Leaders’ Questions.

Wednesday, 22 April 2009

Dáil Eireann Debate
Vol. 680 No. 3

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Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  I have been following closely the questions tabled by Deputy Charles Flanagan in respect of the issuing of a road haulier’s licence to a convicted drug trafficker. As the Taoiseach is aware, one of the fundamental issues is that the rule of law should apply to everybody and be seen to apply. In what circumstances was a road haulier’s licence allocated to a convicted drug trafficker, thus allowing him to transport drugs into and around this country? Will the Taoiseach indicate the conditions that apply? One of the fundamental requirements when obtaining a road haulier’s licence is that the applicant be of good repute.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I understand that the Minister has answered parliamentary questions on this matter and alluded to the fact that the Garda Síochána Ombudsman Commission is now involved in reviewing the case. As the Deputy knows, when this matter was brought to the attention of the Minister for Transport just before last weekend, he asked that a review of the original file be sought from the Department’s office in Loughrea. That was issued yesterday evening. Unfortunately, until such time as he completes his review and receives clarification from the Office of the Attorney General on the legal issues, he will not be in a position to comment further on the matter. It is being examined by both the Minister and the commission, which has an independent remit.

Deputy Paul Kehoe: Information on Paul Kehoe  Zoom on Paul Kehoe  So he can do what he likes.

Deputy Enda Kenny: Information on Enda Kenny  Zoom on Enda Kenny  One of the things that is wrong in the House is that the Minister cannot comment on the matter. Everybody else is doing so.

This appears to be a very strange case. The normal circumstances that apply are such that when one applies for a road haulier’s licence to the Department of Transport, the Department asks the Garda for what is essentially a character reference. The applications are lodged by the applicants themselves. They are not required to state everything about their lives. The unusual point in the case in question is that when the Garda responded to the Department, it was able to point out a number of indiscretions and convictions for charges that applied in England, where the applicant was located. It is clear the information was on the Garda file. Why was no reference made to the fact that the applicant was convicted for the possession of cannabis and sentenced to seven years’ imprisonment? Why was this not in the reference for the Department of Transport, bearing in mind the stipulation that one be of good repute?

Irrespective of the fact that the case is now being reviewed, the Taoiseach is only too well aware of the implications of the trafficking of vast quantities of drugs into this country and of gangland warfare, which arises as a consequence. He is aware of the money that accrues from [364]trafficking drugs, the havoc drugs cause among the young and of the tragedies that happen every day. Given the factual information that is now in the public domain, which is on record here and in Britain, does the Taoiseach consider the applicant in question to be of good repute?

Despite the fact that the Minister for Transport has asked the Attorney General to review the file, is it not entirely within the regulations of the Department of Transport and a Government principle that the law apply and be seen to apply to everybody, as Deputy Flanagan pointed out on numerous occasions? Is it not possible for that law to be seen to apply across the board, with this licence revoked forthwith, and for the Taoiseach to state that convicted drug traffickers are not persons of good repute and are not entitled to road hauliers’ licences? The Taoiseach should say that now and let us get on with it. It is a strange case.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  An issue here arose which is being investigated by the relevant authorities — the Garda. The Minister asked for the file, and it arrived yesterday evening. Obviously, he will look at that. The Garda Síochána Ombudsman Commission is looking at it and we must go through that process.

Clearly, if whatever arises out of it — whatever lessons are to be learned whereby a person who, it seems, was convicted of a drugs offence and was in a position to obtain a haulier’s licence without that coming to the attention, presumably, of those who were administering the licensing regime in the Department — requires a change of arrangement so that this could not happen again, then obviously that is the principle of accountability we want to see. We must get a clear view of the facts in terms of how this happened, who dealt with it, what issues arose and why certain matters came to their attention.

Deputy Charles Flanagan: Information on Charles Flanagan  Zoom on Charles Flanagan  The facts are on the file in the Department of Transport.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  Having looked at the file, one then must find out how it happened. We set up in recent legislation a Garda Síochána Ombudsman Commission to ensure that there was an independent assessment of such matters and to ensure public confidence that they were being looked at in a proper and appropriate way.

There is no difference between myself and the Deputy on the matter. Obviously, we want to get to the bottom of this quickly and ascertain what lessons are to be learned for the future and what policy or, indeed, legislative changes arise out of it so we can proceed to close off any gaps in information that may have arisen in this case which enabled this person to get a licence. People feel, given his convictions, that many questions certainly should have been raised before he got it.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  The Taoiseach will have studied the assessment made by the International Monetary Fund which concludes that Ireland will pay a higher price to re-stablise its banks than any other country and that the cost to the Irish taxpayer may be €24 billion, the biggest Government bail out of banks of any developed country. He will also have seen the opinion piece written by Professor Krugman in the New York Times this week in which he warns other countries against following the Irish Government’s example on the banks, which he described as an exercise in sacrificing the economy in order to save the banks.

The Taoiseach will also have seen the opinion from 20 economists from a wide range of economic opinion and perspectives, and differing ideological standpoints, in which they argued that the game is up for the Irish banks and there is now an inevitability that the Government will have to nationalise them at least temporarily.

Does the Taoiseach agree with the assessment of the International Monetary Fund that our banking situation, in terms of the Government bailout, is now the worst in the developed [365]world? Does he consider it a damning verdict on his Government’s handling of the banking situation? Does he accept the point has been reached where it is necessary to nationalise the banks, at least temporarily, and what consideration has the Government given to that matter?

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  On the first point Deputy Gilmore raised, as it happens the figures quoted in the newspapers this morning suggesting potential loss rates on foot of supports to the banking industry for Ireland do not appear in the IMF’s final global financial stability report. I understand there was a figure in an earlier draft which the IMF did not use in the end. These figures should not be relied on as a measure of the likely cost for Ireland or any other country, although, from the point of view of the IMF, they may well be of use in calculating financial strains at a global level. The particular figures appear to be based on more or less mechanical application of various modelling tools, with a heavy reliance on technical assumptions. They do not represent the outcome of a specific examination of Irish banks’ assets such has been carried out on behalf of the Financial Regulator by PricewaterhouseCoopers.

The principal reason the IMF approach gives a relatively high figure for Ireland is that our bank guarantee arrangement is broader ranging than that in other countries and our financial sector is larger relative to the economy. Obviously, we are open at all times to discussion with international institutions about technical assumptions they apply to the Irish case, but in the current case we are far from convinced that there is a significant new or additional informational value in the figures presented from a national point of view.

I understand from media reports that, following contacts with the UK authorities, figures on the UK in the final report have also been amended.

On what Professor Krugman or any other eminent economist or number of economists might be saying about the banking system, we are very much of the view that we stand ready to assist in relation to financial institutions of systemic importance. The question of impaired assets and how one deals with assets in this situation will be in line with the EU guidelines in these matters. The tool kit available to us is the same as that available to other countries.

As the Deputy will be aware, we have already provided support on the basis of getting a return for the taxpayers’ money that we have invested in preference shares thus far. The Minister for Finance has indicated that, in the event of there being any further requirement for us to invest in any banks of systemic importance, we would obviously look to ordinary shares in the future.

It is also important to recognise the value that the market disciplines provide in terms of how we are viewed internationally in the banking system in the absence of a total nationalisation of the entire banking system in Ireland, and how that would be seen internationally. We have already seen the nationalisation of Anglo Irish Bank and a substantial shareholding taken by the Government — by the public — in Bank of Ireland and soon in Allied Irish Banks as well.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  That answer is a mixture of clutching at straws and denial. No matter how the Taoiseach spins this, the IMF has used the same methodology in looking at the banking situation across all of the countries in the developed world and it has come to the conclusion that the Irish bailout will be the most expensive. Clutching at straws by saying that this or that figure is out or was in an earlier draft is neither here nor there.

We have moved from a situation where on 30 September the Taoiseach told us that the guarantee would avoid having to nationalise a bank or having to put money into any bank through a succession of attempts to deal with the banking situation. A recapitalisation plan was announced before Christmas which did not happen. A very short time prior to the nationalisation of Anglo Irish Bank the Minister was stating that there would not be a nationalisation. Two banks have been recapitalised with €7 billion already and one of those banks now states [366]that it needs an extra €1.5 billion. On top of that, the Taoiseach has stated that the bad debts of the banks must now be all assembled in what is called the national asset management agency. These are anything but national assets. This is “an bord bail out” with a body being set up to assemble all of these bad debts.

Meanwhile, opinion from a range of sources is saying to the Taoiseach that the game is up and the banks in this country will have to be nationalised. People have expressed differing opinions about the way in which the banks are to be nationalised — whether it should be a temporary nationalisation with them being resold at another stage or whether, for example, shares would be put into a trust and protected so that there could be some possibility of recovery down the line.

It seems we are staring at the prospect of the nationalisation of the banks and I am trying to establish whether the Government will nationalise them. Has the Government made a decision on this, or will it be one Government policy today and another in two or three weeks’ time, as we have repeatedly found regarding the banks?

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  With respect, I reject Deputy Gilmore’s contention. He spoke about the game being up; we are not playing any game. We are in the serious business of trying to maintain financial stability in the State, against a background in which far stronger economies than ours are having to contend with the same mammoth task.

Deputy Gilmore continues to use populist phrases such as “bail-outs”.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  What is it then?

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  That is the term the IMF used.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  I want to answer the question. We are interested in protecting the maximum number of jobs in the economy. If I have to say so once, twice or three times to Deputy Gilmore, unless we have a functioning banking system it is not possible to do that.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  That is correct.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The Labour Party’s position was to reject the State guarantee, an action which would have brought about the implosion of the banking system.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  That is not the case.

Deputy Seán Sherlock: Information on Sean Sherlock  Zoom on Sean Sherlock  We were right.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The Labour Party is against capitalisation and every other action because it wants to keep playing the populist game.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  No, that is not the case.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  That is the Labour Party’s game. It is getting much political kudos for it and hoping it will get it to the far side of June.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  It is time the Taoiseach made up his mind.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  The Government is involved in a more serious business. Like every other government, we will do whatever is necessary to maintain financial stability.

[367]Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  The Government is not like any other, it is worse than any other government.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  We are not worse than any other government despite the Deputy’s contention.

Deputy Eamon Gilmore: Information on Eamon Gilmore  Zoom on Eamon Gilmore  Yes it is. That is what the IMF said.

The Taoiseach: Information on Brian Cowen  Zoom on Brian Cowen  Deputy Gilmore has quoted from a draft report but did not see the final report. When he saw the draft, he got his finance spokesperson to put out her statement in the morning. He then decided to come in here to have an argument about something that is not even in the final report.

Deputy Billy Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  That was irresponsible.

Deputy Dick Roche: Information on Dick Roche  Zoom on Dick Roche  The Deputy is encouraged by that kind of action.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  All the Government does is close down debate so that no one can ask questions about the banks.

Deputy Billy Kelleher: Information on Billy Kelleher  Zoom on Billy Kelleher  The Labour Party will close down the country and wreck it if it goes on like this.

Deputy Thomas Byrne: Information on Thomas Byrne  Zoom on Thomas Byrne  We have not seen much from the Labour Party yet.

Deputy Emmet Stagg: Information on Emmet Stagg  Zoom on Emmet Stagg  We will never catch up with the damage Fianna Fáil has done to the country.


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