

In regard to the position of Mr. Casey and Irish Life & Permanent, I went to great lengths during those board meetings to make clear that I would not be drawn out on whether I had indicated to any directors or the board my attitude regarding his status. It is correct for the Deputy to draw the comparison but I behaved in exactly the same way on this occasion. It is not appropriate for a Minister for Finance, in his communications with a board or directors while meetings of the board are pending, to express a view about what a board should do.

I made it clear on television at the time that it was quite impossible to do so given the possible legal exposures for the State. I am sure Deputy O’Donnell would appreciate that as a deputy Opposition spokesperson on Finance. A Minister for Finance who has guaranteed insti[952]tutions should not put himself into a position where he exposes the State to any liability by injudicious comments about what should or should not be done by the boards, which have the responsibility of performing their duties in the management of these societies and banks.

Deputy Kieran O’Donnell: If the Minister sees no great difference in the cases, will he now tell the board members of Irish Nationwide Building Society that he expects them to live up to their responsibilities? Will he pursue every legal avenue to ensure this €1 million bonus is repaid to Irish Nationwide by Mr. Fingleton? Will he, if necessary, introduce retrospective legislation or a form of legislation like that being brought in by President Obama relating to AIG?

Deputy Brian Lenihan: I have made it clear in my reply that all options will be considered. In the first instance it is a matter for the society and its board to investigate these transactions and see what options are available to the society. In default of any action by the society I will, on legal advice, see what options are available to me.

4. Deputy Richard Bruton asked the Minister for Finance his revised forecast for the numbers and rate of unemployment for end of year 2009; the way this forecast compares with the forecast unemployment rate for the EU as a whole; and if he is considering measures to stem the rate of job losses. [12767/09]

Deputy Brian Lenihan: The latest forecasts for EU labour market developments are those published by the European Commission in January. At the time, the European Union unemployment rate was forecast to average 8.7% this year. On a survey basis, the latest data show a sharp contraction in employment in the final quarter of last year — employment in this quarter was over 4% lower than in the same quarter a year earlier. In the addendum to the stability programme update published in January, unemployment was forecast to average 9.2% in 2009. The assumed end-year figure was for an unemployment rate of around 10%.

The quarterly national household survey was published last month. Unemployment on a survey basis rose from 4.5% in the final quarter of 2007 to 7.7% in the same quarter of last year. Although not designed to measure unemployment, live register figures give an indication as to more recent developments. On this basis, when account is taken of seasonal factors, the number on the live register rose by 33,000 month-on-month in January, and by 26,700 in February. The implied unemployment rate, using this measure, in February was 10.4%.

My Department will publish revised unemployment projections in the forthcoming supplementary budget and these will involve a significant upward revision to the January forecasts. The sharp increase in unemployment is the most worrying aspect of the economic downturn and I want to assure Deputies that the Government is doing all in its power to limit the loss in employment.

First and foremost, we are working to generate the conditions necessary for an economic recovery, which includes the restoration of order to the public finances. We have brought in additional fiscal measures and will bring in more in the forthcoming supplementary budget in order to put the public finances on a more sustainable structural path. This will help restore international confidence in Ireland as a place to invest. We are working to improve competitiveness through investing in infrastructure and in education and skills. The recent pension levy in the public sector will also have a favourable impact on competitiveness through a positive demonstration effect.

[953]Finally, we have taken measures to get credit flowing. For example, as part of the recapitalisation package announced on 11 February, Allied Irish Banks and Bank of Ireland reconfirmed their December commitment to increase lending capacity to small and medium enterprises by 10% and to provide an additional 30% capacity for lending to first-time buyers in 2009. If the mortgage lending is not taken up, the extra capacity will be available to small and medium-sized enterprises. Allied Irish Banks and Bank of Ireland have also committed to public campaigns to actively promote small business lending at competitive rates with increased transparency on the criteria to be met. Compliance with this commitment will be monitored by the Financial Regulator.

We are also taking measures to ensure those losing their jobs have access to retraining. The Department of Enterprise, Trade and Employment in conjunction with FÁS are working together to respond quickly and effectively to the rising numbers of people who are now unemployed.

Deputy Richard Bruton: I am sure the Minister was disturbed to see the latest GDP figures published today.

Deputy Brian Lenihan: Yes.

Deputy Richard Bruton: They show that compared to the same quarter last year, GDP has fallen by 7.5%, with investment falling by 30.5%. The consequences of these trends are extremely worrying. Reflecting that, we are seeing unemployment numbers rising by 1,000 per day.

Does the Minister agree that it is not sufficient for the Government to chase down the economy with further tax cuts? There must be a positive investment plan designed to protect and create employment. Fine Gael has today put forward proposals for such a plan, which would make investments on a commercial basis that would not draw on the Exchequer. Will the Minister consider the need for such a programme so that parallel to the fiscal correction, we can have a genuine job strategy?

Deputy Brian Lenihan: I agree with Deputy Bruton that the protection of existing jobs and the retraining of those who do not have jobs must form the cornerstone of our job strategy. We already have programmes in place to protect businesses already providing employment through the Department of Enterprise, Trade and Employment. We already have training and retraining arrangements in place. We must examine how appropriate and focused these are in current circumstances.

I also agree with Deputy Bruton in that there is clearly a shortage of investment funds available for the Government for the implementation of the national development plan. In that context I will examine any constructive proposals for alternative financing for important public projects.

Deputy Richard Bruton: I welcome the Minister’s willingness to do so as we have put forward a detailed programme that focuses on key arteries that are vital to long-term competitiveness, like the communications and power networks. The Minister has indicated we have strategies to protect jobs but if we are seeing an attrition rate of 1,000 jobs lost per day, it does not sound like the strategies are very effective. Is the Minister considering specific proposals designed to help employers get through a very difficult period and protect jobs in the short term?

Deputy Brian Lenihan: Again, I am examining various proposals but Deputy Bruton will appreciate that these matters are not easy to resolve because the reason for the drop in the numbers in employment is the international downturn which has impacted severely on a small [954]open economy such as ours. There is clearly a global banking crisis which is not unique to this country. There was a pre-existing housing contraction which impacted on the construction industry before the global downturn began, but it is now clear that we are in a global downturn and this has had a severe impact on our small, open economy.

4 o’clock

The measures open to the Government in these circumstances are limited but one of the most important initiatives that has been taken is that taken by businesses and workers themselves, namely, their willingness to take pay reductions to maintain the competitiveness of the goods and services they provide and to attend to their cost base. That is being done in many private enterprises in Ireland and it is being done by the State as well. It is essential the State does this in order that the general competitiveness of Ireland can be improved on the global stage.

5. Deputy Kieran O’Donnell asked the Minister for Finance the status of the recapitalisation plans for covered institutions; and if he has assessed the options to isolate impaired loans within banks in order that good banks can be put in a position to resume lending with a clean balance sheet at minimum cost to the taxpayer. [12768/09]

Deputy Brian Lenihan: As the Deputy will be aware, the Government has agreed the recapitalisation terms to be offered to Allied Irish Banks and Bank of Ireland, and these terms will be put before shareholders of the two banks in the coming weeks; indeed, in the case of Bank of Ireland, I understand they will be put before a general meeting of the bank tomorrow. The recapitalisation package will provide €3.5 billion in core tier 1 capital for each bank. The State will receive preference shares with an annual coupon of 8%, as well as warrants for the purchase of shares in five years’ time at predetermined prices. The terms of the recapitalisation include a bank customer package which includes additional capacity for mortgage and small and medium-sized enterprise lending. The Government is in discussions with the other covered institutions concerning their respective capital positions.

With regard to impaired loans, the Government is conscious that in current market circumstances there is a need to bring greater certainty and transparency to the operations of systemically important financial institutions, in particular in regard to specific asset classes currently perceived as carrying a higher than average risk. Irish financial institutions have very little exposure to the sort of complex financial instruments which are weighing on the balance sheets of many banks internationally. However, Irish institutions have engaged in lending for land and property development, and construction, which has exposed them to a specific risk at a time of falling property prices and difficult economic conditions. The Government, therefore, announced on 11 February, along with its recapitalisation programme, that it would examine options for risk mitigation in this area. This work is currently under way.

In this context, I have asked Dr. Peter Bacon and the National Treasury Management Agency to report to me on the management and reduction of risks of bank balance sheets. I have seen the initial report prepared by Dr. Bacon for the NTMA. The proposals, with ongoing work at EU and European Central Bank level, will inform the considerations and any decisions the Government may take in this area. I will bring forward proposals in this area as a matter of priority.

As with all of the actions taken by the Government to address the issues faced by the banking sector, a key objective in the consideration on impaired assets will be to ensure that any State involvement will protect the interests of the taxpayer.

[955]Deputy Kieran O’Donnell: Have discussions taken place with the banks to deal with the issue of setting up a toxic debt bank and what has been the outcome of those discussions? Has the report from Dr. Peter Bacon been considered by Cabinet? Will the Minister explain, if he is considering setting up a toxic bank, what will be the cost to the taxpayer in terms of write-downs on developers’ loans?

Deputy Brian Lenihan: There is no proposal to establish what Deputy O’Donnell described as a toxic bank. No such proposal is among the options being considered by the Government. The position of the Government is that the Cabinet has been briefed in an informal way about the nature of the options involved. The Government’s consideration of this matter has not gone beyond that and, as I indicated in my reply, I will be bringing proposals to the Government in due course following a detailed consideration of the report from the NTMA and Dr. Bacon.

The Deputy asked about the position of the banks. Discussions have not been entered into with any of the guaranteed institutions or other institutions on any formalised basis in regard to this. I cannot and am not briefed to answer in regard to what contacts have been made between Dr. Bacon and-or the NTMA in the context of the preparation of his report. It may be that he has made informal contacts with different financial institutions for the purpose of assembling the information and making the assessments he makes in his report.

Deputy Kieran O’Donnell: How does the Minister intend isolating what is now familiarly termed toxic debt? If I might make a proposal, when the Minister is examining considerations, Fine Gael has put forward a position which is, effectively, that instead of setting up a toxic bank, one would allow the toxic debt to remain in the existing banks and set up fresh banks, which would cost the State less. The Minister still has not quantified what will be the cost to the taxpayer of dealing with the situation in regard to toxic debt and of ensuring funds flow to small businesses. Will the Minister give consideration to the Fine Gael proposal?

Deputy Brian Lenihan: Deputy O’Donnell insists on using the expression “toxic debt”. Toxic debt in banking discussion generally relates to the kind of paper instruments which were generated in the United States and were common in the United Kingdom banking sector — derivative instruments and the like. They do not exist to any substantial extent and, in fact, exist to a minimal extent in the Irish banking sector. As I pointed out in my reply, the exposures of the Irish banks relate to property, which is not a toxic asset and has a residual value. It is important the Deputies understand this. It is accepted by most international analysts and by those who examine these questions.

The continued use of the phrase “toxic”, while popular from a political point of view, does not characterise the nature of what we are dealing with here. We are dealing with substantial exposures to property loans where moneys were advanced in the context of falling asset prices. The various options being canvassed at the NTMA and analysed by Dr. Bacon are being analysed in that context. No final decision has been made by the Government on this matter and, as I indicated in my reply, any final decision will take into account and be based on the best interests of the taxpayer and the economy.

Deputy Kieran O’Donnell: When does the Minister expect to make the decision on this? The Minister refers to not using the term “toxic debt”. We can call them under-performing or non-performing loans. When one is talking about write-offs of 60%, they are highly toxic. The Minister continuously tells us that the world is looking in on us. The world is looking at the Minister also. These are regarded as toxic debts. When will the Minister deal with the issue?

Deputy Brian Lenihan: It is interesting that the credit default swaps with regard to Ireland narrowed dramatically in the past week or two. The market judgment in that particularly specu[956]lative market — a market for which I do not have great regard, although it is worth noting since it was recited at length in the House in recent times — is that these particular instruments have now narrowed where Ireland is concerned, and, therefore, the level of speculative, crazed gambling on the future of this country has disappeared somewhat. One of the reasons it has disappeared is because of the recent visit to Ireland of the President of the European Central Bank and the clear and unequivocal position he took that Ireland is a member of the eurozone, like any other member.

Deputy Kieran O’Donnell: When will the Minister deal with the issue of non-performing loans?

Deputy Brian Lenihan: I indicated I will bring proposals to the Government in due course but, as Deputy O’Donnell would expect, the interests of the taxpayer have to be safeguarded in any analysis we are conducting of this question.

6. Deputy Pat Breen asked the Minister for Finance if he has requested a report from the regulator of credit unions on the ability of the sector and of individual unions to manage the problems thrown up by the crisis in financial institutions. [12523/09]

Deputy Brian Lenihan: As Deputies will recognise, the current serious difficulties in the financial sector and the accompanying economic downturn are affecting all financial institutions, including credit unions. On account of the reduced availability of credit in the banking system, credit unions are now experiencing an increase in demand from their members for loans. There has also been some increase in bad and doubtful debts and, as is the case across the whole of the financial sector, there have been losses on credit union investments. It is not surprising that this combination of trends has led to a situation where credit unions generally have reported a decline in profits for 2008.

However, it is important to note that the Registrar of Credit Unions has highlighted that of the 419 credit unions registered in the Republic, only a handful are experiencing significant difficulties at present. The registrar is continuing to work closely with the boards of these credit unions. Very close oversight, monitoring and controls over these credit unions by the registrar is intended to assist them in addressing current issues and to ensure their long-term stability and sustainability. The registrar reports regularly to the regulatory authority to ensure early identification and response to any significant issues relating to the credit union movement or any individual credit union. In addition, the registrar briefs my Department on these matters on an ongoing basis and my officials keep me fully informed of relevant developments in the credit union sector. I did not, therefore, need to request a specific report from the registrar on the issue raised in the Deputy’s question.

Additional information not provided on the floor of the House.

He has extensive powers of inspection and investigation of credit unions as well as broad supervisory powers, including to appoint, suspend or remove a person as a director of a credit union or to remove auditors. A number of offences are also provided for in the Act.

The extensive powers currently available to the registrar under the Act are important in ensuring that the regulatory system is robust and effective and in particular safeguards members’ savings. The rules-based approach to regulation embodied in the Credit Union Act has clearly served the credit union movement well, as is demonstrated by the small minority of credit unions which the registrar is currently monitoring closely in the current environment.

Deputy Richard Bruton: Perhaps the Minister will set out the extent to which credit unions hold seriously impaired assets such as bank shares. I understand some have held the securities which the Minister describes as toxic. Perhaps the Minister will give an indication of whether a problems arises in terms of credit unions that hold significantly impaired assets. Also, is he satisfied with the robustness of management standards in credit unions? The Minister indicated that only a few have significant difficulties. Has he received a report on the robustness of the management and protection systems to deal with any incidents in respect of individual credit unions?

Deputy Brian Lenihan: On difficulties in individual credit unions, the registrar briefs my Department on a regular basis on the general position within the credit union movement. The credit union movement is in a relatively strong financial position with solid liquidity and reserves. The registrar has highlighted that of the 419 credit unions registered in the Republic, only a handful are affected by these difficulties. He continues to work closely with the boards of those credit unions that are encountering problems. Close oversight, monitoring and controls over those credit unions by the registrar is intended to assist them to address current issues and to ensure their long-term stability and sustainability.

Deputy Joan Burton: In the context of savings in the credit union movement, which total approximately €14 billion, has the Minister given any consideration to a proposal by a number of people in the credit unions that credit unions be permitted to hold a national community savings bond via the National Treasury Management Agency? This would offer an alternative and safe savings mechanism for the credit unions as opposed to some of the types of product which, as Deputy Bruton stated, were aggressively sold to credit unions.

Will the Minister agree that credit unions represent a type of back to basics banking service at local level and that the importance of credit unions is significant now that people are experiencing difficulties? The Central Bank has stated that the figure for personal sector lending in Ireland was, at the end of the last quarter of 2008, €172,000 million. The high level of personal debt is causing huge problems for this country. Would the Minister consider a credit union community savings bond with the National Treasury Management Agency on the same lines as the recovery bond proposed by the Irish Congress of Trade Unions? People want to save with the Government in a safe way.

Deputy Brian Lenihan: As regards any bond which the National Treasury Management Agency might enter into with the credit union movement, I am open to any proposals. I am also certain the NTMA would be open to any proposals formulated in that regard. I would examine them with great care because the Government values the enormous contribution which the credit union movement makes in the provision of credit and basic bank facilities throughout Ireland. However, I would point out that it is difficult as Minister to develop a consensus [958]among the credit unions as not all credit unions are affiliated to the league. Also, even within the league there can be diversities of view in regard to particular issues. However, if any credit union expresses an interest in respect of such a bond, I will examine it.

On the Deputy’s more general question which I appreciate does not arise directly on this question in regard to the provision of some form of savings bond by the National Treasury Management Agency for general investment, I am again open to the suggestion. However, I point out that the rates at which we obtain funding on world markets might be less than that which would command interest among investors. Also were we to offer such products through the post office or directly from the NTMA, an issue would arise in terms of the extent to which we would be simply transferring deposits from the banking system to the State banking system.

Deputy Kieran O’Donnell: The credit union movement, which operates in every corner of Ireland, is fantastic. In terms of ensuring they are robust, I refer to a question raised by Deputy Bruton in regard to whether the registrar and Financial Regulator have carried out an investigation of credit union investments? This would provide certainty and security to the movement. Perhaps the Minister would respond on that specific matter.

Deputy Brian Lenihan: Under the legislative framework set out in the legislation, the primary function of credit unions is to offer savings and loans services to their members. Due to significant growth in the credit union movement in recent years there has been a significant amount of resources for investment by credit unions to generate a return for members. Strict legislative control exists under section 43 of the 1997 Act which restricts investments to those trustees are authorised to invest in under the trustee authorised investment legislation.

The registrar has powers to give a regulatory direction to a credit union if he deems it appropriate in the interests of its members to limit investments of a specified class or description. Of course, it is the responsibility of the board of directors of each credit union to ensure that the investment policy is prudent and responsible and conforms to what is permissible under the Credit Union Act. To assist the boards, in October 2006 the registrar issued a detailed guidance note on investments to help safeguard the risk profile of credit union investments and to ensure that members’ savings continue to be protected. This is the basis for the monitoring of the investment activities of credit unions by the registrar.

Following the changes in financial market conditions for investments since August 2007, the registrar has initiated a process, including consultation with stakeholders, with a view to revising the existing investment framework.

7. Deputy Joe McHugh asked the Minister for Finance if he will publish the latest comparison of price before and after tax between the Republic of Ireland and Northern Ireland; and the tax difference on excisable products between the two jurisdictions which currently apply. [12579/09]

Deputy Brian Lenihan: I assume the Deputy is referring to the periodic informal survey of cross-Border prices undertaken by the Office of the Revenue Commissioners.

I wish to advise the Deputy that the Office of the Revenue Commissioners’ periodic informal survey, which provides a snapshot of the retail prices for the main excisable commodities observed in market outlets in Dublin and Newry, was most recently carried out on 21 January 2009. A summary of the results of that survey and of a number of other surveys since February 2007 are published on Revenue’s website at www.revenue.ie/en/about/publications/index-cross-border-price-comparisons.html.

[959]In brief, the 21 January 2009 survey, when the euro to sterling exchange rate used was 0.9267, which is reasonably close to the current exchange rate, shows in particular that alcohol and tobacco products were considerably dearer in this State than in Northern Ireland. The price of petrol was about the same, auto diesel was cheaper in this State, while that of home heating — kerosene and diesel — was dearer. Of course, not all of the differentials can be accounted for by differentials in tax or excise treatment. Some of them reflect different prices being charged for the same product between the two jurisdictions.

It has to be recognised that we have a long-standing policy, for sound health and social reasons, of applying high excise rates to alcohol and tobacco products. Our excise rates on such products are higher than those in the UK, which has also followed a policy of imposing high excise rates on such products. Consequently, Ireland has the highest excise rate on wine in the EU. It should be noted that the difference between the excise rates that apply to wine in this State and in Northern Ireland is somewhat smaller than the difference between the rates that apply to other alcoholic products. Ireland has the second highest excise rate in the cases of beer and spirits. The difference between the prices of beer and spirits on either side of the Border is wider than the difference between the price of wine. Excise duty on beer has not been increased since budget 1994. Excise duty on cider has not been increased since budget 2002. Excise duty on spirits has not been increased since budget 2003. Excise duty on wine was increased in last year’s budget by 50 cent, inclusive of VAT, per standard bottle, having remained unchanged since budget 1994.

Ireland charges the highest excise rate on, and price for, cigarettes in the EU. The excise rate on cigarettes, inclusive of VAT, has been increased in the last three budgets by a total of €1.30. As Deputies will be aware, there are ongoing demands for the rate of excise on cigarettes to be increased by significantly more. Any further increases in the rate of excise on tobacco will have to be considered in the context of the law of diminishing returns that applies to tax increases.

Additional information not given on the floor of the House.

Due to our high excise rates and higher VAT rate, taxes contribute to our higher prices for alcohol and tobacco products. Non-tax costs also contribute to our higher prices, however, especially in the case of beers, spirits and most wines and, to a lesser extent, in the case of cigarettes. In the case of beer, non-tax cost differences are high. The overall price differences for cans and bottles of beer varies from 55 cent to 76 cent. Excise duties and VAT account for between 21 and 24 cent of the difference. Non-tax trade costs account for the remainder of the difference. In the case of petrol, following an excise increase of 8 cent per litre, inclusive of VAT, in budget 2009, the price per litre is broadly the same in both jurisdictions, as is the tax take and the non-tax cost. Auto diesel is approximately 15 cent per litre cheaper here, due to lower taxes. As I have already said, the price of kerosene is higher in this State due to higher taxes and, particularly, higher non-tax costs. Overall, diesel for heating purposes is dearer here despite the tax take being lower than in Northern Ireland.

In comparing indirect tax, we must remember that taxation strategies generally reflect the political choices made by Governments to meet their specific needs and requirements. In this regard, Ireland has focused on achieving a low taxation economy, especially in the area of direct taxation, which includes income tax and corporation tax. This has delivered significant advantages for Ireland’s competitiveness. In ensuring a relatively low level of direct taxation on income, we have had marginally higher indirect taxation.

In conclusion, I emphasise that the considerable weakening of sterling relative to the euro has had a far more significant impact on changes to relative prices between this State and [960]Northern Ireland than any tax changes, including those made in the standard VAT rates. For example, sterling has weakened by 36% since early August 2007, and by 18% since early October 2008. The extent of the depreciation of sterling can best be illustrated by cross-Border comparisons of petrol prices. In January 2004, petrol in this State was approximately 27 cent cheaper per litre than in Northern Ireland. Prices are now broadly the same in the two jurisdictions. I use petrol as an example because the Irish and UK excise rates have moved by broadly similar amounts over the last five years. It is clear that exchange rate movements, rather than tax changes, are driving price differentials. I am informed by the Revenue Commissioners that a further cross-Border price survey is being undertaken. In line with usual practice, the results of the survey will be posted on the website of the Revenue Commissioners.

Deputy Joe McHugh: I apologise for getting out of the traps a little too fast earlier. I got out of my seat as quickly as people are crossing the Border to spend money. I accept that the Minister will say that the contents of the forthcoming budget are private and confidential until the Budget Statement is made. Will he consider providing some type of stimulus package in the budget? Sweden has introduced a 0% VAT exemption in the case of domestic housing services. Germany has put in place a €2,500 scrappage scheme for cars. Similar incentives and tax initiatives are being offered in various countries. Will the Minister consider reducing the 21.5% VAT rate? It deserves serious consideration in light of the Minister’s acknowledgement that €700 million has left the Irish economy since the last budget.

Will the Minister pay particular attention to the price of certain goods, such as baby products? A Cow & Gate baby food product that costs €12.64 in Tesco in Letterkenny costs just €7, on average, in Sainsbury’s in Derry. Will the Minister consider reducing the rate of VAT that applies to certain items, such as baby products? He should incentivise people to buy certain products, such as building materials, ecologically friendly products, garden plants and trees. We need to use our imagination and creativity. The reality is that in certain parts of the country, such as my home county of Donegal, the Exchequer is not getting any revenue from the 21.5% VAT rate that was introduced by the Minister last year. Nobody is selling cars. People are not buying products. There is not much point in collecting 21.5% of nothing. Will the Minister consider this imaginative and creative proposal?

Deputy Brian Lenihan: I am grateful to Deputy McHugh for tabling Question No. 7 and thereby allowing me to correct certain matters that were misrepresented in a recent newspaper article. A report on the implications of cross-Border shopping, which I commissioned on foot of a request made by Deputy O’Donnell at a meeting of the Joint Committee on Finance and the Public Service, was published recently. The report establishes that in 2008, the value of cross-Border shopping was between €350 million and €550 million. It estimates that the potential loss in Exchequer revenues as a consequence of cross-Border shopping, taking VAT and excise yields into account, was between €58 million and €90 million in 2008. In addition to the VAT and excise loss, there was a possible corporation tax revenue loss, tentatively estimated at between €15 million and €24 million. It should be noted that all estimates for corporation tax revenue are provisional and should be seen as indicative of the potential loss involved. If the exchange rate remains close to current levels throughout 2009, it is estimated that the volume of cross-Border shopping in 2009 will be worth between €450 and €700 million. It has a remote connection with the VAT rate in this jurisdiction — it primarily relates to the differential price arrangements between the sterling and euro areas. The estimated loss of VAT and excise receipts to the Exchequer resulting from that will be between €72 million and €112 million.

[961]I assure Deputy McHugh that I will examine any proposal that might help to stimulate the economy. Two crucial points should be noted in that context. Differentials in prices between Northern Ireland and this State do not always relate to the tax treatment of those items. Some differentials are rooted in the comparative underlying prices of products in the two jurisdictions. It is important that we address those underlying factors in other ways. It should be noted that the United Kingdom’s stimulus package, which involves the reduction of the top rate of VAT in that jurisdiction to 15%, has not succeeded in stimulating the UK economy. It is clear from newspaper reports today that the measure in question has brought the UK into a position of some fiscal exposure. Rather than reversing that country’s economic decline, the stimulus package has brought about the depletion of the tax base in the UK.

Deputy James Reilly: I came into the Chamber to ask the Minister for Finance a single question. Having listened to him, I am reminded of the lines of a song:

There are more questions than answers

And the more I find out the less I know.

Do I understand correctly that the figure of €700 million to which the Minister referred is the putative loss to the economy — the gross loss, rather than just the VAT loss — in a full year?

Deputy Brian Lenihan: Yes. That has been said on many occasions.

Deputy James Reilly: The Minister mentioned a newspaper article on this important matter. Many people think cross-Border shopping, which is hurting many people, does not involve people outside Deputy McHugh’s part of the country. The traders in Balbriggan could tell Deputies that it is also affecting people in my constituency of Dublin North. I accept the Minister’s point that it is not all about tax. If it is clear that our VAT rates are causing a problem, we should reduce them. Specifically, I have twice asked the Taoiseach to consider reducing the VAT rate that applies to the cervical cancer vaccine from the higher rate to the lower rate. An increase of 10 cent in the price of wine, cider, spirits or beer would meet the cost of a reduction.

I accept that the law of diminishing returns applies to tax increases. I am sure some officials from the Irish Cancer Society would love to meet the Minister. I am sure he would look after them. The society has proposed an increase of €2 in the price of a packet of cigarettes, principally to reduce consumption. Such a move might cause the law of diminishing returns to apply not only to the tax take but also to the number of heart attacks and cases of cancer. Will the Minister remove cigarettes and other forms of tobacco from the consumer price index?

An Leas-Cheann Comhairle: The Deputy has moved well beyond the scope of Question No. 7. I will allow some latitude on a Thursday evening.

Deputy Brian Lenihan: The Deputy cannot have it both ways. If he is concerned about the impact of shopping in Northern Ireland on his constituents and on various sectors of our economy, he must realise that Northern Ireland’s major pull factor is the sale of alcohol and cigarettes. All traders in Border counties will advise that fundamental point. If I propose an increase in excise duties on 7 April for the approval of the House, Deputies will have to carefully assess the impact such a measure would have on Exchequer revenue and on the degree of shopping that takes place outside this jurisdiction. It is clear——

Deputy James Reilly: The housewives of Ireland do not go to the North to buy alcohol and cigarettes.

[962]Deputy Brian Lenihan: I am not suggesting——

Deputy James Reilly: They go there to get staple goods for their families and their children.

An Leas-Cheann Comhairle: I ask the Deputy to allow the Minister to respond to his questions.

Deputy James Reilly: I will but I cannot let him away with what he has said.

Deputy Brian Lenihan: The Joint Committee on Finance and the Public Service did a great service to the State when it insisted that a more scientific study of this matter should be undertaken. That study was done. A question on the number of visits people make to Northern Ireland is to be included in the quarterly national household survey. It is important to get an accurate scientific handle on this phenomenon. The evidence available to us to date, which is subject to correction, suggests that the purchase of cheap alcohol is the primary pull factor. I accept that the other main pull factor — the price of baby products — was mentioned by Deputy McHugh. We are beginning to identify the precise products that are creating concern.

Deputy Joan Burton: Does the Minister, as a distinguished senior counsel, know much about the psychology of shopping? I will tell him a little about what happens when one looks at the prices of jackets and dresses in the British multiples on Grafton Street. Although sterling and the euro are very close, one can pay up to 40% more because the differences in sterling are not being passed on, particularly by the high street chains and the large grocery multiples such as Tesco. They can talk all they like about price reductions but the women of Ireland know that the price reductions are not being passed on.

Would the Minister ever go shopping? Would he take his Cabinet colleagues with him shopping? Would he say to people in Ireland, and get RTE to follow him and broadcast it on the “Six One News”, that there are many products in the Republic to which no VAT applies and still we are paying more for them than we are paying for them in the North of Ireland where VAT is actually applied on a wider basis? In order to instill some confidence and encourage people to go back out shopping for value, could he crack the whip?

An Leas-Cheann Comhairle: I will allow Deputy Bruton a brief final supplementary.

Deputy Richard Bruton: Against the background where the Minister was reported to have indicated that he felt he had made a mistake in increasing the VAT rate in the budget, would he consider the sort of suggestions put forward by Deputy McHugh of maybe selecting products that are particularly vulnerable and applying the lower rather than the higher rate of VAT to them?

Deputy Brian Lenihan: I will not divulge any budgetary proposals at this stage. There was no reporter present at this meeting. What I said was that in the light of the fact that the Chancellor in the United Kingdom introduced a change after my budget, I felt somewhat contrite about the change that I had introduced.

Deputy Joan Burton: I thought he said it was a disaster.

Deputy Brian Lenihan: That was all I said on that occasion.

Deputy Kieran O’Donnell: It was a mistake.

Deputy Brian Lenihan: That is all I am prepared to say at this stage as well about the budget.

[963]Deputy Joan Burton: Will the Minister go shopping?

An Leas-Cheann Comhairle: Ceist Uimh. 8 in ainm an Teachta Noel J. Coonan, le do thoil.

Deputy Richard Bruton: A firm act of contrition must be accompanied by a resolve to correct the mistake, is that not the case?

An Leas-Cheann Comhairle: A firm purpose of amendment.

Deputy Brian Lenihan: We must safeguard our revenue as well.

Deputy Kieran O’Donnell: The Minister would feel better.

Deputy Richard Bruton: A firm resolve to amendment, is that right?

An Leas-Cheann Comhairle: A firm purpose of amendment, yes.

A Deputy: We all can make mistakes.

Deputy Brian Lenihan: The firm promise of amendment. I will give a firm promise of amendment all right but I can tell Deputy Bruton that the United Kingdom has had a very unhappy experience in the reduction of VAT rates.

An Leas-Cheann Comhairle: Ceist Uimh. 8.

Deputy Kieran O’Donnell: So have we.

Deputy Brian Lenihan: We have had an unhappy experience due to the increase.

8. Deputy Noel J. Coonan asked the Minister for Finance if he will request the consumer director of the Irish Financial Services Regulatory Authority to examine the extent to which banks have backed their fixed rate mortgages by long dated securities, in order to establish whether the penalty for switching from fixed rate commitments could be reduced. [12537/09]

Deputy Brian Lenihan: The Deputy’s question refers to the redemption fee or breakage costs applied by mortgage providers in circumstances that a customer seeks to break a fixed rate mortgage to avail of lower variable interest rates. At the outset, as much as fixed rate mortgages provide certainty and security to mortgage holders, it is clear that many fixed rate mortgage holders are tempted to switch for a better deal when interest rates are low. In circumstances that many households are faced with significantly increased financial pressures, the current environment of very low interest rates clearly highlights to many fixed rate mortgage holders the saving that would be available if they benefited from a variable interest rate.

Securing a better interest rate is only one part of calculating the benefits of switching. As the Deputy’s question indicates while a fixed rate mortgage offers stability in monthly repayments, one of the biggest drawbacks is the prospect of a financial penalty incurred when the fixing period is broken. It is important to make the point that these redemption fees are also a feature of markets such as France and Germany where long-term fixing is the norm.

The issue of early repayment was analysed in detail in the report of the Mortgage Funding Expert Group established by the European Commission in its report published at the end of 2006. The expert group highlighted that from a lender’s perspective if a consumer repays a mortgage loan earlier than scheduled the mortgage lender will not be able to generate the expected interest and fee income and therefore will incur a loss. If the mortgage lender has [964]raised funding with a stated maturity and coupon specific costs will arise, the availability of an early repayment option to the mortgage borrowers, therefore, has a direct connection with the lender’s profitability and therefore has a value and cost. If this value is conferred on the borrower the cost has to be borne by the lender.

Additional information not given on the floor of the House.

The expert group agreed that prepayment should be compensated and the compensation formula should be clearly established, transparent and easy to understand for consumers. A majority of the expert group believed that all relevant lender losses should be covered in order to ensure the provision of low cost loans. The European Commission committed in its White Paper on Mortgage Integration to assess the costs and benefits of different policy options for early repayment, including the level of compensation.

Under the domestic legislative framework interest-related charges are market determined on the basis of commercial considerations and neither I nor the Financial Regulator would have any statutory role in this matter. The Deputy will recognise that direct regulation of interest-related charges would represent a very significant intervention in commercial conduct which could not be justified unless there was significant evidence of substantial market failure. There are significant benefits for both individual householders and for the stability of the housing and financial sector overall from greater take-up of fixed rate mortgages. I do not believe, therefore that it is wise to embark on any course of action which could impact adversely on the cost and availability of fixed rate mortgages in the future.

In conclusion, I should add that I understand that the Financial Regulator’s consultative consumer panel has shown a particular interest in the low take-up in fixed rate mortgages in Ireland as compared to other EU member states and has commissioned research on this issue. I share the panel’s assessment that it is important for us to examine how we can ensure greater stability in our housing market in the future through greater stability and predictability in mortgage finance.

Deputy Richard Bruton: The Minister is missing the point of the question. The question was whether he would arrange an examination of the financial institutions to see to what extent they have entered into these long-dated security commitments that would justify them imposing these penalties of €20,000 for people to switch. My point is that with the taxpayer now underpinning much of the banking activity, if there is not reasonableness in these charges we should move to get rid of them and give some people relief.

If there is a genuine commercial penalty we can understand why that would be the case. We need to investigate our banks holding long dated securities because my impression is that long dated securities are almost impossible to get. I suspect that they are not holding them and that the justification for the penalty does not stand up.

Deputy Brian Lenihan: I will raise the issue, but the consumer director is independent in these matters and has sufficient powers to investigate the matter on her own initiative. I understand that as she is already aware of the level of charges — and should the Financial Regulator feel that such charges do not represent recovery of funding costs — the cost structure can be fully investigated under section 149 of the Consumer Credit Act 1995. In those cases the charges would need to be approved by the Financial Regulator in advance.

The statutory presumption is that these breakage charges relate to the cost of funding the advance that is made to the borrower. Financial institutions use formulae for calculating these [965]charges and the formulae contain parameters relating to the cost of the original fixed-rate loan and to the new or refunded loan.

The terms applying to the redemption of a fixed-rate mortgage held with a particular financial institution operating in the Irish market are as follows. The charge is applied to a fixed-rate loan where during the term of the fixed-rate period the full loan is repaid early, or a lump-sum repayment over the multiple of €1,200 per annum is made, or the loan is converted to a variable rate loan or another fixed-rate loan. In these circumstances the customer must pay a sum equal to the lesser of six months’ interest charge or the economic breakage charge. There is a formula for the calculation of the economic breakage charge which is a multiplier of the redeemed amount multiplied by the original cost of funds less the current cost of funds multiplied by the time remaining until the end of the fixed-rate period and divided by 365.

An Leas-Cheann Comhairle: That is clear.

Deputy Joan Burton: Would the Minister ask the director of consumer affairs in the Irish Financial Services Regulatory Authority to undertake an investigation of this? Like the previous question on shopping, what we are looking for is positive signals where a consumer is in a fixed-rate mortgage. The Minister must remember he told me yesterday that at the end of December last there was €147 billion in house mortgage finance in this country. I do not know whether he knows how much of that is in fixed-rate mortgages and for what duration. While everything is so flat and today’s figures for the drop in spending are so bad, the Minister must identify actions which will show consumers and mortgage holders that there is hope for them, that something that has worked out as being very unfair in the current climate can be investigated and addressed fairly rapidly. That is how we will start to generate consumer confidence and get people spending again.

Deputy Brian Lenihan: I share the concerns of other Deputies about this matter. We are all aware of individuals who see the very low interest rates that now obtain and contrast the high interest rates which they are locked into by agreement with the financial institutions. It is a matter for the consumer director to examine at all times, whether the strict legal position is being observed. I certainly will seek confirmation from her that such is the case.

9. Deputy Joe Carey asked the Minister for Finance the Departments which have been reviewed to date by the McCarthy spending review group; if a series of options for expenditure savings in these Departments has been drawn up; and the form of evaluation of the options that is planned. [12532/09]

Deputy Brian Lenihan: The special group on public service numbers and expenditure programmes was established to examine the current expenditure programmes in each Department and to make recommendations for reducing public service numbers so as to facilitate the Government’s task of returning the public finances to a sustainable position.

The special group began its work in December. Each Department was asked to prepare an evaluation paper for the special group setting out an analysis of expenditure programmes and identifying possible savings options. The relevant areas in the sectoral policy division of the Department of Finance are also preparing material for the group’s consideration.

To date, the special group has met with 11 of the 15 Departments scheduled for review. The group is considering the outcome of each of these meetings and following its meetings with the remaining Departments and other entities, will finalise its work when all relevant savings options have been explored.

[966]The special group’s analysis and recommendations will be taken into account as appropriate by the Government in framing budgetary policy.

Deputy Richard Bruton: The Minister implied that although the group is finalising its proposals at the end, the Minister is receiving them as they are done, Department by Department. To what form of evaluation will these reports be subjected? Does he regard them as part of the deliberative process of the budget and, therefore, not available to the House? Can he make them available to the House so there can be a debate on the potential for savings in the management of key Departments? Finding efficiencies and savings is not the unique interest of Government. It would be useful if the Oireachtas committees in each of these areas had access to these reports earlier rather than later. I would be interested to hear the Minister’s view on that.

Deputy Brian Lenihan: I will consider what Deputy Bruton said, but to date I have not had the benefit of a detailed report on any of the Departments concerned although an amount of work has been done. Deputies will appreciate that the individual reports in different Departments have to be finalised, but regarding the forthcoming budget I arranged to meet the chairman and to be briefed by him in general terms on possible areas of saving.

Deputy Joan Burton: In terms of some of the information we have received and information in the public domain, I am concerned about the operation of the group on the capital programme. In general, it has been indicated that the 2009 capital programme is approximately €8 billion and that €6 billion of that is committed or contracted for in some formal way. We have had some breakdowns in the information service and during briefings from the Minister’s officials, but we have no information on what are the projects. One would not have to be a genius to work out that the uncommitted €2 billion is most at risk.

I am most concerned that the uncommitted €2 billion includes a very high figure for education. Large numbers of school building programmes have not been subject to full commitment because of how the schools building programme works. From talking to principals and others, I understand that is over €600 million. In terms of generating construction activity, it is far more important to spend the €600 million on schools than some of the committed projects under the €6 billion, because that will give jobs to construction workers on a wide basis throughout the country. It is really important that we have some answers. Otherwise, one could spend on commitments which generate very little in jobs and reflation of local economies. That is where the Opposition needs information on the strategy.

Deputy Brian Lenihan: In this context, “committed” does not mean politically committed but legally committed.

Deputy Joan Burton: I mean contractually; I am not talking about politics.

Deputy Brian Lenihan: Exactly, but it is not a budgetary option available to a Government to break a contract with a contractor engaged in a capital project. There could be a substantial exposure for the State in the sums which could be recovered by damages and penalties were the State to breach a contract which is contractually committed in the public capital programme. In examining the scope for any savings, I assume the officials are identifying the areas for the Deputy which are not contractually committed as these are the areas available for any reductions. Where there is a contractual commitment, it is not open to us to do so.

Deputy Joan Burton: We have no definition of what that means.

[967]Deputy Brian Lenihan: To take an example, the national roads programme in the context of the main inter-urban routes is contractually committed until the end of 2010.

Deputy Joan Burton: However, many of the schools are not, and that is where one will get employment.

Deputy Brian Lenihan: It is true that the bulk of the areas that are not contractually committed tend to be the smaller roads in the Department of Transport, schools, water projects and social housing projects in the Department of the Environment, Heritage and Local Government because these projects are smaller in scale.

Deputy Joan Burton: They generate jobs locally around the country.

Deputy Richard Bruton: I welcome the Minister’s willingness to consider sharing these reports with the appropriate committees. Has the wisdom of the Comptroller and Auditor General, who has substantial experience in this area, been brought to bear on this work? Has the Government imposed any embargoes on recruitment in the public service? Some people seem to be working under embargoes while others do not. Can the Minister clarify the Government’s position on recruitment and replacement?

Deputy Brian Lenihan: I am not aware of whether Mr. McCarthy has consulted the Comptroller and Auditor General but I will draw Deputy Bruton’s suggestion to his attention. A Government decision has been made on the restriction of recruitment in the public sector and that decision was finalised over the weekend.

Written Answers follow Adjournment Debate.

Acting Chairman (Deputy Jack Wall): I wish to advise the House of the following matters in respect of which notice has been given under Standing Order 21 and the name of the Member in each case: (1) Deputy Leo Varadkar — the provision of a primary health care centre in Corduff, Dublin 15; (2) Deputy Brian O’Shea — the upgrading of Waterford Institute of Technology to university status; (3) Deputy Joe Costello — the need to proceed, without delay, with the metro north and Luas BXD projects; (4) Deputy Finian McGrath — the development of services for sufferers of cystic fibrosis in 2009; (5) Deputy Thomas Byrne — the need to review roads policy to give a greater priority to safety; (6) Deputy Caoimhghín Ó Caoláin — the Minister’s policy in relation to road infrastructure in view of recent reports that more than 70 road projects will not be proceeded with; and (7) Deputy Lucinda Creighton — the need to review the process involving the Poolbeg planning scheme.

The matters raised by Deputies Thomas Byrne, Caoimhghín Ó Caoláin, Lucinda Creighton andBrian O’Shea have been selected for discussion.

Deputy Thomas Byrne: I thank the Minister of State at the Department of Transport with responsibility for road safety, Deputy Noel Ahern, for being in the House. I welcome this opportunity to speak on the national roads programme and road safety, particularly in light of an extremely serious road accident that occurred in my constituency in Slane, County Meath, [968]on Monday. The accident involved a lorry, delivery truck and seven cars which collided on the main N2 road in the centre of the village. Some seven people and a young baby were brought to Our Lady of Lourdes Hospital in Drogheda and, thank God, nobody sustained serious injuries. My thoughts are with those caught up in the incident and the gardaí and emergency services who performed wonderful work on the day. However, this accident highlights yet again the need for a review of road safety on the N2 and in particular the urgent need for the NRA and the Minister to proceed with a bypass of Slane.

It is unfortunate that yet again the front page headlines of the Meath Chronicle describe an accident in Slane. I have another newspaper article from 1 September 2002 whose headline is: “Yet another road accident in Slane.” As most people know, Slane is an elegant hillside village of outstanding natural beauty overlooking the Boyne. Many of the problems, although not all of them and not those this week, are caused by the N2 bridge over the River Boyne. This is a very historic village, proud to be associated with Francis Ledwidge and many other people from St. Erc down through the ages. However, over the past 40 years Slane has become choked with heavy traffic and this affects the social, community and commercial life of the village. More than 20 people have lost their lives at Slane bridge. There are accidents there on a regular basis. There was an accident on Monday in the centre of the village and only a few weeks ago there was another accident at the bridge. Accidents happen all the time and there will be more. I am glad I am speaking today in the absence of deaths or serious injuries there this week.

Residents and I have been in regular contact with the NRA and the Minister for Transport to ensure that the Slane bypass progresses. However, residents are not entirely happy with progress on the issue. The NRA has kept in touch with me on the issue and it has completed some studies and reviews, but it is time for shovels, spades, JCBs and earth movers to get this job under way. The argument in favour of it is utterly compelling. According to the census, people in my constituency are more likely than people anywhere else to own a car and to use it for daily commuting. That is a fact. This has clear implications for transport provision and infrastructure in the community. While that shows the need for even more public transport than we have, it has implications for road safety. Meath has the fastest growing population of any county outside Dublin. It has grown by more than 22% in the past seven years.

When complete, the Slane bypass would enable motorists to bypass Slane and also remove rat-running traffic from surrounding county roads. However, the M1 connects very conveniently to Ardee for traffic which needs to go north of Ardee up to County Monaghan and beyond, but that traffic does not use the M1. There are issues for the NRA and Meath County Council to discuss outside this Chamber and I would like the Minister to bring that to their attention. There are arguments to ban lorries from the village at certain times of the day and the Minister may refer that to the NRA because that is an issue for it.

A large amount of money has been allocated for roads, as has just been discussed, and it is very important to keep building and planning our roads with the primary objective of reducing carnage, preventing accidents and allowing communities such as Slane to grow, prosper and celebrate, and to develop the important heritage they have in that village.

Minister of State at the Department of Transport (Deputy Noel Ahern): I thank Deputy Thomas Byrne for raising the matter. The Government already has a policy which provides for priority to be given to safety in our road networks around the country. This is reflected in the significant amounts of funding provided for our national road network in recent years. In the three years, 2006 to 2008, almost €5 billion was invested in capital projects related to the national road network, with a further €1.44 billion being invested this year. All this funding is resulting in significant improvements being made to our road infrastructure, which is most [969]readily seen in the work under way on the major inter urban, MIU, routes between Dublin and Waterford, Cork, Limerick, Galway and the Border. The MIU between Dublin and the Border has been completed and work is under way on the remainder, with sections along those routes open to traffic.

All five routes will be open to traffic by end 2010. In addition to enhancing prospects for economic development, particularly in the current economic environment, stimulating increased tourism and improving access within regions, better roads also deliver significant safety benefits. High quality dual carriageways and motorways are proven to be seven times safer than the roads they replace. By opening more than 150 km of new roads in 2009, we will make a significant contribution to the safety of our national road network. The National Road Authority, NRA, also uses part of its annual funding allocation to identify and improve sections of road, which are the scenes of accidents.

I acknowledge the Deputy’s comments on the recent road accident in Slane. Specific projects are a matter for the NRA rather than the Minister but €500,000 has been allocated this year by the authority for the planning of the Slane bypass. Planning of the project must be approved before it can be constructed. Funding will be considered but that will depend on the economic climate at the time. However, significant funding has been allocated to the planning side this year.

Bigger and better roads are only one aspect of improving road safety. A tangible difference can be made only if each and every road user takes personal responsibility and drives carefully and at a speed appropriate to the conditions. Much work has been achieved to improve driver behaviour and training through the work of the Road Safety Authority, RSA, in the past few years and the road safety strategy, which was approved by Government in October 2007. It contains 126 different actions or initiatives under the headings of education, enforcement, engineering and evaluation with a number of different agencies having responsibility and target completion dates.

The strategy’s primary target is to reduce road deaths to not more than 60 per million of population by the end of 2012, which equates to an average of 21 road deaths per month or 252 deaths per year. The average number of road deaths per month in 2007 was 28 and last year the number reduced to 23. The first two months of this year were good but this month, up to last weekend, was bad. This week was better but, up to last weekend, this month was the worst so far this year. The strategy is being successfully implemented across a range of agencies and there has been a sustained reduction in the number of people killed on our roads.

The penalty points system and the introduction of mandatory testing of drivers for alcohol, coupled with high visibility enforcement by the Garda, have lead to significant reductions in fatalities. The increased levels of enforcement measures by the Garda has led to a change in attitude and a visible change in behaviour, an improvement in driving habits and a reduction in the number of people who senselessly drive while intoxicated. The lowest number of road deaths on record, at 279, occurred last year. Records began in the late 1950s. The worst year was 1972 when 670 people were killed. Both injuries and fatalities must be considered in conjunction with the overall population and the number of vehicles on the road, both of which have increased in recent years — 1 million additional vehicles in ten years. Injuries and fatalities relative to population and vehicle numbers have declined noticeably in recent years. In the past decade fatalities as measured against the number of vehicles have more than halved, which is the result of a combination of both the road safety and road investment programmes.

While the number of fatalities has reduced, the loss of even one life on our roads is one too many and it is a tragedy. I acknowledge the Deputy’s comments. Driving through Slane village [970]is a particular problem. Money is being spent on the planning of the bypass this year and, as soon as that is ready, the project will be in the pot for completion.

5 o’clock

Deputy Caoimhghín Ó Caoláin: I thank the Minister of State for taking this matter on the Adjournment. I deplore the Government decision to halt the building of 78 major road schemes, including the N2 Dublin to Derry primary route from Clontibret, County Monaghan, to the border with County Tyrone. This involves the essential bypass of the village of Emyvale, which is vital primarily for safety reasons, as the volume of traffic passing along the 8 km stretch between Monaghan town and the Border at Moy Bridge through the village remains life threatening.

This latest roads debacle is another example of the gross mismanagement of Fianna Fáil-led Governments over the past decade and more. Through the early years of the Celtic tiger, the Government presided over a scandalous situation where contractors for major roads were allowed to run hugely over budget and well over time at massive expense to the State. There clearly was a massive rip-off by some of those so engaged. Eventually the Government got its act together to some extent and major road projects were finally required to be completed on time and on tighter budgets, following a massive uproar about the waste of public money. Now in straitened economic circumstances, the Government wants to halt these important and essential projects.

The news that the road scheme I have cited, along with 77 others, has been halted with immediate effect will be greeted with dismay by many people. The most disappointed, undoubtedly, will be the people of Monaghan town, north Monaghan and Emyvale who suffer daily the real dangers and many difficulties associated with traffic along this route. They have been promised by Government on several occasions that this work would be carried out. This road scheme is essential to the entire economy of County Monaghan and the wider Border region, as it is an essential piece of transport infrastructure. It must be remembered this is the crucial link between Derry and the north west and Dublin.

What presentation is this to the people of Six Counties, as we seek to encourage people of traditional Unionist outlook of the benefits of an all-Ireland approach to our shared needs in the future? The first introduction to many driving south is this outrageously dangerous stretch of roadway. Where stands the planned co-operation with the Department of the Environment in the Six Counties? The N2 upgrade was to link up with the A5 upgrade north of the Border and the Government was to make a significant contribution to the works in counties Tyrone and Derry. Where stands that commitment?

The Government’s decision not only in regard to this north Monaghan project but all 78 projects across the State is ill-conceived as it will lead directly to increased redundancies and will be another blow to the already depressed construction industry. I call on Fianna Fáil and the Green Party to reverse this retrograde move in the interest of motorist safety, in the first instance, with jobs also much to the fore of my thoughts as I make this case. It is not only a question of job creation but of sustaining those who still happen to have employment in roadmaking works around the country. These projects were a lifeline for many of those people who moved from one scheme to another. This is the most short-sighted proposition that this Government has put forward in recent times.

We do not need to close the door on infrastructural development but to realise that this is the optimum time for making real investment in infrastructure, recognising that money is cheap, that there is a readily available labour force willing to take up job opportunities in construction [971]projects. Now is the time to move on with these development projects, to sustain jobs, create work and be in a position throughout the island to avail of new opportunities that will present themselves when the economy turns, sooner hopefully than many suggest. There has been a real failure to invest, particularly in the Border counties, the midlands and the west. This is another indication of the Government’s failure to recognise the importance of the Border counties and the link to the north west of the island, counties Donegal, Derry and Tyrone.

Deputy Noel Ahern: The Minister for Transport has responsibility for overall policy and funding for the national roads programme element of Transport 21. The implementation of individual national road projects is a matter for the National Roads Authority under the Roads Act 1993 in conjunction with the local authorities concerned.

The Deputy’s suggestion that the roads programme has almost been cancelled is nonsense. This year, the Government provided a budget to the NRA of nearly €1.5 billion, one of the largest single annual investments in road infrastructure in the history of the State. This investment programme represents an average investment of €120 million per month in Ireland’s national roads. That is a huge investment and allocation of resources. The Deputy’s comments to the effect that the programme has been almost halted are nonsensical.

The figures I have quoted demonstrate this Government’s commitment to providing for an infrastructure that will allow this country to take full advantage of the upturn in the economy when it comes. The current economic climate and the difficult and rapidly worsening position of the Exchequer have had an impact on the Government and the NRA’s ambitious plans for the development of the road network that this country needs.

In view of the severe constraints on Exchequer finances, and in light of the forthcoming budget, the Government has now re-prioritised all national development plan expenditure for the rest of this year to concentrate on employment intensive projects. Every Department in receipt of NDP funding has been asked to ensure that no new contractual commitments are entered into before sign-off by the Department of Finance. This will allow the Government to have maximum discretion in future allocations. There is no halting of the programme. The Departments could work ahead on the programmes in the NDP but the situation has changed and it is important for the Department of Finance to be able to keep an eye on what is happening and approve individual sign-offs. That does not halt anything, that is good management, controlling the situation and keeping an eye on the resources and signing long-term contracts accordingly.

The NRA is so far advanced on the delivery of the major inter-urban routes, with all five routes now either under construction or open to traffic that most of its funds for 2009 are contractually committed. Approximately €50 million of the allocation is not committed. This money will finance a range of other projects around the country, including the Castleisland by-pass, which will be the only major construction project to start this year. That is the way the work has flowed because the continuing work, such as the M50 around Dublin, and other massive projects, is contractually tied. As soon as that work is finished next year the budget will be available for other projects to be approved.

My Department has written to the Department of Finance outlining the expenditure programmes its agencies propose to undertake for the remainder of 2009 and seeking that Department’s sanction for those programmes. This includes the NRA’s proposed programme of minor roadworks on both national primary and national secondary roads, as well as planning and preparatory works on a range of other projects.

I expect that the Department of Finance will respond to my Department about these matters following the budget on 7 April. The total capital provision for regional and local roads is €468 [972]million of which approximately €95 million is already committed. The Department of Finance recently sanctioned expenditure of €150 million and local authorities will be advised immediately following the supplementary budget what projects can proceed under this restored sanction.

Further information is available about the roads under construction but it is not fair to say that 70 roads have been halted or anything like that. The Department of Finance wants to give specific approval for major contracts before they go out——

Deputy Caoimhghín Ó Caoláin: That is exactly what was said. That was the wording used.

Deputy Noel Ahern: The situation has changed. There is a shortage of money. It is important that somebody at the top approves the contracts. That does not mean that work has been stopped. It is a case of the Department of Finance having an overview of the situation. Most of the money for this year is contractually tied so there are no cutbacks there. When the five major inter-urban routes are finished next year other routes will be lined up for approval.

Deputy Lucinda Creighton: I thank the Minister of State at the Department of Transport for coming to the House to deal with these matters. I am disappointed, however, that the Minister for the Environment, Heritage and Local Government has neither attended here whenever this matter has been raised, nor in his constituency when local meetings have been held over recent months. It shows a certain contempt for the people who elected him but I suppose I would say that.

There is an urgent need for the Minister for the Environment, Heritage and Local Government to at the minimum postpone the section 25 process for the Dublin Docklands Development Authority’s proposed planning scheme for the Poolbeg peninsula. It has raised ethical concerns about banks, commercial interests, developers and the authority and the complex web of relationships between these individuals and corporate entities. This is a significant scheme which will have a profound effect on people not only in the Sandymount and Ringsend area but in the city. There has been no provision for transport and other infrastructure to support this massive scheme.

The premise of the scheme is worrying. It will allow the Dublin Docklands Development Authority become its own planning authority for a vast tract of land which is an important public amenity. Anyone who lives in Dublin city probably uses or has used it. It is also an area of significant flooding that affects the canal and the Dodder, Tolka and Liffey rivers. This is not merely a local issue but is very much a city-wide one. It is also a matter of national concern, for a number of reasons that I will outline.

Three fiascos are currently connected to the Dublin Docklands Development Authority. One is the Becbay investment scheme in the Irish Glass Bottle site, a greatly questionable endeavour involving a number of people. The CEO of the authority until last month, Mr. Paul Moloney, stated that no interest has been paid since last June on the loan of almost €300 million put forward to purchase the IGB site. This raises a very significant question with regard to the solvency of the DDDA and Deputy Phil Hogan raised the matter at the relevant Oireachtas committee. There are major concerns among the public and they have not been answered by the Minister. The matter has not been dealt with and we have not had any meaningful clarification.

Let us bear in mind that the Dublin Docklands Development Authority was established by my very fine constituency colleague, Deputy Ruairí Quinn, the former Minister for Finance in [973]the Fine Gael-led rainbow Government of 1994-97. It was done as part of a rejuvenation scheme for the city centre, based on commercial intent but also to offer a very important social dimension for the area. What has been happening in the DDDA over the past number of years has deviated so far from those original objectives that serious questions must now be answered.

There is the issue of the newly appointed chairman of the DDDA, Mr. McCaughey, who was appointed by the same Minister, Deputy John Gormley. Mr. McCaughey was forced to resign in recent days as a result of what can only be described as very questionable behaviour with regard to payment of taxes. This raises significant questions over the judgment of the Minister and how much of a handle he really has on what is going on in the various authorities under his Ministry, particularly the DDDA.

There is the very important issue of the links between the recently nationalised Anglo Irish Bank and the DDDA. Two directors of the authority were directors of Anglo Irish Bank at the time of the Becbay deal, a very serious conflict of interest. According to the DDDA’s last annual report, it paid €964,648 to companies that had direct links with three of its directors. One such was Arup Consulting, one of whose directors was a member of the DDDA board; another relates to PricewaterhouseCoopers; and we are very much aware of the Anglo Irish Bank connections. These are major questions of public interest and the Minister, Deputy Gormley, must get to the bottom of them before he gives any sanction to, or stands over this project going ahead.

In any case, this project is not viable because it is proposed on the basis of completely flawed planning grounds——

Acting Chairman: The Deputy must conclude.

Deputy Lucinda Creighton: ——and fanciful transport plans that will never happen. Already we have had two matters raised on the Adjournment with regard to transport plans that will not happen under Transport 21.

Acting Chairman: Please.

Deputy Lucinda Creighton: These plans are not even contained in that. There is a Luas line that will never be built. We need answers and I am sorry that the Minister is not here to give them.

Deputy Noel Ahern: I shall try to give the Deputy the factual position on behalf of the Minister for the Environment, Heritage and Local Government, but if I may, I will keep away from the politics of Dublin South-East.

As the Deputy knows, the authority was established under the Dublin Docklands Development Authority Act 1997, to lead the physical, economic, social and cultural regeneration of Dublin’s docklands.

Section 24 of that Act requires the authority to prepare a master plan for the docklands area, setting out objectives for its social and economic regeneration. The authority’s most recent master plan was adopted only a few months ago, in November 2008, following a comprehensive public consultation process. It envisaged the development of the Poolbeg area following the preparation of a comprehensive planning scheme.

The authority has now prepared and published a draft planning scheme for the Poolbeg peninsula under section 25 of the Dublin Docklands Development Authority Act. The draft plan details how it is envisaged that the area covered by the plan should be developed, and sets out policies in respect of land use, distribution and location of development, overall design, transportation, the development of amenities, and conservation. Copies of the Poolbeg plan[974]ning scheme and the related environmental impact statement are available for inspection at various locations throughout the docklands. The closing date for submissions is 9 April. I am sure the Deputy knows this.

Deputy Lucinda Creighton: I certainly do.

Deputy Noel Ahern: That follows a consultation period of 62 days. The final draft planning scheme will be submitted to the Minister for the Environment, Heritage and Local Government, Deputy Gormley, for his consideration later this year.

It is entirely a matter for the authority to prepare a draft planning scheme and to carry out the necessary consultations. In accordance with the Act, once a draft planning scheme is finalised and submitted to the Minister, and, following consultation with the Minister for Finance and consideration of any objections from Dublin City Council, the Minister, Deputy Gormley, has the option, at that stage, of approving the draft planning scheme, with or without modification. That is when his formal role, in accordance with the Act, comes into play. The Minister has no function in the preparation of the planning scheme prior to its submission for approval.

As provided for in section 18 of the Act, the authority, which is self-financing, has since its establishment, engaged in extensive business transactions including the purchase, management, development and sale of lands in the area.

The authority, through its involvement in a joint venture company, Becbay, made a significant investment in the acquisition of the Irish Glass Bottle, IGB, site in Poolbeg. The authority’s involvement in Becbay, and the position of certain former directors of the authority, who were also directors of Anglo Irish Bank, with regard to the decision making process leading to the acquisition of the IGB site, were the subject of extensive debate with DDDA officials at the Joint Committee on the Environment, Heritage and Local Government on 10 February. I am sure the Deputy attended. The DDDA advised the committee that the process was conducted in full compliance with the authority’s code of conduct.

Deputy Lucinda Creighton: The Minister has the responsibility to investigate these issues.

Acting Chairman: Please allow the Minister speak.

Deputy Noel Ahern: The Minister expects to be in a position shortly to announce the appointment of a new chair of the authority. It will be a matter for the chair, the board and the executive of the authority to ensure that the completion of the drafting of the Poolbeg planning scheme, and its subsequent implementation including development of the IGB site, is closely managed in the interests of the sustainable social and economic regeneration of the area.

I hope I have outlined for the Deputy the Minister’s role, in accordance with the Act. He will have the say in the decision making process when it comes to him but that has not yet happened.

Deputy Lucinda Creighton: I thank the Minister of State. I hope that the Minister, Deputy Gormley, has better luck with his second stab at the appointment.

Deputy Brian O’Shea: In February 2006 Waterford Institute of Technology made a formal application to the Department of Education and Science in pursuit of university status. The submission embraces constituent campuses throughout the south east. There was an expec[975]tation by the institute at the time that a body of national and international education experts would be set up to adjudicate the merits of the institute’s case and then report to the Higher Education Authority.

More than three years later, I tabled a parliamentary question last Tuesday, asking the Minister for Education and Science to request the Higher Education Authority to recommend, as provided for under section 9.1 of the Universities Act 1997, the membership of a body to include international experts and national experts for appointment by the Government. This body would advise the Higher Education Authority whether Waterford Institute of Technology should be established as the university of the south east.

The Minister’s reply was clear. He stated there are no plans to advance any of the current applications for university status before the strategy group on higher education reports. The Minister has asked the group to report to him with a two-decade roadmap for the development of the sector before the end of the year. There is no guarantee that it will report on time and if previous adherence to timeframes around the Waterford Institute of Technology application is repeated, it could be quite some time before the report is produced.

The Minister stated that applications have been received for designation as universities from Waterford Institute of Technology, Dublin Institute of Technology and Cork Institute of Technology. Dublin already has three universities and Cork has one. In addition to universities, Limerick and Galway have institutes of technology. Waterford and the south-east region are alone in not having a university. When we compare the five major cities in terms of spending on third level education, Dublin’s spend is more than 11 times that of Waterford, Cork spends almost four times as much and Galway and Limerick have three times Waterford’s spend.

One tactic used by Fianna Fáil to delay commencing the statutory process of assessment for the WIT application announced by the then Taoiseach, Deputy Bertie Ahern, in advance of the 2007 general election was that a preliminary assessment of the submission would be made by Dr. Jim Port, a UK-based independent consultant. This was a ploy to get Fianna Fáil through the election by giving the impression that something real was happening on the application. Dr. Port’s report was finally published in February 2008. In it, he described the Waterford Institute of Technology application as a serious one that raised a number of issues for the Government but contained nothing inherent to prevent its consideration under the existing process. Dr. Port found that WIT has an academic maturity and activity profile in degree and postgraduate training, research and scholarly activity which overlaps with institutions in the Irish university sector and other western countries. He felt that WIT fulfils many of the broader roles of the university, especially in terms of supporting the regional economy and cultural development and knowledge transfer.

There is a brain drain from the south east, with some 7,000 students at any given time studying in universities outside the region. Many of these will never return to live in the region. There is a regional deficit in fourth level education provision and under capacity in research and development. If the south-east region is to be part of Ireland’s smart economy, it must have a university.

I am demanding that the statutory process on the WIT application be initiated immediately. This will not cost a great deal of money or impinge on the work of the strategy group. I call on the Government to end its cynicism and evasion and the dishonest ploys which have been repeatedly to avoid progressing the application by WIT for university status.

Deputy Noel Ahern: I am taking this adjournment matter on behalf of my colleague, the Minister for Education and Science, Deputy Batt O’Keeffe.

[976]Applications have been received from three institutes of technology, namely, Waterford Institute of Technology, Dublin Institute of Technology and Cork Institute of Technology, for designation as universities. These applications raise significant issues regarding Government policy towards higher education, in particular regarding the existing roles of universities and institutes of technology, which have distinctive missions, provide different levels and types of academic programmes, fulfil different roles in the community and have separate academic and governance structures.

Waterford Institute of Technology is a very important institution and makes a significant contribution to education generally and the economic and social well-being of the south-east region. It has an excellent track record of industry collaboration, particularly in the areas of applied research and curriculum design. The Government wants to see Waterford Institute of Technology further develop its strengths in these areas in line with the objectives of the Government’s strategy for science technology and innovation.

Since the applications for university status were received, there have been significant changes in the legislative and regulatory framework governing the institute of technology sector. The Institutes of Technology Act 2006 provides for the creation of a unified management structure framework for higher education in Ireland by bringing the institute of technology sector under the remit of the Higher Education Authority. The legislation also extends significant managerial and academic autonomy to the institutes, with a view to facilitating further development of their roles.

In its review of the Irish higher education sector conducted in 2004, the OECD found that the differentiation of mission within the sector contributed significantly to Irish economic growth and recommended that no further institutional transfers be made to the university sector. Building on the reform agenda that has been under way since the publication of the OECD report five years ago and in recognition of the critical role that the higher education system plays in generating the skills, knowledge and innovation on which Ireland’s future competitive advantage depends, the Government believes it is time to develop a new national higher education strategy which will provide a road map for the future development of the sector.

The process to develop a new strategy was launched by the Minister last month and is being led by a high level steering group which draws on national and international expertise and includes representatives from business, community and student interests as well as senior Government officials. The strategy process will examine how well Ireland’s higher education system is performing, how it ranks internationally, how well existing resources are being used and how the system can be reconfigured to meet the challenges it will face over the next two decades. The process is expected to be completed by the end of the year. Pending its completion, there are no plans to advance any of the current applications for university status.

I have a feeling that I read a reply on the same issue one year ago. The situation appears to be evolving but I do not think the intention is to mess up Waterford. It is important to formulate long-term Government thinking before making a final decision. I thank the Deputy for raising the matter.

The Dáil adjourned at 5.30 p.m. until 2.30 p.m. on Tuesday, 31 March 2008.

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The following are questions tabled by Members for written response and the ministerial replies as received on the day from the Departments [unrevised].

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Questions Nos. 1 to 9, inclusive, answered orally.

10. Deputy John Perry asked the Minister for Finance if he is monitoring charges made to bank customers over inter bank rates set by the European Central Bank; and if he will make a statement on the matter. [12594/09]

Minister for Finance (Deputy Brian Lenihan): The Deputy may wish to note that the decision whether an institution operating in Ireland passes on ECB interest rate reductions to customers is primarily a commercial decision for the institution concerned.

However, as the Deputy will be aware, I have publicly indicated that I expect institutions to pass on funding cost reductions to their customers as appropriate, including in particular to those purchasing properties on variable mortgages and to small and medium-sized enterprises. This is important to help support sustainable growth and employment in line with the objectives of the Government guarantee scheme and the Government’s recapitalisation programme.

For example in the case of mortgage interest rates, I understand that in general credit institutions differentiate between mortgages of owner occupiers and residential investors for the purposes of setting mortgage interest rates. I have been informed by the Financial Regulator that all of the covered institutions have fully passed on each ECB interest rate cut to owner occupiers since the bank guarantee scheme was introduced and that this will be so for the latest ECB cut announced on 5 March 2009.

However, it must be borne in mind that credit institutions are not primarily funded from the ECB but from a variety of sources and the cost of much of their funding has been significantly above ECB rates over the last year.

The Deputy will be aware that many lenders are conducting extensive advertising campaigns, showing that competition is a real factor on the mortgage scene. The existence of that level of competition in the mortgage lending market is sufficient, I believe, to ensure that credit institutions will reduce their rates where possible in order to remain competitive and retain their share of the market.

[978]The Deputy will appreciate that a balance must be achieved by Government between influencing private banks through the bank guarantee scheme and other financial support incentives while at the same time being seen to have a hands-off approach to the day to day running of these institutions which must operate on a strictly commercial basis.

11. Deputy Seán Barrett asked the Minister for Finance his views on the impact of the VAT clawback on the motor trade in times of recession. [12521/09]

Minister for Finance (Deputy Brian Lenihan): I am conscious of the decline in the motor industry in Ireland and internationally due to the contraction in economic activity. I and my officials have had meetings with representatives of the motor industry on the matter.

In the case of second-hand cars a special VAT scheme is in place in Ireland. This special scheme was introduced in 1994, following strong representations from the motor industry, as a derogation under the VAT Directive. The scheme contrasts with the Margin Scheme, which operates in most other Member States.

The special scheme allows motor dealers, at the time of purchase, to claim credit for residual input VAT which is considered to be included in the cost of acquiring a second-hand car from a customer. When the car is subsequently resold, the VAT is chargeable on the full sale price of the car or on the original purchase price paid by the dealer, whichever is the higher. This is necessary because the dealer has already been granted a credit in relation to the residual input VAT incurred. The special scheme allows dealers the maximum benefit by allowing an immediate deduction of residual VAT at the point of purchase. The VAT credit already allowed on second-hand cars must, despite the industry’s view, be seen for what it is, i.e. money advanced to dealers by the Exchequer which they are only repaying when they resell the second-hand cars.

Under the Margin Scheme, garages and dealers would account for VAT on their profit margin only, i.e. on the difference between the cost of acquiring and selling the second-hand cars involved. Under the Margin Scheme, there would be no entitlement to a deduction on the acquisition of the car and consequently the question of a VAT clawback would not arise.

Although with the changing economic circumstances dealers have found themselves selling traded-in second-hand cars at a loss, which is increasingly giving rise to clawbacks of VAT situations for dealers, it is not possible to write-off the VAT credit already allowed to the dealers on second-hand cars. In this context the Revenue Commissioners have however granted concessionary treatment which allows dealers to postpone payment in respect of the clawbacks over the past number of months until 19 May 2009.

The motor industry has made calls for the introduction of a Margin Scheme for second-hand cars in conjunction with the writing-off of the outstanding VAT credits already provided to dealers in respect of second-hand cars. I am not opposed to the introduction of such a Margin Scheme, but not on the basis that the outstanding VAT credit already provided to dealers in relation to their existing stock of second-hand cars would be written-off in full.

12. Deputy Andrew Doyle asked the Minister for Finance his views on recent reports that insurance costs are rising at a time when prices generally are falling; and his further views on whether policy changes could play a role in containing these trends. [12552/09]

[979]Minister for Finance (Deputy Brian Lenihan): I am aware of the reports referred to by the Deputy. Insurance costs reflect a broad range of factors, including for example, the level of cover, the number of claims, legal and administration costs, the cost of fraud as well as the overall cost level in the economy.

My Department has been advised by the Financial Regulator that while the non-life insurance market performed well up to the end of 2006, market sources indicate that much non-life business was written at a loss in 2007. This trend continued in 2008, but the companies were still willing to write business at a loss in order to maintain their market share. They were able to do this as a result of the reserves they had built up during profitable years. However, the situation could not go on indefinitely and indications are that firms are now taking action on pricing to underpin their financial positions.

In the current difficult trading climate, there is a delicate balance to be struck between ensuring the long-term sustainability of the insurance industry and at the same time making sure that the consumer obtains good value for money. I am particularly conscious of the impact of a significant increase in premiums for both the consumer and business and it must be a priority for insurance companies to ensure that insurance cover is provided as competitively as possible consistent with long term commercial sustainability and viability.

The Deputy will be aware that like all financial service providers, the insurance industry is also affected by the continuing stress in the financial markets and the recessionary pressures in the economy. This is likely to be one of the reasons for increases in areas such as motor insurance.

In conclusion, the recent upward trend in insurance prices reflects a range of factors outside the control of the industry. It would not, therefore be appropriate from a policy perspective to seek to intervene in the commercial conduct or decision making of insurance firms in the absence of clear evidence of market failure in respect of which there is scope to address from a national perspective.

13. Deputy Shane McEntee asked the Minister for Finance if he plans to publish tax forecasts for 2009, 2010 and 2011 before the emergency budget. [12575/09]

Minister for Finance (Deputy Brian Lenihan): The Addendum to the Stability Programme Update, published on 9 January last, forecast total tax receipts in 2009 of approximately €37 billion. However, in light of the continuing weakness in the Exchequer Returns, my Department now anticipates that there could be a shortfall of up to €3 billion on this figure. This would mean that only €34 billion in tax receipts would be collected in 2009, representing a year-on-year decline of over 16 per cent.

Economic growth has also continued to weaken and lower levels of economic activity will obviously have implications for future tax revenue receipts.

In light of this, the Government decided to announce further measures to stabilise the budgetary situation. This will involve the introduction of additional taxation and expenditure measures in 2009 to address the continued deterioration in the public finances. The Supplementary Budget will be presented to the Dáil on the 7th of April and will set out a multi-annual plan to restore stability to the public finances. The scale of the challenge we face means that all options must now be on the table, including action on both current and capital expenditure, as well as revenue raising measures. The Government has already taken significant action to restore stability to the public finances and the Supplementary Budget will continue this process. [980] Taking action now will ensure that confidence in our public finances can be restored and that we are positioned to take advantage of a recovery in the international situation when it occurs.

The Government has sought to engage all parties in our efforts to address the difficulties in the public finances and with this in mind I have made my Department available to the Opposition on an unprecedented scale by arranging for officials to brief the main opposition spokespersons on the latest available figures and on the emerging position. The Opposition has also been asked to submit any proposals they may have to the Department of Finance for costing by officials and I am open to considering what further information that can be made available is put into the public domain in advance of the Supplementary Budget.

14. Deputy Terence Flanagan asked the Minister for Finance if he has developed the terms of a scheme of voluntary redundancies for the public service; the details of the scheme; and the staff reductions planned. [12562/09]

Minister for Finance (Deputy Brian Lenihan): Proposals for Voluntary Early Retirement (VER) are being developed at present for the public service. However, I would point out that VER has to be seen in the wider context of the problems facing the public finances, and the related requirement for greater control and discipline in regard to public service numbers generally.

The programme of rationalisation of State agencies, which I announced in Budget 2009, is relevant in this regard. Work on implementing the rationalisation measures is now proceeding across all relevant Government Departments, and the broad approach to identifying and addressing staff surpluses may arise for consideration in particular areas. The options for redeployment of staff generally within the civil service, and across the wider public service, are issues that logically fall to be considered in advance of the question of VER, and indeed my Department is considering these issues proactively at present.

Moreover, the Special Group on Public Service Numbers and Expenditure Programmes was established to examine the current expenditure programmes in each Department and to make recommendations for reducing public service numbers so as to assist the Government in its task of returning the public finances to a sustainable position. The potential staff savings identified by the Special Group, and the mechanisms for addressing any surpluses, will likewise fall to be considered by the Government in due course in the context of an overall approach to controlling public service numbers, including any possible role for VER schemes in this regard.

15. Deputy Jim O’Keeffe asked the Minister for Finance the resources available to the Revenue Commissioners and the customs service to combat cigarette smuggling; his views on whether such resources are adequate; and if he will make a statement on the matter. [12459/09]

18. Deputy Jim O’Keeffe asked the Minister for Finance the estimated amount in value of cigarettes smuggled into Ireland in each of the past three years; and the loss to the Exchequer arising therefrom in each of the three years. [12458/09]

Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 15 and 18 together.

[981]I am informed by the Revenue Commissioners that they are not in a position to provide a reliable estimate of the number and value of cigarettes smuggled into Ireland in each of the past three years due to the fact that there is no proven method for determining this figure.

Estimating the tax gap or the amount of tobacco tax lost as a result of smuggling is particularly difficult because of the multiple factors that have to be taken into account. For instance, a drop in the overall tax take may be partly due to a decline in smoking levels as a result of the various anti-smoking campaigns. Increased legal purchase of duty paid cigarettes in other EU member states for personal use is also a factor, particularly in the context of low cost air travel and more frequent foreign holidays. This, of course is perfectly legal in the context of the EU principle of freedom of movement. Consequently the only reliable information available which I can give to the Deputy is the quantity and value of contraband cigarettes intercepted and seized by Customs and also the volumes of cigarettes on which duty is collected each year.

Details of the above for each of the past three years are as follows:

Year	No. of cigarettes duty paid	No. of cigarettes seized	Estimated retail value of cigarettes seized
			€
2006	5,604,884,000	51,180,921	17,529,465
2007	5,401,702,000	74,520,798	25,597,894
2008	4,940,567,000	135,243,859	54,435,315

Revenue is aware of a variety of methodologies that are used internationally by the tobacco industry and some Customs and Revenue Administrations for the purposes of estimating the quantity and value of cigarettes smuggled into their jurisdictions. The variety of factors taken into account include:

national estimates of the overall number of cigarettes consumed each year

estimates of the quantity of cigarettes brought into the State legally by cross- border shoppers

surveys of empty (discarded) cigarette packs conducted at periodic intervals throughout the country

the volume of cigarettes on which excise duty is charged annually the number of cigarettes seized by customs.

It is evident that the only precise information that Revenue can confirm are the last two items listed above i.e. the volume of cigarettes on which duty has been collected and the actual quantity of cigarettes seized. The remaining factors require a significant level of speculation and extrapolation.

While the various estimates published in the media are at best speculative and are likely to include cigarettes purchased duty paid in other Member States brought into the State for personal consumption, the significant increase in the number of cigarettes seized in 2008 and the reduction in duty paid deliveries suggest that the overall level of smuggling may have increased.

While Revenue is not in a position to estimate the volume of smuggled cigarettes it very tentatively estimates that about 20% of cigarettes consumed in Ireland may be untaxed in [982]Ireland. This however includes substantial quantities of legitimate personal imports from other EU Member States and should be treated with caution.

Turning to the question of resources available to Revenue’s Customs Service to combat cigarette smuggling, enforcement staff are deployed at all key ports and airports in the State for the purposes of detection, interception and seizure of both contraband cigarettes and drugs. Staffing at these locations is subject to continuous review and staff numbers deployed at these locations are often augmented by additional staff from other areas particularly where specific operations are organised.

Maritime freight and passengers arriving from high-risk countries are targeted on the basis of risk analysis which is carried out by specialist intelligence teams. Customs relies heavily on intelligence from other Customs Administrations and receive valuable assistance and co-operation from the European Anti-Fraud Office, OLAF. There is also close co-operation with An Garda Síochána and multi-agency operations continue to be mounted where appropriate. Revenue also liaises with the Office of Tobacco Control. In addition, Revenue receives close co-operation and information from the legitimate tobacco manufacturers and has regular meetings with these companies along with the Irish Tobacco Manufacturers Advisory Committee (ITMAC). The international agreements signed by Ireland along with other Member States and the Commission with Philip Morris International and Japan Tobacco International are also utilised.

Staff carry out checks and searches at inland premises for contraband that may have evaded controls at the point of importation. Customs also utilise the latest scanning technology and tobacco detector dogs to assist them in detecting contraband. A Mobile Container Scanner was acquired two years ago and is normally based in Dublin where it is used to scan both accompanied and unaccompanied freight. The scanner is also deployed in the other major ports as the need arises. A procurement process to acquire a second Mobile Scanner is currently in train. Smaller baggage/parcel scanners are also located at the four major airports in Dublin, Shannon, Cork and Knock. Similar scanners are located at the ports of Rosslare and Ringaskiddy and at Portlaoise Mail Centre for screening mail. In summary, while overall staff numbers in Revenue are being reduced, in the context of the Government decision on expenditure controls, the number of staff engaged in front line enforcement work in tackling smuggling and protecting tax receipts is being maintained and the position is being kept under review.

16. Deputy Michael D’Arcy asked the Minister for Finance if the EU has expressed a view on the maximum borrowing levels before penalty clauses might apply to Ireland under the stability pact. [12545/09]

Minister for Finance (Deputy Brian Lenihan): Article 104 of the Treaty governs the operation of the excessive deficit procedure of the Stability and Growth Pact. On foot of the commission’s recent report on Ireland’s budgetary position the Commission has now adopted proposals for a Council recommendation to Ireland. This is part of the normal operation of the Pact whenever the General Government Deficit of a Member State exceeds the reference value of 3% of GDP as did that of Ireland and of a number of other Member States in 2008.

The proposed recommendation invites Ireland to reduce the deficit below the 3% of GDP reference limit by 2013. This is in line with the Government’s budgetary strategy and we welcome the Commission’s stance in this regard.

[983]It is expected that the question of a Council recommendation to Ireland along with recommendations to other Member States in excessive deficit will be considered by the Ecofin Council next month. As is normal in these circumstances, I have been in regular contact with the Commission and with my European colleagues with regard to the position of the public finances.

Council recommendations are intended to support and encourage the Member State(s) concerned in its pursuit of necessary, if difficult, budgetary measures to reduce the deficit below 3% of GDP in a timeframe taking account of the economic background.

We are working with the Commission on this and other matters and as such the question of penalty clauses does not arise.

17. Deputy Joe Costello asked the Minister for Finance his views on reports (details supplied) with respect to the possibility of moving large amount of Ireland’s capital expenditure off balance sheet using a bonds for cash mechanism facilitated by the European Investment Bank; if this is expected to have an impact on the 2009 or 2010 budgetary equation and to what degree; and if he will make a statement on the matter. [12331/09]

Minister for Finance (Deputy Brian Lenihan): My Department is considering a number of innovative financing proposals for public infrastructure which various bodies have submitted. I am not at liberty at this juncture to talk about any of the details of these proposals.

Key considerations for the State would be the costs of such proposals compared to either the cost of Exchequer-funded infrastructure or the cost of infrastructure delivered by PPP arrangements. Another key imperative would be value for money.

Question No. 18 answered with Question No. 15.

19. Deputy Bernard J. Durkan asked the Minister for Finance if he is satisfied that the procedures by which he predicts future economic trends are adequate in view of the fact that new and more serious economic issues seem to arise unexpectedly on a weekly basis; if he is further satisfied that the full extent of the current economic situation was foreseeable a year ago; if not, the reason for same; the steps he proposes to take to ensure that future economic forecasts reflect with some degree of accuracy the expected situation arising within a specific period and that, as a result, the necessary budgetary measures can be taken in sufficient time to avert the impact of uncertainty and lack of confidence which affects the economy here; and if he will make a statement on the matter. [12453/09]

Minister for Finance (Deputy Brian Lenihan): I am satisfied with the procedures in place to conduct economic forecasting in my Department.

Even in a normal environment, it must be noted that short-term economic forecasting is not an exact science, given the many dynamic components which make up the economy. But we are not in a normal environment — conditions in the global economy are unfolding at a rapid pace, and this reflects the fall-out from the unprecedented financial market turbulence last September. As a result of this, the uncertainty associated with forecasting is heightened to an almost unprecedented level, not just in Ireland but in almost every country in the world.

[984]This fact of how uncertain the global economic situation is can be seen by the frequency by which organisations such as the International Monetary Fund, OECD and EU Commission have reversed their forecasts for the global economy. The current global situation was not foreseen a year ago and it largely reflects a dramatic intensification of financial market difficulties since last September. The impact of this on the global economy is evolving.

My Department’s approach, which is similar to others, is to identify the most likely outcome and then to identify the various risks — both domestic and international to this projection. The majority of current difficulties were identified as risks in both Budget 2009 and in the Addendum to the Stability Programme Update published in January.

20. Deputy Lucinda Creighton asked the Minister for Finance if, in view of the revelations regarding irregular lodgements between Anglo Irish Bank and another bank (details supplied) in the accounting year from September 2007 to September 2008, there were similar lodgements between Anglo Irish Bank and that bank or any of their subsidiaries or associated companies in the previous accounting year; and if he will make a statement on the matter. [12454/09]

30. Deputy Lucinda Creighton asked the Minister for Finance if, in view of the revelations regarding irregular lodgements between Anglo Irish Bank and a bank (details supplied) in the accounting year from September 2007 to September 2008, there were similar lodgements between Anglo Irish Bank and another bank or any of their subsidiaries or associated companies in the previous accounting year; and if he will make a statement on the matter. [12455/09]

Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 20 and 30 together.

The transactions to which the Deputy refers, between Anglo and IL&P, are currently under investigation and I can not comment on those. However, I understand that these were exceptional due to the materiality of the transactions and the involvement of a non-bank subsidiary. I am not aware of any similar such transactions between Anglo Irish Bank and IL&P.

I am aware that there are ongoing financial transactions between Anglo Irish Bank and other financial institutions, in normal trade. Such transactions include transactions between Anglo and the bank referred to, in Question 12455/09, during 2006 and 2007. I am assured by the Financial Regulator the transactions with the bank are not similar to the IL&P transactions on the grounds of the materiality level of the transactions and the fact that there was no involvement of a non-bank subsidiary.

21. Deputy Willie Penrose asked the Minister for Finance if he has instructed the National Treasury Management Agency to make a contingency plan for the liquidation at short notice of the National Pensions Reserve Fund; if his attention has been drawn to such contingency planning or exit strategy at the NTMA in respect of the NPRF; and if he will make a statement on the matter. [12302/09]

Minister for Finance (Deputy Brian Lenihan): The National Pensions Reserve Fund was established on 2 April 2001 under the National Pensions Reserve Fund Act 2000 with the objective of meeting as much as possible of the cost to the Exchequer of social welfare pensions and public service pensions to be paid from the year 2025 until at least 2055.

[985]I have no plans to liquidate the Fund. The Government announced on 11 February 2009 that it had agreed the recapitalisation terms to be offered to Allied Irish Bank and Bank of Ireland, under which the Government would provide €3.5 billion in Core Tier 1 capital for each bank through the purchase of preference shares. The announcement stated that the recapitalisation is to be funded from the National Pensions Reserve Fund, with €4 billion being provided from the Fund’s current resources and €3 billion by frontloading the Exchequer contributions to the Fund for 2009 and 2010. These investments will remain part of the Fund and the return earned on them will accrue to the Fund. As the Deputy will be aware, the recently-enacted Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009 provides for the necessary amendments to the National Pensions Reserve Fund Act 2000 to enable this proposal to be implemented.

22. Deputy Pat Rabbitte asked the Minister for Finance the expected cost of funding the national debt in 2009; and if he will make a statement on the matter. [12327/09]

Minister for Finance (Deputy Brian Lenihan): The Exchequer Borrowing Requirement published in the Addendum to the Irish Stability Programme Update in January was forecast at €18 billion. Based on that amount, the cost of funding the national debt in 2009 was forecast at €4.5 billion.

The Government is currently considering the overall deficit position for 2009. In the context of the Supplementary Budget the planned borrowing requirement and the associated debt servicing costs for 2009 will be finalised and published on 7 April.

23. Deputy Bernard Allen asked the Minister for Finance if he has assessed options to isolate impaired loans within banks in order that a good bank could be put in a position to resume lending with a clear balance sheet and new capital. [12517/09]

Minister for Finance (Deputy Brian Lenihan): The Government has indicated that it is committed to ensuring the stability of the Irish financial system and protecting systemically relevant institutions. In this regard and as the Deputy will be aware, the Government is reviewing proposals for dealing with the risks associated with certain assets in order to strengthen relevant institutions and ensure the flow of credit to the real economy. I have asked Dr. Peter Bacon and the National Treasury Management Agency to report to me on this matter.

I have seen the initial report prepared by Dr. Peter Bacon for the NTMA. The proposals contained in the report will inform the Government’s ongoing considerations, involving the Financial Regulator, Central Bank, the NTMA and our legal and financial advisers.

24. Deputy Frank Feighan asked the Minister for Finance if he plans to make institutional changes in the arrangements for financial regulation; if he will publish an assessment of issues in advance of presenting proposals to Government; and if he will present the heads of any legislative Bill to the committees of the Houses of the Oireachtas which are investigating regulatory failure for early consideration of reform proposals. [12558/09]

65. Deputy Mary Upton asked the Minister for Finance his plans for the establishment of a banking commission here; if he has submitted these plans to the Cabinet for consideration; if [986]new legislation will be required in order to establish such a commission; when he will introduce such legislation; and if he will make a statement on the matter. [12325/09]

Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 24 and 65 together.

I am bringing proposals before the Government to introduce new structures for banking regulation that will provide for the integration of Central Bank responsibilities with regulatory and supervisory functions, new standards of corporate governance and a new approach to enhance consumer protection. These changes are designed to restore Ireland’s reputation and are consistent with the emerging international agenda for reform in the financial services sector. The structural changes and a substantial increase in regulatory capacity will lead to a more effective and efficient financial services regulatory system which will be aligned to the best international standards.

There is growing and extensive international literature on the causes of the financial crisis and identification of issues that need to be addressed on the supervisory front, to which I do not propose to add. I particularly welcome the report of the de Larosière Group, prepared at the request of the President of the European Commission and published on 25 February 2009. The De Larosière report provides a thorough analysis of the origins of the current financial crisis and, while acknowledging there is room for debate on the relative importance to be assigned to regulation in relation to the crisis, nonetheless sets out clear recommendations for reform of financial services regulation and supervision, which I welcome. The proposals I am bringing to Government are fully consistent with its central proposal for action at national level to strengthen the link between macroeconomic surveillance and macro prudential supervision.

25. Deputy Brian O’Shea asked the Minister for Finance his views on rising a loan and investment losses in the credit union sector and that some credit unions could be on the verge of insolvency or may not have sufficient liquid assets to meet their financial commitments to members; and if he will make a statement on the matter. [12310/09]

Minister for Finance (Deputy Brian Lenihan): As Minister for Finance, my role is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions. The Registrar of Credit Unions is responsible for administering the system of regulation and supervision of credit unions provided under the Credit Union Act 1997, with a view to the protection by each credit union of the funds of its members and the maintenance of the financial stability of credit unions generally.

As the Deputies will recognise, the current serious difficulties in the financial sector and the accompanying economic downturn is affecting all financial institutions, including credit unions. On account of the reduced availability of credit in the banking system credit unions are now experiencing an increase in demand from their members for loans. There has also been some increase in bad and doubtful debts and, as is the case across the whole of the financial sector, there have been losses on credit union investments. It is not surprising that this combination of trends has led to a situation where credit unions generally have reported a decline in profits for 2008.

I am aware of recent media reports regarding difficulties with which the Registrar of Credit Unions is dealing in a small minority of credit unions. Following the Government’s decision last September on the extension and increase in protection available under the Deposit Guarantee [987]Scheme, all credit union savers can be reassured that their deposits and shares to the total maximum value of €100,000 are safe and secure. The credit union movement as a whole is in a relatively strong financial position with solid liquidity and reserves. The Registrar of Credit Unions has highlighted that, of the 419 credit unions registered in the Republic, only a handful are affected by these difficulties. The Registrar is continuing to work closely with the boards of those credit unions that are encountering problems. Very close oversight, monitoring and controls over these credit unions by the Registrar of Credit Unions are intended to assist them in addressing current issues and to ensure their long-term stability and sustainability.

In addition, it should be noted that the Irish League of Credit Unions maintains a savings protection fund in excess of €105 million which is available to help stabilise the position of any credit union that encounters problems. The Department of Finance also is actively considering proposals in consultation with the representative bodies for credit unions for a central liquidity fund using the surplus liquidity in the credit union movement as a whole to support credit unions that may experience any temporary difficulties.

The Registrar of Credit Unions is of the view, and I am in full agreement with him on this point, that there is no reason credit unions cannot survive and prosper in the present financial environment. He has advised credit unions that the focus of day-to-day management within credit unions must be to ensure that adequate liquid resources are always available for operational purposes and that surplus funds should be held in liquid form. Credit committees in credit unions should be given clear limits on the total funds available for the granting of loans, bearing in mind the availability of liquid resources. Easy access to liquid funds must be a priority. Lending criteria must be based on carefully researched factors and on conservative estimates of the ability and commitment of the potential borrower to repay a loan.

The Registrar of Credit Unions is responsible for the regulation and supervision of credit unions using the powers available under the Credit Union Act 1997. This rules-based legislation provides extensive powers of direction to the Registrar to ensure the financial soundness and safety of credit unions and to protect credit union savers. The Registrar can also issue regulatory direction and prohibition orders to a credit union in relation to a broad range of issues including, investments, raising of funds, loans, assets and liabilities ratios and the composition of their assets and liabilities. He has extensive powers of inspection and investigation of credit unions as well as broad supervisory powers, for example, to appoint, suspend or remove a person as a director of a credit union or to remove auditors. A number of offences are also provided for in the Act.

The extensive powers currently available to the Registrar under the Act are important in ensuring that the regulatory system is robust and effective and in particular safeguards members’ savings. The rules-based approach to regulation embodied in the Credit Union Act has clearly served the credit union movement well, as is demonstrated by small minority of credit unions which the Registrar is currently monitoring closely in the current environment.

26. Deputy Michael D. Higgins asked the Minister for Finance the position regarding the funding difficulties facing Irish small and medium enterprises; the way these difficulties are evolving; the steps he is taking to ease them; and if he will make a statement on the matter. [12330/09]

Minister for Finance (Deputy Brian Lenihan): As part of the recapitalisation package announced on 11 February, Allied Irish Bank and Bank of Ireland reconfirmed their December [988]commitment to increase lending capacity to small and medium enterprises (SMEs) by 10% and to provide an additional 30% capacity for lending to first time buyers in 2009. If the mortgage lending is not taken up, then the extra capacity will be available to SMEs. AIB and Bank of Ireland have also committed to public campaigns to actively promote small business lending at competitive rates with increased transparency on the criteria to be met. Compliance with this commitment will be monitored by the Financial Regulator. The banks will make quarterly reports, with the first report to end March 2009 to be submitted by end April 2009.

Government Departments and State agencies have engaged with banks and business representatives in a variety of settings on issues surrounding the flow of credit for business. A formal structure for those contacts on an ongoing basis will be finalised shortly. An independent review of credit availability, funded by the banks but managed jointly by the banks, Government and business representatives, is also under way.

A Code of Conduct for Business Lending to Small and Medium Enterprises was published by the Financial Regulator on 13 February and took effect on 13 March. This code will apply to all regulated banks and building societies and will facilitate access to credit, promote fairness and transparency and ensure that banks will assist borrowers in meeting their obligations, or otherwise deal with an arrears situation in an orderly and appropriate manner. The business lending code includes a requirement for banks to offer their business customers annual review meetings, to inform customers of the basis for decisions made and to have written procedures for the proper handling of complaints. Where a customer gets into difficulty the banks will give the customer reasonable time and seek to agree an approach to resolve problems and to provide appropriate advice. This is a statutory code and banks will be required to demonstrate compliance.

Furthermore, a €100 million environmental and clean energy innovation fund has been established by each of the recapitalised banks. A quarterly report to the Financial Regulator of the loans made and the purposes for which they have been made will be required. The banks have also agreed to each provide €15 million to a new seed capital fund with Enterprise Ireland. The banks funding will be matched as appropriate by funding under Enterprise Ireland’s Seed and Venture Capital Programme and/or by funding from other national or international investors. It is expected that much of these funds will be utilised by SMEs.

27. Deputy Simon Coveney asked the Minister for Finance if he is proposing to tax the sending and receiving of text messages; and if he will make a statement on the matter. [10401/09]

Minister for Finance (Deputy Brian Lenihan): As the Deputy will be aware, it is not customary for the Minister for Finance to comment on possible tax and expenditure changes in advance of the budget.

28. Deputy Denis Naughten asked the Minister for Finance the steps which he is taking to address the summer flooding in the Shannon callows; and if he will make a statement on the matter. [12456/09]

Minister of State at the Department of Finance (Deputy Martin Mansergh): I visited the Shannon Callows last year and met with those affected by the flooding. I am conscious of the [989]very serious impact on both farming and the environment in the area. Due to exceptionally heavy rainfall, the problem in 2008 was more severe than the normal summer flooding in the Callows. The extremely flat gradient of the river, together with the environmentally protected status of the location, makes it very difficult to devise a cost-effective solution.

The Office of Public Works carried out some clearance of vegetation in the area, which, although not sufficient to prevent the flooding last year, is generally acknowledged to have improved the situation. This work was carried out with the agreement of the National Parks and Wildlife Service and in consultation with other stakeholders.

The Irish Farmers Association requested that dredging be undertaken to remove accumulated silt, which they believed was reducing the capacity of the channel through the “New Cut”. The Office of Public Works, having carefully studied the matter, was not convinced that the proposed silt removal would yield any further substantial relief of summer flooding in the Shannon Callows. It was, nevertheless, in recognition of the conviction of landowners that dredging would be effective, in light of the hardship, which the summer flooding causes, and in the absence of any better short-term solution prepared, subject to resolution of significant environmental issues, decided to undertake a limited amount of silt removal as a pilot scheme to demonstrate the efficacy or otherwise of the measure. It has not proved possible to date to resolve the environmental concerns and I regret that, in the light of the current budgetary constraints, it is no longer possible to justify undertaking these further works where the economic benefit cannot be clearly demonstrated.

In the circumstances, the Office of Public Works has no plans for further works in the immediate future. OPW will continue to monitor the situation and will be willing to consider any works, which can be justified economically and environmentally. The preparation of a Catchment Flood Risk Management Plan for the Shannon, which I expect will commence within the next 12 months, will build on previous reports and may present an opportunity to examine the problem on a comprehensive basis in the whole catchment context.

29. Deputy Jack Wall asked the Minister for Finance if he will extend or replace the bank guarantee scheme upon expiry at end September 2010; his views on whether it is important to signal these intentions to the market as early as possible and that continued uncertainty in this regard is making, and will continue to make, it increasingly difficult for the covered institutions to raise debt with a term extending beyond September 2010; and if he will make a statement on the matter. [12315/09]

Minister for Finance (Deputy Brian Lenihan): The Government acted decisively in September 2008 to guarantee, until 30 September 2010, the liabilities of relevant institutions in order to ensure banks could maintain normal liquidity position in interbank lending and debt markets. The guarantee has ensured Irish banks can continue to do their business and that the general public and businesses have been able to deposit with financial institutions in confidence.

The Government is committed to bringing forward proposals, if the need arises, to secure the position of our financial system. In the context of the six-month review of the guarantee scheme to be completed by mid-April 2009, the Government will examine how the scheme could be revised, subject to European Commission approval and consistent with EU state aid requirements, to achieve a reduction in risk overall, including by supporting longer-term bond issuance by the covered institutions.

Question No. 30 answered with Question No. 20.

31. Deputy Ruairí Quinn asked the Minister for Finance his views on recent economic forecasts (details supplied) to the effect that unemployment could reach 16% by end of 2010, that house prices could undergo a 40% peak-to-trough decline and that national income is expected to decline by some 8% in 2009 and a further 3.5% in 2020; and if he will make a statement on the matter. [12314/09]

Minister for Finance (Deputy Brian Lenihan): I understand the Deputy is referring to a recent economic forecast produced by Ulster Bank in which they anticipate a very large contraction in growth with unemployment rising to the levels mentioned in the question.

I would point out that there is a wide range of economic forecasts produced by a variety of financial institutions regarding the likely outcome for this year. In this regard, the market consensus at end-February was for GDP to contract by 4½% this year and by 1¾% next year. The market is forecasting unemployment to reach 13½% by the end of next year. The consensus is also for house prices to decline by an average of 10% this year and by 5% next year.

My Department will publish revised economic growth and labour market forecasts in the supplementary budget next month. Irrespective of what the forecasts are, it is clear that a large fall in economic activity is in prospect and that unemployment is going to rise substantially. Figures published this morning by the Central Statistics Office give an indication as to the scale of the difficulties.

32. Deputy Richard Bruton asked the Minister for Finance if he has assessed the make up of uncommitted capital spending in 2009 and the impact on jobs in the construction sector if this spending was postponed. [12526/09]

Minister for Finance (Deputy Brian Lenihan): Information is not collated centrally on a routine basis on the number of direct and indirect jobs that would be created as a result of Exchequer capital investment.

However, my Department has recently completed an exercise on the labour intensity of infrastructure investment more broadly. This exercise found that, with a few exceptions, the labour intensity of capital projects falls within a range of 8-12 direct jobs created per €1 million expenditure. It also found that “minor” works tend to be more labour intensive in terms of direct jobs created than major new build projects. Both of these findings would be broadly supported by the academic studies that were consulted as part of the exercise conducted by my Department.

Of course, as well as taking account of the impact on employment, any decisions in relation to capital investment will also consider the extent to which that investment enhances the productive capacity of the economy and generates economic returns over the longer term.

The Government recently announced its intention to examine all current and capital expenditure as part of its decision to introduce further measures to stabilise the public finances. All decisions on funding will be taken in the course of these deliberations and will be announced on 7 April.

33. Deputy Brian O’Shea asked the Minister for Finance the quantum of Exchequer savings, through both increased tax revenue and reduced expenditure, he is seeking in the Budget of 7 [991]April 2009; his views on whether it is realistic to target a general Government deficit of 9.5 % for 2009; and if he will make a statement on the matter. [12307/09]

Minister for Finance (Deputy Brian Lenihan): The Supplementary Budget is to be presented to the Dáil on 7 April. The Government has already taken significant action to restore stability to the public finances and the Supplementary Budget will continue this process.

In relation to the details of what will be presented in the Supplementary Budget, it is not the usual practice to speculate in advance on the content of any budget and I do not propose to deviate from this practice now. However, all options are on the table, including action on both current and capital expenditure, as well as revenue raising measures.

34. Deputy Joe Costello asked the Minister for Finance the position regarding the investigation reported to be being carried out by the Financial Regulator into irregular trading activities at a company (details supplied); and if he will make a statement on the matter. [12332/09]

Minister for Finance (Deputy Brian Lenihan): I am informed by the Financial Regulator that Merrill Lynch International Bank Limited (an Irish licensed credit institution) advised it on 18 February 2009 of matters in relation to the mispricing of trades in their London branch. Authorised officers of the Financial Regulator attended on site in the London branch in the days following this contact.

The Financial Regulator has also informed me that Merrill Lynch/Bank of America Corporation (Bank of America is Merrill’s parent company) have employed independent external expertise to investigate the circumstances in conjunction with Bank of America’s corporate audit and have agreed the scope of this investigation with the Financial Regulator and the UK Financial Services Authority. The Financial Regulator is also liaising with Bank of America/Merrill’s parent US regulators on this matter. The Financial Regulator is receiving daily updates on the progress of this investigation. While this investigation continues, the Financial Regulator is not in a position to comment further on the matter.

35. Deputy Kieran O’Donnell asked the Minister for Finance if he plans to extend the cut in the levels of professional fees to other areas of public procurement. [12587/09]

Minister for Finance (Deputy Brian Lenihan): I would expect to see the Government’s initiative reflected in better public procurement prices especially given the more competitive market environment and that the savings desired will be achieved in this way.

36. Deputy Jan O’Sullivan asked the Minister for Finance the proposals or options under consideration by his Department for the taxing of telephone and Internet betting; and if he will make a statement on the matter. [12311/09]

Minister for Finance (Deputy Brian Lenihan): As I stated during the Finance Bill process, it has been my intention to widen if possible the tax base on which betting duty would be applied. One obvious option in this regard is to include bets placed online or over the telephone with companies outside the State. However, it is clear that there are very serious legal difficulties surrounding this option which my officials are exploring on an ongoing basis.

37. Deputy David Stanton asked the Minister for Finance his latest assessment of tax changes in the USA which might adversely affect Irish interests; and the initiatives he has taken to try to pre-empt such moves; and if he will make a statement on the matter. [12603/09]

Minister for Finance (Deputy Brian Lenihan): The new US Administration has not yet given any real indication of its main focus in terms of international taxation. That said there has been a lot of speculation about potential changes to the US system of deferral whereby multinational corporations can defer paying US taxes on the profits of their subsidiaries overseas until they return them to the US.

I want to assure the Deputy that the Minister for Foreign Affairs, through the Embassy in Washington together with my own Department and the IDA work in close collaboration in seeking to address any policy proposals including those in relation to taxation which could affect foreign direct investment in Ireland. Issues that may have implications for Ireland are subject to focused discussion with US policymakers within the overall framework of a shared commitment to promoting the consolidation and growth of our economic relationship.

The recent Saint Patrick's Day meetings in Washington afforded us further opportunities to put forward our case in a considered and informed manner.

38. Deputy Bernard Allen asked the Minister for Finance if he has met the executives of building societies (details supplied) to hear their proposals for recapitalisation, for handling of liquidity and for impaired loans; and if he will make a statement on the matter. [12518/09]

Minister for Finance (Deputy Brian Lenihan): Since the Government’s guarantee Scheme was announced I have met on numerous occasions with representatives of all the covered institutions. The questions of capital, liquidity and loan impairment have been addressed at these meetings.

The Financial Regulator also enforces specific liquidity regulatory requirements and the issue of liquidity is a matter in the first instance for the Financial Regulator and the Central Bank. However, given the turmoil in financial markets in recent times, my officials are updated by the Financial Regulator and Central Bank regularly.

As the Deputy will be aware, the Government is reviewing proposals for dealing with the risks associated with certain assets including assets in the institutions concerned. I have asked Dr. Peter Bacon and the National Treasury Management Agency to report to me on this matter.

I have seen the initial report prepared by Dr. Peter Bacon for the NTMA. The report will inform the Government’s ongoing considerations, involving the Financial Regulator, Central Bank, the NTMA and our legal and financial advisers.

39. Deputy Kathleen Lynch asked the Minister for Finance the models of bad asset support scheme under consideration by his Department with respect to reinforcing the balance sheets of credit institutions supported by the bank guarantee; the parameters under which these models are being considered; the advantages and disadvantages of these models in the Irish context; when he will make an announcement in respect of such a scheme; the way he proposes to fund it; and if he will make a statement on the matter. [12300/09]

[993]Minister for Finance (Deputy Brian Lenihan): The Government is conscious that in current market circumstances there is a need to bring greater certainty and transparency to the operations of systemically important financial institutions, in particular in relation to specific asset classes currently perceived as carrying a higher than average risk.

In this context, the Government is examining proposals for the management and reduction of risks within financial institutions with respect to these specific exposures, having regard to international developments. As part of this work I have asked Dr. Peter Bacon and the National Treasury Management Agency to report to me on the matter. I have seen the report prepared by Dr. Bacon for the NTMA. The report will inform the Government’s ongoing considerations, along with ongoing work at EU and European Central Bank level. I will be bringing forward proposals in this area as a matter of priority.

40. Deputy James Bannon asked the Minister for Finance his estimate of the value of tax receipts on newly built property not yet sold which would accrue to the Exchequer if this property was sold, distinguishing the number of unsold properties and the average tax revenue that would be released by their sale. [12520/09]

Minister for Finance (Deputy Brian Lenihan): The Department of Finance does not have relevant statistics on which to base an assessment of the value of tax receipts on newly built property not yet sold which would accrue to the Exchequer if this property is sold. I have also been informed by the Revenue Commissioners that they have no information on which to base an estimate such as this. In these circumstances it is therefore not possible to estimate the potential yield from this request.

41. Deputy Denis Naughten asked the Minister for Finance the steps he is taking to secure funding from the national lottery in respect of sports projects; and if he will make a statement on the matter. [8412/09]

Minister for Finance (Deputy Brian Lenihan): The position in relation to National Lottery funding is that receipts from the sale of National Lottery tickets are deposited in the National Lottery Fund in the Central Bank. A portion of these funds is transferred by my Department into the Exchequer over the course of each year on the basis of the projected surplus for that year. The monies transferred into the Exchequer are entered as non-tax revenue and, as such, form part of the general pool out of which expenditure is financed.

42. Deputy John O’Mahony asked the Minister for Finance the overall national lottery funding in 2008 which was allocated to sport; the percentage given towards the sports capital programme; and if he will make a statement on the matter. [8487/09]

70. Deputy John O’Mahony asked the Minister for Finance the percentage of the proceeds of the national lottery which will be awarded to fund sport here in 2009; the way this compares with 2007 and 2008; and if he will make a statement on the matter. [8498/09]

[994]Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 42 and 70 together.

Since 2005, the total allocation for subheads which had formerly been funded entirely from the proceeds of the National Lottery has exceeded the funds available from the National Lottery. The total amount of funding is determined in the Estimates process, and is paid out of the general pool of revenue of which National Lottery proceeds form part. Subheads that, prior to 2005, were exclusively funded by National Lottery funds are now funded by a combination of National Lottery and Exchequer funding. It is not, therefore, possible to indicate the percentage of National Lottery funding which was included in the allocations provided in the subheads relating to sport which are part-funded by the National Lottery in the Vote for the Department of Arts, Sport and Tourism.

Funds from the National Lottery as a percentage of the total allocation for all subheads which are part-funded by the proceeds of the National Lottery amounted to 52% in 2007 and 57% in 2008. As the Revised Estimates for Public Services 2009 has not yet been finalised, corresponding figures for 2009 are not yet available.

43. Deputy Joanna Tuffy asked the Minister for Finance his views on whether the payment of significant bonuses, contractual or otherwise, to senior bank executives at institutions covered by the bank guarantee with respect to the financial year 2008 in which the guarantee was granted is appropriate; the steps he will be taking to ensure that no such inappropriate payments are made; if he will take steps within his remit to ensure the replacement of such in appropriate payments to the relevant covered institution; and if he will make a statement on the matter. [12323/09]

Minister for Finance (Deputy Brian Lenihan): The Deputy will be aware from the details in the recently published Covered Institution Remuneration Oversight Committee (CIROC) report that with the exception of the Irish Nationwide Building Society (INBS) where the CEO was paid a pre-arranged incentive bonus of €1,000,000 in relation to 2008, no bonuses have been or will be paid to chief executives and senior executive management teams in relation to performance in 2008/2009.

It is my view that recent detailed disclosures in relation to the remuneration of the CEO of the INBS require investigation. I wrote to the Acting Chairman of the Board on 12th March stating that I considered the payment of the bonus to be potentially a breach of the guarantee scheme and seeking immediate reply as to what the board intended to do. While the reply to that letter indicated that the payment concerned was contractually committed before the Government guarantee I have asked that the two directors appointed by the board nominated by me should review all of these issues and that I would receive a report within one month. In relation to the board at INBS I have requested the board to brief me next week on their plans for the Society, including the review of management and board personnel.

44. Deputy Mary Upton asked the Minister for Finance if he will estimate the average CPI and HICP measures for price volatility in 2009; and if he will make a statement on the matter. [12326/09]

Minister for Finance (Deputy Brian Lenihan): Based on the latest information available at the end of last year my Department set out its expectation that the Consumer Price Index [995](CPI) would fall this year by -1.0% but that Harmonised Index of Consumer Prices (HICP) inflation would be slightly positive, at ½% for 2009 as a whole. These forecasts were contained in the Addendum to the Stability Programme Update published on 9th January this year.

Since then, inflation data for December, January and February have been released by the Central Statistics Office (CSO). In addition the ECB has cut interest rates by a full percentage point significantly impacting on the CPI index, while falls in regulated energy prices have also been announced. Furthermore, the weakening economic climate has led to a fall-off in price pressures across a range of sectors. My Department now expects CPI inflation to be lower then previously expected in 2009 and could average around -3¾% for the year as a whole. HICP inflation is expected to be negative too, averaging around -1½% for 2009 as a whole.

Revised forecasts for inflation this year will be published with the Supplementary Budget on 7th April.

45. Deputy Eamon Gilmore asked the Minister for Finance if has begun the search for an individual or group of individuals to head his proposed Irish banking commission; and if he will make a statement on the matter. [12308/09]

Minister for Finance (Deputy Brian Lenihan): I am bringing proposals before the Government to implement major reform of the structure and organisation of financial regulation in Ireland. The changes will focus on restoring confidence in the Irish financial regulatory system and the strengthening of co-ordination of the central banking and financial regulation functions. It is a priority for the Government to ensure that the membership of the new structure will be highly authoritative, expert and experienced in the key areas required for it to effectively discharge its responsibilities.

46. Deputy Bernard J. Durkan asked the Minister for Finance when it is expected that traditional banking practices will be re-established; if this is expected to encompass traditional lending criteria in respect of mortgages or other uses; if it is intended to take steps to ensure that greater emphasis is placed on lending for employment creation purposes; if his attention has been drawn to the fact that the banking system does not appear to meet the ongoing needs of trade and commerce in the current climate; if it is intended to issue directives to the banking sector with a view to achieving a particular focus on the productive areas of the economy; and if he will make a statement on the matter. [12452/09]

Minister for Finance (Deputy Brian Lenihan): The primary objective of the Government is to secure and maintain the financial and economic position of the State. Significant steps have been taken to achieve that objective including the Bank Guarantee Scheme and the recapitalisation of Ireland’s two main banks. An essential element of the recapitalisation scheme, which I expect to be implemented in the very near future, anticipates the banks involved increasing the level of credit available throughout the economy. As part of the recapitalisation measures, the recapitalised banks have committed to increase lending capacity to small and medium enterprises (SMEs) by 10% and to provide an additional 30% capacity for lending to first time buyers in 2009. If the mortgage lending is not taken up, then the extra capacity will be available to SMEs. Compliance with this commitment will be monitored by the Financial Regulator. An independent review of credit availability, funded by the banks but managed jointly by the banks, Government and business representatives is also underway and will be completed [996]shortly. Amongst the issues covered by this review will be changes in bank lending, repayment terms and a comparison with customer experiences prior to the onset of the financial crisis. I am satisfied that this review, along with the quarterly reports from the recapitalised institutions, will give a clear picture regarding the flow of credit in the Irish economy.

The Financial Regulator has also worked closely with my Department to introduce two new codes. The code of conduct for business lending applies to all regulated banks and building societies and will facilitate access to credit, promote fairness and transparency and ensure that banks will assist borrowers in meeting their obligations, or otherwise deal with an arrears situation in an orderly and appropriate manner. The second code covers mortgage arrears and is designed to ensure that mortgage lenders take action to assist householders who are in arrears and will apply to all mortgage lenders, including banks, building societies and retail credit firms.

The question of issuing specific directives to the banks does not arise at this point in time. I fully expect that the banks concerned will meet their commitments under the recapitalisation scheme to increase the level of credit available nationally. Compliance with those commitments will be monitored by the Financial Regulator, the independent review of credit availability referred to above and by the State’s appointees on the recapitalised banks.

47. Deputy Richard Bruton asked the Minister for Finance if he has data available to him on the trends in business credit since the bank guarantee in September 2008 and on the work of the clearing group on blocked credit; and if he will make a statement on the matter. [12525/09]

Minister for Finance (Deputy Brian Lenihan): Government Departments and State agencies have engaged with banks and business representatives in a variety of settings on issues surrounding the flow of credit for business. A formal structure for those contacts on an ongoing basis will be finalised shortly.

An independent review of credit availability, funded by the banks but managed jointly by the banks, Government and business representatives is also underway and will be completed shortly. Amongst the issues covered by this review will be changes in bank lending, repayment terms and a comparison with customer experiences prior to the onset of the financial crisis. I am satisfied that this review, along with the quarterly reports from the recapitalised institutions, will give a clear picture regarding the flow of credit in the Irish economy.

As part of the recapitalisation package announced on 11 February, Allied Irish Bank and Bank of Ireland reconfirmed their December commitment to increase lending capacity to small and medium enterprises (SMEs) by 10% and to provide an additional 30% capacity for lending to first time buyers in 2009. If the mortgage lending is not taken up, then the extra capacity will be available to SMEs. AIB and Bank of Ireland have also committed to public campaigns to actively promote small business lending at competitive rates with increased transparency on the criteria to be met. Compliance with this commitment will be monitored by the Financial Regulator. The banks will make quarterly reports, with the first report to end March 2009 to be submitted by end April 2009. Both institutions have met with officials from my Department to give details of the steps they are taking to implement these measures.

48. Deputy James Bannon asked the Minister for Finance the way he will manage the State role on the banks which are to be recapitalised. [12519/09]

[997]Minister for Finance (Deputy Brian Lenihan): As a general rule, the State’s relationship with the banks following their proposed recapitalisation will be managed through two conduits. Firstly the NPRF Commission will hold the shares on the State’s behalf and develop a shareholder/company relationship with the banks. Also arrangements will be put in place to monitor closely the commitments made by the banks in relation to the recapitalisation and to monitor the State’s interests as a stakeholder.

Secondly, I will appoint 25% of the members of the Boards of these banks. Initially this will involve two extra Directors as there are already two Directors appointed from panels nominated by myself to each of the banks to be recapitalised.

In addition, I have other avenues of influence in relation to the banks, for example under the Government Guarantee Scheme and the associated legislation and deeds.

49. Deputy Ruairí Quinn asked the Minister for Finance if he will table proposals to mitigate the potentially significant negative effects of deflation; and if he will make a statement on the matter. [12313/09]

Minister for Finance (Deputy Brian Lenihan): Based on the latest information available at the end of last year my Department set out its expectation that the Consumer Price Index (CPI) would fall this year by -1.0% but that Harmonised Index of Consumer Prices (HICP) inflation would be slightly positive, at ½% for 2009 as a whole. These forecasts were contained in the Addendum to the Stability Programme Update published on 9th January this year.

While prices are currently falling and will on average do so this year, it is important to stress that this is not expected to continue. The reason we have entered a short period of declining prices is mainly due to large falls in mortgage interest rates as well as the fall-back in the sharp increases in energy and food prices last year. It is generally expected that both CPI and HICP inflation will be positive in 2010.

The current and prospective easing in inflation will have both positive and negative effects. It will lead to an increase in households’ purchasing power, helping all but especially those on tighter budgets, and this is to be welcomed. In addition, in recent years price levels in Ireland have risen to some 20% above the rest of the euro area, which has damaged our international competitiveness. Inflation continuing below the euro area average should help us to regain some of the price competitiveness which we have lost in recent years.

That said, falling prices also means an increase in the real burden of debt so I would not like to see a prolonged period of declining prices. In the case of mortgage debt, the Government has put in place supports for households experiencing difficulties in meeting mortgage payments. For example, the Mortgage Interest Supplement provides assistance where the mortgage relates to the sole place of residence. In addition, the new mandatory Code of Conduct on Mortgage Arrears, incorporates a requirement for the lender to wait at least six months from [998]the time arrears arise before taking legal action. In addition, the recapitalised banks have assured the Government that in the normal course they will make every effort to avoid repossessions, as indicated by the low level of repossessions by them to date.

50. Deputy Thomas P. Broughan asked the Minister for Finance when he will publish profiles of expected tax revenues and voted expenditure for 2009; the reason for the delay in their publication in 2009; and if he will make a statement on the matter. [12298/09]

Minister for Finance (Deputy Brian Lenihan): In the context of the normal December Budget day decisions for both expenditure and taxation, monthly profiles of projected receipts and expenditure are generally published by my Department by the end of January every year. However this year, against a difficult and deteriorating economic background, it has proven necessary to revise the fiscal forecasts, initially in the context of the Addendum to the Stability Programme Update which was submitted to the European Commission on 9 January last and now in the context of the Supplementary Budget to be published on 7 April. Consequently, the publication of the monthly profiles has been delayed this year. I expect tax and expenditure profiles to be published by my Department shortly after the Supplementary Budget.

51. Deputy Pat Breen asked the Minister for Finance the number of staff who will be released as a result of the rationalisation of 30 State agencies announced in budget 2009; and if new legislation is needed to allow staff to be assigned to work outside of the agencies being merged. [12524/09]

Minister for Finance (Deputy Brian Lenihan): In Budget 2009, I announced 30 rationalisation decisions that will reduce the number of State agencies by 41. The specific details with regard to reductions in numbers and the requirement for new legislation is a matter for the relevant Departments responsible for each of the rationalisation proposals. The general policy approach is to create efficiencies, including staffing efficiencies, through streamlining the delivery of public services, removing duplication of functions and promoting Departmental and Ministerial responsibility. The requirement for new legislation arises from the individual circumstances of the bodies, for example where the functions of statutory bodies are being changed or the body abolished. The assignment of staff to work outside of the agencies is in general a human resources/industrial relations issue and does not normally require new legislation.

52. Deputy Seán Barrett asked the Minister for Finance his views on the introduction of personalised vehicle registration plates alongside the existing system of vehicle registration as a means of generating extra revenue for the State and providing additional employment opportunities; and if he will make a statement on the matter. [10024/09]

Minister for Finance (Deputy Brian Lenihan): The current vehicle registration plate numbering system in the State does not lend itself to the creation of a market for the purchase and transfer of personalised number plates. In order to create a successful market, the current system would need to be redesigned or augmented by a parallel plate numbering system.

The registration plate in place under the current system allows members of the public and car buyers to ascertain, at a glance, both the year and county of registration of a vehicle. It is [999]seen as a simple and effective registration plate system which is indeed the envy of many European registration authorities, including the UK. A move to a more complicated plating system, using variations of letters and numbers, could create confusion without providing any real benefits.

A move to introduce a parallel system for personalised plates would also require inter-agency agreement, involving An Garda Síochána, the Department of the Environment, Heritage and Local Government, the Department of Transport and the Office of the Revenue Commissioners; and would necessitate legislative and administrative changes.

The small size of the Irish car market, the potential for confusion and increased tax evasion, as well as the costs of administering such a scheme, raise considerable doubts as to whether any real overall benefit would accrue to the State if a personalised vehicle registration system was introduced. These difficulties are compounded by potential additional problems in the management of the national fleet and the identification of vehicles in connection with road traffic accidents and offences.

53. Deputy Emmet Stagg asked the Minister for Finance the net present value of the Exchequer’s commitment in respect of the retirement package, including payments already made as part of this package when relevant to the current governor of the Central Bank, the acting chief executive of the Financial Regulator and the previous chief executive of the Financial Regulator; and if he will make a statement on the matter. [12321/09]

Minister for Finance (Deputy Brian Lenihan): The remuneration, including superannuation, of the Governor, the Chief Executive of the Financial Regulator and the staff of the Central Bank and Financial Services Authority of Ireland are not paid from the Exchequer but from the organisation’s own resources. The annual costs of the Central Bank and Financial Services Authority of Ireland, including those relating to remuneration and superannuation, together with the costs of providing pension benefits in compliance with stated accounting rules, are set out in the organisation’s annual reports.

54. Deputy Joanna Tuffy asked the Minister for Finance the aggregate knock-on effect on economic growth and contraction he would expect as a result of deflating the economy, through Government revenue raising or expenditure reductions in the 7 April 2009 budget, by €1.5 billion, €2.5 billion, €3.5 billion, €4.5 billion and €5.5 billion over a nine-month period to end 2009; if he, his officials or external bodies at his or their request have; and if he will make a statement on the matter. [12324/09]

Minister for Finance (Deputy Brian Lenihan): There are considerable uncertainties regarding the economic impact of any fiscal measures, given that it is unknown how economic agents will react to the various policy changes. In addition, the composition of the fiscal package would be important, as different policy measures would have different economic impacts.

Notwithstanding these uncertainties, the economic impact of fiscal measures can be estimated in broad terms.

A fiscal package designed to raise €4.5 billion in 2009 is the equivalent of about €6 billion in a full year and would amount to around 3½% of GDP for 2009 as a whole. Taking account of a number of factors such as the potential for significant ‘leakages’ through imports and some [1000]impact on price rather than on the quantity of output it is estimated that GDP growth would be around 1½% lower than would otherwise be the case on foot of these measures. Broadly similar pro rata rates apply to the other amounts.

However, there is potential for considerable variation on the macroeconomic impact depending on the exact nature of any fiscal package. Furthermore, account of the potential for enhanced consumer and investor confidence and greater future certainty that such a package may have would also have to be considered.

55. Deputy Seán Sherlock asked the Minister for Finance the steps he will be taking in order to stabilise the credit institutions covered by the bank guarantee scheme; and if he will make a statement on the matter. [12317/09]

Minister for Finance (Deputy Brian Lenihan): The Government’s approach to the unprecedented crisis in global financial markets has been structured and considered. The series of measures taken to ensure the stabilisation of the Irish financial system since last September evidences the proactive stance taken by the Government. In deciding policy approaches, the Government has taken advice and consulted with the Central Bank, the Financial Regulator, the National Treasury Management Agency and its legal and financial advisors.

The Deputy will be aware that following a drain on liquidity in the Irish banking system in 2008, the Government, through the Credit Institutions (Financial Support) Scheme 2008, guaranteed all the deposits, covered bonds, senior debt and dated subordinated debt (lower tier II) of seven Irish banking institutions (covered institutions). This very important initiative by the Government was designed to protect the Irish financial system and to remedy a serious disturbance in the economy caused by the turmoil in the international financial markets.

The Guarantee scheme (the scheme) has proved successful in safeguarding the stability of the Irish banking sector and in restoring its liquidity position in order to support its normal lending activities.

As I have emphasised on several occasions, the scheme imposes very strict conditions to ensure that balance sheet growth is measured and in accordance with prudent banking practice, that risk is properly measured and managed.

In addition to what is contained in the scheme, the Financial Regulator has instigated a series of regulatory measures to take account of the changed environment, including an increased focus on the management of credit and liquidity risks of the banks.

Among the actions the Financial Regulator is taking are the following:

the recruitment of an additional 20 senior supervisory staff with banking experience to be placed on-site in key banks to monitor developments;

requiring banks to set out new business plans focusing on the need to reduce their risk profile and how their models of banking are sustainable in the new environment; and

enhanced reporting obligations in relation to capital, asset quality and individual large loans to supplement daily liquidity reporting requirements.

As the Deputy is aware, in early January the Government nationalised Anglo Irish Bank. Anglo Irish Bank is a major financial institution whose viability is of systemic importance [1001]to Ireland. The Government has made clear that it will ensure its continued viability as a going concern.

In view of the continuing turmoil in global financial markets the Government decided on 11 February, on a comprehensive recapitalisation package for AIB and Bank of Ireland which will reinforce the stability of our financial system, increase confidence in the banking system here, and facilitate the banks involved in lending to the economy.

The Government is also in discussions with other covered institutions (Irish Life and Permanent, EBS and INBS) concerning their respective capital positions and is reviewing the guarantee scheme.

In the context of the six month review of the guarantee Scheme to be completed during April 2009 the Government will examine how the Scheme could be revised subject to European Commission approval and consistent with EU State aid requirements, in ways which include supporting longer-term bond issuance by the covered institutions. This would be in line with international and EU trends where the average term of State cover for bond issues extends beyond 2010.

Irish institutions have engaged in lending for land and property development which exposes them to specific risk at a time of falling property prices and difficult economic conditions. The Government will examine proposals for the management and reduction of risks within financial institutions with respect to these specific exposures, having regard to international developments. I will be carrying forward this work to produce proposals as a matter of priority.

56. Deputy Ciarán Lynch asked the Minister for Finance if he proposes to bring forward legislative proposals relating to the management of consumer debt; his views on whether the legislative framework is satisfactory in this regard; if, in particular, his Department has considered the implementation of UK models such as individual voluntary agreements or debt management plans; if new legislation would be required for the implementation of such models in an Irish context; and if he will make a statement on the matter. [12303/09]

Minister for Finance (Deputy Brian Lenihan): As far as safeguarding the interests of individual borrowers is concerned, the function of Government is to provide an appropriate legislative framework for effective and efficient regulation of the financial services sector. Much progress has been made in this regard over recent years, through such measures as the establishment of the Financial Regulator and the Financial Services Ombudsman and the publication of the Financial Regulator Consumer Protection Code (CPC) in August 2006.

The CPC, which came into full effect from July 2007, represents a major step in promoting the interests of consumers in that it obligates the regulated entities that it covers to act in the customer’s best interests, to seek appropriate information about the customer, to ensure that the products and services provided are suitable for the consumer, to treat their customers fairly and have adequate procedures in place to handle complaints. These obligations are additional to the statutory prior information and warnings required under the Consumer Credit Act, 1995.

The Financial Regulator has prioritised the provision of information for consumers about the potential risk of excessive debt and has also drawn attention to the need for consumers to choose the right type of loan for their needs. It has also developed a number of specific initiatives to help consumers make informed choices in terms of the financial products they choose, the amount of risk they take on and the cost of financial products.

[1002]General issues relating to the enforcement of debts are for other Ministers. I understand that as part of the Law Reform Commission’s Third Programme of Law Reform, it will shortly look into the area of legislation concerning debt enforcement. Any conclusions arising from the Law Reform Commission’s work will of course be carefully considered by the other Ministers.

57. Deputy Emmet Stagg asked the Minister for Finance the forecast Exchequer borrowing requirement for the years 2009, 2010, 2011 and 2012; the position regarding discussions he or his Department officials have had with the EU institutions with regard to the deficit procedure to which Ireland is subject; and if he will make a statement on the matter. [12322/09]

Minister for Finance (Deputy Brian Lenihan): The latest published forecast for the Exchequer borrowing requirement (EBR) and the General Government Balance (GGB -the relevant measure for the Stability and Growth Pact), were set out in the Addendum to the Irish Stability Programme Update. This was submitted to the European Commission in January 2009 and the relevant details are as follows:

	2008	2009	2010	2011	2012	2013
	€m	€m	€m	€m	€m	€m
EBR	-12,714	-17,980	-16,860	-13,769	-11,583	-8,081
GGB	-11,796	-17,165	-16,271	-12,092	-9,443	-5,537
% GDP	-6.3%	-9.5%	-9.0%	-6.4%	-4.8%	-2.6%

In the context of the supplementary budgetary measures to be announced on Tuesday, 7th April my Department will be publishing revised projections.

On foot of its report on Ireland’s budgetary position last month, under Article 104 of the Treaty which governs the operation of the excessive deficit procedure of the Stability and Growth Pact, the Commission has now adopted proposals for a Council recommendation to Ireland. This is part of the normal operation of the Pact whenever the General Government Deficit of a Member State exceeds the reference value of 3% of GDP as did that of Ireland and of a number of other Member States in 2008.

The proposed recommendation invites Ireland to reduce the deficit below 3% of GDP by 2013. This is in line with the Government’s budgetary strategy.

Following a meeting of the EU’s Economic and Financial Committee on 26th and 27th March which is being is attended by officials of my Department, the proposed Council recommendation will be among those considered by the Ecofin Council next month. As is normal in these circumstances, I have been in regular contact with the Commission and with my European colleagues with regard to the position of the public finances.

I look forward to the support of the Commission and Council for the overall budgetary strategy of restoring stability to the public finances, while taking steps also to maximise short-term economic activity and employment and improve competitiveness.

58. Deputy Ciarán Lynch asked the Minister for Finance his views on recent statements by the President of the European Investment Bank to the effect that giving State guarantees to the banking sector can have a significant impact on the cost of sovereign borrowing; his views on both of these models. [12304/09]

Minister for Finance (Deputy Brian Lenihan): The National Treasury Management Agency has successfully issued two new bonds (totalling €10 billion) in 2009 and this week it launched the first of a series of auctions of long-term bonds. The auction was nearly three times oversubscribed. In common with other euro sovereign borrowers benchmarked against Germany, Ireland’s cost of borrowing has increased. There are a range of factors that influence the cost of borrowing on the international market — the bank guarantee being one of them. However, it should be noted that Ireland’s cost of borrowing has fallen recently from the levels recorded earlier in the year.

I am advised by the NTMA that notwithstanding the uncertain times we are in, they do not envisage any problems on the international markets this year in terms of raising funds.

59. Deputy Michael D. Higgins asked the Minister for Finance if and when he will table further proposals with respect to the capitalisation and stabilisation of the credit institutions covered by the bank guarantee scheme; and if he will make a statement on the matter. [12329/09]

Minister for Finance (Deputy Brian Lenihan): As the Deputy will be aware, the Government has announced detailed proposals for the recapitalisation of Allied Irish Bank and Bank of Ireland. As I have noted previously, the Government’s approach to the recapitalisation of these institutions has been structured and considered and based on a detailed assessment of the institutions concerned. This included work undertaken for the Financial Regulator by PricewaterhouseCoopers and Jones Lang LaSalle. Following the completion of the Government’s due diligence exercise, which is currently being finalised, the proposals will be put to EGMs of both banks over the coming weeks.

The Government is in ongoing discussions with the other covered institutions including with regard to their respective capital positions and in relation to the review of the guarantee scheme. The Government will be bringing forward proposals to strengthen these institutions as required.

As the Deputy will be aware, the Government is also examining how the guarantee Scheme could be revised, subject to European Commission approval and consistent with EU State aid requirements, to support longer-term bond issuance by the covered institutions. Moreover, in consultation with my advisers, I am examining proposals for dealing with risky assets on the balance sheets of relevant institutions.

60. Deputy Liz McManus asked the Minister for Finance when the fees charged to institutions under the bank guarantee scheme in respect of that guarantee are next to be reviewed; the stakeholders in this review and the process involved; if he will publish the formula used to generate this fee; if recent increases in Ireland’s long-term sovereign borrowing costs will be considered in the context of this review process; and if he will make a statement on the matter. [12305/09]

Minister for Finance (Deputy Brian Lenihan): There is provision in Paragraph 22 of the Scheme that I may review the guarantee charging model every six months. I expect that the [1004]first of these reviews will be completed during April 2009. The review process will require advice from the Central Bank, Financial Regulator and the NTMA.

The thinking behind the Charging Model is set out in some detail in the Annexe to the Scheme. The charge is calculated by reference to the composition of the covered institution’s average month-end covered liabilities during the preceding quarter. Each covered institution pays its share in accordance with its risk profile and the guarantee charging model, subject to the estimated cost to the Exchequer being fully recouped.

I acknowledge that Irish bond spreads have widened against the benchmark German bund over recent months. There are complex factors at play, many not specific to Ireland.

However, in regard to Ireland, the fiscal performance is and will continue to be a key issue. In this regard I have outlined at length the necessity to bring public spending and revenue into better balance.

61. Deputy Jan O’Sullivan asked the Minister for Finance his technical understanding of the term “economic depression”; his views on whether Ireland is on the verge of fulfilling or has already fulfilled these criteria; and if he will make a statement on the matter. [12312/09]

Minister for Finance (Deputy Brian Lenihan): There is no universally accepted definition of the term depression, but my own view is that the experience of the 1930s in many countries is an accurate description of the term.

In Ireland after a very long period of sustained growth we are now experiencing a deep recession. As a result living standards will decline significantly and we will all have to adjust our expectations of what can be achieved. The figures published by the Central Statistics Office this morning provide an indication as to the scale of the downturn currently underway.

Notwithstanding the downward adjustment, the Deputy should note that economic activity and income levels in Ireland remain comparatively high by international and historical standards. Furthermore, we must remember that recessions end and that we must now prepare ourselves to be best able to take advantage of the global economic pick-up when it emerges.

62. Deputy Joan Burton asked the Minister for Finance the position regarding the implementation of the car parking levy announced in budget 2009; and if he will make a statement on the matter. [12333/09]

Minister for Finance (Deputy Brian Lenihan): Consultations between my Department and the Department of the Environment, Heritage and Local Government with regard to the implementation of the levy are well advanced and details of its introduction will be announced shortly.

As previously indicated, the levy will apply in the five urban areas of Dublin, Waterford, Cork, Limerick and Galway. Within these urban areas, regard will be had to factors such as,

1. the availability of public transport,

2. the level of congestion in the relevant parts of those cities, and

3. the relative value of the car parking spaces.

[1005]Accordingly, the relevant local authorities and the Department of Transport are also being consulted so as to ensure that the prime objectives of reducing traffic congestion and contributing to a cleaner environment are realised.

63. Deputy Joan Burton asked the Minister for Finance if, in view of the evolution in their respective share prices and the recent events impacting on the global financial sector, it may be necessary to review the decision to invest the €7 billion in preference shares (details supplied); and if he will make a statement on the matter. [12334/09]

Minister for Finance (Deputy Brian Lenihan): As I have noted previously, the Government’s approach to recapitalisation has been structured and considered and based on a detailed assessment of the institutions concerned.

The Financial Regulator engaged PricewaterhouseCoopers to examine the capital position of the institutions covered under the Guarantee Scheme. This examination included an assessment of the level of impairment of assets under various stress scenarios. A further assessment of the market values of land and development assets was carried out by Jones Lang LaSalle to complement this work. Following the completion of the Government’s due diligence exercise, which is currently being finalised, the proposals will be put to EGMs of both banks over the coming weeks.

The recapitalisation of the institutions in question addresses both the expectations of international markets on the Irish bank’s capital levels, and strengthens the ability of institutions to cope with impaired loans in conjunction existing reserves and retained profit from performing loans and other trading activities.

The share price of an institution reflects a broad market assessment of a business or sector and the objective of the recapitalisation is not to support the share price but to support the stability of the institution concerned. The current depressed share prices of banks internationally indicate an uncertainty over the future operation and earning potential of banks globally and this is no different for the institutions referred to by the Deputy. In this regard the Government has indicated that it is committed to ensuring the stability of the Irish financial system and protecting systemic institutions.

64. Deputy Pat Rabbitte asked the Minister for Finance the recent discussions, negotiations or other activities undertaken by him or his officials with respect to the recapitalisation of banks (details supplied); if he will provide an estimate of the cost to the Exchequer of such recapitalisation; if it is his intention to fund such recapitalisation; if it is his intention to fund such recapitalisation by utilising assets held in the National Pensions Reserve Fund. [12328/09]

Minister for Finance (Deputy Brian Lenihan): The Government is in discussions with the covered institutions referred to including with regards to their respective capital positions and in relation to the review of the guarantee scheme. The Government will bring forward proposals to strengthen these institutions if required. As previously announced, capital is available, through the National Pension Reserve Fund, or otherwise and subject to terms and conditions, as appropriate. Any possible capital requirement for these institutions would be substantially less than that for the two main banks.

Question No. 65 answered with Question No. 24.

66. Deputy Róisín Shortall asked the Minister for Finance if and when he will publish the report of the Covered Institution Remuneration Oversight Committee on bankers’ pay; and if he will make a statement on the matter. [12320/09]

Minister for Finance (Deputy Brian Lenihan): The Report of the Covered Institutions Remuneration Committee (CIROC) was published by my Department on 13 March 2009.

The Government welcomed the recommendation by CIROC for reductions in the prevailing base salary, pension levels and bonuses for Chairs, Chief Executives and ordinary Board members in those financial institutions covered by the Bank Guarantee Scheme. As the Deputy is aware, I have written to those institutions seeking a salary cap of €500,000 or the amount recommended by CIROC, whichever is the lesser.

The CIROC Report was placed before the House on 13 March 2009 and is also available on my Department’s website.

67. Deputy Willie Penrose asked the Minister for Finance if he will publish the reports relating to banks (details supplied); and if he will make a statement on the matter. [12301/09]

Minister for Finance (Deputy Brian Lenihan): The reports which the Deputy refers to were prepared on behalf of the Financial Regulator who has indicated that because of the commercially sensitive nature of the information contained in the reports, they will not be publishing or making the contents of the reports generally available.

As the Deputy is aware, extracts from a series of reports on Anglo Irish Bank prepared by Pricewaterhouse Coopers were released in view of the fact that Anglo Irish Bank is in public ownership and there was an important public interest in publishing the document.

The banks the Deputy refers to are not in public ownership. As the reports contain commercially sensitive information, it would not be appropriate for those reports to be published at this time.

68. Deputy Jack Wall asked the Minister for Finance the details of direct contacts, whether formally or informally, he or his officials have had with credit rating agencies over the past six months in respect of Irish sovereign debt; the details of briefings he or his officials have had on such meetings which have occurred between the Governor of the Central Bank or the chief executive of the National Treasury Management Agency; and if he will make a statement on the matter. [12316/09]

Minister for Finance (Deputy Brian Lenihan): In the normal course of events, officials in my Department regularly brief and meet with representatives of international credit rating agencies in order to provide information on the Irish economy. As part of my function as Minister for Finance, I meet with a wide variety of organisations, including on occasion, credit ratings agencies. In the past six months I have only met with representatives of Standard and Poors on 18 February 2009 to discuss the budgetary and economic outlook for Ireland.

The rating agencies as a matter of course also meet with a wide variety of public and private sector organisations in Ireland, including the Central Bank and the NTMA, on a regular basis as part of their process of keeping themselves informed of developments in the Irish economy. [1007]In addition, National Treasury Management Agency officials regularly brief the rating agencies on various issues related to the public finances.

69. Deputy Billy Timmins asked the Minister for Finance if he plans to publish policy options for expenditure savings put forward by Departments ahead of the emergency budget. [12522/09]

Minister for Finance (Deputy Brian Lenihan): In line with normal budgetary practice, the Government will consider and decide upon expenditure policy options, and the decisions will be announced on Tuesday 7 April next.

Question No. 70 answered with Question No. 42.

71. Deputy Liz McManus asked the Minister for Finance his views on recent increases in the cost of raising sovereign debt; the extent to which he attributes this increased funding cost to the deteriorating Exchequer position; the extent to which he attributes it to the contingent liabilities arising from the bank guarantee; and if he will make a statement on the matter. [12306/09]

Minister for Finance (Deputy Brian Lenihan): The National Treasury Management Agency has advised me that the main reasons for the increase in the forecast cost of servicing the national debt for 2009 are the increase in the estimate for the 2009 Exchequer Borrowing Requirement and the higher interest rates currently prevailing on Government bonds. The current elevated yields on Irish Government bonds reflect both global factors which are affecting all euro sovereign borrowers benchmarked to the German bond, and national specific factors, which would include the state of the public finances and the bank guarantee. I understand that it is impossible to quantify the specific impact that each of these diverse individual factors have on the borrowing cost. The NTMA notes that the cost of borrowing for Ireland has fallen recently from the levels recorded earlier in the year.

72. Deputy John Perry asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will ensure that the 60% redundancy refund is awarded to a person (details supplied) in County Sligo; and if she will ensure that as a result of the financial hardship involved in this case, this refund will be awarded as expeditiously as possible. [12643/09]

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Billy Kelleher): I would like to inform the Deputy that an application for a rebate was received in the Redundancy Payments Section of my Department on 3 March 2009.

Unfortunately, reflecting the turmoil in the labour market, there has been a huge increase in the number of claims. In the interest of fairness, all claims are being dealt with in order of receipt. Currently, on-line claims submitted in November last are being processed, and those submitted manually in October are now being reached for processing. Obviously this delay is very much regretted and every effort is being made to allocate increased resources to the Redundancy Payments Section. I fully appreciate the difficulties facing those who have lost their jobs. Unfortunately, these are common challenges being faced by many and the main focus of my Departments efforts is to make sure that everybody’s claim is dealt with in order and within the quickest possible timeframe.

73. Deputy Thomas P. Broughan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will introduce measures to address the issue of double jobbing in the taxi industry; if she will introduce the EU working time directive for all drivers in the taxi sector; and if she will make a statement on the matter. [12656/09]

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Billy Kelleher): The Organisation of Working Time Act 1997 in conjunction with the Organisation of Working Time (Inclusion of Transport Activities) Regulations 2004-S.I. No. 817 of 2004 provide that the maximum average working week of 48 hours and the rest periods and rest breaks provided for in that legislation apply to taxi drivers who have employee status.

Section 33 of the 1997 Act provides that if an employee, such as a taxi driver with employee status, works for two employers he or she may not work more than an average 48 hour week aggregated between the two employers. Section 33 also provides that it is an offence for the second employer to require an employee to work in excess of these hours between both employers and also for the employee to so work between both employers.

Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organisation of working time, on which the 1997 Act is based, applies only to workers or employees and does not apply to the self-employed. Accordingly, as it was enacted to transpose the terms of the Directive, the 1997 Act does not apply to the self- employed.

In addition the 1997 Act is employment rights legislation and in common with the wide range of such legislation enacted over the years only applies to workers or employees.

The rationale for the Working Time Directive and the 1997 Act applying to workers or employees only and not to the self- employed is that employees or workers would be vulnerable to any pressure from their employer to work long hours in excess of the maximum average 48 hour week set out in the Directive and 1997 Act, unlike the self-employed who are in a position to control their own working hours. In the circumstances there are no proposals to amend the 1997 Act.

74. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the steps taken to address the issue of competitiveness in the economy in both the manufacturing and service sectors in each of the past eight years to date in 2009; the results of such measures; and if she will make a statement on the matter. [12735/09]

Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): Sustaining Ireland’s competitiveness continues to be a key priority for this Government. It is monitored in particular through the work and advice of the National Competitiveness Council. Their work is a very important part of regular short and medium term analysis of what our economy requires to stay competitive. The National Development Plan 2006-2013 underpins competitiveness by improving our infrastructure stock and putting in place advanced capital programmes for our future needs. Of the numerous steps taken to enhance competitiveness since 2001, I would like to highlight some introduced by my department, in particular:

The establishment of Science Foundation Ireland in 2000.

The implementation of the Enterprise Strategy Group’s “Ahead of the Curve” Report, published in 2005, by the Enterprise Advisory Group.

[1009]The Enterprise Agencies have led an ambitious and strategic programme of funding and support measures for both indigenous enterprise and foreign direct investment.

The National Skills Strategy, published in 2006.

Implementation of the Report of the Small Business Forum, published in 2006.

The IFSC Strategy document, “Building on Success” launched in September 2006, to support the future development of the international financial services industry in Ireland.

The continuing implementation of the Strategy for Science, Technology and Innovation, launched in 2006.

The High Level Group on Manufacturing was established in 2007

Ongoing implementation of The Services Strategy, launched in 2008

Further details of strategies are included in my Department’s Annual Reports.

To offset the competitive threat from lower wage economies, in recent years my department has implemented a series of policies to encourage a move to higher productivity levels and the production of higher value added goods and services. Maintaining our low rate of corporation tax, has been of particular value in attracting Foreign Direct Investment.

In common with many other developed economies, we continue to invest in the “knowledge economy”. Over the past ten years we have reshaped the infrastructure for research and innovation with strong investment in centres of research excellence, enterprise incubators in universities and many new programmes to help ordinary firms commercialise new ideas. Our policies have led economic activity into new areas, opening up new and sustainable sources of competitive advantage such as life sciences, biotechnology, services and related research, development and innovation. That commitment has delivered successes in terms of our international reputation and our ability to compete for internationally mobile research-related investment.

Our long-term commitment to investing in and supporting science will, I am confident, bring an additional dimension to our competitiveness as well as taking us to a new level of innovation and entrepreneurial activity.

75. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the measures or incentives she has in mind to address the issues regarding competitiveness in the manufacturing and service areas of the economy; and if she will make a statement on the matter. [12742/09]

Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): Under the Framework for Economic Renewal we are taking a number of measures across Government to address competitiveness objectives. A key element of the Government’s current strategy to develop the enterprise sector is to encourage increased levels of investment in research, using more technology in product development and encouraging more innovation. “Building Ireland’s Smart Economy” sets a clear agenda to help manage this change.

I believe that our economic prosperity exists to a significant degree on our capability to build ‘high tech’—‘high value’ businesses that can compete successfully from an early stage in global markets. In order to be competitive and to increase exports, Irish companies must focus on improving productivity, investing in research and continue applying innovative solutions to every facet of their business process. I believe that our success in stimulating business to do more R&D will be a key determinant of our future economic well-being. Our development [1010]agencies are assisting companies to this end. Agencies are also focused on helping companies to identify and drive down costs to sustain existing jobs and generate new employment and economic growth for Ireland.

Implementation of the recommendations of the High Level Group on Manufacturing will strengthen the manufacturing sector to maximise its potential and exploit new opportunities. I will shortly be announcing the membership of the Manufacturing Forum who will oversee implementation of these recommendations.

Our competitiveness priorities also include a strong focus on skills, education and training. Lifelong education fundamentally supports advances in productivity, upon which our competitiveness depends. I will shortly be announcing an implementation plan for the National Skills Strategy.

We are committed to support the development of environmental technologies in Ireland in order to achieve a win-win situation of improved competitiveness and environmental performance. Emerging sectors such as Environmental Products and Services have significant potential and will be targeted. Both IDA and Enterprise Ireland have recently established an internal team to identify enterprise opportunities for Ireland in the newly emerging clean /green sectors.

We know that services innovation is as vital as technological innovation as a key driver of performance. We are committed to assist business in realising their potential for non-technological innovation through the development of new business models, customer-interfaces and service-products, as an invaluable source of business, as well as, national competitiveness. We want to successfully reach those services companies that traditional RTD innovation policy has not. Ongoing implementation of the Services Strategy will be important in this respect.

Our investment in R&D places the higher education system at the forefront of Ireland’s economic development strategy for the coming years. Science Foundation Ireland is working on developing initiatives to forge closer links between Ireland’s higher education institutes and industry to drive the R& D agenda. I believe it essential that we continue to maintain the best possible conditions across all policy spheres for supporting and sustaining innovation.

76. Deputy Olwyn Enright asked the Tánaiste and Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 227 of 24 September 2008, the position regarding the series of actions outlined in her reply to facilitate redundant apprentices in completing their studies; and if she will make a statement on the matter. [12651/09]

Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): My Department and FÁS have been continually monitoring the trends in apprenticeship. A number of measures are being put in place to assist apprentices who have become redundant in completing their apprenticeship. These measures are providing assistance to over 2,600 redundant apprentices. These include the following.

FÁS Employment Services Division is focusing on assisting redundant apprentices to source employment, in order that they can complete their apprenticeship by receiving on-the-job training and undertaking the associated competence based assessments.

The scheduling rules for off-the-job training were amended to permit redundant apprentices to progress in their apprenticeships to the next off-the-job phase. This change in the scheduling rules has permitted 428 apprentices to attend phase 4 and phase 6 off-the-job [1011]training in 2008 and 398 apprentices attended off-the-job training in the term January 2009 to March 2009.

The scheduling of apprentices for term 3, commencing on 6th April, 2009, is expected to provide for at least 700 apprentices to attend Phase 4 and Phase 6 off-the-job training in the Institutes of Technology.

115 redundant apprentices are currently attending phase 2 training and a further 47 are expected to be called to attend training over the next number of weeks.

The Employer Based Redundant Apprentice Rotation Scheme will provide for up to 500 places during 2009 and currently there are over 90 redundant apprentices placed with eligible employers.

FÁS and ESB Networks have agreed to the placement of 400 redundant electrical apprentices during 2009/2010, for redundant apprentices at phase 5 and phase 7. The first group of 22 apprentices commenced their on-the-job placement with ESB Networks on 23/3/09.

Léargas provided part funding for redundant apprentices for the trades of Carpentry & Joinery, Electrical, Plumbing and Brick & Stonelaying to be placed with employers in Germany to complete their phase 7 on-the-job assessments. Twenty redundant apprentices are currently in Germany placed with German employers.

A handbook/travel guide is in development for apprentices who gain employment overseas

My Department and FÁS will continue to monitor the situation and trends closely and will work with all relevant stakeholders to ensure that redundant apprentices will have every opportunity to complete their apprenticeship and gain a craft qualification.

77. Deputy Mary Upton asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will ensure that adequate resources are provided for training persons in employment in addition to ensuring that those recently unemployed are given adequate resources to upskill; and if she will make a statement on the matter. [12680/09]

Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The State makes a significant investment in training measures for both employed and unemployed. The amount of funding invested in those in employment has increased significantly over recent years and has been used to facilitate a broad range of upskilling programmes, ranging from basic literacy and numeracy to specific skills or support to build the management capabilities and skills within companies to help them achieve their business goals. Such upskilling for those in employment is provided through the various agencies of my Department together with Skillsnet Ltd.

In order to meet the challenges of the changing economy there will be a policy emphasis on activation and training for the unemployed. This includes a focus on those most recently unemployed, where additional opportunities for training and re-skilling are being provided. In the current economic climate it is important to ensure that such people can avail of relatively immediate upskilling to best position themselves to re-enter employment with improved skills.

78. Deputy Michael Ring asked the Tánaiste and Minister for Enterprise, Trade and Employment her views, in respect of the present unemployment situation, on abolishing an age rule to a scheme (details supplied). [12691/09]

Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): Community Employment (CE) is an active labour market programme designed to provide eligible long term unemployed people and other disadvantaged persons with an opportunity to engage in useful work within their communities on a fixed term basis. The programme helps unemployed people to progress to the open labour market by breaking their experience of unemployment through a return to work routine and assists them in enhancing/developing both their technical and personal skills.

CE remains as an active labour market programme with the emphasis on progression into employment. The programme is managed within this context, with consideration to the availability of resources and the needs of participants and the community. However, it should be remembered that, in so far as participants remain on CE, they are precluding someone else from benefiting from the programme. FÁS makes every effort to ensure that differing levels of demand between neighbouring schemes are equalised. FÁS also operates the programme flexibly as far as possible to ensure the continuation of community projects.

Persons under 55 years of age who fulfil the criteria for CE may be eligible for a maximum of 3 years participation on the Scheme.

It is not my intention to change the rule for those under 55 years, however, the operation of the Scheme is being kept under constant review in the context of the current difficult unemployment situation.

79. Deputy Finian McGrath asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will respond to a query (details supplied). [12761/09]

Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): FÁS Employment Services provides a full guidance service to the unemployed, including architects, and offers upskilling/retraining opportunities through its Training Services Division. It also provides grant aid assistance through the Technical Employment Support Grant (TESG) for training not provided by or available from FÁS.

FÁS is currently setting up, on a “pilot” basis, a number of executive/professional Job Clubs in the Dublin area. Typical participants would include managing directors, solicitors, HR managers, IT project managers, financial services executives as well as architects.

80. Deputy Mary Upton asked the Minister for Finance if it is technically feasible to proceed with an idea (details supplied); and if he will make a statement on the matter. [12647/09]

81. Deputy Mary Upton asked the Minister for Finance his views on an idea (details supplied) from a legal perspective; and if he will make a statement on the matter. [12648/09]

86. Deputy Mary Upton asked the Minister for Finance his views on an idea (details supplied); and if he will make a statement on the matter. [12646/09]

[1013]Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 80, 81 and 86 together.

Betting duty is payable by the bookmaker. If a bookmaker were to establish an on-line betting operation within the State, the bookmaker would be liable to pay betting duty. In general, however, the charge to pay duty does not apply to on-line betting because virtually all providers of such a service are based outside the State. A similar scenario occurs in the case of bets carried out by telephone. This is not unusual since these types of operations tend to locate in jurisdictions that have extremely low levels of taxation.

As I stated during the Finance Bill process, it has been my intention to widen if possible the tax base on which betting duty would be applied. One obvious option in this regard is to include bets placed on-line or over the telephone with companies outside the State. However, it is clear that there are very serious legal difficulties surrounding this option which my officials are exploring on an ongoing basis.

82. Deputy Mary Upton asked the Minister for Finance his views on an idea (details supplied); and if he will make a statement on the matter. [12649/09]

Minister for Finance (Deputy Brian Lenihan): Betting duty is payable by the bookmaker. If a bookmaker were to establish an on-line betting operation within the State, the bookmaker would be liable to pay betting duty. In general, however, the charge to pay duty does not apply to on-line betting because virtually all providers of such a service are based outside the State. A similar scenario occurs in the case of bets carried out by telephone. This is not unusual since these types of operations tend to locate in jurisdictions that have extremely low levels of taxation.

In exploring options for widening the tax base on which betting duty could be applied, my aim is to generate revenue to fund public expenditure generally, rather than to fund one specific item of expenditure. The Deputy will be aware the 2009 Budget publications announced that arrangements would end whereby the annual payment to the Horse and Greyhound Racing Fund would be automatically calculated by reference to the previous year’s betting duty or the contribution to the Fund in the year 2000 adjusted for inflation.

83. Deputy Michael D’Arcy asked the Minister for Finance the percentage of funds for regional development aid that is from national Exchequer funds and the percentage that is from European or other funding; and if he will make a statement on the matter. [12665/09]

Minister for Finance (Deputy Brian Lenihan): Under the Regional Competitiveness and Employment Objective, Ireland has been allocated €750 million of EU Structural Funds for the period 2007-13: of this €458 million has been allocated to the Border, Midland and Western (BMW) Region and €292 million to the Southern and Eastern (S&E) Region.

Ireland’s National Strategic Reference Framework (NSRF), which sets out the strategy for using these Funds, was approved by the European Commission in July 2007. The BMW and S&E European Regional Development Fund (ERDF) and National European Social Fund (ESF) co-funded Operational Programmes implementing the strategic priorities in the NSRF [1014]were approved by the European Commission on 16th October and 6th November 2007 respectively.

A further €151m has been allocated under ERDF for smaller Territorial Co-operation Operational Programmes, e.g. the INTERREG Programmes for Ireland/Northern Ireland/Scotland and Ireland/Wales and the PEACE III Programme.

The Structural Funds programmes are co-financed both from the EU Funding and nationally allocated Exchequer funds. The EU Regulation (EC No 1083/2006 of 11 July 2006) sets out the general provisions for the ERDF, ESF and the Cohesion Fund. This states that the contribution from the funds at the level of operational programmes under the Regional Competitiveness and Employment and Territorial Co-operation objectives shall be subject to ceilings of 50% and 75% respectively.

Following the negotiations with the Commission on the content of the BMW and S&E ERDF Operational Programmes, the Commission decisions dated the 16th October 2007 approving the Operational Programmes set the maximum co-financing rates for each of them at 40%; that is the Exchequer will fund 60% and the EU ERDF contribution will be 40%. The Commission decisions in relation to the INTERREG and PEACE III Operational Programmes set the maximum co-financing rates at 75% and 67.54% respectively.

84. Deputy Joan Burton asked the Minister for Finance the status of a property (details supplied) in Dublin 15; if his attention has been drawn to the fact that this property has been idle for a number of years; if this property comes under the remit of the Office of Public Works; if so, his proposals for the future use of the property; if his attention has further been drawn to the interest expressed by a charity in using this property to expand delivery of services for people with intellectual disabilities; his views on this potential use of the idle property; if he will make contact with the charity in this regard if he, or the OPW, has not already done so; and if he will make a statement on the matter. [12640/09]

Minister of State at the Department of Finance (Deputy Martin Mansergh): The property referred to by the Deputy was purchased a number of years ago with a view to utilising it as a Probation and Welfare Office. Following objections to it being used for this purpose, it was then decided to seek planning permission for it to be converted for use as a Driving Test Centre. Planning permission for such use was granted in May 2008. However, in the current financial climate, there are no immediate plans to progress further with this project. The situation will, nevertheless, be kept under review in the light of the developing financial picture. A number of bodies and organisations have expressed an interest in the past in acquiring the property in the event that it is deemed surplus to State requirements. Should it be decided that this is the case, the normal procedure would be to dispose of it by way of public tender.

85. Deputy John O’Mahony asked the Minister for Finance his plans to exempt community and voluntary groups from paying VAT in providing facilities for their communities; and if he will make a statement on the matter. [12642/09]

Minister for Finance (Deputy Brian Lenihan): Charities and non-profit groups engaged in non-commercial activity are exempt from VAT under the EU VAT Directive, with which Irish VAT law must comply. This means they do not charge VAT on the services they provide and cannot recover VAT incurred on goods and services that they purchase. Essentially only VAT [1015]registered businesses which charge VAT are able to recover VAT. Accordingly, it is not possible under EU law to change the current VAT treatment of charities.

Even if funds were available for grant-aiding charities and other voluntary groups, it is not clear that the most appropriate use of Exchequer funds would be to relieve VAT as opposed to supporting their activities using other criteria, as is already being done, which provides a more focused approach.

The tax code already provides considerable assistance to charities through exemption from income tax, corporation tax, capital gains tax, deposit interest retention tax, capital acquisitions tax, stamp duty, probate tax and dividend withholding tax.

Question No. 86 answered with Question No. 80.

87. Deputy Michael D’Arcy asked the Minister for Finance his views on placing a tax on bonuses paid to bank executives in banks which received the State guarantee, similar to the proposal from the United States in relation to senior executives in a company (details supplied); and if he will make a statement on the matter. [12666/09]

Minister for Finance (Deputy Brian Lenihan): The position is that all salaries and bonuses paid by financial institutions are taxable in the normal way. It would not be open to the Government to impose tax retrospectively on such payments already made. The Deputy will be aware that I recently published the report by the Covered Institution Remuneration Oversight Committee (CIROC) which recommended reductions in prevailing base salary, bonus and pension levels for chief executives, chairpersons and ordinary board members that the Committee considered to be, in many cases, markedly excessive. The Committee report, that with the exception of the Irish Nationwide Building Society where the CEO was paid a pre-contracted incentive bonus of €1,000,000 in relation to 2008, no bonuses will be paid to chief executives or the senior executive management teams in relation to performance in 2008/2009.

88. Deputy Michael D’Arcy asked the Minister for Finance if the gratuity paid to the former Financial Regulator (details supplied) is tax free; and if he will make a statement on the matter. [12667/09]

Minister for Finance (Deputy Brian Lenihan): The Central Bank and Financial Services Authority of Ireland complies fully with all tax requirements. Under statutory pension schemes and pension schemes approved by the Revenue Commissioners, there is no liability to income tax in respect of retirement gratuities or lump sum paid to members of such schemes on retirement provided Revenue rules are complied with. Accordingly, the pension gratuity was not subject to tax and all other payments made by the Financial Regulator to its former Chief Executive on the occasion of his retirement were fully subject to tax.

89. Deputy Michael D. Higgins asked the Minister for Finance the research that has been carried out over the past ten years by his Department on the extent and breakdown of wealth, as opposed to income here; the findings of such research; if he will make these findings available; the changes in findings and figures on a year to year basis over this ten year period; if it is proposed that such research or new research in this area be used in order to create an [1016]equitable system of taxation in the 7 April 2009 budget; his views on the taxing of wealth; and if he will make a statement on the matter. [12670/09]

Minister for Finance (Deputy Brian Lenihan): I have been informed that no general research has been carried out over the past ten years by either the Department of Finance or the Revenue Commissioners regarding the extent and breakdown of wealth as opposed to income. However, all of an individual’s assets and liabilities are declared in a number of specific circumstances — for example:

after the death of an individual, on an Inland Revenue Affidavit, which is a document that is required to be delivered to the Revenue Commissioners and certified by them in order to obtain a Grant of Probate or Letters of Administration; or

if an individual is required to submit a Statement of Affairs regarding an investigation by the Revenue Commissioners.

In addition, an individual is asked to list chargeable assets acquired and disposed of during a year on their annual tax return.

Asset values increase and decrease over time and in the context of recent economic circumstances, they may have declined considerably in many cases. Thus, if the value of an asset or of an individual’s wealth is measured at a particular time there is no guarantee that the asset value or the individual’s wealth will remain at that level or increase from that point.

Capital Gains Tax (CGT) and Capital Acquisitions Tax (CAT) are, in effect, taxes on wealth, in that they are levied on an individual or company when they dispose of an asset (CGT) or acquire an asset through gift or inheritance (CAT). The rate of both these taxes was increased from 20% to 22% in the last Budget and Finance Act. All taxes and potential taxation measures are constantly reviewed in the context of the Budget and Finance Bill.

90. Deputy Tom Sheahan asked the Minister for Finance if he will visit the flooded land at Rossbeigh and Incheree, County Kerry. [12683/09]

Minister of State at the Department of Finance (Deputy Martin Mansergh): The Office of Public Works (OPW) assumed responsibility for the management of coastal erosion and coastal flood risk in January this year. OPW will continue the policy of working with Local Authorities to deal with these issues. and in particular of supporting the Authorities to undertake measures to deal with erosion where these are environmentally, socially and economically justifiable. I am advised that OPW officials have discussed the problems in the Rossbeigh area with their Local Authority counterparts and those contacts will be pursued.

91. Deputy Mary Upton asked the Minister for Finance if he will respond to a query from a person (details supplied) in Dublin 20 on the pension levy as it affects research staff in universities here; and if he will make a statement on the matter. [12689/09]

Minister for Finance (Deputy Brian Lenihan): The position is that public servants are in general liable to pay the pension-related deduction introduced in the Financial Emergency Measures in the Public Interest Act 2009.

[1017]University research staff are liable to pay the deduction because they meet the key qualifying conditions under the Act, which is to say that they are public servants and are members of a public service pension scheme.

I am aware that some university research staff hold fixed-term or non-permanent posts, and may on that basis have concerns about their job security. Certain concerns in relation to the pay rates of such staff have also been articulated. However none of these facts or concerns bear on the liability of the staff in question to pay the deduction. In this regard it is worth noting that fixed-term and non-permanent workers across many areas of the public service are paying the deduction.

In this general connection, the Government has moved to make fixed-term university researchers pensionable, and has thus significantly improved the attractiveness of a research career. It should also be noted that, even for relatively short periods in such posts, pensionable service is accrued.

It may also be transferred in the future to any public service employment. If the service is not transferred, section 6 of the Act provides for a refund of the deduction in certain limited circumstances, essentially in those cases where, on leaving employment, the pension scheme member has not accrued sufficient service to build up a benefit in any public service pension scheme.

92. Deputy John Deasy asked the Minister for Finance if he will explain the law as it relates to insurance claims that have been taken against companies that subsequently went out of business; and if he will make a statement on the matter. [12716/09]

Minister for Finance (Deputy Brian Lenihan): I presume the Deputy is referring to claims being made against insolvent insurers who are unable to meet policy holders claims. A compensation fund exists for non life insurance companies. However no such fund exists for life companies. The compensation fund for non life insurance companies was set up under Section 2 of the Insurance Act 1964 (the Act). Section 3 of the Act provides that monies from the Insurance Compensation Fund can be used to pay, subject to certain conditions, monies to consumers in respect of parts of their claims and to support the administration of the insolvent insurance company on a going concern basis.

93. Deputy Bernard J. Durkan asked the Minister for Finance when a P60 will issue in respect of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [12734/09]

Minister for Finance (Deputy Brian Lenihan): I have been advised by the Revenue Commissioners that they contacted the taxpayer’s employer on 24th March 2009 and were advised that Form P60 was issued to the taxpayer in January 2009. As the taxpayer does not appear to have received it, the employer will issue a copy of Form P60 to the taxpayer.

94. Deputy Bernard J. Durkan asked the Minister for Finance the steps he will take to stimulate the economy; and if he will make a statement on the matter. [12736/09]

Minister for Finance (Deputy Brian Lenihan): In broad terms, there are three strands to the Government’s approach to stimulating the economy. Firstly, we are putting the public finances [1018]on a more sustainable path, in order to restore domestic and international confidence in Ireland, thereby promoting Ireland as a sound place in which to invest. Secondly, the Government’s package of measures for the Irish banking system, including significant steps to maintain the stability of the financial system and those taken under the recently announced recapitalisation initiative, will serve to stimulate credit supply and consequently economic recovery.

Finally, we are implementing measures to restore competitiveness. For instance, we are maintaining capital investment at relatively high levels of national income. We have also introduced a pensions levy in the public sector which, in addition to helping re-balance the public finances, will have a positive impact on national competitiveness.

More generally, the Framework for Sustainable Economic Renewal launched by the Taoiseach last December sets out our agenda over the next few years of how we will re-orientate and reprioritise the business of Government to achieve the goal of building a Smart Economy, which will help underpin our future.

95. Deputy Bernard J. Durkan asked the Minister for Finance if he will issue guidelines or restrictions to mortgage companies involved in home repossession with particular reference to instances in which mortgages were issued when there was a knowledge of either inability to pay or over valuation of the property; and if he will make a statement on the matter. [12737/09]

Minister for Finance (Deputy Brian Lenihan): It is a particular priority of the Government to ensure as much as possible that difficulties in relation to mortgage arrears do not result in legal proceedings for home repossession. Home repossession should be, and generally is, the last resort for the lender and the preferred method of dealing with arrears cases should be early intervention.

The Financial Regulator has issued a statutory Code of Conduct on Mortgage Arrears applicable to all mortgage lenders to assist consumers in arrears difficulties. The Code requires that all genuine arrears cases must be handled sympathetically and positively by the lender, with the objective at all times of assisting the borrower to meet his/her obligations. Where an arrears situation continues, the lender must examine each case on its individual merits and explore with the borrower various alternative repayment measures. A lender may only apply to the courts to commence enforcement of legal action for repossession six months from the time arrears first arise; and must not seek repossession of the property until every reasonable effort has been made to agree an alternative repayment schedule with the borrower or his/her nominated representative.

The Financial Regulator’s statutory Consumer Protection Code has applied to credit institutions since 1 July 2007 and was extended to other lenders on 1 June 2008, following the introduction of legislation which provided for the regulation of sub-prime lenders by the Financial Regulator. The Consumer Protection Code contains “Know the Consumer” and “Suitability” requirements, which must be followed by both lenders and intermediaries at point of sale. A mortgage lender will have to demonstrate that it has gathered sufficient information from the consumer to allow it to provide a recommendation to that consumer. The mortgage recommended must be suitable to the consumer having regard to the facts disclosed by the consumer. A written statement setting out the reasons why a mortgage product/selection of mortgage products offered to the consumer are suitable must be given to the consumer. Mortgage intermediaries must submit to a mortgage lender a signed declaration that it has had sight of all original supporting documentation including banks statements, P60/certificate of earnings and other supporting documentation evidencing the consumer’s identity and ability to repay.

[1019]As part of feedback issued by the Financial Regulator in 2007 to mortgage lenders following a survey of the mortgage sales process, the Financial Regulator indicated that factors such as, but not limited to those set out below should be considered when assessing suitability in relation to mortgage products:Purpose of borrowing, type and length of loan, attitude to fixed/variable interest, age of consumer, savings track record, LTV, employment, income, repayment capacity.

If a consumer has a complaint about his/her mortgage a complaint must first be made directly to the lender. If the consumer is dissatisfied with the outcome of his/her complaint he/she can then refer the matter for further investigation to the Financial Services Ombudsman.

The two banks participating in the recapitalisation programme have each committed that they will not commence court proceedings for repossession of a principal private residence until after 12 months of arrears appearing, where the customer continues to operate reasonably and honestly with the bank. The recapitalised banks, have in addition, assured the Government that in the normal course of events they will make every effort to avoid repossessions.

96. Deputy Bernard J. Durkan asked the Minister for Finance if action has been taken or is expected to be taken against mortgage companies involved in sub-prime lending up to the extent of 200% of the entitlement of the applicant; and if he will make a statement on the matter. [12738/09]

Minister for Finance (Deputy Brian Lenihan): The Financial Regulator’s statutory Consumer Protection Code has applied to credit institutions since 1 July 2007 and was extended to other lenders on 1 June 2008, following the introduction of legislation which provided for the regulation of sub-prime lenders by the Financial Regulator. It requires regulated entities to act honestly, fairly and professionally in the best interests of their customers and the integrity of the market. The Code also requires each mortgage lender to inform consumers, in writing, of the status of their mortgage accounts as soon as possible after the lender becomes aware of the arrears.

The Consumer Protection Code also contains “Know the Consumer” and “Suitability” requirements, which must be followed by both lenders and intermediaries at point of sale. A mortgage lender will have to demonstrate that it has gathered sufficient information from the consumer to allow it to provide a recommendation to that consumer. The mortgage recommended must be suitable to the consumer having regard to the facts disclosed by the consumer. A written statement setting out the reasons why a mortgage product/selection of mortgage products offered to the consumer are suitable must be given to the consumer. Mortgage intermediaries must submit to a mortgage lender a signed declaration that it has had sight of all original supporting documentation including banks statements, P60/certificate of earnings and other supporting documentation evidencing the consumer’s identity and ability to repay.

The Financial Regulator is currently carrying out a further examination of mortgage lenders to ensure that they are in compliance with the specific provisions of the Consumer Protection Code and the Consumer Credit Act. The examination will also review the application of the residential mortgage arrears and repossession procedures and practices in place in mortgage lenders, as advised to the Financial Regulator in 2008, to ensure that consumers are being treated fairly, and will seek an update on the implementation of the “best practices” outlined in the Financial Regulator’s letter of 16 December 2008.

97. Deputy Bernard J. Durkan asked the Minister for Finance when it is expected that traditional banking and lending practices are expected to become operational; and if he will make a statement on the matter. [12739/09]

Minister for Finance (Deputy Brian Lenihan): The primary objective of the Government is to secure and maintain the financial and economic position of the State. Significant steps have been taken to achieve that objective including the Bank Guarantee Scheme and the recapitalisation of Ireland’s two main banks. An essential element of the recapitalisation scheme, which I expect to be implemented in the very near future, anticipates the banks involved increasing the level of credit available throughout the economy. As part of the recapitalisation measures, the recapitalised banks have committed to increase lending capacity to small and medium enterprises (SMEs) by 10% and to provide an additional 30% capacity for lending to first time buyers in 2009. If the mortgage lending is not taken up, then the extra capacity will be available to SMEs. Compliance with this commitment will be monitored by the Financial Regulator. An independent review of credit availability, funded by the banks but managed jointly by the banks, Government and business representatives is also underway and will be completed shortly. Amongst the issues covered by this review will be changes in bank lending, repayment terms and a comparison with customer experiences prior to the onset of the financial crisis. I am satisfied that this review, along with the quarterly reports from the recapitalised institutions, will give a clear picture regarding the flow of credit in the Irish economy.

98. Deputy Bernard J. Durkan asked the Minister for Finance if he has in mind taxation measures or incentives to encourage multinational chainstores here to bring their mark-up into line with that in adjoining jurisdictions; and if he will make a statement on the matter. [12740/09]

Minister for Finance (Deputy Brian Lenihan): The option of using tax measures or some other incentives to influence a multinational retailer’s mark-up in this jurisdiction, to align it to that in another jurisdiction, does not arise.

Market conditions are such that retailers, whether domestic or multinational, are lowering their mark-up presently. As the Deputy will be aware, in the context of retail prices in the State, the Tánaiste and Minister for Enterprise, Trade and Employment has asked the Competition Authority to investigate supply chains in the retail sector. The Competition Authority is to report by 30 April 2009.

99. Deputy Bernard J. Durkan asked the Minister for Finance if it is his intention to reduce VAT or other taxes with a view to competing with other immediate jurisdictions; and if he will make a statement on the matter. [12741/09]

[1021]Minister for Finance (Deputy Brian Lenihan): As the Deputy will be aware, taxes are considered in the context of a Budget process. In regard to the forthcoming Supplementary Budget, it is the usual practice for the Minister for Finance not to speculate in advance of a Budget on what it will contain and I do not propose to deviate from that practice.

100. Deputy Bernard J. Durkan asked the Minister for Finance the steps he has taken or proposes to take to improve the competitiveness in the economy; and if he will make a statement on the matter. [12743/09]

Minister for Finance (Deputy Brian Lenihan): The economy’s competitive position has deteriorated in recent times. This deterioration has been driven by wage increases in excess ofproductivity and a rate of inflation above our euro area peers. Notwithstanding the fact that for most of the last 12 months our rate of inflation has been lower than the euro area, our price levels are still some 20% above the euro area. Regaining our competitive position — which as a small open economy is critical to our economic success — will require each of us to play our part and work towards this end.

For its part, the Government has, and will continue, to support competitiveness. To this end, the Government is committed to maintaining a pro-enterprise environment, and has implemented policies aimed at improving competition in product markets and flexibility in the labour market. For example, last October in Budget 2009, I re-affirmed the Government’s commitment to the 12½ per cent rate of Corporation Tax. The subsequent Finance Act contained a number of very significant changes to the R&D tax credit scheme aimed at encouraging further R&D activity here. In addition, the Government is continuing to prioritise productivity-enhancing investment under the National Development Plan, subject to available resources. This applies to both infrastructural investment as well as investment in education and skills.

The Government introduced the Framework for Sustainable Economic Renewal, called “Building Ireland’s Smart Economy”, in December 2008 which sets out a clear roadmap for Ireland’s move back to economic growth and prosperity. The Cabinet Committee for Economic Renewal is driving this strategy and we will continue to pursue policies that will build on our strengths, address our weaknesses and maximise economic activity and employment.

In addition, the public service pension-related deduction recently instituted in the light of the pressures on the public finances should have a demonstration effect in the private sector which will have a beneficial knock-on effect for competitiveness.

Finally, the Government has announced plans for a Supplementary Budget on 7th April in order to ensure stability in the public finances. This will have a positive impact in terms of restoring confidence in the Irish economy and, in turn, boosting our attractiveness as a location for inward investment. I would also point out that, by undertaking the necessary adjustments now, the Government will avoid having to take more injurious action in the future. In this way, Government action is supporting the long-term competitiveness of the economy.

101. Deputy Bernard J. Durkan asked the Minister for Finance if he proposes to take action to ensure that economic forecasting by his Department is more soundly based than in the past five years; and if he will make a statement on the matter. [12744/09]

Minister for Finance (Deputy Brian Lenihan): I am satisfied that economic forecasting in my Department is as soundly based as it can possibly be. The Deputy will note that even in normal [1022]circumstances short-term economic forecasting is not an exact science, given the many dynamic components which constitute an economy. We are not now in normal economic times and the frequency that all other forecasters, national and international, have revised their forecasts points to the unusually high degree of uncertainty that exists.

Following the extraordinary financial market developments last September, the global economy has entered uncharted waters, and in this new environment virtually all economic forecasters — the world over — are finding it difficult to make accurate projections.

Analysis published alongside the 2006 Budget showed that my Department’s macro-economic forecasts over the period 1997-2004 were amongst the most accurate of those produced by the major domestic and international economic forecasters. Since then, my Department has continued to perform well in terms of macro-economic projections.

In early January when my Department published its forecast it was one of the most pessimistic forecasts available. Since then most other commentators have reduced their forecasts reflecting international economic data that have become available.

The approach taken by my Department is to identify the most likely outcome and to outline the main risks — both upside and downside — to this. This is in line with other organisations that produce regular forecasts on the Irish economy.

102. Deputy Richard Bruton asked the Minister for Finance his views on the submission of an association (details supplied) on the harsher rules that apply to its members, compared to solicitors, accountants or banks, in terms of regulatory obligations; if he is considering changes in these provisions. [12754/09]

Minister for Finance (Deputy Brian Lenihan): I met with representatives of the association referred to in the Deputy’s question on 17 February last. The specific issue they highlighted was in relation to the conclusions drawn in a recent Regulatory Impact Assessment (RIA) which was conducted by my Department. This recommended that, when amending the Insurance Mediation Regulations (S.I. No. 13 of 2005), the existing regulatory regime should be maintained for accountants that perform insurance mediation business on an ancillary basis. However, the RIA also made a number of recommendations which were aimed at making the existing Approved Professional Body (APB) regime more transparent. In particular, the RIA recommended that the current benchmark for determining ancillary business should be reviewed.

The association referred to had argued strongly against the retention of the existing APB regime during the RIA process. On the other hand, the accountancy representative bodies argued the contrary position equally strongly. In those circumstances, it was appropriate that particular emphasis should be given to the position of the Financial Regulator, in view of its roles in regard to the supervision of insurance intermediaries, as well as its statutory responsibility for consumer protection.

The Financial Regulator’s assessment was that the current APB regime delivers effective regulation in a rigorous, independent and professional manner. The Financial Regulator confirmed to the Department that there is no evidence that the APB supervisory regime is less effective than direct regulation by the Financial Regulator. As far as the impact on consumers and the rights of citizens are concerned, the assessment of the Financial Regulator is that customers are best served by the retention of the present APB arrangement for insurance mediation.

[1023]At our meeting referred to earlier, the association disagreed with this conclusion and, consequently, I offered to ask the Financial Regulator to re-examine its assessment. The Financial Regulator is at present analysing the counter arguments put forward by the association and I await the Financial Regulator’s further assessment with interest.

103. Deputy Richard Bruton asked the Minister for Finance his views on modifying Revenue pension rules to allow self-employed people who suffer accidents which prevent them from working to access moneys in their pension funds early; and if he will make a statement on the matter. [12755/09]

Minister for Finance (Deputy Brian Lenihan): I am advised by the Revenue Commissioners that a self-employed individual making provision for retirement will generally do so by way of contributing to Retirement Annuity Contracts (RACs) and/or Personal Retirement Savings Accounts (PRSAs). The pensions tax legislation already facilitates the inclusion of an ill health early retirement option in these pension products. The relevant legislative provisions are sections 784(3) (b) and 787K(2)(a) of the Taxes Consolidation Act 1997. Specifically, the legislation allows benefits to commence before age 60 where an individual becomes “permanently incapable through infirmity of mind or body of carrying on his or her own occupation or any occupation of a similar nature for which he or she is trained or fitted”. In order to access benefits under these provisions the pension administrator must have received medical evidence that the individual satisfies the medical criteria.

104. Deputy Kieran O’Donnell asked the Minister for Finance the measures he will bring forward in the 7 April 2009 budget on dealing with the toxic loans in the banking sector. [12769/09]

Minister for Finance (Deputy Brian Lenihan): As the Deputy is aware it is not the practice to respond to Parliamentary Questions on the possible inclusion or otherwise of specific matters directly in advance of a forthcoming budget. However, The Government is conscious that in current market circumstances there is a need to bring greater certainty and transparency to the operations of systemically important financial institutions, in particular in relation to specific asset classes currently perceived as carrying a higher than average risk.

In this context, the Government is examining proposals for the management and reduction of risks within financial institutions with respect to these specific exposures, having regard to international developments. As part of this work I have asked Dr Peter Bacon and the National Treasury Management Agency to report to me on the matter. I have seen the report prepared by Dr Bacon for the NTMA. The report will inform the Government’s ongoing considerations, along with ongoing work at EU and European Central Bank level. I will be bringing forward proposals in this area as a matter of priority.

105. Deputy Kieran O’Donnell asked the Minister for Finance if he will publish the economic plan as part of the 7 April 2009 budget; if not, when this plan will be published; and the length of time this plan is for. [12770/09]

Minister for Finance (Deputy Brian Lenihan): The Government’s approach to reviving the economy consists of three broad strands — improving competitiveness, stimulating credit supply in our financial system and putting the public finances on a more sustainable basis. Given [1024]the deterioration in the public finances in recent months, the focus of the 7 April Supplementary Budget will be on measures to put the public finances on a more sustainable path.

More generally, the Framework for Sustainable Economic Renewal launched by the Taoiseach last December sets out our agenda over the next few years for how we will re-orientate and reprioritise the business of Government to achieve the goal of building a Smart Economy, which will help underpin our future.

106. Deputy Kieran O’Donnell asked the Minister for Finance the measures to be proposed in the 7 April 2009 budget involving the taxation of tax free lump sums in respect of public and private sector pensions. [12771/09]

Minister for Finance (Deputy Brian Lenihan): The House will appreciate that I do not propose to comment on what may or may not be contained in the forthcoming supplementary Budget.

107. Deputy Kieran O’Donnell asked the Minister for Finance the parameters he will use for the general Government balance deficit amount and percentage of tax increases, income, PRSI, pension and other levy adjustments and expenditure cuts and savings included in the national development plan in framing the 7 April 2009 budget. [12772/09]

Minister for Finance (Deputy Brian Lenihan): The Supplementary Budget is to be presented to the Dáil on the 7th of April. The Government has already taken significant action to restore stability to the public finances and the supplementary Budget will continue this process. In relation to the details of what will be presented in the Supplementary Budget, it is not the usual practice to speculate in advance on the content of any Budget and I do not propose to deviate from this practice now. However, all options are on the table, including action on both current and capital expenditure, as well as revenue raising measures.

108. Deputy Willie Penrose asked the Minister for Finance when the construction of the Department of Education and Science offices in Mullingar, County Westmeath, as part of the decentralisation programme, will take place; when the necessary contracts will be signed to enable the construction to commence; and if he will make a statement on the matter. [12775/09]

Minister of State at the Department of Finance (Deputy Martin Mansergh): A number of key projects were identified as priority elements of the decentralisation programme in the Government announcement of 14 October 2008. The construction of a new headquarters building in Mullingar for the Department of Education and Science, in conjunction with a new headquarters for the Department of Agriculture, Fisheries and Food in Portlaoise and a new decentralised office for staff of the Department of Enterprise, Trade and Employment in Carlow was one of the projects given priority status.

The proposed decentralised offices in the above three locations are being procured by means of a Public Private Partnership as a single Design, Build, Finance and Maintain contract. Planning permissions have been received for the three buildings, and discussions are proceeding with the successful tenderer with a view to finalising financial closure and contract signing.

109. Deputy Róisín Shortall asked the Minister for Finance if, in respect of appendix D of the Green Paper on Pensions, he will provide the same information in respect of PRSAs and RACs for the last year for which figures are available. [12782/09]

Minister for Finance (Deputy Brian Lenihan): I am informed by the Revenue Commissioners that the latest relevant information available is in respect of income tax relief allowed for contributions to Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) for the income tax year 2005. RACs and PRSAs are available to the self-employed and to employees not in occupational pension schemes.

The information is set out in the following tables, which provide the number of cases, amount of deduction and reduction in tax for tax relief for RACs and PRSAs for the various income ranges. The information is based on income returns contained in Revenue records at the time the data were compiled for analytical purposes, representing about 98.5 % of all returns expected. A married couple who has elected or has deemed to have elected for joint assessment is counted as one tax unit.

INCOME TAX 2005

Retirement Annuity — by range of Gross Income

Range of gross income		Totals
From	To	Number of cases	Amount of deduction	Reduction in tax	Gross Tax*	Reduction in tax as % of Gross Tax
€	€		€	€	€	%
—	9,000	1,008	1,881,903	75,498	82,740	91.2
9,000	10,000	265	374,631	30,386	33,229	91.4
10,000	12,000	657	1,025,582	134,741	190,034	70.9
12,000	15,000	1,392	2,392,161	350,206	679,108	51.6
15,000	17,000	1,323	2,233,300	352,112	842,250	41.8
17,000	20,000	2,589	4,780,514	816,857	2,287,102	35.7
20,000	25,000	5,651	11,087,382	2,080,370	7,539,642	27.6
25,000	27,000	2,715	5,668,769	1,098,028	4,696,639	23.4
27,000	30,000	4,381	9,484,765	1,880,533	9,069,509	20.7
30,000	35,000	7,751	18,261,845	4,705,878	22,318,537	21.1
35,000	40,000	7,780	20,674,562	6,003,555	30,473,740	19.7
40,000	50,000	14,363	45,816,794	14,547,614	79,144,477	18.4
50,000	60,000	12,398	48,880,951	15,565,254	95,469,140	16.3
60,000	75,000	14,057	70,245,866	25,617,798	155,121,844	16.5
75,000	100,000	13,615	99,961,110	40,744,562	235,383,899	17.3
100,000	150,000	9,892	125,055,147	52,235,223	295,482,218	17.7
150,000	200,000	3,705	81,437,198	34,165,790	184,174,412	18.6
200,000	250,000	2,240	67,483,762	28,305,769	153,550,523	18.4
Over	250,000	5,532	278,887,354	117,075,544	832,516,852	14.1
Totals		111,314	895,633,596	345,785,718	2,109,055,895	16.4

[1026]INCOME TAX 2005

Personal Retirement Savings Accounts — by range of Gross Income

Range of gross income		Totals
From	To	Number of cases	Amount of deduction	Reduction in tax	Gross Tax*	Reduction in tax as % of Gross Tax
€	€		€	€	€	%
—	9,000	99	131,880	1,331	1,655	80.4
9,000	10,000	36	44,781	4,764	5,745	82.9
10,000	12,000	59	85,072	11,937	17,987	66.4
12,000	15,000	150	233,336	32,587	63,085	51.7
15,000	17,000	149	223,139	38,841	91,737	42.3
17,000	20,000	309	508,353	91,482	285,601	32.0
20,000	25,000	672	1,222,950	234,106	964,971	24.3
25,000	27,000	341	633,141	121,908	658,814	18.5
27,000	30,000	468	909,837	182,962	1,146,859	16.0
30,000	35,000	784	1,885,268	550,654	2,586,331	21.3
35,000	40,000	748	2,020,822	673,858	3,504,921	19.2
40,000	50,000	1,231	3,918,871	1,331,798	7,816,522	17.0
50,000	60,000	1,010	4,258,348	1,460,433	8,867,772	16.5
60,000	75,000	1,152	5,832,227	2,224,524	13,755,660	16.2
75,000	100,000	1,143	8,357,350	3,448,343	20,731,795	16.6
100,000	150,000	914	10,057,040	4,219,484	28,241,781	14.9
150,000	200,000	302	5,161,334	2,166,660	15,221,998	14.2
200,000	250,000	157	3,749,842	1,572,734	10,862,836	14.5
Over	250,000	282	9,359,602	3,931,033	39,741,329	9.9
Totals		10,006	58,593,193	22,299,439	154,567,399	14.4

110. Deputy Dan Neville asked the Minister for Health and Children the hospitals which do not have special psychiatric nurses for patients who self harm in acute hospitals. [12624/09]

Minister for Health and Children (Deputy Mary Harney): As this is a service matter it has been referred to the HSE for direct reply.

111. Deputy Dan Neville asked the Minister for Health and Children the position regarding the setting up of the Health and Social Care Professionals Council and of registration boards for certain designated health and social care professionals; and the designated professions under section 4 of the Health and Social Care Professionals Act 2005 for which established boards have been set up in view of the fact that this Act was signed into law on 30 November 2005. [12625/09]

Minister for Health and Children (Deputy Mary Harney): The Health and Social Care Professionals Act 2005 provides for the establishment of a system of statutory registration for 12 [1027]health and social care professionals. This new system of statutory registration will apply to the twelve professions regardless of whether they work in the public or private sector or are self-employed and is the first time that fitness to practise procedures will be put in place for these professionals on a statutory basis. The structure of the system of statutory registration will comprise a registration board for each of the professions to be registered, a Health and Social Care Professionals Council with overall responsibility for the regulatory system and a committee structure to deal with disciplinary matters. While the proposed system of statutory registration applies, in the first instance to twelve health and social care professions, the legislation empowers the Minister for Health and Children to include, on the basis of specific criteria, additional health and social care professions in the regulatory system by regulation over time, as appropriate.

The first step in the implementation of the system was the establishment of the Health and Social Care Professionals Council, launched in March 2007. The Council has now recruited a Chief Executive Officer in May of last year and is currently putting in place a suitable organisational structure. The Council has examined which professions from within the designated twelve are most suitable for early registration and has decided to appoint the first two of twelve statutory Registration Boards, provided for under the Act. The Social Workers Registration Board and the Physiotherapists Registration Board are the first two registration boards prioritised for registration in 2009. It is proposed that two additional registration boards will be established by the end of 2009 and a decision regarding the order of roll-out of these additional boards will be made by the Council in due course.

112. Deputy Dan Neville asked the Minister for Health and Children if the high observation area of 5B Mid-Western Regional Hospital has been constructed. [12626/09]

Minister for Health and Children (Deputy Mary Harney): As this is a service matter, it has been referred to the HSE for direct reply.

113. Deputy Denis Naughten asked the Minister for Health and Children further to Parliamentary Question No. 408 of 27 January 2009, when a nursing home refund appeal by persons will be processed; the reason for the delay; if the delay is as a result of extended holiday leave; and if she will make a statement on the matter. [12629/09]

Minister for Health and Children (Deputy Mary Harney): The Health Repayment Scheme Appeals Office is an independent office established to provide an appeals service to those who wish to appeal the decision of the Scheme Administrator under the Health (Repayment Scheme) Act 2006. The Appeals Officers must investigate each appeal independently, these investigations can require additional reviews by the Health Service Executive and the Scheme Administrator and certain appeals present a high level of complexity. In addition a high percentage of appellants have requested an Oral Hearing with an Appeals Officer.

The Claimant referred to by the Deputy lodged an Appeal Form with the Health Repayment Scheme Appeals Office on 3 June 2008 and lodged an Oral Hearing Form on 12 June 2008. The Appeals Officer is awaiting additional information from the Scheme Administrator as part of the review of this appeal.

114. Deputy James Reilly asked the Minister for Health and Children the action she will take to address the shortage of neurosurgery at Beaumont Hospital, Dublin; when a person (details supplied) in County Meath will be admitted to the Beaumont Hospital neurosurgical unit; and if she will make a statement on the matter. [12634/09]

Minister for Health and Children (Deputy Mary Harney): I have identified the development of neuroscience services as a priority in recent years. Additional revenue funding of €7m was allocated to the Health Service Executive (HSE) in 2006 and 2007 for the development of services in the area of neurosciences, which comprises neurology, neurophysiology and neurosurgery. Additional funding of €850,000 has been included in the HSE’s 2009 National Service Plan to support the further development of neurosciences, including neurosurgery. My Department has requested the Parliamentary Affairs Division of the Executive to reply directly to the Deputy in relation to the specific service issue raised.

115. Deputy Michael McGrath asked the Minister for Health and Children the details of the Health Service Executive policy for treating persons with a rare medical condition (details supplied). [12650/09]

Minister for Health and Children (Deputy Mary Harney): As this is a service matter it has been referred to the Health Service Executive for direct reply.

116. Deputy Pat Breen asked the Minister for Health and Children when the national spatial strategy for the ambulance service will be published; and if she will make a statement on the matter. [12652/09]

Minister for Health and Children (Deputy Mary Harney): As this is a service matter, it has been referred to the HSE for direct reply.

117. Deputy Frank Feighan asked the Minister for Health and Children the amount of savings a person can have as well as €700 weekly income and still qualify for over 70 years GMS card. [12701/09]

Minister for Health and Children (Deputy Mary Harney): Under the Health Act 2008, automatic entitlement to a medical card for persons aged 70 or over ceased on 31st December 2008, and with effect from 1st January 2009, the income thresholds for entitlement to a medical card for those aged 70 or over is €700 (gross) per week (€36,500 per year) for a single person and €1,400 (gross) per week (€73,000 per year) for a couple.

Any savings and similar investments up to €36,000 (single)/€72,000 (couple) will be disregarded when assessing means and only interest from savings or similar investments above these figures will be considered as income. The relevant portion of savings and similar investments will be assessed on the income calculated at a notional interest rate (currently 5%), based on the prevailing interest rates at the time of application. The Health Service Executive’s (HSE) Central Application Unit will review the notional rate on a quarterly basis.

[1029]Alternatively, where an applicant wishes to have the actual interest from savings/investments considered, then the HSE will apply this approach and use the most beneficial option in favour of the applicant, subject to submission of the appropriate certificates from the relevant institutions. In the case of “longer term” investment accounts, where the interest is only applied at the end of a fixed period, if the applicant so wishes, the HSE will only take account of the interest earned on the date the investment matures.

118. Deputy Fergus O’Dowd asked the Minister for Health and Children if a hospital place will be provided as a matter of urgency for a person (details supplied) in County Louth; and if she will make a statement on the matter. [12706/09]

Minister of State at the Department of Health and Children (Deputy John Moloney): As the Deputy’s question relates to service matters I have arranged for the question to be referred to the Health Service Executive for direct reply.

119. Deputy Jan O’Sullivan asked the Minister for Health and Children if she will clarify the plan under the new consultants contract to have a single waiting list for all patients, public and private; when this will be implemented; if it will include waiting lists for outpatient appointments; the way it will operate if consultants in the same department of a hospital have opted for different contracts while the hospital operates a single list for that specialty; and if she will make a statement on the matter. [12710/09]

Minister for Health and Children (Deputy Mary Harney): Under the terms of Consultants Contact 2008, consultants will provide outpatient and ambulatory diagnostic services on a ‘one for all’ basis, so that all patients are seen at the key entry point to public hospitals on the basis of medical need alone. The Clinical Directors appointed under the new contract will have a key role in ensuring ‘one for all’ access. The detailed implementation of this common waiting list is the responsibility of the HSE and I have asked the Executive to examine the issues raised by the Deputy and reply to her directly.

120. Deputy Bernard J. Durkan asked the Minister for Health and Children when a medical card will issue in respect of a person (details supplied) in County Kildare; and if she will make a statement on the matter. [12745/09]

Minister for Health and Children (Deputy Mary Harney): As this is a service matter it has been referred to the Health Service Executive for direct reply to the Deputy.

121. Deputy Bernard J. Durkan asked the Minister for Health and Children if a person (details supplied) in County Meath qualifies for mobility allowance; and if she will make a statement on the matter. [12746/09]

122. Deputy Richard Bruton asked the Minister for Health and Children if her attention has been drawn to the fact that the Health Service Executive will not issue emergency medical card cover to persons who can not work as a result of an assault and that such people face a lengthy wait for approval; her views on a policy change in this area; and if she will make a statement on the matter. [12750/09]

Minister for Health and Children (Deputy Mary Harney): As this is a service matter it has been referred to the Health Service Executive for direct reply to the Deputy.

123. Deputy Michael McGrath asked the Minister for Health and Children if she will arrange for a personal document to be issued from the Health Service Executive in respect of a person (details supplied) in County Cork. [12751/09]

Minister for Health and Children (Deputy Mary Harney): As this is a service matter it has been referred to the HSE for direct reply.

124. Deputy Finian McGrath asked the Minister for Health and Children if she will support matters (details supplied). [12759/09]

Minister of State at the Department of Health and Children (Deputy Máire Hoctor): As this is a service matter it has been referred to the Health Service Executive for direct reply.

125. Deputy Finian McGrath asked the Minister for Health and Children if she will respond to a query (details supplied). [12760/09]

Minister of State at the Department of Health and Children (Deputy John Moloney): As this is a service matter the question has been referred to the HSE for direct reply.

126. Deputy Phil Hogan asked the Minister for Transport his views on halving the cost of bonding for travel agents; and if he will make a statement on the matter. [12654/09]

Minister for Transport (Deputy Noel Dempsey): Statutory responsibility for regulation of the travel trade rests with the Commission for Aviation Regulation.

As the existing legislative framework for the regulation of the travel trade has been in existence since 1982 in May last year I asked the Commission for Aviation Regulation, to undertake a comprehensive review of the travel trade legislation. The purpose of the review was to assess the operation of the current regulatory arrangements and to recommend any reforms that may be warranted. Following an extensive consultation process, the Commission submitted their report to me on 30 December 2008 which I have published on my Department’s website www.transport.ie.

I am currently examining the Commissions findings and recommendations and I am consulting with my colleague, the Tánaiste and Minister for Enterprise Trade and Employment, on the report’s findings in the context of consumer protection policy generally.

127. Deputy Thomas P. Broughan asked the Minister for Transport his views on recent proposals from the Joint Committee on Transport on reforming the regulation of the taxi industry, including the introduction of a cap or moratorium on the issuing of taxi licences; and if he will make a statement on the matter. [12657/09]

Minister for Transport (Deputy Noel Dempsey): I understand that the Joint Committee on Transport has not finalised its proposals relating to the taxi industry. When they become available I will consider them insofar as they relate to my statutory responsibilities.

128. Deputy Denis Naughten asked the Minister for Justice, Equality and Law Reform further to Parliamentary Question No. 871 of 17 June 2008, if all outstanding judgments are resolved; and if he will make a statement on the matter. [12630/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): Further to my reply to Parliamentary Question No. 871 of 17 June 2008, I wish to inform the Deputy that the Supreme Court has delivered judgments in all eight IBC/05 test cases which were before the Court.

Of the 136 Judicial Review applications referred to in my previous reply, some 124 have been resolved. The remaining cases are due for hearing in the High Court in the first week of May.

129. Deputy Lucinda Creighton asked the Minister for Justice, Equality and Law Reform the reason there has been no proper investigation into the case of a person (details supplied) in Dublin 6. [12644/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I have requested a report from the Garda authorities in relation to the matter referred to by the Deputy. I will contact the Deputy again when the report is to hand.

130. Deputy Paul Gogarty asked the Minister for Justice, Equality and Law Reform when a decision will be made on the application for citizenship by naturalisation of a person (details supplied) in County Dublin. [12653/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): An application for a certificate of naturalisation from the person referred to in the Deputy’s Question was received in the Citizenship Division of my Department in February 2008.

Officials in that Section inform me that on examination of the application submitted by the person concerned it was determined that she did not meet the statutory residency requirements as set out in the Irish Nationality and Citizenship Act, 1956, as amended. The person in question was informed of this in a letter issued to her via her legal representatives on 22 August, 2008.

It is open to the person in question to lodge a new application if and when she is in a position to meet the statutory requirements.

131. Deputy Tom Hayes asked the Minister for Justice, Equality and Law Reform when a decision on an application for residency will be made on behalf of a person (details supplied) in County Kildare. [12660/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person concerned applied for asylum in the State on 8 September 2006. Her application was refused following consideration of her case by the Office of the Refugee Applications Commissioner and, on appeal, the Refugee Appeals Tribunal.

Subsequently, in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 6 July 2007, that the Minister proposed to make a Deportation Order in respect of her. She was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of a Deportation Order or of making representations to the Minister setting out the reasons why she should be allowed to remain temporarily in the State. In addition, she was notified of her entitlement to apply for Subsidiary Protection in the State in accordance with the European Communities (Eligibility for Protection) Regulations, 2006 (S.I. No. 518 of 2006). The person concerned submitted an application for Subsidiary Protection in the State in accordance with these Regulations and this application is under consideration at present. When consideration of this application has been completed, the person concerned will be notified in writing of the outcome.

In the event that the Subsidiary Protection application is refused, the case file of the person concerned, including all representations submitted, will then be considered under Section 3(6) of the Immigration Act, 1999 (as amended) and Section 5 of the Refugee Act, 1996 (as amended) on the prohibition of refoulement. When this latter consideration has been completed, the case file of the person concerned is passed to me for decision.

132. Deputy Charles Flanagan asked the Minister for Justice, Equality and Law Reform the number of persons who have been sent to prison for defaulting on loan repayments and failure to pay fines in each of the years 2005 to date in 2009; and if he will make a statement on the matter. [12704/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): It has not been possible to retrieve the required statistical information in the timeframe available. This will be forwarded to the Deputy in due course.

133. Deputy Martin Ferris asked the Minister for Justice, Equality and Law Reform if it is the case that cells in Mountjoy Prison which have recently become empty are being kept free for people who may be arrested in possible civil unrest as a consequence of the budgetary measures being contemplated by the Government. [12711/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I can advise the Deputy that Mountjoy Prison is currently operating at a level over its bed capacity. All cells in this institution that can be occupied are being occupied.

134. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform [1033] the position in relation to an application for residency in respect of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [12717/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I refer the Deputy to Parliamentary Questions No. 163 of Thursday 13 November 2008, No. 844 of Wednesday 24 September 2008 and No. 242 of Thursday 3 April 2008 and the written Replies to those Questions. The person concerned arrived in the State on 25 April 2003 and applied for asylum. His application was refused following consideration of his case by the Office of the Refugee Applications Commissioner and, on appeal, the Refugee Appeals Tribunal.

Subsequently, in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 16 May 2005, that the Minister proposed to make a Deportation Order in respect of him. He was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of a Deportation Order or of making representations to the Minister setting out the reasons why he should be allowed to remain temporarily in the State.

Representations have been received on behalf of the person concerned and these representations will be fully considered, under Section 3(6) of the Immigration Act, 1999 (as amended) and Section 5 of the Refugee Act, 1996 (as amended) on the prohibition of refoulement, before the file is passed to me for decision.

135. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for residency in respect of a person (details supplied) in County Louth; and if he will make a statement on the matter. [12718/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I refer the Deputy to Parliamentary Question No. 244 of Thursday 15 May 2008 and the written Reply to that Question. The person concerned arrived in the State on 3 December 2003 and applied for asylum. His application was refused following consideration of his case by the Office of the Refugee Applications Commissioner and, on appeal, the Refugee Appeals Tribunal.

Subsequently, in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 14 March 2005, that the Minister proposed to make a Deportation Order in respect of him. He was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of a Deportation Order or of making representations to the Minister setting out the reasons why he should be allowed to remain temporarily in the State. Following consideration of his case, under Section 3(6) of the Immigration Act, 1999 (as amended) and Section 5 of the Refugee Act, 1996 (as amended) on the prohibition of refoulement, a Deportation Order was signed in respect of the person concerned on 3 July 2006. This Deportation Order was formally served on the person concerned by letter dated 11 August 2006. This communication also notified the person concerned of the requirement that he present himself at the Offices of the Garda National Immigration Bureau on 29 August 2006 to make arrangements for his removal from the State.

Subsequently, on 14 August 2006, the legal representative of the person concerned requested that the Deportation Order made in respect of the person concerned be revoked, in accordance with the provisions of Section 3(11) of the Immigration Act 1999 (as amended). Following consideration of this request, the Deportation Order was affirmed on 17 October 2006. The person concerned was notified of this decision by letter dated 14 November 2006 and was also notified of the requirement that he present himself at the Offices of the Garda National [1034]Immigration Bureau on 23 November 2006 in order to make arrangements for his removal from the State.

The person concerned subsequently submitted an application under Regulation 4(2) of the European Communities (Eligibility for Protection) Regulations, 2006 (Statutory Instrument No. 518 of 2006) requesting that the Minister consider an application for Subsidiary Protection in the State from the person concerned. Following consideration of this application, the person concerned was notified, by letter dated 18 March 2008, that the Minister had decided to exercise his discretion to allow the person concerned to make an application for Subsidiary Protection. This application is under consideration at present. When consideration of this application has been completed, the person concerned will be notified in writing of the outcome.

Pending the determination of the Subsidiary Protection application, the Deputy can be assured that the Deportation Order will not be enforced.

136. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for family reunification in respect of a person (details supplied) in Dublin 15; and if he will make a statement on the matter. [12719/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I am informed by the immigration Division of my Department that the person in question made a Family Reunification application on behalf of his wife and two sons in December 2003. The application was forwarded to the Refugee Applications Commissioner for investigation as required under Section 18 of the Refugee Act 1996. This investigation was completed and the Commissioner forwarded a report to my Department.

The application was refused on the 22 August 2007 and a letter outlining the reasons for the refusal issued on the same date. A copy of this letter was issued to the applicant’s legal representative on the same day. There is no provision under Section 18 of the Refugee Act 1996 to appeal the decision of an application for Family Reunification. Each application is processed on its own merits and the decision reached is based on the information submitted. If the person in question has significant new information it is open to them to submit a new application for Family Reunification to my Department.

137. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for refugee status and leave to remain in respect of a person (details supplied) in Dublin 8; and if he will make a statement on the matter. [12720/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person concerned applied for asylum in the State on 22 February 1999. Her application was refused following consideration of her case by the then Asylum Division of the Department of Justice, Equality and Law Reform and, on appeal, the Refugee Appeals Tribunal.

Subsequently, in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 26 February 2002, that the Minister proposed to make a Deportation Order in respect of her. She was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of a Deportation Order or of making representations to the Minister setting out the reasons why she should be allowed to remain temporarily in the State.

Representations were submitted on behalf of the person concerned and these representations will be fully considered, under Section 3(6) of the Immigration Act, 1999 (as amended) and [1035]Section 5 of the Refugee Act, 1996 (as amended) on the prohibition of refoulement, before the file is passed to me for decision. I am assured by my officials that this case will now be brought to a conclusion as speedily as possible. The Deputy might wish to note that the person concerned is not the holder of Irish Citizenship.

138. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for citizenship in respect of a person (details supplied) in Dublin 7; and if he will make a statement on the matter. [12721/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I refer the Deputy to my reply to Parliamentary Question No. 134 on 23 October 2008. The position remains as stated.

139. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for residency in respect of a person (details supplied) in Dublin 22; and if he will make a statement on the matter. [12722/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person concerned is the infant daughter of a person who had made an application for asylum in the State. On 23 January 2008, an application for asylum in her own right was made on behalf of this child by her mother. This application was refused following consideration of the case by the Office of the Refugee Applications Commissioner and, on appeal, the Refugee Appeals Tribunal.

Subsequently, in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 6 March 2009, that the Minister proposed to make a Deportation Order in respect of her. She was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of a Deportation Order or of making representations to the Minister setting out the reasons why she should be allowed to remain temporarily in the State. In addition, she was notified of her entitlement to apply for Subsidiary Protection in the State in accordance with the European Communities (Eligibility for Protection) Regulations, 2006 (S.I. No. 518 of 2006).

The 15 working day period referred to in my Department’s letter expires on 2 April 2009. It is open to the person concerned to make representations and/or apply for Subsidiary Protection within that period. In any event, a final decision on this case will not be made prior to the expiry of the 15 working day period referred to.

140. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for residency in respect of a person (details supplied) in Dublin 22; and if he will make a statement on the matter. [12723/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person concerned and her two children arrived in the State on 27 November 2007 and applied for asylum. The children were included in their mother’s application for asylum. The asylum application was refused following consideration of the case by the Office of the Refugee Applications Commissioner and, on appeal, the Refugee Appeals Tribunal.

[1036]Subsequently, in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 6 March 2009, that the Minister proposed to make Deportation Orders in respect of her and her children. She was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of Deportation Orders or of making representations to the Minister setting out the reasons why she and her children should be allowed to remain temporarily in the State. In addition, she was notified of her entitlement to apply for Subsidiary Protection in the State in accordance with the European Communities (Eligibility for Protection) Regulations, 2006 (S.I. No. 518 of 2006).

141. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for residency in respect of a person (details supplied) in County Dublin; and if he will make a statement on the matter. [12724/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I would refer the Deputy to my reply to Dáil Question No 133 on Thursday 5th March 2009. This case is currently under consideration. My Department is awaiting updated medical reports from the applicant’s legal representatives who have informed us that their client is currently awaiting an appointment with her consultant.

142. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to a residency and asylum application in respect of a person (details supplied) in County Cork; and if he will make a statement on the matter. [12725/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person concerned arrived in the State on 5 June 2001 in the company of her guardian and was initially included as part of her guardian’s asylum application which was lodged on 6 June 2001. This asylum application was the subject of a formal refusal decision on 22 May 2003. Subsequently, on 11 December 2003, the Minister signed Deportation Orders in respect of the guardian and the person concerned. The person concerned became ‘of age’ during the course of the asylum process.

Judicial Review Proceedings were initiated in the High Court on behalf of the person concerned in early 2004. These Proceedings were subsequently ‘settled’ with the consequence that the Deportation Order made in respect of the person concerned was revoked and she was enabled to make a separate asylum application in her own right which she duly did, on 19 February 2008. The person concerned gave birth to a child in the State in 2005 and this child was included on her asylum application. The asylum application was refused following consideration of the case by the Office of the Refugee Applications Commissioner and, on appeal, the Refugee Appeals Tribunal.

Subsequently, in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 29 July 2008, that the Minister proposed to [1037]make Deportation Orders in respect of her and her child. She was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of Deportation Orders or of making representations to the Minister setting out the reasons why she and her child should be allowed to remain temporarily in the State. In addition, she was notified of her entitlement to apply for Subsidiary Protection in the State in accordance with the European Communities (Eligibility for Protection) Regulations, 2006 (S.I. No. 518 of 2006).

Representations have been submitted on behalf of the person concerned and these representations will be fully considered, under Section 3(6) of the Immigration Act, 1999 (as amended) and Section 5 of the Refugee Act, 1996 (as amended) on the prohibition of refoulement, before the case file of the person concerned is passed to me for decision.

143. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for residency in respect of a person (details supplied) in County Meath; and if he will make a statement on the matter. [12726/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person concerned applied for asylum on 31 May 2004. His application was refused following consideration of his case by the Office of the Refugee Applications Commissioner and, on appeal, the Refugee Appeals Tribunal.

Subsequently, in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 12 May 2005, that the Minister proposed to make a Deportation Order in respect of him. He was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of a Deportation Order or of making representations to the Minister setting out the reasons why he should be allowed to remain temporarily in the State.

Representations were received on his behalf. Following consideration of his case, under Section 3(6) of the Immigration Act, 1999 (as amended) and Section 5 of the Refugee Act, 1996 (as amended) on the prohibition of refoulement, a Deportation Order was signed in respect of the person concerned on 4 May 2006. Notice of this Order was served by registered letter dated 19 May 2006 requiring the person concerned to present himself at the Offices of the Garda National Immigration Bureau (GNIB) on a specified date in order to make arrangements for his deportation from the State.

The person concerned initiated Judicial Review Proceedings in the High Court with the consequence that the Deportation Order was revoked on 17 July 2007 and the person concerned was invited to submit fresh representations as to why he should be allowed to remain temporarily in the State. Representations were received on behalf of the person concerned and, following consideration of these representations, the Minister signed a Deportation Order in respect of the person concerned on 29 August 2007. Notice of this Order was served by registered letter dated 18 October 2007 requiring the person concerned to present himself at the Offices of the Garda National Immigration Bureau (GNIB) on a specified date in order to make arrangements for his deportation from the State. This Order was subsequently revoked following the submission of further representations on behalf of the person concerned, through his legal representative. These representations will now be considered under Section 3(6) of the Immigration Act, 1999 (as amended) and Section 5 of the Refugee Act, 1996 (as amended) on the prohibition of refoulement. When this consideration has been completed, the case file of the person concerned is passed to me for decision.

[1038]

144. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for residency in respect of a person (details supplied) in County Meath; and if he will make a statement on the matter. [12727/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person concerned and her two children applied for asylum on 17 February 2005. The two children were included on their mother’s asylum application. Her application was refused following consideration of her case by the Office of the Refugee Applications Commissioner and, on appeal, the Refugee Appeals Tribunal.

Subsequently, in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 28 September 2005, that the Minister proposed to make Deportation Orders in respect of her and her children. She was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of Deportation Orders or of making representations to the Minister setting out the reasons why she and her children should be allowed to remain temporarily in the State. Representations were received on her behalf. Following consideration of her case, under Section 3(6) of the Immigration Act, 1999 (as amended) and Section 5 of the Refugee Act, 1996 (as amended) on the prohibition of refoulement, Deportation Orders were signed in respect of the person concerned and her children on 4 May 2006. Notice of these Orders was served by registered letter dated 19 May 2006 requiring the person concerned and her two children to present themselves at the Offices of the Garda National Immigration Bureau (GNIB) on a specified date in order to make arrangements for their deportation from the State.

The person concerned initiated Judicial Review Proceedings in the High Court with the consequence that the person concerned was invited to submit fresh representations as to why she and her children should be allowed to remain temporarily in the State. Representations have been received on behalf of the person concerned and these representations will be considered under Section 3(6) of the Immigration Act, 1999 (as amended) and Section 5 of the Refugee Act, 1996 (as amended) on the prohibition of refoulement. When this consideration has been completed, the case file of the person concerned is passed to me for decision.

145. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for residency in respect of a person (details supplied) in County Meath; and if he will make a statement on the matter. [12728/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person concerned, an infant child, was born in the State in early 2006 and an application for asylum was made on her behalf on 26 May 2006. Her asylum application was refused following consideration of her case by the Office of the Refugee Applications Commissioner.

Arising from the refusal of her asylum application, and in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 30 January 2009, that the Minister proposed to make a Deportation Order in respect of her. She was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of a Deportation Order or of making representations to the Minister setting out the reasons why she should be allowed to remain temporarily in the State. In addition, she was notified of her entitlement to apply for Subsidiary Protection in the State in accordance with the European Communities (Eligibility for Protection) Regulations, 2006 (S.I. No. 518 of 2006). The person concerned submitted an application for Subsidiary Protection in the State in accordance with these Regulations and this application is under consideration at [1039]present. When consideration of this application has been completed, the person concerned will be notified in writing of the outcome.

146. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for family reunification in respect of a person (details supplied) in Dublin 15; and if he will make a statement on the matter. [12729/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I am informed by the immigration Division of my Department that the person in question made a Family Reunification application on behalf of his wife and son in January 2005. The application was forwarded to the Refugee Applications Commissioner for investigation as required under Section 18 of the Refugee Act 1996. This investigation was completed and the Commissioner forwarded a report to my Department.

A decision on the application was made on the 1 October 2007 refusing the request and a letter outlining the reasons for the refusal issued on the same date to the applicant. A copy of this letter was subsequently issued to the applicant’s solicitor on the 21 July 2008. There is no provision under Section 18 of the Refugee Act 1996 to appeal the decision of an application for Family Reunification. Each application is processed on its own merits and the decision reached is based on the information submitted.

If the person in question has significant new information it is open to them to submit a new application for Family Reunification to my Department.

147. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the current or expected asylum and refugee status in respect of a person (details supplied) in County Meath; and if he will make a statement on the matter. [12730/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): If an application for asylum has been made by the person concerned, the Deputy will of course be aware that it is not the practice to comment on asylum applications that are pending.

148. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform if an appeal will be given in respect of a person (details supplied) in County Meath; and if he will make a statement on the matter. [12731/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person referred to by the Deputy applied for asylum on 06/03/2007. The claim was assessed by the Refugee Applications Commissioner who concluded that the person concerned did not meet the criteria for recognition as a refugee. The Commissioner’s recommendation was communicated to him by letter dated 25/07/2007. This communication advised the person of his entitlement to appeal the Commissioner’s recommendation to the Refugee Appeals Tribunal, which he duly did.

The Refugee Appeals Tribunal considered the person’s appeal, following which the Tribunal affirmed the Commissioner’s earlier recommendation to reject his claim. The outcome of the appeal was made known to the applicant by letter dated 09/03/2009.

[1040]In accordance with normal procedures, the applicant’s file will be forwarded to my Department’s Ministerial Decisions Unit for final processing of the asylum claim. A letter will issue to him from my Department advising him formally that his asylum claim has been rejected and affording him three options as follows:

1. Return home voluntarily

2. Consent to the making of a deportation order, or

3. Make written representations to me within 15 working days for temporary leave to remain in the State and/or make an application for subsidiary protection under the European Communities (Eligibility for Protection) Regulations 2006 (SI No. 518 of 2006).

149. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in regard to an application for naturalisation in respect of a person (details supplied) in Dublin 22; and if he will make a statement on the matter. [12732/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I refer the Deputy to my reply to Parliamentary Question No. 267 on 3 March 2009. The position remains as stated.

150. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position in relation to an application for asylum in respect of a person (details supplied) in County Cork; and if he will make a statement on the matter. [12733/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person concerned applied for asylum on 31 January 2005. His application was refused following consideration of his case by the Office of the Refugee Applications Commissioner and, on appeal, the Refugee Appeals Tribunal.

Subsequently, in accordance with Section 3 of the Immigration Act, 1999 (as amended), the person concerned was informed, by letter dated 21 February 2006, that the Minister proposed to make a Deportation Order in respect of him. He was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of a Deportation Order or of making representations to the Minister setting out the reasons why he should be allowed to remain temporarily in the State.

151. Deputy David Stanton asked the Minister for Justice, Equality and Law Reform the progress he has made in drafting the Sale of Alcohol Bill; when he expects to publish same; and if he will make a statement on the matter. [12756/09]

[1041]Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The Government Legislation Programme published on 26 January provides for publication of the Sale of Alcohol Bill in 2009. The Bill will modernise and streamline the law relating to the sale and consumption of alcohol by repealing the Licensing Acts 1833 to 2008, as well as the Registration of Clubs Acts 1904 to 2008, and replacing them with updated provisions.

152. Deputy Michael McGrath asked the Minister for Justice, Equality and Law Reform the position in relation to the proposed Civil Partnership Bill. [12764/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The position is as outlined in my reply to Parliamentary Question Number 244 of 3 March 2009.

153. Deputy Brian O’Shea asked the Minister for Justice, Equality and Law Reform his proposals to appoint more judges; and if he will make a statement on the matter. [12773/09]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The allocation of judicial resources is, in the first instance, a matter for the Presidents of the Courts. I am guided by the Presidents as to the need for additional judges, subject to Exchequer constraints. It should be noted, however, that judicial numbers have been significantly increased in recent years. Fourteen additional judges were appointed under the provisions of the Courts and Court Officers (Amendment) Act 2007: six to the District Court, four to the Circuit Court and six to the High Court. Furthermore, three additional District Court judges have recently been appointed following the enactment of the Civil Law (Miscellaneous Provisions) Act 2008. These additional judges constitute a significant increase in judicial resources and should positively impact on delays throughout the courts system.

Since 1997 the judges allocated to the court jurisdictions have increased as follows:

	1997	2009
Supreme Court	8	8*
High Court	20	37**
Circuit Court	26	38
District Court	47	64

154. Deputy Jack Wall asked the Minister for Community, Rural and Gaeltacht Affairs the position in relation to the dormant account funding for 2009; the number of applications received for such funding; the number of applications received for such funding in 2008; the funding allocated but not drawn down in 2008; the position of such applications; and if he will make a statement on the matter. [12674/09]

Minister for Community, Rural and Gaeltacht Affairs (Deputy Éamon Ó Cuív): Funding is provided from the Dormant Accounts Fund (DAF), through the votes of relevant Departments, to tackle disadvantage and to assist persons with a disability. Details in respect of the number of applications are set out in my reply to question number 55 answered on 4th March [1042]2009. Since early 2006, all projects have been approved by the Government and managed by the Government Department with responsibility for the areas assisted.

In 2006, 2007 and 2008, my Department has managed an annual measure to support priority projects in RAPID areas valued at €7.5 million per annum; in 2006 my Department managed measures to provide recreation and personal development opportunities for disadvantaged young people valued at €1.12 million and €3.95 million to fund two projects under the Flagships Measure. In 2008, €2m was provided for a substance misuse measure. Details in respect of funding yet to be drawn down by projects is set out below:

Measure	No of Projects Approved	Projects in Receipt of Funds	Projects NOT in Receipt of Funds	Value of Projects not yet in receipt of funds
				€m
RAPID Additionality	630	600	30	1.25
Flagships	2	1	1	2.50
Recreational & Development — Disadvantaged Youth	51	48	3	0.03

There are a number of reasons why groups do not draw down the funding they have been granted. For example, some groups may decide that the project is no longer necessary, viable or a priority for them. Others experience capacity issues in relation to their ability to implement the project. Issues also arise in relation to compliance with public procurement rules, planning permission and access to additional funding to complete the project or to meet other undertakings. All projects are kept under review and where appropriate, offered support. Where it is agreed that a project will not proceed or draw down the full amount of funds approved, procedures, including consultation with the project promoters, are in place to decomit the funding approved.

With respect to 2009, I have no proposals to make any further allocations to specific measures until information is available on the value of funds liable to transfer from financial institutions later this year. Details of the individual grants and organisations that have been approved for support from the Fund are available on the Department’s website, www.pobail.ie.

155. Deputy Jack Wall asked the Minister for Community, Rural and Gaeltacht Affairs the position of the programme for grants for locally based community and voluntary organisations; the number of applications received to date in 2009; the position of such applications; if funding is available to address such applications; if all of the funding allocated in 2008 has been drawn down; if not, the position of such funding; and if he will make a statement on the matter. [12675/09]

Minister of State at the Department of Community, Rural and Gaeltacht Affairs (Deputy John Curran): I would refer the Deputy to my replies to questions number 43 on 4th March and questions numbered 304, 305 and 306 on 10th March 2009 concerning the suspension of this Programme.

To date, nearly 500 applications have been received. Of these, around 250 have been either recommended for funding or found to be ineligible or incomplete. Six applications were withdrawn. The remaining projects are currently at different stages of the appraisal process. Going [1043]on experience thus far, I would expect that about three-quarters of these outstanding applications would be recommended for funding.

However, as I have previously outlined, it will not be possible to fund all successful applications given the current economic circumstances and the need to prioritise funding for other areas of activity. Of the €9 million provided for the programme 2008, some €4.2 million was drawn down by projects and to meet the costs of administration. Outstanding commitments to projects at year-end amounted to nearly €2.5 million. The Deputy will appreciate that organisations draw funding over a period of months depending on progress on the delivery of a particular project. Any funds not drawn down are used to meet the cost of other organisations awarded allocations under the Programmes.

156. Deputy Jack Wall asked the Minister for Community, Rural and Gaeltacht Affairs the number of agencies or bodies under the control of his Department; the changes or alterations made to date or planned in regard to Budget 2009 directive in regard to such groups; if legislation is necessary in regard to amalgamations or in regard to reductions of such groups; and if he will make a statement on the matter. [12676/09]

Minister for Community, Rural and Gaeltacht Affairs (Deputy Éamon Ó Cuív): The Deputy will appreciate that matters in relation to the forthcoming Budget remain to be agreed by Government and presented to the Oireachtas. Any consequential measures as may relate to bodies within the ambit of my Department, can be subsequently addressed, as appropriate.

157. Deputy Róisín Shortall asked the Minister for Social and Family Affairs her views on whether it is acceptable that a person (details supplied) in Dublin 11 who applied for jobseeker’s allowance in December 2008 has not been awarded payment; and if she will intervene to ensure that the claim is assessed and processed without further delay. [12655/09]

Minister for Social and Family Affairs (Deputy Mary Hanafin): The person concerned made a claim for Jobseeker’s Allowance at Finglas local office on 10 December 2008. His application was forwarded to a social welfare inspector on 17 December 2008 so that an assessment of his means could be conducted. The claim papers are with the inspector. All the required documentation has been received from the person concerned. The present position is that the assessment of means will be completed by the middle of the week. The claim will then be submitted to a deciding officer for decision before the end of the week and the person will be advised of the outcome. The reason for the delay in conducting the means assessment is that the Live Register has increased significantly in recent months in the Finglas office. The absence of an inspector due to illness also contributed to the delay. All efforts are being made to ensure cases are dealt with as quickly as possible. If a person feels that he or she has insufficient means to meet his or her needs, it is open to him or her to apply for supplementary welfare allowance. This allowance is administered by the Health Services Executive through the community welfare officers at local health centres.

158. Deputy Deirdre Clune asked the Minister for Social and Family Affairs the reason recipients of payments from her Department still receive payments on a manual basis; her [1044]views on phasing out such payments in favour of an electronic system; and if she will make a statement on the matter. [12663/09]

Minister for Social and Family Affairs (Deputy Mary Hanafin): The Department supports the Government’s policy of aiming to facilitate the greater use of electronic payment systems in the economy in the interests of developing a world-class payments environment in Ireland. Our payment strategy is designed to ensure that cost-effective arrangements are in place for making payments to social welfare customers by using a range of payment options and to ensure that new payment facilities are made available to customers as they arise. The Department is implementing a three-year strategy to change paper-based payment instruments to electronic payments at post offices, banks and other financial institutions, including certain credit unions that have financial regulatory approval. Some 84% of customers receive their payment electronically direct to their post office or financial institution. The remaining personalised payable order books will be changed to electronic payment by the end of September 2009. Plans are under way to change cheque payments to electronic payment at a post office or a financial institution over the next 12 months. Of the 1 million payments issued each week, a small number is made by manual cheque. A facility to make such payments by an electronic system is being investigated.

159. Deputy Mary Upton asked the Minister for Social and Family Affairs her views on correspondence (details supplied); and if she will make a statement on the matter. [12687/09]

Minister for Social and Family Affairs (Deputy Mary Hanafin): A range of education and employment supports are available to people who are in receipt of welfare payments. These initiatives, including the back to work allowance and the back to education allowance, are designed to assist and facilitate people on such payments to return to the active labour force. The back to work allowance scheme is designed to assist and encourage the long-term unemployed, lone parents, people with disabilities and other social welfare recipients to return to the active labour force. The scheme’s two strands are the back to work enterprise allowance for the self-employed and the back to work allowance for employees. The allowances provide a monetary incentive for long-term social welfare dependants and make their return to work financially attractive and viable. This scheme has been subject to review and modification over the years. The requirement to be in receipt of a relevant social welfare payment for a minimum period of time has always been a feature of it. While those who have been unemployed for a short time are not the main focus of the scheme, its qualifying conditions will continue to be monitored in the context of the changing economic circumstances.

The national employment action plan, which has been in operation since 1998, is the main welfare-to-work measure of the Government. It has proven successful in helping people on the live register to get back into employment. It is a preventive strategy that provides for systematic engagement of the employment services with the unemployed. The operation of the action plan involves the referral to FÁS of people on the Live Register who have been unemployed for a certain period. Everyone who is approaching three months on the Live Register is referred to FÁS for interview with a view to job placement or an offer of training. FÁS employment services, together with local employment services, have put in place measures designed to provide increased capacity for the increase in referrals and the increased number of unemployed people who are seeking job search assistance voluntarily. The implementation of these measures has increased the monthly capacity of job search services from 6,500 to 12,250 persons [1045]per month. Arrangements also exist whereby people who are employed for up to three days in a week may claim jobseeker’s payment in respect of the remainder of the week, subject to being available for full-time work. It may be noted that if there is an employment relationship between a worker and an employer, that relationship may dictate that the full range of rights and protections afforded to employees, including minimum wage, will apply. The Department will continue to work closely with the Department of Enterprise, Trade and Employment and FÁS to improve the services available for progressing people who depend on social welfare progress to education, training and employment.

160. Deputy Terence Flanagan asked the Minister for Social and Family Affairs if she will transfer surplus civil servants on a temporary basis to the Money Advice and Budgetary Service in Coolock, Dublin 5 to deal with the six week waiting list to meet a money advisor; and if she will make a statement on the matter. [12695/09]

Minister for Social and Family Affairs (Deputy Mary Hanafin): The Money Advice and Budgeting Service, MABS, is the main Government-funded service which provides assistance to people who are over-indebted and need help and advice in coping with debt problems. There are 53 independent MABS companies with voluntary boards of management operating the local MABS services from 65 locations throughout the country. In addition, the MABS National Telephone Helpline is available from 9 a.m. to 8 p.m., Monday to Friday, at lo-call number 1890 283 438. Budgeting and money management information can be accessed 24 hours a day at www.mabs.ie. In 2009, almost €18 million has been provided to assist the MABS in dealing with its workload. Six additional full-time and part-time staff have been allocated to the local services. The capacity of the telephone helpline has been strengthened. MABSndl, which is the national support company, has introduced a number of community education and other initiatives to assist the local services in managing their increased caseloads. Some 252 money advice staff are employed throughout the country in the MABS. Dublin north-east MABS has four money advice staff at present. Applications for funding for additional staff are being kept under review should further funding become available for additional posts. There are no plans to transfer civil servants to the MABS at this time.

All MABS companies, including Dublin north-east MABS, operate an appointment system for meeting clients. Clients with urgent difficulties are prioritised for attention and dealt with promptly. Less urgent cases are referred to the telephone helpline and to the MABS website. Over 90% of callers to the helpline find that their money management and budgeting issues can be resolved with the assistance of the helpline advisor. Some 10% of callers are referred to the local MABS for appointment. In addition, the helpline is assisting local services, including Dublin north-east MABS, to manage their appointment lists by providing an initial preliminary MABS service to clients and ongoing support while they await their appointment with their local money advisor. The MABS advises that people coping with debt difficulties should take early action. An approach to the MABS can be the first positive step in addressing debt difficulties. The MABS provides a high quality personal service to members of the public that helps many to cope with and overcome the burden of indebtedness that can have such an impact on their lives and those of their families.

161. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs when rent [1046]support will be offered in respect of persons (details supplied) in County Kildare; and if she will make a statement on the matter. [12747/09]

Minister for Social and Family Affairs (Deputy Mary Hanafin): Rent supplement is administered on behalf of the Department by the community welfare service of the Health Service Executive as part of the supplementary welfare allowance scheme. The purpose of the rent supplement scheme is to provide short-term income support to eligible persons living in private rented accommodation, whose means are insufficient to meet their accommodation costs and who do not have accommodation available to them from any other source. The HSE has advised that the people concerned are living in local authority housing and therefore have no entitlement to rent supplement. They should contact the local authority with regard to any concerns they have about their rent payment.

162. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs the position in relation to an application for supplementary welfare allowance in respect of a person (details supplied) in County Kildare; and if she will make a statement on the matter. [12748/09]

Minister for Social and Family Affairs (Deputy Mary Hanafin): The supplementary welfare allowance scheme, which is administered on behalf of the department by the community welfare division of the Health Service Executive, is designed to provide immediate and flexible assistance for those in need who do not qualify for payment under other State schemes.

The Executive has advised that the person concerned is in receipt of supplementary welfare allowance. The community welfare officer recently asked the person concerned to provide additional information and also asked her to call to the local health centre to collect a payment. The community welfare officer tried to contact the person concerned a number of times but she has not been answering the contact telephone number provided by her.

The person concerned should call to the local health centre immediately to discuss her supplementary welfare allowance claim with the community welfare officer.

163. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs if mortgage assistance will be offered in respect of a person (details supplied) in County Kildare; and if she will make a statement on the matter. [12749/09]

Minister for Social and Family Affairs (Deputy Mary Hanafin): The supplementary welfare allowance scheme, which includes mortgage interest supplement, is administered on behalf of the department by the community welfare division of the Health Service Executive.

The Executive has advised that the person concerned was in receipt of mortgage interest supplement from 2 July 2007 to 31 December 2008 when payment ceased as she returned to full-time employment on 3 January 2009. She left employment on 14 January 2009 on health grounds.

The Executive has advised that mortgage interest supplement has been re-instated with effect from January 2009. Arrears of payment due will issue to the person concerned shortly.

164. Deputy Richard Bruton asked the Minister for Social and Family Affairs if she will extend occupational injury cover to self-employed people or another protection to deal with accidents; and if she will make a statement on the matter. [12752/09]

[1047]Minister for Social and Family Affairs (Deputy Mary Hanafin): Workers are insured under the Social Welfare Acts as either employed or self-employed contributors. All workers, both employed and self-employed, are obliged to pay PRSI contributions as a percentage of their personal reckonable income.

The range of benefits and pensions to which different groups of workers may establish entitlement reflects the risks associated with the nature of their work. This in turn reflects the rate of contribution payable. Self-employed people aged between 16 and 66 years are liable for PRSI at the Class S rate of 3% and are consequently eligible for a narrower range of benefits than general employees who, together with their employers, pay a total social insurance contribution of 14.05%, excluding levies, under the full-rate PRSI Class A. These contributions provide entitlement to a range of contingency-based payments under various social insurance schemes.

PRSI Class S contributors are entitled to the following payments:

the Widow’s or Widower’s (Contributory) Pension;

the Guardian’s Payment (Contributory);

the State Pension (Contributory);

Maternity Benefit;

Adoptive Benefit, and

the Bereavement Grant.

Self-employed workers are not insured against short-term benefits such as illness and jobseeker’s payments. Neither are they covered for Injury Benefit which is one of the benefits available under the Occupational Injuries Scheme. This reflects the need for coverage for various contingencies, the rate of contributions that self-employed persons pay, the practicalities of administering and controlling access to benefit payments, and the annualised system of contributions that these same persons enjoy.

A system of separate arrangements for employed and self-employed workers within a social insurance context is common in other European social protection systems.

There are no immediate plans to expand coverage for Class S contributors. However, they may qualify for the means tested Disability Allowance if the illness/injury is expected to last for at least one year.

165. Deputy Richard Bruton asked the Minister for Social and Family Affairs the obligations of a company (details supplied) to make up any deficit in the pension fund as they withdraw from their operations here; and if she will make a statement on the matter. [12753/09]

Minister for Social and Family Affairs (Deputy Mary Hanafin): Defined benefit (DB) pension schemes are required to comply with the funding standard provision set out in the Pensions Act. This funding standard requires defined benefit pension schemes to maintain sufficient assets to enable them discharge accrued liabilities. Where schemes do not satisfy the Funding Standard, the sponsors/trustees must submit a funding proposal to the Pensions Board to restore full funding within three years.

[1048]The Government is conscious of the pressures on employers sponsoring pension schemes, and scheme trustees, arising from the very significant losses incurred by pension funds over the last year. While 81% of DB pension schemes satisfied the funding standard at the end of 2007, it is estimated that in excess of 90% of DB pension schemes are in deficit at the moment.

As the deputy is aware, in recognition of the current market difficulties and the challenges facing pension trustees, the Government recently announced a number of short-term measures aimed at easing the pressures on many DB schemes. I believe that these measures will assist schemes currently in difficulty and will help to ensure the best outcomes for the scheme members.

However, it must be acknowledged that in the current economic climate, a certain number of companies will cease trading and this may have an impact on their pension schemes. In the case of the company referred to by the Deputy, it is understood that the employees’ DB pension scheme is currently in deficit.

Employers who provide DB pension schemes have no legal obligation to make up any shortfalls that arise in their funds. However, many employers have been willing to contribute towards such shortfalls.

It is Government policy to support the continuation of DB schemes where possible. The recent measures announced by the Government will ease the pressure on underfunded schemes by allowing more time to recover recent losses.

My Department, together with the Pensions Board, will continue to monitor the situation in relation to the underfunding of DB schemes. In addition, the Government is currently considering a number of options in relation to the ongoing security of occupational pensions. Any decisions in this regard will be made in the context of the National Pensions Framework which will be finalised shortly.

166. Deputy Róisín Shortall asked the Minister for Social and Family Affairs if she will provide MABSIS data for the first two months of 2009 for each Money Advice and Budgeting Service centre in respect of the number of new clients, the number of new clients earning a wage, the number of new clients with a mortgage and the total and average debt owed by new clients when they first presented to MABS. [12763/09]

Minister for Social and Family Affairs (Deputy Mary Hanafin): The Money Advice and Budgeting Service (MABS) provided services to 3,373 new clients in the period to end February 2009. In addition 500 people sought information about budgeting and money management. The MABS National Helpline received approx 4,230 calls to end of February 2009.

National MABS statistics are produced on a monthly basis and individual company statistics are produced quarterly. The national MABS statistics for January/February 2009 show that the majority of new clients were receiving social welfare payments (62%), some 830 (25%) were receiving Jobseekers payments, 525 (16%) were receiving One Parent Family Payment and 164 (4.9%) were in receipt of illness/disability payments. In addition 25% of clients were in employment and 3.9% were self-employed.

Clients mostly lived in rented accommodation, with 24% living in private rented accommodation and 21% in rented local authority accommodation. People with mortgages made up 34% of clients and 7% lived with parents.

[1049]The total owed by new clients in February 2009 to creditors, based on the debt they had when they first came to the MABS, amounted to €46.2 million, which works out at an average amount of €13,700 debt per client. Of the total amount of debt 65% was owed to banks/financial institutions, 15% was owed to credit unions, 2% was owed in respect of utilities bills and 2% was owed to moneylenders.

Information on new clients per MABS company up to the end of December 2008 is detailed in the following table.

Money Advice and Budgeting Service — New Clients

Company	New clients at 31st December 2008
Arklow	253
Athlone	188
Ballymun	543
Blanchardstown	422
Bray	574
Carlow	677
Cavan	205
Charleville	111
Clare	298
Clondalkin	322
COMAC	410
Cork	970
North Cork	384
West Cork	288
North Donegal	264
South Donegal	93
West Donegal	25
Drogheda	146
Dublin 12 Area	242
Dublin North City	257
Dublin North East	383
Dublin South East	181
Dundalk	188
Dundrum/Rathfarnham	293
Dun Laoghaire	411
Fingal	224
Finglas	482
North Galway	347
South Galway	602
Kerry	684
Kildare	457
Kilkenny	363
Laois	414
Leitrim	117
Liffey South West	310
Limerick	592
Longford	151
North Mayo	113
South Mayo	222
Meath	179
Monaghan	128
Mullingar	191
Offaly	223
Roscommon	158
Sligo	210
Tallaght	438
North Tipperary	206
South Tipperary	546
Waterford	624
West Waterford	186
Wexford	305

167. Deputy Willie Penrose asked the Minister for Social and Family Affairs if a person (details supplied) in County Westmeath who is just over six months unemployed, and who wishes to start a business, can avail of the back to work allowance; if, in this context changes will be made in order to ensure that people such as this person can obtain same and commence their own businesses; and if she will make a statement on the matter.

Minister for Social and Family Affairs (Deputy Mary Hanafin): The enterprise stream of the back to work allowance (BTWA) scheme is designed to assist people, who are long term dependant on social welfare payments, to take up self-employment. Participants receive a tapered percentage of their social welfare payment over a four year period for those who become self employed and they may also retain entitlement to certain other secondary benefits.

To qualify for the back to work enterprise allowance scheme, the person must receive approval from a partnership company or one of this Department’s local facilitators before taking up self-employment. The person must be in receipt of a qualifying social welfare payment for a specified length of time immediately prior to commencing the self-employment. For a person on a Jobseeker’s payment the qualifying period is 24 months. The person referred to by the Deputy has been in receipt of Jobseeker’s Benefit since September 2008 and, consequently, does not satisfy the eligibility criteria of the scheme.

The conditions of the scheme will continue to be monitored in the light of the changed economic circumstances.

168. Deputy Tom Hayes asked the Minister for the Environment, Heritage and Local Government when a decision will issue on an application for a licence to carry out an archeological dig on a site for a person (details supplied) in County Tipperary. [12661/09]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): A licence for the proposed excavation issued on 18 March 2009.

169. Deputy Frank Feighan asked the Minister for the Environment, Heritage and Local [1051]Government if he will confirm allocation of €500,000 for Boyle Town Council, County Roscommon in respect of remedial works. [12669/09]

Minister of State at the Department of the Environment, Heritage and Local Government (Deputy Michael Finneran): Following my Department’s Call for Proposals under the Remedial Works Programme for 2009, I approved five projects for assistance on 30 January 2009, including one at Boyle, Co. Roscommon, the initial projected cost of which was €691,000. My Department has since written to Boyle Town Council requesting, inter alia, a detailed cost plan and details of how anticipated revenue from the sale of houses will impact on the overall cost. The level of funding to be provided for the project will be determined following receipt and consideration of the Council’s response.

170. Deputy Joanna Tuffy asked the Minister for the Environment, Heritage and Local Government the steps he has taken to opt out of Article 9(1) of the Water Framework Directive that requires the recovery of water charges by Member States starting from 2010, that this will include Ireland having to charge domestic charges, unless Ireland makes a case in writing for opting out of charging for domestic water charges to the European Commission by December 2009; if he will ensure that Ireland formally requests that it opt out in time by December 2009, particularly in view of the fact that he sought a clause providing that member states could opt out from charging for domestic water when the Water Framework Directive was being negotiated by member states; if he will explain what is meant by the statement by the Government to the Commission that he is merely reflecting on the implementation of Article 9; if this statement means he intends that Ireland will introduce water charges from 2010; and if he will make a statement on the matter. [12685/09]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): The Water Framework Directive was adopted on 23 October 2000. Article 9(1) of the Directive requires Member States to take account of the principle of the recovery of the cost of water services, including environmental and resource costs. However, Article 9(4) of the same Directive stipulates that a Member State will not be in breach of the Directive if it decides, in accordance with established practices, not to apply these provisions where it does not compromise the purposes and the achievement of the Directive’s objectives.

The Local Government (Financial Provisions Act) 1997 removed the authority of water services authorities to levy charges for water services on domestic users. The Water Pricing Policy, subsequently agreed by the Government in November 1998, requires local authorities to recover the full cost of providing water services from the users of these services, with the exception of households using the services for domestic purposes. There is no requirement, therefore, for the Government to take steps to opt out of Article 9(1) given that the established practice at the time of the adoption of the Directive was not to levy charges on domestic users.

Under the Directive, the island of Ireland is divided into eight River Basin Management Districts. Management Plans for these districts must be published no later than 22 December 2009 and submitted to the European Commission within three months of publication. The Management Plans must include details of cost recovery, in accordance with Article 9. Draft River Basin Management Plans for the eight River Basin Districts in Ireland were published in December 2008 by the respective management authorities.

171. Deputy Frank Feighan asked the Minister for the Environment, Heritage and Local Government the procedures his Department has in place to assist elderly people who have [1052]land and now find under the new metering system they are receiving bills for water due to the fact there must be leaks in the pipes covering their land which can not be identified. [12699/09]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): The Government’s Water Pricing Policy requires local authorities to recover the cost of providing water services from non-domestic users of these services. The Policy exempts domestic users from charges for water services. As such, landowners are only levied with charges if they are engaged in commercial activity on their property, for example, farming. The policy makes no distinction between different categories of non-domestic users in the application of charges. However, where a supply serves both the domestic and business needs of a consumer, a domestic allowance is applied by the local authority.

To encourage water conservation, Section 54 of the Water Services Act 2007 includes a general duty of care for owners and occupiers to keep water distribution systems leak-free — this duty applies to both domestic and non domestic consumers.

172. Deputy Frank Feighan asked the Minister for the Environment, Heritage and Local Government if his Department will review the boundaries of the bog land included in special areas of conservation and natural heritage areas as a measure to alleviate the distress caused to private individuals who have for generations cut small amounts of turf for their own use on the margins of these areas; and if his Department will engage in meaningful discussions with those peoples representatives particularly in view of the crisis in price and supply of other fuels. [12702/09]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): Bogs are important natural habitats and are home to unique ecosystems containing rare flora and fauna. Both blanket bogs and raised bogs are protected habitats under European and Irish Law and representative samples have been designated as Special Areas of Conservation (SAC) under the Habitats Directive or Natural Heritage Areas (NHA) under the Wildlife Acts. Ireland has some of the most ecologically important bogs in the European Union. In 1999, when the first of these sites was designated for nature protection, all commercial cutting on these bogs was stopped and the then Minister granted a ten year grace period for those who were cutting turf for their personal domestic use to find alternative sources of fuel.

Blanket bogs, which occur predominantly on the Western seaboard but also in Wicklow and the midlands, can tolerate a certain amount of turf extraction without compromising their value as habitats. It is envisaged that cutting on Blanket Bog SACs and NHAs can continue, except in very sensitive areas, under the current restrictions, which prohibit commercial extraction and the use of “sausage” machines. Raised bogs occur predominantly in the midlands. There are over 1,500 raised bogs in the State and only 139 of these are designated for nature protection as SACs or NHAs. The continued cutting of turf, by hand or machine, and associated drainage on these designated raised bogs is incompatible with their preservation. Even with the restrictions in cutting that were introduced in 1999, over one third of the best bog habitat on these sites has been lost in ten years. It is clear that more needs to be done if we are to meet our obligation to protect this important habitat.

The Habitats Directive imposes a legal obligation on the State to take measures to ensure the protection of this essential and irreplaceable part of our natural heritage. Therefore, in the light of the scientific evidence of continuing damage to these valuable habitats, it would not be appropriate to review the boundaries in these areas as suggested in the question. Rather, it is [1053]necessary to put arrangements in place to provide for more effective protection of these habitats, which will necessitate the transition to a cessation of turf cutting on the small number of raised bogs which are designated. My Department will establish an interdepartmental working group to consider how best to achieve this and to assess the resources that will be required. This group will consult with interested parties and representative groups, and report back to me later this year.

173. Deputy Frank Feighan asked the Minister for the Environment, Heritage and Local Government the reason Ireland opted for 12% to 14% of land for inclusion in special areas of conservation and natural heritage areas when only 1% was requested. [12703/09]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): The overall area of land designated for nature conservation purposes constitutes 14% of the terrestrial area of the State. The location and amount of land designated follows on from the application of scientific site selection criteria that have been determined to meet the requirements of the European Union Birds and Habitats Directives for sites of European importance i.e. Special Protection Areas and Special Areas of Conservation respectively. Similarly, scientific criteria were applied to the selection of sites of national importance as Natural Heritage Areas. I am not aware of any basis for the 1% figure referred to in the Question.

174. Deputy Finian McGrath asked the Minister for the Environment, Heritage and Local Government when the contract for the upgrading of the water and sewerage services in Tuam, County Galway will be signed. [12762/09]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): The Tuam Town Water Supply and Sewerage Scheme Stage 2 is included for funding in my Department’s Water Services Investment Programme 2007-2009. I approved Galway County Council’s tender recommendation for the scheme in October 2008. Subsequent contract arrangements are a matter for the County Council.

175. Deputy Frank Feighan asked the Minister for the Environment, Heritage and Local Government the position regarding the sale of bog land under special area of conservation in respect of a person (details supplied) in County Roscommon; and when it is envisaged payment will issue in this case. [12779/09]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): I understand that this application is currently being progressed within the Chief State Solicitor’s Office. However, it is not possible, at this stage, to be definitive as to when the transaction may be completed.

176. Deputy Tom Sheahan asked the Minister for Communications, Energy and Natural Resources when broadband can be expected in Rathmore, County Kerry. [12681/09]

Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan): Broadband service providers operate in a fully liberalised market, regulated, where appropriate, by the independent Commission for Communications Regulation, ComReg. Broadband services are available from competing service providers over multiple platforms, including DSL [1054](telephone lines), cable, fixed wireless, mobile and satellite. I understand that broadband is available in Rathmore, County Kerry from mobile and satellite service providers.

177. Deputy Frank Feighan asked the Minister for Agriculture, Fisheries and Food when a REP scheme application in respect of a person (details supplied) in County Roscommon will be processed for payment in view of the fact that the application is with his Department for a considerable time. [12697/09]

Minister for Agriculture, Fisheries and Food (Deputy Brendan Smith): REPS 4 is a measure under the current Rural Development Programme 2007-13 and is subject to EU Regulations which require detailed administrative checks on all applications to be completed before the first payments issue. The first payments for 2008 REPS 4 applications issued in the last week of January to those whose applications required no correction following the administrative checks. Further payments continue to be made as applications are cleared. Queries have arisen during the administrative checks on the plan of the person named and it is currently under further examination.

178. Deputy James Reilly asked the Minister for Education and Science if he will confirm that he will, at some date in the future, provide a new school at Hedgestown, Lusk, County Dublin; if he will confirm same in writing to the board of management and Fingal County Council in order that the board of management can proceed with the purchase of the two acre school site from Fingal County Council; and if he will make a statement on the matter. [12635/09]

Minister for Education and Science (Deputy Batt O’Keeffe): The school’s application for Major Capital Grant Aid has been assessed in accordance with the prioritisation criteria, and has been assigned a Band rating of 2.1. The Department approved funding for the purchase of an 80 sq m classroom for the school on its existing site in 2007. Emergency funding was granted to the school in December 2008 for ceiling repairs.

The Department is aware of the accommodation needs of this school and, on foot of a technical inspection some time ago, is satisfied that the proposed 2 acre site is suitable for a new school building. The progression of all large scale building projects, including this project, from initial design stage through to construction phase will be considered in the context of my Department’s multi-annual School Building and Modernisation Programme.

However, in light of current competing demands on the capital budget of the Department, it is not possible to give an indicative timeframe for the progression of the project at this time. In that context, it is a matter for the school authority as to whether or not they acquire the 2 acre site from Fingal County Council at this time.

179. Deputy Joan Burton asked the Minister for Education and Science the position regarding plans for the long promised refurbishment or replacement of a school (details supplied) in Dublin 15; if he will confirm that funds will be made available through the summer works scheme 2009 for the refurbishment of the science laboratories and the home economics facilities at the school; and if he will make a statement on the matter. [12636/09]

[1055]Minister for Education and Science (Deputy Batt O’Keeffe): The school’s application for Major Capital Grant Aid has been assessed in accordance with the prioritisation criteria, and has been assigned a Band rating of 2.4.

The progression of all large scale building projects, including this project, from initial design stage through to construction phase will be considered in the context of my Department’s multi-annual School Building and Modernisation Programme. However, in light of current competing demands on the capital budget of the Department, it is not possible to give an indicative timeframe for the progression of the project at this time. Applications submitted for the deferred Summer Works Scheme in 2008, including one from the school in question, are being assessed currently for summer 2009 and the school authority will be notified of the outcome of this assessment in due course.

180. Deputy Joan Burton asked the Minister for Education and Science the status of a school (details supplied) in Dublin 15 with respect to the capital development programme; if funding is allocated to this effect for 2009 or for 2010 under his Department’s multi annual school building and modernisation programme; if the appointed design team has completed its preliminary design and sketch activities for this project; if they have not, when these activities are due to be completed; when this project is scheduled to progress to phase two; when this project is scheduled to be completed; and if he will make a statement on the matter. [12638/09]

Minister for Education and Science (Deputy Batt O’Keeffe): The major capital project for the School to which the Deputy refers has been assigned the highest priority band rating of 1. A design team has been appointed and the project is currently at Stage 1 — preliminary design and sketch scheme. The project will be allowed to proceed up to Stage 2a i.e. developed sketch scheme.

The progression of all large scale building projects from initial design stage (up to and including stage 2a) through to tender and construction (stages 3-5), including this project, will be considered in the context of my Department’s Multi-Annual School Building and Modernisation Programme. In light of current competing demands on my Department’s capital budget, it is not possible to give an indicative timeframe for the completion of the project at this time.

181. Deputy Joan Burton asked the Minister for Education and Science the status of the preparations for the construction and opening of a post-primary school in Luttrelstown, Dublin 15; if his Department and the County Dublin Vocational Education Committee have identified suitable accommodation for the opening of the school in September 2009; if he will confirm that this school will open in September 2009; if a site for the permanent location of the school has been identified and acquired; when this is expected to take place; the funding allocated to this school for 2009; when construction is scheduled to commence on the permanent accommodation for this school; if a construction contract has been tendered and concluded; and if he will make a statement on the matter. [12639/09]

Minister for Education and Science (Deputy Batt O’Keeffe): My Department has been aware of a need for further post primary provision in the Dublin 15 area and in that context, I sanctioned the establishment of a new post primary school for the area last year. The new school will be called Luttrellstown Community College and the Patron is County Dublin VEC.

My Department is working closely with Co. Dublin VEC to open the new school in September 2009 and temporary accommodation has been identified. My Department will acquire a permanent site for the new school under the Fingal School Model Agreement. A [1056]number of sites, including this one, being acquired under the Fingal School Model agreement are at varying stages of acquisition and, as the Deputy will appreciate, due to commercial sensitivities relating to site acquisition, I am not in a position to comment further at this time.

182. Deputy Joanna Tuffy asked the Minister for Education and Science if he will investigate why special needs assistance care was removed from a person (details supplied) in Dublin 22; if his attention has been drawn to the fact that the student is sitting the leaving certificate examination in 2010; if he will ensure the service is restored; and if he will make a statement on the matter. [12641/09]

Minister for Education and Science (Deputy Batt O’Keeffe): As the Deputy will be aware, the National Council for Special Education (NCSE) is responsible, through its network of local Special Educational Needs Organisers (SENOs), for allocating resource teachers and Special Needs Assistants (SNAs) to schools to support children with special needs.

Applications for SNAs may be considered by the NCSE where a pupil has a significant medical need for such assistance and where there are identified care needs arising from a diagnosed disability. A pupil’s level of care may diminish over time as the child matures. Pupils may move to a different school or on to post-primary school. In such situations, the NCSE will review and adjust the SNA support required in the school. This may mean that some pupils who had previously been supported by a full time SNA may have their needs met through the shared support of an SNA or perhaps they may have no need for SNA support.

The NCSE operates within my Department’s criteria in allocating such support and conveys decisions directly to schools without recourse to my Department.

I have arranged for the details supplied to be forwarded to the NCSE for their attention and direct reply.

183. Deputy Charlie O’Connor asked the Minister for Education and Science if there are plans to establish an Educate Together school in Tallaght, Dublin 24; the contacts he has had in the matter; and if he will make a statement on the matter. [12671/09]

Minister for Education and Science (Deputy Batt O’Keeffe): A Notification of Intention to apply for recognition of a new primary school in the Tallaght/Firhouse area has been received from the Patron Body for Educate Together.

I have recently announced a review of the procedures for the establishment of new primary schools under the Commission on School Accommodation. It is expected that the review of procedures for recognising primary schools will be completed and revised arrangements will be in place within a two year time frame.

In the interim it is not proposed to recognise any new primary schools, except in areas where the increases in pupils numbers cannot be catered for in existing schools and which require the provision of new schools. This means that new schools will not be established for reasons [1057]unrelated to demographic growth in areas where there is already sufficient school accommodation or where increases can be catered for by extending existing school accommodation.

The Forward Planning Section of my Department is in the process of identifying the areas where significant additional accommodation will be required at primary and post-primary level for 2009 and onwards and Dublin 24 will be included in this process.

Factors under consideration include population growth, demographic trends, current and projected enrolments, recent and planned housing developments and capacity of existing schools to meet demand for places. Having considered these factors decisions will be taken on the means by which emerging needs will be met within an area.

184. Deputy Brian Hayes asked the Minister for Education and Science if he will make a statement in regard to his recent meeting with a group (details supplied) on the removal of a special service support grant to certain schools. [12677/09]

Minister for Education and Science (Deputy Batt O’Keeffe): I met with representatives of the Grand Orange Lodge of Ireland on 10 March. This was a historic meeting and was the first time that members of the Orange Order had sent a delegation to discuss an educational issue within this state.

I briefed the representatives on funding arrangements for Protestant schools and the background to the decision in the October budget to remove ancillary grants from fee-paying Protestant schools.

I outlined the background to the block grant, which is expected to be €6.5 million in this school year. It covers capitation, tuition and boarding costs and is distributed through the Secondary Education Committee established by the churches concerned. Applications for assistance are made by parents to the Secondary Education Committee which, on the basis of a means test, distributes the funds to individual schools on the basis of pupil needs. This fund ensures that necessitous Protestant children can attend a school of their choice. I confirmed that there were no changes to this grant and that I would be willing to consider increasing it when the public finances permit.

We discussed also the meeting I had with representatives of the Church of Ireland Board of Education, led by Archbishop John Neill, on 13 November last, at which I expressed my willingness to consider any proposals that might be made to my Department that would enable the available funding to be focused and adjusted to more effectively meet the twin objectives of access for individuals and sustaining the dispersed schools that they wish to attend. The Bishops are to respond on how the funding I am continuing to make available might best be deployed to meet the needs of their schools. I can advise the Deputy that I recently received correspondence from the Secondary Education Committee who have sought a meeting with my officials to progress the matter.

I emphasised to the representatives of the Grand Orange Lodge of Ireland that I, along with my colleagues in Government, recognise the importance of ensuring that students from a Protestant background can attend a school that reflects their denominational ethos. The meeting was constructive and I expressed my willingness to schedule further meetings if it would be considered helpful.

185. Deputy Michael McGrath asked the Minister for Education and Science if he will [1058]respond to a query regarding the funding of his Department’s school capital building programme (details supplied). [12690/09]

Minister for Education and Science (Deputy Batt O’Keeffe): As the Deputy will be aware, individual Ministers do not borrow funds for projects. My Department operates within the funding voted to it by the Oireachtas.

The borrowing of exchequer funds is managed by the Minister for Finance and the National Treasury Management Agency.

186. Deputy Frank Feighan asked the Minister for Education and Science if his Department will review the financial burden placed on families due to the increased cost in school transport with particular reference to persons (details supplied) in County Leitrim who have two children using school transport to school. [12698/09]

Minister of State at the Department of Education and Science (Deputy Seán Haughey): The cost of school transport, a service delivered by Bus Éireann on behalf of my Department, have been increasing arising from a range of issues such as: ensuring a comfortable and safe transport service for over 135,000 children daily travelling to and from school (breakdown by county not readily available), measures to ensure the highest standards including the phasing out of the 3 for 2 seating arrangement on both primary and post-primary services, providing all children with an adult seat each; the addition of a considerable number of vehicles to address capacity shortfalls arising from the decision to provide each child with an individual seat and the equipping of all dedicated school buses with safety belts; increased demands to meet the needs of special needs children; parental choice.

In order to minimise the overall impact of these charges on families, the increases will apply to the 55,000 eligible post primary pupils and children availing of concessionary transport. Primary school transport remains free of charge for over 54,500 children. Parents will be offered the option to spread the amount due over two payments payable in July and December. A maximum family payment of €650 will apply. Charges continue to be waived in the case of eligible post-primary children where the family is in possession of a valid medical card.

The overall spend on school transport in 2009 is now estimated to be €194m — a reduction of €2m in the revised allocations as a result of efficiencies.

Taking into all the factors outlined, it is not envisaged that there will be a reduction in the annual charge system, the estimated expenditure or the level of charges.

My Department has also commenced a Value for Money Review of the School Transport Scheme which is to be completed before the end of the year.

187. Deputy Fergus O’Dowd asked the Minister for Education and Science if fees (details supplied) for the recently redundant will be covered under the grant schemes; and if he will make a statement on the matter. [12705/09]

Minister for Education and Science (Deputy Batt O’Keeffe): The statutory framework for the maintenance grants scheme, as set out in the Local Authorities (Higher Education Grants) Acts, 1969 to 1992, provides for means-tested higher education grants in order to assist students to attend full-time third level education.

[1059]Clause 1, 1.1 of the Higher Education Grants Scheme defines an approved course as a full-time undergraduate course of not less than two years duration or a full-time postgraduate course of not less than one year duration pursued in one of the approved institutions listed in the appendices to the scheme. Distance learning courses do not meet this definition.

In the higher education sector, a course is considered to be full-time where the student is attending an intramural day course at a third level institution and devoting their whole working time to their academic studies.

188. Deputy Jan O’Sullivan asked the Minister for Education and Science if he will provide a grant under the summer works scheme for emergency works for health and safety reasons in respect of a school (details supplied) in County Limerick consisting of a boundary wall and fence; and if he will make a statement on the matter. [12709/09]

Minister for Education and Science (Deputy Batt O’Keeffe): Applications submitted for the deferred Summer Works Scheme in 2008, including one from the school in question, are currently being assessed for summer 2009 and the school authority will be notified of the outcome of this assessment in due course.

189. Deputy Michael McGrath asked the Minister for Education and Science the position in relation to a land transfer issue which relates to a proposed extension to a school (details supplied) in County Cork. [12713/09]

Minister for Education and Science (Deputy Batt O’Keeffe): My Department is of the view that it is necessary to transfer a portion of land from the Community School to the neighbouring gaelscoil for a school building project. To this end my officials have liaised with the CSSO on the matter. My Department will be formally seeking the views of the Community School Trustees to the proposal before formally instructing the CSSO to execute the transfer.

190. Deputy Frank Feighan asked the Minister for Education and Science the number of children in junior cycle and senior cycle using school transport provided by Bus Éireann in counties (details supplied). [12757/09]

Minister of State at the Department of Education and Science (Deputy Seán Haughey): In the region of 75,000 post primary pupils avail of school transport services nationally. My Department will arrange to provide the Deputy with a breakdown of this figure on a County by County basis. The split between junior and senior cycle pupils is not readily available.

191. Deputy Pádraic McCormack asked the Minister for Education and Science if he will confirm if a school (details supplied) in County Galway will be included in the next public private partnership bundle in order that this school can proceed to tender, full planning permission and construction without delay in view of the fact that funds have been provided for the transfer of the site from Galway City Council to Galway City Vocational Education Committee; and if he will make a statement on the matter. [12780/09]

[1060]Minister for Education and Science (Deputy Batt O’Keeffe): I am pleased to confirm that my Department has recently provided funds to the Galway City Vocational Education Committee to enable them to close the sale on the site for the school mentioned by the Deputy.

This school is included in my Department’s PPP school building programme and the make up and timing of further school bundles from this programme will be determined by my Department in consultation with the National Development Finance Agency (NDFA).

The issues to be considered in the timing and bundling of these schools include site availability for each school, geographical spread and the estimated total cost of the proposed school bundle.