3 o’clockPrelude
Ceisteanna — Questions.
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Chuaigh an Ceann Comhairle i gceannas ar 2.30 p.m. Paidir.1. Deputy Leo Varadkar asked the Taoiseach the number of times the task force on innovation has met; the Ministers who attended in each case; and if he will make a statement on the matter. [44505/09]
2. Deputy Eamon Gilmore asked the Taoiseach if he will make a statement on the progress made to date of the innovation task force. [45392/09]
3. Deputy Caoimhghín Ó Caoláin asked the Taoiseach if he will make a statement on the work of the innovation task force. [1237/10]
161. Deputy Leo Varadkar asked the Taoiseach the date, time and location of meetings of the innovation task force in 2009 and to date in 2010; the Ministers who attended in each case; when the task force will report; and if he will make a statement on the matter. [1476/10]
The Taoiseach: I propose to take Questions Nos. 1 to 3, inclusive, and 161 together.
I appointed the innovation task force on 29 June 2009 to advise the Government on its strategy for positioning Ireland as an international innovation development hub and to assist [2]in making the smart economy a reality. The members of the innovation task force have a wide range of expertise and include individuals with global experience in international companies and entrepreneurs who have recently established and grown successful start-up companies. There is also representation from the higher education sector and senior representatives from a number of Departments and agencies.
The task force has met in plenary session for all day meetings in Government Buildings on four occasions thus far, on 17 July, 25 September, 30 October and 14 December. I addressed the first meeting of the task force and was accompanied by the Minister of State at the Department of Enterprise, Trade and Employment with responsibility for innovation, Deputy Conor Lenihan. The Minister of State also attended the meetings of 30 October and 14 December. In addition, a full day consultation meeting for task force members was held on 19 October. The task force is due to meet again on 29 January.
The task force has established four working groups focusing on specific aspects of its terms of reference. These working groups, which are chaired by private sector members of the task force, have been meeting regularly and a draft report is currently being finalised to reflect their deliberations.
To assist with its work, the task force issued a public request for submissions and received over 100 responses from interested groups and individuals. These submissions have been reviewed by members of the task force and will feed into its deliberations on the content of its report. A summary document highlighting key themes and proposals from the submissions has been published and is available on the innovation task force’s website. The task force is due to meet again on 29 January. I look forward to receiving its report, which I understand will be finalised shortly.
Deputy Enda Kenny: I welcome the Taoiseach back to the House. On 18 December 2008, the Government published Ireland’s framework for sustainable economic renewal. That document, although launched with great fanfare, was merely a rehash of several programmes which were already in place with the notable addition of an innovation fund of €500 million. The document refused to make any of the difficult decisions which need to accompany infrastructural development if we are to give rise to compatibility in innovation with our European Union counterparts. Can the Taoiseach indicate the source of the aforementioned €500 million? Was it allocated through various Departments’ Votes or was new money put up?
What is the function of the task force and the four subgroups in regard to encouraging and overseeing the work of universities, third level colleges and other organisations which deal with innovation in the context of the European framework? Clearly, the new Commissioner for Research, Innovation and Science will have a substantial budget. Does the Taoiseach envisage the innovation task force having a role in overseeing and encouraging organisations and firms which are interested in innovation to become compatible with the European framework and thereby receive funding for appropriate programmes?
The Taoiseach: The innovation fund is part of our five-year programme. It aims to raise funds from private sector venture capital investors who also bring their expertise to the country. The role of the State will be to provide structures and incentives to best leverage private sector investment. This is why the NTMA, which is an expert in this area, is leading the process. The amount required directly from the Exchequer is likely to be small relative to the overall size of the fund. Investment will only be required from the State as the fund grows over a number of years to an envisaged total of €500 million. Alternative models are currently being tested [3]with potential venture capital investors and other stakeholders, particularly in the United States. Detailed decisions will be possible only following completion of that process.
The objective is to identify and leverage private sector venture capital funds, including funds from the United States, to complement and augment the seed capital and other funds available within Enterprise Ireland, for example, for assisting high-potential start-up companies and other companies which merit or obtain market support on the basis of the product, process development or innovation they are undertaking.
In the past ten years we have trebled the level of investment in research and development to some €2.5 billion, two thirds of which is leveraged in the private sector. We have devised a single income stream for the science, technology and innovation moneys from the Department, which are under the auspices of the Minister of State, Deputy Conor Lenihan. The function of the task force on innovation, which will come forward shortly with its recommendations, is to identify how we can assist high-potential start-ups more successfully so that they can be the future market leaders in the various sectors from which they spring. A more general objective is to promote higher productivity through innovation across all sectors of the economy, but the expertise in this area relates to those start-up proposals and enterprises to which I referred.
Deputy Enda Kenny: Will the Taoiseach confirm how much has been committed or promised from private venture sources in respect of moneys for innovation? The task force on innovation was set up with a six-month remit, which is due to expire at the end of January. If we are to receive a report, it must be produced by the end of the month or else the lifetime of the committee must be extended. Which is the case?
There is no disagreement among Members regarding the possibilities and potential for job creation arising from innovation. First, there has been much discussion of what can be done in the area of energy, including wind, wave power, tidal power, pump storage, natural gas and so on. There is no reason that this State should not be a world leader in some of these niche areas of renewable energy. Will the task force examine that potential?
Second, we have all the ingredients to be a world leader in the area of biotechnology, whether arising from the clusters of medical companies in operation throughout the State or through the availability of resources and research from our universities and other third level institutions, including, for example, the Marine Institute. All these elements provide us with absolute potential in terms of world leadership in the biotechnology area.
Third, all the major multinational information technology companies already have a presence here, a sector in which developments are taking place at blinding speed. These are three areas where we can clearly see the potential for innovation, as exemplified on a smaller scale by the young scientists last week. All of that potential is there to be harnessed in the next 20 years.
Will the task force look at the bigger picture and the longer view where there is clearly potential for substantial job creation and job sustainability arising from innovation? That will clearly require a longer-term remit for the task force than its initial six-month allocation. Irrespective of political positions, this is something that will stand to us, but it will require encouragement and clarity of objective from Government. Will the Taoiseach ensure, having chaired its first meeting, that the task force on innovation and its four sub-committees will focus on these clear areas of massive potential for the State?
The Taoiseach: We received a detailed report recently on the area of green enterprise from the group under the chairmanship of Joe Harford, who is also a member of the innovation taskforce. That is a linkage in terms of those two exercises which is beneficial. The outcome of the recommendations by the innovation taskforce will take cognisance of that and be very much aware of the potential that has been identified by the green enterprise group that recently [4]reported detailed proposals for the creation of new jobs and businesses in the green technology area.
On the question of the level of funds, we are in the process of seeking to design the fund in a way that will attract private sector venture capital funds. That is precisely what is going on. The NTMA team is in the United States this week as part of that process of market testing how it can devise a fund that will assist and augment existing seed capital and other venture capital funds that are currently under the auspices of, for example, Enterprise Ireland, quite apart from the private sector venture capital industry in this country in any event. The record has shown US venture capital funds and other venture capital funds in Europe are helpful in commercialising ideas for start-up enterprises far more quickly where they can identify potential. Such funds have worked very well, for example, in Israel and elsewhere. That is the concept we are seeking to develop.
The taskforce will report shortly. It has broken up into a number of working groups comprising a number of very well qualified people who are involved in the business of start-up companies themselves, as well as people from Departments. The terms of reference that were given to the group less than six months ago draw on the lessons from successful international and national models in the area of the strategy for science, technology and innovation. The group was to examine options, increase levels of innovation and the rates of commercialisation of research and development on a national basis with a view to accelerating the growth and scale-up of indigenous enterprise and to attract new knowledge-intensive direct investment.
The taskforce was also to seek to bring forward proposals for enhancing the linkages between institutions, agencies and organisations in the public and private sectors to ensure a cohesive innovation and commercialisation ecosystem. It was also to identify any specific policy measures that might be necessary to support the concept of Ireland as an international innovation development hub, including in the areas of legislation, educational policy, intellectual property arrangements, venture capital and immigration policy.
A number of working groups have been set up because of the relatively limited reporting timeframe of six months and the significant expertise and experience of members. It was considered that the establishment of a number of focused working groups was the best way to progress the terms of reference and consider certain aspects of the work programme. For example, the first group deals with incentives, intellectual property and venture capital, identifying measures to increase innovation, commercialisation and entrepreneurship, including changes to incentives, venture capital arrangements and intellectual property strategies. Another group is focusing on commercialisation, technology transfer and converging technologies, including examining institutional structures for research and development funding delivery, how to maximise commercialisation of research, increase technology transfer and promote innovation in converging technologies.
A further group is considering how to achieve the innovation island concept, how to position and promote this country as the innovation island, including attracting entrepreneurs, foreign direct investment, international start-ups and private sector research and development investment. The fourth group is examining the international innovation development hub Dublin, supporting the various alliances that have taken place in the university system, for example, including identifying necessary supporting policy measures. Much good work is being done. A great deal of seriousness of intent and time is being given voluntarily by many people to assist in bringing forward ideas based on what has been outlined in the terms of reference.
Deputy Eamon Gilmore: The Government’s approach to the task force seems to have all the lack of urgency that is so typical of this Government. The idea of an innovation task force was [5]announced by the Government in December 2008 with great fanfare in Dublin Castle to introduce the Government’s plans for a smart economy. It took all of six months to get the task force set up, and it was not set up until June of last year. The last time the Taoiseach answered questions in the House about this task force, he told us it would report early in the new year. This is early in the new year and I see now it will meet again at the end of January and the report will be sometime after that. Meanwhile, there are 423,595 people on the live register, 84,000 of whom are under 25, many of them the kind of young people who are emigrating and who we would expect should be working in the smart economy, if we had one.
Has this task force made any recommendation to date to Government in respect of any measure that the Government might have taken to advance the smart economy and innovation in this country? Was any specific recommendation made to Government in advance of the recent budget, for example, which might have informed the provisions of that budget, or lack of them, in respect of measures to generate employment? Is it envisaged that this task force will make any recommendation or have any report made to Government before the Finance Bill so that any measures that are contained in it in respect of start-up capital incentives and so on might be included in the Bill?
The Taoiseach: I reject Deputy Gilmore’s suggestion that there is a delay involved. There is much very good work ongoing, and I do not accept that six months is a long time to give the task force to do that work. Quite apart from the innovation task force that was mentioned at the launch of the smart economy framework, many other initiatives were also mentioned. That framework is a comprehensive strategy covering not just innovation and research and development but all aspects of economic renewal.
There have, in fact, been tax changes to support the smart economy, including an improved research and development tax credit, new tax arrangements for intellectual property and tax incentives for start-up companies and to encourage venture capital companies to locate in Ireland. Indeed, at the time of the publication of the smart economy document, in preparation for the Finance Bill last year, these sorts of changes were incorporated so one would not have had to wait for a report for that to happen.
I have outlined in previous replies what is the purpose of this task force’s work at present. New technology initiatives to support a smart economy have also taken place, including the development of a new international content services centre, making Ireland the leading location for energy efficient data centres such as the Microsoft centre I opened during last year, which saw an investment of over €500 million. There are a number of other issues in the whole renewable energy area and, as I said, we now have the green enterprise group, which reported last month with a series of recommendations which will also be helpful.
As the Deputy will be aware, there is a need to support a culture of innovation to help start-up companies and to make sure we have the right processes and policies in place, whether they be fiscal or in regard to intellectual property. A number of changes have already taken place in that area.
Deputy Eamon Gilmore: Can the Taoiseach be more specific than he has been up to now with regard to when this task force will actually report? I understand from him that there is a meeting towards the end of January, probably on 29 January. Is that to be the final meeting of the task force? Is it the meeting at which it will conclude its report? When does the Taoiseach expect that the report will be presented? To whom will the task force report?
In September, I attended a good event in Farmleigh at which leading business people from various parts of the world, many from North America, with connections to Ireland were assembled. The weekend was bubbling with good ideas for economic development in Ireland. [6] What happened with this? It was my understanding that a report was to be produced and circulated to participants, but I got no such report. I do not know whether one has been prepared. Will the Taoiseach inform the House of the follow-up to the September Farmleigh event?
The Taoiseach: The Minister for Foreign Affairs produced a report on that and it was put on the website. However, as Deputy Gilmore says, there are ideas that have to be taken forward and concepts that have to be developed. A great deal of work is being done in respect of some of those mentioned at the conference and it will continue.
On the innovation task force, I make the point that the next meeting will be, if not the last, then the penultimate meeting and I expect a report in the next couple of months, based on how advanced things are at the moment.
Deputy Caoimhghín Ó Caoláin: The Taoiseach cited several smart economy initiatives that have been taken in the innovation area. Regarding a specific initiative mentioned, Innovation Fund Ireland’s €500 million was to increase the availability of capital to small research and development companies. How much of that fund, if any, has been accessed? What is the current take-up and the processing procedure regarding same?
In earlier replies, the Taoiseach cited a number of areas, each of which we welcome. However, I am sure the House would like to know how much of the matter is still paperwork and how much has occurred in terms of delivery. How many companies have been able to access and are currently benefiting from announced innovation?
Something caught the imagination during the course of last year, namely, the ESB’s announcement of the creation of some 3,700 new jobs covering the areas of new meters, smart networks, electric vehicles and wind energy to name but a few. This announcement was lauded and applauded by the Taoiseach’s Department at the time and rightly so if the former delivers. How many of the promised 3,700 additional jobs within the ESB have been created? Has the Taoiseach concern regarding initiatives being announced and the timeframe between their announcement and the actual production of real jobs?
The Taoiseach: I mentioned in earlier replies to Deputy Kenny the nature of the fund and its progress. It is about augmenting and supplementing existing funds, including venture capital, start-up and seed capital funds in the private sector and those provided by Enterprise Ireland, for example. The Department of Enterprise, Trade and Employment is providing almost €300 million this year for science, technology and innovation. This is a significant contribution, as the Deputy will agree. Enterprise Ireland is allocated €129 million of that. This is used to put Irish companies at the cutting edge of development and ahead of their competitors. It provides equity funding to high-potential start-up companies. It continues its research and development grant programmes for small and medium-sized enterprises. It supports innovation partnerships between enterprises and universities. It funds three competence centres and announced and confirmed funding to further centres during the year. It continues the innovation voucher programme and provides support for near-to-the-market commercialisation. It supports researchers and companies competing for the EU Framework 7 programme to leverage a target amount of €600 million up to 2013. This is what the State moneys in place at the moment do.
The point I was making is that the level of investment in research and development now stands at €2.5 billion, which is three times what it was a decade ago. Science Foundation Ireland did not exist before this Fianna Fáil-led Administration came back into office in 1997. There was no arrangement in place then for promoting research and development as a central plank [7]of economic policy for sustainable development into the future. It did not exist. All that has happened and has provided a great deal of investment for companies that are now providing jobs. Science Foundation Ireland has been allocated €162 million. In protecting this budget, the Government recognises the pivotal role it plays in the framework for sustainable, economic renewal. That allocation consolidates its investments to date; it leverages them for maximum outputs; it continues to support 29 major research centres; and partners with 150 small and medium-sized enterprises and blue chip multinationals in Ireland. It has been a vital driver of major investment decisions by both overseas and indigenous companies.
If one notes more than 40% of IDA investment wins are in the area of research, development and innovation worth more than €400 million annually, that gives an indication as to what is the bang for the buck. Clearly, in more difficult times one has to ensure that the funding goes to the best possible projects and that commercialisation is brought forward and not simply pure research but applied research. Science Foundation Ireland’s allocation allows us to continue to fund high-quality scientific research and researchers in recognition that they are the drivers needed to develop Ireland into a high-value, knowledge-based economy.
On the question the Deputy asked about the innovation fund, as I explained earlier, we are market-testing that fund with the United States. We want to bring in more money from the private sector, particularly successful venture capital companies in the United States which have shown a track record in being able to identify and invest in start-up companies that then take the next step forward and internationalise their business, etc. The NTMA is charged with that process on our behalf and is currently operating in the United States as part of the process. The Deputy will accept that last year was not a very propitious year for obtaining venture capital investments, given the overall economic downturn, but this is part of a five-year programme. It is one of our initiatives and it is ongoing; there is no question of it lying in abeyance or anything like that.
Deputy Caoimhghín Ó Caoláin: It would be unfair of me to expect that the Taoiseach could give us an update on the uptake on the programme at this point, but can he clarify that he indicated in his reply that the National Treasury Management Agency is currently exploring the potential of attracting into this economy new inward investors in research and development with a proven record in the United States? Is that the exclusive focus of the €500 million Innovation Fund Ireland? Will it not also focus on existing small companies based in this economy in terms of aiding and abetting further research and development?
I understand this would not have been part of what the Taoiseach prepared for this reply, but will he undertake to give me an informed reply on the ESB announcement last year of 3,700 jobs, which caught the imagination of the people and was very welcomed at the time, but we have never——
An Ceann Comhairle: A separate parliamentary question might elicit that information.
Deputy Caoimhghín Ó Caoláin: The Taoiseach will either oblige me or he will not. I am not being awkward. I only asked if he can facilitate the provision of the information, having acknowledged that he may not have it to hand this afternoon. There is a great deal of interest in learning the current position in that respect.
The Taoiseach: As the Deputy will know, that announcement was in respect of a very direct change in policy by the ESB to promote sustainable energy initiatives to help build more sustainable energy projects in Ireland over a period of years. It was not suggested that 3,900 jobs would be created over night, but the company indicated it was committed. It made the commitment in terms of investment and over a period of years it believes it will create that [8]number of jobs. That is its policy and it is implementing it. A more detailed reply from the Minister for Communications, Energy and Natural Resources will elicit what progress has been made on it.
With regard to the other point made by the Deputy, the NTMA — because of its position in terms of dealing with funds and with this area generally — is assisting the relevant Departments in designing and market-testing a fund to attract the interest of venture capitalists. This work must be done although success in the outcome is not guaranteed. One must go out and do it and see what can be achieved. Other countries — including Israel, which set up what is known as the Yozma fund — have been successful in this regard. This does not guarantee success for us, but we are in the process of providing such a fund because we believe that in addition to traditional areas of finance for companies in the start-up phase, venture capital can provide the pump-priming necessary to commercialise an idea or concept and ensure it has a sustainable future. It is not the case in every enterprise but there are some for which that is the case.
The fund will supplement State provision. The State is already investing directly in seed capital funding and providing equity to start-up companies through the Enterprise Ireland programmes. The question is how we can develop a private-sector venture capital fund which is independent of the taxpayer but supports national objectives.
4. Deputy Caoimhghín Ó Caoláin asked the Taoiseach the arrangements he has with non-party Deputies who support the Government; if changes to such arrangements were made in advance of budget 2010; and if he will make a statement on the matter. [46878/09]
5. Deputy Enda Kenny asked the Taoiseach the arrangements in place in his Department for providing assistance to certain Independent Members of Dáil Éireann; and if he will make a statement on the matter. [48410/09]
6. Deputy Eamon Gilmore asked the Taoiseach the Deputies with whom special arrangements have been made in return for support for the Government; if changes to these arrangements were made prior to or arising from budget 2010; if such changes have been costed; and if he will make a statement on the matter. [48421/09]
7. Deputy Enda Kenny asked the Taoiseach if the agreements between the Government and the Independent Deputies who support the Government were changed in advance of the budget 2010 statement; and if he will make a statement on the matter. [48425/09]
8. Deputy Enda Kenny asked the Taoiseach the number of Independent Deputies with whom he has entered into agreements to support the Government; and if he will make a statement on the matter. [48426/09]
The Taoiseach: I propose to take Questions Nos. 4 to 8, inclusive, together.
The agreements referred to are political agreements entered into by my predecessor as leader of the Fianna Fáil Party with individual Independent Deputies — namely, Deputies Healy-Rae and Lowry. On becoming leader of Fianna Fáil, I confirmed to the Deputies concerned that I would continue to implement those agreements. As the House is aware, such arrangements have existed for more than 12 years.
The agreements are confidential but are, as always, based on the programme for Government, which incorporates the national development plan, approved Government programmes [9]and annual Estimates for capital and current expenditure. I have continued the practice whereby a staff member in my office assists the Chief Whip’s office in its work in liaising with these Deputies. The staff member meets the Deputies on a regular basis and arranges to keep them briefed on issues as they arise. No changes have been made to these arrangements.
Deputy Enda Kenny: Could I ask the Taoiseach——
Deputy Caoimhghín Ó Caoláin: I beg the Deputy’s pardon. I understand the practice is that the Deputy who tabled the first question is the first to be called. I rarely have this opportunity so I will avail of it while it is there.
As is the case on almost all such occasions, Deputy Healy-Rae availed of the opportunity, in the course of the passage of budget 2010 before Christmas — in return, allegedly, for his support in the passage of the budget and all votes related to it, including the disgraceful and savage cuts in social welfare supports — to declare that he had secured a deal from the Government regarding a promised 40-bed hospital facility in Kenmare. The Taoiseach has the Minister for Health and Children at his side. Is it not the case, as was my understanding, that a commitment to establish a 40-bed hospital facility in Kenmare had issued 12 months previously from the HSE? Either it was a quid pro quo for Deputy Healy-Rae’s support in the passage of budget 2010 or it was not. Certainly, the Deputy has sought to impress on everyone that such a deal was done and that there were other elements of the deal which related to his constituency of Kerry South.
Can the Taoiseach inform the House whether he, or representatives of his Department, met Deputy Healy-Rae to discuss his support for budget 2010? Was the establishment of a 40-bed hospital in Kenmare one of the matters discussed? What other matters were discussed? Are these matters — including the hospital facility — new elements of existing arrangements between the Government and the Independent Deputy for Kerry South? Did similar engagements take place with other Deputies who are currently——
An Ceann Comhairle: At a time like this, there always is a danger that issues which relate to another Minister may be introduced to the question.
Deputy Caoimhghín Ó Caoláin: I have absolutely no idea what the Ceann Comhairle is talking about. I am asking the Taoiseach a question which he can answer. Either he or representatives of his Department did or did not engage with Deputy Healy-Rae.
Deputy Grealish was reported to have met the Taoiseach on 8 December in advance of the budget that he also supported. What can the Taoiseach tell Members about this meeting? What of the meeting with Deputies Scanlon and Devins? Were hospital upgrades and major road repairs, which I note from the statements issued by both Deputies representing the Sligo-North Leitrim constituency, promised in return for their votes? Each of them supported budget 2010 and the subsequent disgraceful measures in respect of social welfare. Is this the case that such Deputies, with whom the Taoiseach allegedly has a standing arrangement going back to 2007 and the formation of the Government, can up the ante every time the Government presents budget proposals or other measures such as Members have gone through all too frequently in the closing months of last year? Do they continue to be in a position to ratchet up their demands on the public purse regarding their own respective constituency needs? The Taoiseach should clarify the position and shed some light regarding the current arrangements with the Government of each of these Deputies in the context of budget 2010, which was introduced in the early stages of last December.
[10]The Taoiseach: As I have stated previously, no changes were made to the arrangements in advance of the budget. Obviously, I meet Deputies on all sides of the House from time to time, with varying degrees of success depending on their disposition. I make the point that political agreements and arrangements are in place. I would be hesitant were the Deputy to try to second-guess how Deputy Healy-Rae wishes to communicate with his constituents. That is a matter for Deputy Healy-Rae. It is true that the requirements for a community hospital in Kenmare have been long sought and have been supported by Deputy Healy-Rae and others for some time. If Deputy Healy-Rae wishes to communicate to his constituents the validity of his support for the Government by giving another indication of how they benefit from his support of the Government, as distinct from those who oppose it, he would take that small advantage whenever it arises. Were Deputy Ó Caoláin in the same position, he would not be too far behind the door himself. It is time to recognise that there are Members who support the Government and who have political arrangements that were completed by my predecessor and which continue in operation.
As for other Members, Deputies Devins and Scanlon are members of the Fianna Fáil Party, albeit not members of the parliamentary party at present. I am glad to note the Government was in a position to confirm the developments for Sligo General Hospital, which were possible on the basis that they were required. Contrary to what the Deputy seems to suggest, it is not the case that the proposals as put forward lack merit. They have merit and have been in planning for some time. From my perspective, yes, I meet Deputies. I met Deputies Lowry and Grealish and many people. Before a budget, it always is timely to speak to Ministers and the Government regarding arrangements and agreements that are in place to enable it to try to assist where it can, consistent with programme for Government commitments. An examination of any of these projects would reveal them to have merit and I understand they are well supported by all sides of the House.
Deputy Caoimhghín Ó Caoláin: In a brief follow-on to the Taoiseach’s response, I note that while it is all very well to make the point that Deputy Healy Rae will employ all means and methods of communicating with his constituents, this is a case of smoke and mirrors. The Taoiseach is playing that game himself by not being absolutely up-front in his response. A nod and wink approach always is taken in this regard and it is not all on Deputy Healy-Rae’s side. It is also on the Taoiseach’s side because he would have us believe, as the Minister for Health and Children, who is beside him, has stated ad nauseam, that the HSE makes determinations in regard to hospital configuration and the network. I have heard that probably more often than any Deputy given the constituency I represent and my home county of Monaghan. However, the Taoiseach is happy to allow Deputy Healy-Rae make whatever claims he likes and he is not prepared to discount them and to make it clear that is not the way hospital facilities are secured. I wish the people of Kenmare well and while I support the provision of such a facility, I want equity across the board and equal access to all hospital services. Does the Taoiseach agree a more upfront reply from him would clarify for all Deputies and the wider populace the position that must apply to the configuration of hospital services and it is not a gift he or anyone else can offer to a Deputy as a trade off for his or her support and votes in the House?
An Leas-Cheann Comhairle: Time has expired.
Deputy Caoimhghín Ó Caoláin: How would the Leas-Cheann Comhairle know that? He is only in the House. I am following the nods carefully.
An Leas-Cheann Comhairle: The order of the House is that questions to the Taoiseach ended three minutes ago.
[11]Deputy Caoimhghín Ó Caoláin: That is unfortunate.
An Leas-Cheann Comhairle: I do not need to be in early or late to know that. I would like to allow other Deputies to put a brief supplementary.
Deputy Caoimhghín Ó Caoláin: It is time the Taoiseach was upfront with the House.
Deputy Enda Kenny: What is the cost of the commitments to the Independent Deputies for 2010? Far be it from me to interfere with the arrangements Deputy Healy-Rae has with the Government, but is this the same hospital in Kenmare for which he secured a commitment ten years ago?
Deputy Bernard J. Durkan: Or an extension to it.
Deputy Eamon Gilmore: Every time we ask these questions about the agreements between the Government and the Independent Deputies, we seem to run into the sand and we have never been able to track down where are the agreements. Nobody has ever put them on the record of the House or told us exactly what is in them. It is a bit like chasing the Holy Grail. I have come to the conclusion that there are no agreements. Every time Deputies Healy-Rae and Lowry say they have secured something for their constituency, a Minister says it was in the pipeline anyway. When Deputies Devins and Scanlon said they secured the hospital extension for Sligo, they were told it was coming anyway. The reality is that Deputies Healy-Rae and Lowry and other Deputies like them who support the Government have sold out the pensioners and their constituents and all they have in return is the pleasure of a periodic private meeting with the Taoiseach.
The Taoiseach: Obviously the electorates of those constituencies do not agree with the Deputy.
Deputy Eamon Gilmore: They obviously rate a meeting with the Taoiseach highly.
Deputy Brian Hayes: Or the pleasure of a meeting.
The Taoiseach: Deputy Gilmore might find value in a meeting some time.
Deputy Eamon Gilmore: Not for a while yet.
The Taoiseach: The Deputy is not as shy as he lets on.
With regard to the comments of Deputies Ó Caoláin and Kenny, it is well known that agreements are in place with people who support the Government and the Government seeks to honour them in the context of available resources and priorities and programme for Government commitments. It is the same for political parties as Independent Deputies and, therefore, I do not see why party leaders should be so dismissive of individual Deputies who seek to have arrangements with the Government when they would make that a condition for membership of a government themselves.
Deputy Bernard J. Durkan: That is an interesting development.
Minister for Social and Family Affairs (Deputy Mary Hanafin): As Minister for Social and Family Affairs may I start by congratulating Deputies Enright and McHugh on the birth of their boy. Guím gach rath, sláinte agus fad saoil ar an gclann álainn.
[12]Deputy Olwyn Enright: I thank the Minister.
77. Deputy Olwyn Enright asked the Minister for Social and Family Affairs if she will increase the fuel allowance to help alleviate fuel poverty and to support vulnerable families who will face enormous heating bills in the coming months; and if she will make a statement on the matter. [2056/10]
Deputy Mary Hanafin: The Department of Social and Family Affairs assists social welfare recipients with heating costs, through their basic payments, through the fuel allowance scheme and through the household benefits package of electricity and gas allowances.
The household benefits package is payable throughout the year to almost 380,000 pensioners, people with disabilities, and carer households to assist them with their heating, light and cooking costs. This scheme cost approximately €200 million in 2009.
In addition, the national fuel allowance scheme assists householders on long-term social welfare or health service executive payments with meeting the additional cost of their heating needs during the winter season. The allowance represents a contribution towards a person’s heating expenses. It is not intended to meet those costs in full and must be seen in the context of the overall level of income available to the family.
In budget 2009, the duration of the payment was increased by an extra two weeks to 32 weeks, while the weekly value of the allowance was increased by €2 to €20 a week, or €23.90 in designated smokeless areas. This compares with just €14 and €17.90 respectively three years ago.
These are in addition to other improvements made in recent years, including a significant increase in the income threshold for the allowance with effect from 2008. A single person aged under 80, with a household income of less than €330.30 a week can now qualify for the fuel allowance. The income limits for couples are €483.80 a week where the qualified adult is aged under 66 and €536.80 a week where both adults are aged over 66. As a result of these improvements, almost 318,000 people benefited from the fuel allowance in 2009 at an estimated cost of €217 million.
In addition to the basic welfare payments, household benefits and fuel allowance payments highlighted above, the Department also provides funding to the community welfare service to assist people with special heating needs. Community welfare officers can pay a heating supplement to people in certain circumstances with specific heating needs due to infirmity or a particular medical condition. They can also make exceptional needs payments to people who do not have enough money to meet their heating costs.
Since the onset of the adverse weather conditions, community welfare officers have provided assistance to people to purchase additional fuel, heaters and clothing. They have also given funding towards the payment of heating bills and for repairs arising from burst pipes. More than €170,000 has been paid out since 1 January 2010 in respect of such claims. Assistance will continue to be provided towards the payment of heating bills for those in need.
Paying a special increase in response to the bad weather would not necessarily represent a good targeting of limited resources. Rather, it is considered desirable to continue to give community welfare officers the discretion and the funding to assist people who need extra financial support.
Deputy Olwyn Enright: I find it peculiar that one third of the Minister’s answer relates to community welfare officers as a question I tabled for today on the community welfare service [13]was disallowed because it does not come under the Minister’s responsibility. To deal with the question in hand, I very much disagree with the Minister. Does she not see and appreciate the difficulty in asking people on low incomes and those in receipt of social welfare to bear the brunt of the type of weather we have had in recent weeks? Certainly, it is unfair to ask them in general — the Minister has not done so — to conserve energy when they do so on such a limited budget.
Was the Minister involved in the emergency committee established to deal with the bad weather? Did the committee consider the difficulties being experienced by people on low incomes and on social welfare as a result of requiring far more fuel than normal? The renewed programme for Government contained a commitment to publish a fuel poverty strategy by the end of last year. This has not been published. When are we likely to see it published? It was decided in the budget to introduce a carbon tax, which will have a significant impact on those in receipt of the fuel allowance. Does the Minister have any plans to alleviate the difficulties that will be experienced by people as a result of this?
Deputy Mary Hanafin: I was not involved in the emergency committee and I do not believe it addressed this particular issue, knowing that it was being dealt with by the Department of Social and Family Affairs and the community welfare officers who distribute the money for the Department; that is why I am in a position to answer these questions.
Interestingly, although I know many people had to use fuel almost around the clock during the very cold weather we have not had demand or communication seeking additional help from the major organisations, namely, the Society of St. Vincent de Paul and Age Action Ireland. However, I expect that when bills for the fuel begin to arrive we will see the real demand. People have not yet received their electricity or fuel bills. Gas and electricity bills will not be received for two months and those who use oil will also see how much has been used. I anticipate greater demand at that stage——
Deputy Olwyn Enright: What will the Minister do about it?
Deputy Mary Hanafin: ——through the community welfare officers. The sufficient amount of €92 million has been allocated to them this year for supplementary welfare payments.
Deputy Olwyn Enright: A certain figure has been allocated for supplementary welfare payments. Every time a difficulty arises for one in the social welfare system one is told to go to a community welfare officer to apply for a supplementary welfare payment. People whose houses were flooded were also told to go to a community welfare officer to apply for a supplementary welfare payment. That figure was agreed before the floods and the cold weather conditions. Is the Minister stating that people who cannot meet their fuel bills because of the extreme weather will be looked after when they go to the community welfare service?
Deputy Mary Hanafin: In fairness to community welfare officers they dealt extraordinarily well with the flooding issue.
Deputy Olwyn Enright: They do great work but are constrained by their budgets.
Deputy Mary Hanafin: They are the people best placed on the ground and who know. Providing an additional week’s benefit has been suggested. However, that would be paid in May which would not be much good to people now. Much of the money invested in fuel expenditure by the Department is done so through household benefits and that is not targeted. Admittedly it goes to everybody over the age of 70 and older people have greater demands, but they all do not have the same financial needs.
[14]Deputy Olwyn Enright: The Minister could increase the amount community welfare officers have to distribute.
Deputy Mary Hanafin: The exceptional needs payment available for this year is approximately €90 million. There is also the installation scheme but that is a separate issue and I want to return to the question asked by the Deputy in the first instance on the carbon tax to be introduced this year and her final question on the fuel strategy for last year. An interdepartmental group on energy affordability has been established and that will address both issues. We are conscious of the fact that a carbon tax on heating products will come into effect from May but it will be September before solid fuels come in. We should have a targeted response but we must find the most efficient way to target and administer it.
78. Deputy Róisín Shortall asked the Minister for Social and Family Affairs if she will amend the back to education allowance to address a number of inadequacies such as its lack of compatibility with the academic year; the length of time an applicant must be unemployed to qualify for this scheme; the restricted access for persons who already have third level qualifications; and the restricted access to students pursuing other back to education type programs. [2062/10]
Deputy Mary Hanafin: The primary objective of the back to education allowance, BTEA, is to give welfare recipients who left school early and those without third level qualifications a second chance to attain educational qualifications so as to reduce their risk of long-term unemployment.
In order to qualify for participation, an applicant must generally be in receipt of a relevant social welfare payment for three months if pursuing a second level course or 12 months if pursuing a third level course. In May 2009, the qualifying period for access to third level courses was reduced to nine months for people engaging with the Department’s facilitator programme, thereby aligning with the existing similar threshold for people within the national employment action plan. People who are awarded statutory redundancy may access the scheme immediately, provided an entitlement to a relevant social welfare payment is established prior to commencing an approved course of study.
Acceptance into the back to education allowance scheme can result in a person receiving income support for three years or more if pursuing a degree course. It is, therefore, considered appropriate, in the context of limited resources, to ensure that such long-term support is only given to those who actually need it. The waiting periods for the scheme act as a disincentive for people to leave education early with a view to getting paid the BTEA to complete it soon after.
It is worth noting that the maximum rate of the back to education allowance is more than double the maximum rate of the maintenance grant available to third level students from the lowest income families. It could, therefore, be considered unfair if a young person could finish school, work for a couple of years and then secure three years worth of BTEA support after being unemployed for only a very short time, while another young person who went straight from school into third level would get far less financial support.
The BTEA is currently limited to full-time courses from second level to higher diploma level in any discipline and to a graduate diploma in education. Qualifications above this level would not generally be considered necessary to secure employment. Payment under the scheme covers the relevant academic year and the scheme caters for approved courses where the starting date is not aligned to the standard academic year. Under separate arrangements, job seekers can participate in a part-time course and maintain their welfare entitlements, provided they obtain [15]approval in advance and continue to satisfy all relevant conditions, such as being available for work.
In 2009, €87.8 million was provided for the BTEA scheme. The number of people on the scheme at the end of November 2009 was 20,418, which is 88% higher than the 10,854 recorded at the end of November 2008. The scheme is being monitored on an ongoing basis in the light of the changed economic circumstances, in order to ensure that it continues to meet its objectives.
Deputy Róisín Shortall: The Minister said at the outset that this scheme was intended for early school leavers. The point I am making is that the qualifying criteria for the scheme are very outdated and do not meet the needs of the newly unemployed. It is fine for the Minister to talk about the minor changes she has made, which are welcome, but the reality is that there has been unprecedented growth in unemployment. One in five unemployed people are under 25. There are many graduates who are drawing the dole. The restricted nature of this scheme means that many people who should be able to avail of it are not entitled to do so.
It would make a lot of sense for the Minister to provide education and training opportunities to those who are on the dole who are precluded from participating in any courses. This problem is relatively new and it needs new solutions. The Minister should consider sitting down with some of the groups who work with unemployed people and try to identify some of those barriers that currently prevent them from participating in training. The current system encourages long-term unemployment. With a little tweaking of the rules, this could be a much more effective intervention for people who find themselves unemployed. Will the Minister apply herself to identifying those blockages?
Deputy Mary Hanafin: The Deputy has acknowledged that we have made necessary changes and I am open to making more. We need to ensure that we keep qualifying criteria for the link with social welfare. We must also ensure that there is a time lag because problems can arise if there is no waiting time.
The Deputy referred to graduates. Traditionally, we have not gone beyond the higher diploma. I accept that there are graduates on the live register, but they can also benefit from the work placement programme and hold on to their social welfare benefits. This may enable them to become more prepared for employment. There are other options available for people. Through FÁS, the Department of Education and Science and the PLC courses, a great number of additional places have also been made available. There are people who may not qualify for the back to the education allowance but who would qualify for the third level grant. That would allow people to continue with their education.
I meet with groups all the time but if there are other practical suggestions that allow more people to participate then I am very open to that. The numbers went up by 88% last year but because more people will be qualifying again this year, more people will be participating as well. We issued a mailshot to 18 to 25 year olds this time last year, and this was quite successful because it forced them to look at it. People who work with the young unemployed said that to me. When they suddenly got a letter about education it set them thinking in that direction. A targeted mailshot might work again.
I come in here every month and tell Deputies that I am more than willing to take on ideas because it is such a difficult area and we all want to do something. However, I do not always get these suggestions. When I do get them, I try to take them on board.
Deputy Róisín Shortall: Time does not permit me to go through the various suggestions that I have received from constituents and from groups working in this area. There are six or seven [16]things that could be done and which would not result in a huge cost to the Exchequer, but which would open the scheme up to more people. These people are going to be drawing the dole anyway. People may have received a postgraduate qualification 15 years ago and these qualifications are now fairly irrelevant to the demands of the job market. It makes sense for those people to go back and retrain, but they are precluded from availing of this scheme.
The Joint Committee on Social and Family Affairs should take a look at this in the next few weeks and the Department should participate in a round-table discussion on it and take on board some of its suggestions. I would welcome the Minister’s support for that idea.
Deputy Mary Hanafin: I have been looking at a number of issues, such as the problems encountered by people who qualified a long time ago and whose postgraduate qualifications are no longer relevant to the current market. We need to have a focus on any solutions to these problems, and we could do that in the context of the smart economy. We should be targeting support for people who are doing courses that might ultimately lead to employment, rather than some of the other courses. At the same time, we also have to ensure that we continue to support other people on social welfare payments, such as lone parents and people on disability benefit, to ensure that the back to education allowance facilitates them as well.
Deputy Róisín Shortall: What about the round-table discussion?
Deputy Mary Hanafin: I will participate in any discussion on back to education programmes.
79. Deputy Olwyn Enright asked the Minister for Social and Family Affairs the amount of fraud control savings achieved in 2009; if she is satisfied with the savings achieved; and if she will make a statement on the matter. [2057/10]
Deputy Mary Hanafin: Welfare fraud is theft. It is a serious crime and the Department is doing everything it can to prevent and detect fraud, and to crack down on those who abuse the system. Several initiatives were introduced or enhanced last year to target controls more effectively in schemes. These included more frequent mailshots to identify people who have left the country and who are no longer entitled to a payment; additional data matches with other agencies to identify welfare customers who had failed to disclose relevant information to the Department, such as earnings and compensation claims; improved internal data matching procedures to ensure that relevant information available in one area of the Department is applied to all schemes; and increased emphasis in the border regions on control of claims from applicants with a previous address in Northern Ireland. These were additional to the improved controls introduced in 2008, which included requiring new claimants of jobseekers payments to collect their money in person at the post office rather than having it paid straight into their bank account.
Greater emphasis was also placed last year on prevention of fraud and error at the claim application stage. While this is the most cost effective mechanism of reducing unwarranted welfare expenditure, it should be noted that savings achieved in this way are not included in the published figures for control savings. For 2009, the Department set a target of reviewing almost 620,000 individual welfare claims. Over 750,000 reviews were carried out last year, which is 20% more than the annual target. The total fraud and error savings recorded for the year was approximately €484 million, which is an increase of €8 million on the 2008 figure.
In considering the level of savings recorded in 2009, it is important to note that the final average live register figure for the year, at 395,500, was significantly lower than the 440,000 [17]that had been predicted when the annual target was set. While it is difficult to identify exactly why the above target number of reviews did not generate higher savings, it may be partially due to decreased opportunities for people to work and claim. Increased emphasis on preventing unwarranted claims at the initial application stage may also have led to a reduction in the number of claims stopped after they had gone into payment.
Additional information not recorded on the floor of the House.
It is also worth noting that the 2009 control savings from several schemes were ahead of target. These include family income supplement, carers, illness payments and State pensions.
Overall, I am satisfied that the enhanced controls introduced in recent years are helping to reduce the potential for fraud and errors in welfare payments. I also believe that the new anti-fraud powers included in the Social Welfare Bill are a clear demonstration of this Government’s determination to do everything that it can to stop people getting money to which they are not entitled.
Deputy Olwyn Enright: The savings made by the Minister were far short of the target she had set, and this is clear from her reply. The same pertained to 2008. She has set a much lower target for 2010. Is that because she has failed to reach her targets for the last two years?
What else does the Minister plan to do? She has asked for useful suggestions. The Joint Committee on Social and Family Affairs, through Deputy Shortall, suggested rolling out a national identification card, something to which the Government has committed itself. When are we likely to see that?
The Minister will be aware of a case that went to court a couple of weeks ago. The gentleman involved collected somebody else’s payment in the same post office as his own for 14 or 15 years. How did that happen? The clear answer is that there was no ID card and there was no requirement for a check to be made on that gentleman. People in the Dublin region have told me that they have gone to social welfare offices and have not been asked for identification. There is nothing to prevent people from collecting someone else’s payment. When will a tougher, stricter approach be introduced? We have heard a great deal of talk but it has not been matched by action on the ground.
Deputy Mary Hanafin: One of the reasons the target was not met was that the number on the live register did not reach the anticipated level. It is important that we stop people receiving payment before fraud occurs. This issue is being given careful attention. The control target for next year is €533 million. The Department hopes and expects to achieve this target through the range of measures it has implemented and new initiatives.
Money was provided in the budget for the roll-out of a PPS card, which will commence this year. This measure will help eliminate fraud as the new card will feature a photograph. While it will not be an identity card, it will be helpful.
I do not wish to discuss individual cases but it is extraordinary that the person to whom the Deputy referred was able to continue with the fraud for so long. An individual can, however, collect a pension for an older person if he or she is the designated agent.
Deputy Olwyn Enright: The gentleman in question was not the designated agent in this instance. The person for whom he claimed was dead and could not designate an agent.
Deputy Mary Hanafin: I am aware of that. It is awful that anyone would continue to collect money for such a long period.
Deputy Róisín Shortall: The Department held details of the death.
[18]Deputy Mary Hanafin: Deputy Shortall makes a fair point. At that time, the systems did not talk to each other. As a result of new information technology, deaths are automatically notified to the Department. This did not occur at the time of the case to which the Deputies refer. One should not underestimate the fact that the systems talk to each other. While it may be odd that is only taking place now, at least it is being done.
Data matching with other groups and organisations is also helping to crack down on fraud. I have twice met representatives of postmasters who have been very helpful. They have requested in their newsletters that postmasters ensure that they ask for proof of identity.
Deputy Olwyn Enright: With respect, the Minister’s statement that the number of people on the live register is not as high as anticipated is neither here nor there. Those who would have been on the live register would not have been fraudulent claimants but people with an entitlement to claim a benefit.
Deputy Mary Hanafin: A person who was working would not have an entitlement.
Deputy Olwyn Enright: If the number on the live register had been higher, it would not have affected the figure. Is data matching in place to enable the Revenue Commissioners to check whether landlords in receipt of rent supplement from the Department are paying tax on the payment?
An Leas-Cheann Comhairle: The Deputy is extending the scope of the question.
Deputy Mary Hanafin: I will return to the Deputy on that question. In some schemes, including lone parent’s allowance, carer’s allowance, illness payments, State pensions and family income supplement, the savings secured from anti-fraud measures have exceeded the targets. We cannot concentrate all our efforts on the live register.
Deputy Olwyn Enright: The Minister raised the issue, not me.
Deputy Mary Hanafin: We will continue to take the issue seriously. The Deputy asked what new measures the Department would take this year. The introduction of the new PPS card is a new initiative. Members of the public can also make a complaint or report suspected fraud on-line without providing any information about themselves. They can provide details and information on the Department’s website about people who they believe are engaging in fraud. The success of these initiatives will prove helpful.
Deputy Olwyn Enright: The Minister indicated previously that the majority of such reports prove to be unfounded.
80. Deputy Olwyn Enright asked the Minister for Social and Family Affairs if she is satisfied that her Department can adequately target low income families who have had their child benefit cut by increasing the qualified child increase and the family income supplement; her views on whether increasing the qualified child increase and the family income supplement creates poverty traps and fails to target the most vulnerable; and if she will make a statement on the matter. [2058/10]
Deputy Mary Hanafin: Between 2000 and 2009, overall expenditure on child benefit grew from just €638 million to approximately €2.5 billion per annum. The Government is proud to have been able to deliver such significant increases in payments to families when the resources [19]were available. However, with tax revenues having fallen dramatically, we cannot afford to maintain spending at this level.
The Government is conscious that the payment can be an important source of income for all families. For this reason, we decided against withdrawing child benefit completely from any family. We also decided against taxing the benefit. Apart from the significant administrative complexities that taxation would have involved, it would be unfair to take up to 20% of child benefit from families on the lower tax rate and up to 41% from those on the higher rate who do not have very large incomes. It was fairer to reduce the child benefit rates across the board, while fully protecting up to 420,000 children in families who are dependent on social welfare or in low income employment.
Families with children who are dependent on social welfare will be fully compensated for the reduction by receiving an extra €3.80 per child per week in the value of the qualified child increase paid with the principal payment. Families who currently receive a half-rate qualified child increase because they have other household income and are not, therefore, totally dependent on welfare will receive an extra €1.90 per child per week. The family income supplement income thresholds have also been increased to compensate low income working families for the cuts in child benefit.
I am fully satisfied that these improvements to the qualified child increase and family income supplement will effectively target the needs of low income families. I am also satisfied that measures are in place to address potential poverty traps. For example, to ease the transition from welfare into work people who have been in receipt of a jobseeker’s payment, with a full-rate qualified child increase, for at least 12 months can generally keep the qualified child increase for 13 weeks if they take up work that is expected to last at least four weeks.
The family income supplement is also arranged in such a way as to enable people to increase their earnings while maintaining some support. For example, a family with four children can have a net income from employment of up to €820 a week and still receive a family income supplement.
Deputy Olwyn Enright: I do not know if the Minister is aware of a number of studies done on poverty traps in the social welfare system in 2005 and 2006. The Government has not introduced any changes which have had a positive impact by reducing these traps. The most recent budget was especially negative in terms of disincentivising people to work. I received a call from a gentleman yesterday who, having been offered a job with a salary of €22,000 per annum, decided it was not worthwhile to accept the offer because he would be better off on social welfare.
On the qualified child increase, Government policy for the past 15 years has been that increasing this benefit creates a poverty trap. What poverty proofing did the Department do to ensure that the decision in the budget to change child benefit did not create a further poverty trap? The changes in the qualified child increase and family income support create a disincentive to return to work as people who enter employment will lose these benefits.
Deputy Mary Hanafin: A person earning €22,000 per annum would be much better off than an individual on the live register because the latter would only receive slightly more than €11,000 per annum.
Deputy Olwyn Enright: One must take all the other factors into account.
An Leas-Cheann Comhairle: Please allow the Minister to complete her answer.
[20]Deputy Mary Hanafin: The Deputy and I probably agree that we do not want a circumstance to arise in which people believe they are better off on social welfare. However, a person earning the figure cited by the Deputy would not be financially better off on social welfare.
In all of our discussions on the budget, especially its social welfare aspects, the Government considered the effects it would have on individuals and families, particularly those on lower incomes who are not dependent on social welfare benefits. This was one of the reasons I was particularly anxious not to proceed with the cuts in child benefit proposed in the McCarthy report. Not only would such cuts have had a severe effect on people on middle incomes, but we would have created a poverty trap by compensating those on lower incomes. The decision to cut child benefit by the lowest amount possible meant that we did not have to substantially increase the qualified child increase. To have done so would have made it difficult for people to extricate themselves from social welfare and enter employment.
At present, child benefit provides half of the support for a child in low income families whereas the figure ten years ago was 34%. The Department continues to target child income support and families in the correct manner. Combined, child benefit and the qualified child increase are higher than ever. In devising difficult cuts in the budget the Government genuinely set out to protect low income families, an objective we achieved in this case.
Deputy Olwyn Enright: I disagree. I can give the Minister several further examples of people who find themselves in the same position as the man offered a job earning €22,000. Does the Minister take decisions in isolation? Did she decide to examine the qualified child increase and family income supplement or did she examine all benefits, including rent supplement, the medical card? I accept that medical cards are issued by a separate Department. When people are making the decision to return to work they consider the totality of their income and do not focus solely on the potential loss of the qualified child increase. Considering one’s entire income is the sensible way to budget for one’s family. Did the Minister consider this?
Deputy Mary Hanafin: Not only did I do so in my Department but we also did it cross-departmentally in our discussions. We were very conscious that various cuts could impact on the same people. In discussions prior to the budget, organisations representing different groups, particularly the Society of St. Vincent de Paul, made clear that while they did not want any cuts, which can be taken as a given, where there were cuts they wanted one rather than myriad cuts. A general cut was made in child benefit and the rates of payment of social welfare benefit——
Deputy Olwyn Enright: Those are two pretty big cuts.
Deputy Mary Hanafin: ——but there was no cut in fuel allowance or the other elements that support people. That was one point that the organisations were anxious about at a difficult time for making cuts in the budget.
Deputy Olwyn Enright: The Minister put the bottom line ahead of the number of cuts.
Deputy Róisín Shortall: Did the Minister poverty-proof the measures?
81. Deputy Olwyn Enright asked the Minister for Social and Family Affairs when she will proceed with the reform of the pension system; and if she will make a statement on the matter. [2059/10]
[21]Deputy Mary Hanafin: The Green Paper on pensions outlined the challenges facing the Irish pensions system in the years ahead, including the sustainability of the system over the longer term in light of demographic change and the adequacy of contribution levels and benefits. The consultation process that followed publication of the Green Paper reflected the wide range of views and interests held by individuals and organisations throughout the country. While there was no consensus on ways to respond to the challenges facing our pension system, it was clear that there were significant issues and problems that people wanted addressed.
Since the Green Paper was published in October 2007, the economic environment has changed considerably and the Government needs to ensure that any decisions we make in the pensions area will be robust enough to withstand the challenges that will arise in the future. We must make decisions now to ensure the adequacy of retirement incomes for this and future generations and, at the same time, develop a system that is affordable and sustainable for the State and for those who sponsor and provide pension schemes.
In the past 18 months or so the Government has taken a number of steps to respond to the immediate difficulties facing pension scheme members, particularly members of defined benefit schemes. These include the establishment of a pensions insolvency payment scheme and a reordering of wind-up priorities so that, in any defined benefit wind-up situation, employees and former employees who have not yet retired may still receive a large proportion of their benefits. Legislation to support these measures was passed in the Social Welfare and Pensions Act 2009. The Government has also introduced provisions to allow for more flexible restructuring of pension benefits and stronger regulation regarding remittance of pension contributions. We have also protected people in receipt of the State pension by retaining the rates of pension and other social welfare payments for older people in the recent budget.
The Government is aware that the wider and longer-term pensions policy issues require a comprehensive and co-ordinated response and has been considering a number of options to address the challenges facing our pension system. Uncertainty in the economic climate has increased the complexity of the decisions we must make but it does not prevent or deter the Government from making these vitally necessary decisions. However, it does require us to give very careful consideration, and it is precisely because the development of the national pensions framework involves decisions on such a wide range of future and complex issues that we have been spending a considerable amount of time working on it. The Taoiseach and the Minister for Finance have indicated that we hope to be in a position to publish the framework shortly.
Deputy Olwyn Enright: Every month we ask this question and we hear that it will be published shortly. What does shortly mean? We attended a Green Paper launch by the Minister for Social and Family Affairs, although I do not know whether Deputy Cullen or Deputy Hanafin was Minister at the time.
Deputy Olwyn Enright: He obviously made an impact. We were told it would be published very shortly but that was almost two years ago. Does the Minister have any idea when this will be published? A piecemeal approach is being taken at present, as outlined by the Minister, in respect of PIPS and other matters addressed in the budget. The latest step by the Department concerns farmers’ spouses’ pensions. The Department allowed farmers’ spouses to apply and back pay contributions if they had not paid them by the time they were 66 under the Social Welfare Consolidation Act 2005. Over the past number of weeks and months——
An Leas-Cheann Comhairle: The Deputy should ask a question.
[22]Deputy Olwyn Enright: I must explain it so the Minister is clear.
An Leas-Cheann Comhairle: The time is nearly up.
Deputy Olwyn Enright: The Department wrote to at least 200 farm families to ask them to repay the money, which the Department allowed them to pay into this scheme. Why has the Minister made this move? How many farm partnerships are affected? Will she give consideration to allowing them to retain the pension the Department allowed them to pay into?
An Leas-Cheann Comhairle: This is a specific question——-
Deputy Olwyn Enright: It is relevant to the question.
An Leas-Cheann Comhairle: ——and an Adjournment debate may be allowed on this matter later.
Deputy Mary Hanafin: It is a question on pensions and I anticipated it. There is no change in policy in respect of commercial partnerships and there is no change of budget in respect of commercial partnerships. Approximately 1,000 people applied for partnership under the scheme by showing that they were in partnership with their spouses. Generally, it refers to farm spouses. Of those 1,000 people, 579 cases have been decided on the basis of whether they qualify as a partnership. Some 508 of those were deemed to have a partnership in existence. Of those, 268 have applied for a pension. The rest have not reached pension age yet. These are people who qualify for the partnership and have applied to see if they qualify for a pension. Some 46 did not qualify because of the social insurance element. Some 87 were told they qualified, were put into payment but then it was discovered they did not qualify. We are talking about 87 individuals. This occurred because of an administrative mistake by the Department and I regret that it was made. Some 135 people out of 268 are in receipt of a pension. These are the accurate figures. Letters were sent by the Department last week that caused some distress to the people concerned. I regret the administrative mistake was made.
Deputy Olwyn Enright: How was a mistake like that made when the Department worked out how much people would pay back? People borrowed money in some instances to be in a position to apply to the Department. The Department knowingly allowed them to do that and people thought they were entitled to the pension. They planned accordingly and now the Department is writing to them to say that they are not allowed get it and that it was an administrative error. If the administrative error had been made on the other side, the Minister would be acting tough to get it back. This must be re-examined because it is extremely unfair to those who planned on the basis of information provided by the Department.
Deputy Mary Hanafin: There are two elements to this pension. In the first instance, people must prove that the partnership existed and then people must qualify under social insurance contributions. The section that determines whether a partnership existed did not communicate properly with the social insurance end. When the partnership was found to exist and the application was approved in respect of this, it was presumed to be approved for a pension. It was a genuine mistake and I regret that it happened. It happened in respect of 87 people, not hundreds, but it is a serious issue for those 87 people.
Deputy Olwyn Enright: The data matching is not as good as the Minister said earlier.
An Leas-Cheann Comhairle: We now move on to Other Questions and the first question is in the name of Deputy Olwyn Enright, who was fortunate in the draw.
82. Deputy Olwyn Enright asked the Minister for Social and Family Affairs the number of dental applications made on behalf of multiple customers without their knowledge; the action she will take in this regard; and if she will make a statement on the matter. [1674/10]
Deputy Mary Hanafin: Changes to the treatment benefit scheme were announced in the 2010 budget. From 1 January 2010, treatments available under the scheme are limited to a free optical and dental examination together with the treatments previously available under the medical appliance scheme, namely hearing aids and contact lenses required for medical reasons. People who at 31 December 2009 were undergoing a course of treatment or who had applied for approval to commence treatment will have their applications for dental benefit processed under the rules that operated prior to 1 January 2010.
In the period immediately after the changes were announced in the budget, there was a sharp increase in the number of inquiries from customers and from dentists on behalf of customers seeking approval for dental treatment. From the level of correspondence received from some dentists, it was clear they were submitting bulk applications on behalf of their patients. Claims involving many hundred customers were received from eight dental practices. These applications were supplied in alphabetical order as if downloaded from a database.
On checking with a number of customers, it became evident that many of them had not approached the dentist to seek treatment nor had they authorised the dental practice to submit an application on their behalf. The dentists concerned were contacted and agreed to withdraw the inquiries and resubmit them in the proper manner.
In order to avoid any repetition of the problem, a letter was issued to all dentists clarifying the procedures to be followed in submitting eligibility and approval inquiries. These procedures include the need to ensure that the patient had given approval for the inquiry to be made and the need to provide a confirmed appointment date and contact number for each customer. This was difficult in some cases because the customers had passed away. It has been noted that since the letter issued, the majority of inquiries have been submitted in the correct manner. Inquiry applications received without all the relevant information are being returned. A number of dentists have been in contact with the Department since the issuing of the letter to advise that they submitted inquiries in error, to ask for them to be withdrawn and to advise that they will submit a revised list of inquiries in the correct manner. It is estimated that over 150,000 eligibility inquiries for dental treatment were received in the period between budget day and 31 December last. The inquiries in question are being processed. It strikes me that dentists were very busy in the ten working days between budget day and the end of the year. Priority is being given to confirming patient eligibility. Officials will perform spot checks on inquiries to ensure that they were submitted properly and with the consent of patients. Any breaches of the guidelines will be reported to the Office of the Data Protection Commissioner for appropriate follow-up action.
Deputy Olwyn Enright: I welcome this example of vigilance on the part of the Department. Does the Minister know how many dental practices attempted to submit lists of patients without such applications having been signed by the patients in question? How did the Department realise that dentists seemed to be submitting patients’ names without their consent? Was the alphabetical order issue the main one in this regard? Will any sanctions be applied in cases of this nature? Have the applications been returned to the people in question? Has everyone on [24]the list been contacted by the Department to make them aware that their dentists submitted this information?
Deputy Mary Hanafin: This phenomenon came to light when applications were submitted in bulk and in alphabetical order. In some cases, all of the forms were signed with the same signature. That may have been erroneously done by receptionists. When departmental officials conducted cross-checks within the system, they found that some of the customers who were anticipating getting treatment in the future were actually dead. When some of the people on the list were telephoned on foot of those spot-checks, they said they had not been to the dentist recently. In some cases, people who had not been to the dentist for a couple of years were on the list as having been approved for future treatment.
Deputy Noel J. Coonan: They could come back from the dead for treatment, like certain people do on voting day.
Deputy Mary Hanafin: I mentioned in my reply that the bulk of the claims to which I refer came from eight dental practices. In fairness to the officials in the relevant section of the Department, they copped on very quickly to what was happening and started to contact the dentists in question. By the time they contacted the third dentist, the word had got out and he was expecting the telephone call. Two professional groups of people — opticians and dentists — were affected by the decision that was announced on budget day. When I met the opticians, I found they were particularly keen to retain the examination, which is the best way of identifying real problems. As a result, the examination was retained and there has not been a word from the opticians since. They are getting on with their work in a professional manner. By contrast, the dentists conducted an enormous campaign, involving postcards as well as radio and television advertising. They were well within their rights to do so. A number of dentists are making an awful lot of money from the system. Eligible people who properly made their appointments and submitted their applications will, of course, continue to be treated in the first few months of this year. It is important for professional bodies like those we are discussing to realise that these cuts were made with difficulty.
Deputy Róisín Shortall: This is one of the budget cuts of which people are not yet terribly well aware. It seems extraordinary that the Minister has changed the rules in a manner that drastically cuts the entitlements of those who have been paying into the social insurance fund for 25, 30 or 40 years. A lot of trouble is coming down the track in this regard. The word has not got out terribly well yet. As people try to make appointments with dentists and opticians, they are starting to discover that the Minister has interfered with their entitlements to this extent. I would like to ask the Minister about the specific abuses that are the subject of the question before the House. What was the largest number of claims to be made by an individual practice during the period between budget day and the end of the year? Does the Minister have any penalties at her disposal? What sanctions can she impose on practices that have engaged in this kind of abuse?
Deputy Mary Hanafin: People have been making their contributions into a fund that is now in deficit.
Deputy Róisín Shortall: It is not their fault.
Deputy Mary Hanafin: I know it is not.
Deputy Róisín Shortall: They have paid their social insurance contributions.
[25]Deputy Mary Hanafin: When we made decisions in advance of last month’s budget, we had to ascertain how best the fund could be protected. We do not intend to retain these changes on a permanent basis. My aim is that they will be in place for just one year. We have maintained the two most critical elements of this scheme. The examination can highlight basic difficulties in addition to a myriad of much more serious diseases. We have protected the basic scheme while changing the eligibility criteria. We hope those changes will last just a year. As I have said, some 150,000 names were submitted in total. I am aware that one or two individual dentists submitted hundreds of names, which is quite significant. I do not have the exact numbers to hand.
Deputy Róisín Shortall: What sanctions are available to the Minister?
Deputy Mary Hanafin: The first sanction is that somebody can be reported to the Office of the Data Protection Commissioner. The use of people’s information without their permission is quite a serious offence. The Department may consider the possibility of striking individual dentists from the panel, if it is felt they were deliberately trying to defraud the system. The relevant section of the Department is trying to work through the 150,000 names to determine the degree of eligibility in each instance. We will see if anything else comes to light as a result of that.
Deputy Róisín Shortall: Does the Minister intend to take action against any of the practices?
Deputy Mary Hanafin: As this is just the third week of January, we are still in the process of taking a look at the names.
Deputy Olwyn Enright: Were the dentists involved in communication with each other?
An Leas-Cheann Comhairle: I want to make some progress by calling the next question.
83. Deputy Seymour Crawford asked the Minister for Social and Family Affairs if she has carried out a review on the way inspectors are estimating income for the self-employed and for farmers; her views on whether current income is not being accepted by some inspectors; and if she will make a statement on the matter. [1525/10]
Deputy Mary Hanafin: Jobseeker’s allowance and farm assist are means tested payments. In each case, social welfare inspectors interview claimants and make the inquiries necessary to ascertain their means. Historically, self-employed people were assessed on their income in the 12 months prior to claiming, and decisions were made on that basis. This has proved an effective measure of means during periods of relatively stable economic conditions. However, it has always been open to each applicant to make a case showing that his or her income in the coming 12 months was likely to be reduced in light of personal or economic circumstances. The Department’s inspectors and deciding officers take account of such arguments and, in assessing means, exercise their best judgment as to the likely income such a person would receive in the 12 months following their claim.
In light of the changed economic environment, and recognising that the system of using past year earnings as a basis for assessing means was no longer as equitable as it had been, the Department issued a circular in May 2008 advising inspectors of the need to recognise that, in general, less work would be available in the current economic environment and, as a consequence, the income of a self-employed person may be reduced. A further circular, on self-employment process improvements, was issued in December 2009. It advised inspectors to deal [26]efficiently and effectively with means tested cases that contain an element of self-employment. Inspectors were advised that each case should be examined on its merits and that they should apply their knowledge of local conditions to arrive at a fair assessment of the income from self-employment for the coming 12 months.
Some 88% of farm assist claims and 93% of self-employed claims that were decided on in the period between January and December 2009, inclusive, were awarded. If a self-employed person’s situation changes after he or she has made an initial claim for jobseeker’s allowance or farm assist, he or she can apply to have his or her means reviewed. In addition, if the individual is dissatisfied with the means assessed, it is open to him or her to make an appeal to the social welfare appeals office. I appreciate the need to ensure that claimants who have been self-employed, and whose income is significantly affected by the economic downturn, receive their full entitlements in a timely manner. I assure the House that we are doing our best to ensure that this is achieved.
Deputy Seymour Crawford: I am sorry to have to raise this issue again. I brought a number of cases to the Minister’s attention last year. For example, I spoke about a self-employed person who went out of business last August. His ten workers have received their entitlements, but he has not yet received a single penny.
An Leas-Cheann Comhairle: A question please, Deputy.
Deputy Seymour Crawford: How can I ask a question without explaining what I am asking about?
An Leas-Cheann Comhairle: The Deputy will know that one minute is allowed for supplementary questions.
Deputy Seymour Crawford: This situation has not yet been resolved. The man in question is living entirely on the basis of the support of his family. His wife has applied for carer’s allowance. When I spoke to officials in the carer’s allowance section of the Department, they said they would re-examine the case without reference to the appeals process. That did not happen, unfortunately. Both the man and his wife are without assistance. I am also familiar with the case of a young farmer——
An Leas-Cheann Comhairle: Go raibh maith agat.
Deputy Seymour Crawford: ——with €6.50 of farm assist——
An Leas-Cheann Comhairle: We do not have time to go through the Deputy’s list of cases.
Deputy Seymour Crawford: He got farm assist all right. He got €6.50 for himself, his wife and his children. We asked the Department to get the inspector to re-examine the matter.
An Leas-Cheann Comhairle: The Deputy cannot simply ignore the Chair.
Deputy Seymour Crawford: The inspector refused to do so. What is the Minister going to do about that?
An Leas-Cheann Comhairle: Before the Minister replies, I ask the Deputy to have some regard for the Chair. The rules which exist for the asking of questions can be set aside if the House so decides but in the interim the Chair should be allowed to apply them.
[27]Deputy Mary Hanafin: Genuine issues arise in respect of self-employed people seeking unemployment assistance. We took these issues on board in recognising that the income a person earned over the preceding 12 months could not reflect what he or she could earn during the following year. This is why new circulars were issued to inspectors. Bearing in mind some of the concerns raised by Deputy Crawford on previous occasions, a substantial new circular issued to inspectors last month to ensure, for example, they did not take sole account of previous incomes. Accounts cannot be exclusively relied upon or considered in isolation from other factors. The circular tells inspectors precisely what they should look for and advises them to be cognisant of the fact that employment is unavailable. The projected net income for the succeeding 12 months should take account of the downturn and reflect diminishing trade on a proportionate basis. We are sending the message to our offices and inspectors that there is a cohort of self-employed people who may have earned a decent income 12 months ago but cannot at present expect similar remuneration.
The figures speak for themselves when I note that 88% of applications under farm assist were granted and that 93% of those who sought unemployment assistance were self-employed. I am aware the Deputy is interested in a particular case but the issues he has set out are not reflective of the success of the scheme overall.
Deputy Seymour Crawford: I assure the Minister that the example I have set out is only one of many. What efforts will be made by the Minister to ensure that inspectors follow her directions? It appears that a few people are ignoring them. Is it fair that somebody should have been waiting since early summer for a result?
Deputy Mary Hanafin: Inspectors have already received three circulars and they have also been brought together in a workshop so that the details of the scheme could be explained and their fair implementation ensured. We will continue to keep the matter under review.
84. Deputy Seymour Crawford asked the Minister for Social and Family Affairs the reason a person (details supplied) in County Monaghan in receipt of farm assist has had payment reduced from €15.90 to €2.10; her views on whether this is a serious income reduction for someone on such a low income; and if she will make a statement on the matter. [1524/10]
Deputy Mary Hanafin: Arising from the changes made in the Social Welfare Act 2010 the rates of payment for both jobseeker’s allowance and farm assist payments were reduced. Accordingly, the farm assist payment of the person concerned was reduced in line with these provisions with effect from 1 January 2010.
The person concerned applied for and was awarded farm assist with effect from 19 November 2008. In such cases, a social welfare inspector interviews the claimant and makes such inquiries as are necessary to ascertain his or her means. The person’s means were assessed at €324 per week, derived from his spouse’s income from employment and farm income.
Where a person’s situation changes after making an initial claim for farm assist, he or she can apply to have his or her means reviewed. In addition, it is open to the individual, if he or she is dissatisfied with the means assessed, to make an appeal to the social welfare appeals office.
The person concerned requested a review of his means in November 2009 and a social welfare investigator duly reviewed his circumstances. However, based on the information provided by the claimant, there was no material change in the means derived from his farming enterprise and his wife’s income from employment remained unchanged. Accordingly there [28]was no change in his means. He was notified of this decision and of his right to appeal to the social welfare appeals office.
The Deputy will be aware that in light of the changed economic environment the basis for assessing means in cases where self-employment is involved was reviewed by my Department, which issued circulars in May 2008 and December 2009 advising inspectors and deciding officers of the changed economic circumstances and the need to recognise that, in general, claimants’ self-employed income potential has reduced. Inspectors were advised that each case should be examined on its respective merits and that they should apply their knowledge of local conditions to arrive at a fair assessment of the income from self-employment in the coming 12 months.
I appreciate the need to ensure that claimants who have farm income and whose income is significantly affected by the economic downturn receive their full and fair entitlements having regard to the legislative provisions and means test that apply.
Deputy Seymour Crawford: This man’s wife earns a low income by working in retail four days per week and he owns a farm comprising 14 acres. I hope his application will be reassessed in order to take account of his actual income because the decision as it stands is extremely unfair.
Deputy Mary Hanafin: Difficulties arise where the wife is also working because her income is also taken into account. We accept that somebody might need farm assist but the household income must be considered. This is a social issue because in the past the man was the main breadwinner but the roles have now reversed and men are being refused social welfare assistance because their household income is being earned by their spouses.
Written Answers follow Adjournment Debate.
An Leas-Cheann Comhairle: 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 Thomas P. Broughan — the urgent need for the Minister to fully report to the Dáil on why cutbacks of up to 30% in funding have been sanctioned in 2010 for sphere 17 and RASP programmes in Dublin 17, which provide essential community programmes including educational, health, art, drug outreach and counselling programmes and support for the local travelling community, given the appalling effect these cutbacks will have on the local north Coolock communities and to ask the Minister to indicate whether the Government is planning to end completely funding for these vital programmes in 2011 and if he will make a statement on the matter; (2) Deputy Joan Burton — in light of the recent acknowledgement by the Department of Justice, Equality and Law Reform that women and young girls were routinely committed by order of the courts and other mechanisms to institutions and homes run by religious orders, known as Magdalene laundries, to ask whether the Minister will make a statement and outline the position in respect of files and records held by Departments, if these files will be released and what the Minister proposes to do in respect of this matter and the proposals made by the Justice for Magdalene Group; (3) Deputy Frank Feighan — to ask the Minister for Education and Science if he will expedite the provision of the new school in Ballinamore, County Leitrim, due to the fact that the current school, Mean Scoil Fatima, has been severely damaged by fire and whether he will provide suitable accommodation in the interim for the students as a matter of urgency; (4) Deputy Pádraic McCormack — the proposals for deciding the preferred corridor for the construction of the new R336 road from [29]Barna to Rosamhíl, County Galway; (5) Deputies Michael Creed, Olwyn Enright and Jimmy Deenihan — the pension entitlements of farm spouses; (6) Deputy Alan Shatter — the suspension of negotiations with Vietnam on a bilateral adoption agreement; (7) Deputy Martin Ferris — the ongoing difficulties faced by staff and patients at Kerry General Hospital; (8) Deputy Tom Hayes — in light of very serious problems with the N24, to ask the Minister for the Environment, Heritage and Local Government to respond to a request by South Tipperary County Council to his Department for special funding; (9) Deputy Joe Costello — the need for the Minister for the Environment, Heritage and Local Government to ensure that a national strategy be prepared to deal with the increasing crisis in the supply of drinking water; (10) Deputy James Bannon — the need for the Minister for the Environment, Heritage and Local Government to update this House as to when he will be implementing and funding the river basin management plan for the Shannon river basin district, which he signed in October 2009; (11) Deputies Pat Breen, Joe Carey, Andrew Doyle, Paul Kehoe and Billy Timmins — the provision of additional funding to local authorities in respect of road maintenance following the recent bad weather; (12) Deputy Kieran O’Donnell — to call on the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, to immediately implement and resource the recommendations of the mid-west jobs taskforce report, which she established, and to ask her plans for the disbursement of funds for redundant workers under the European Globalisation Fund; (13) Deputy Phil Hogan — the proposals to deal with the fallout from the severe weather crisis for communities and the allocation of financial resources to achieve the early implementation of those plans and to ask whether a statement will be made on the matter; (14) Deputy Lucinda Creighton — the urgent need for an investigation by the Minister for the Environment, Heritage and Local Government into the ongoing water crisis in Dublin, and the need for emergency funding to be provided for the repair and maintenance of water infrastructure; (15) Deputy Noel J. Coonan — to raise with the Minister of State at the Department of Health and Children, Deputy John Moloney, the provision of mental health services in north Tipperary and to ask the proposals his Department have made for the delivery of mental health services, both acute and community-based, following HSE proposals to close St. Michael’s unit in Clonmel, which currently provides acute psychiatric services for both north and south Tipperary, and whether his Department plans to provide capital funding for proposed high dependency psychiatric units in north Tipperary; (16) Deputy Deirdre Clune — the need to regulate the sale of certain products in head shops in Ireland; (17) Deputy Mattie McGrath — the proposed transfer of acute services from St. Michael’s psychiatric hospital in Clonmel to Kilkenny; and (18) Deputy Joe McHugh — the need for the Minister for Finance to disclose all new capital projects gone to tender that will begin this year across all Departments, all new capital projects gone to tender that were due to start this year across all Departments but are not now proceeding and all capital projects that are in the middle of construction at present, and to comment on the importance of such projects in getting capital flowing into banks and around the economy.
The matters raised by Deputies Alan Shatter, Pat Breen, Joe Carey, Andrew Doyle, Paul Kehoe, Billy Timmins, Michael Creed, Olwyn Enright and Jimmy Deenihan have been selected for discussion.
Deputy Enda Kenny: No issue in the past 30 years has consumed the minds of the Irish public like the crisis that has arisen because of the catastrophic failure of our banking system. It is necessary that we conduct a comprehensive inquiry into the reasons for regulatory failure, the adoption of policy positions which amounted to an endorsement of that failure and the fact that hundreds of thousands of Irish people now have to pay the price.
[30]Last week I published proposals on behalf of the Fine Gael Party on the kind of inquiry we would like to see. Under these proposals, the Oireachtas would be empowered to set out terms of reference for the collection of information necessary for an inquiry which would not cross the boundaries of the Director of Corporate Enforcement and the fraud squad. I am aware that the Labour Party has separately published a broadly similar set of proposals.
I reject the line that the Government has suddenly changed its position from opposing an inquiry to advocating an inquiry of sorts. I also reject the claim that the banking crisis was not caused in part by policy failures and lax regulatory reform while the Taoiseach was Minister for Finance. I do not accept the proposals published by the Government in response to the Labour Party Private Members’ Motion for a number of reasons. First, the Government would commission the initial reports, the terms of which make no mention whatsoever of the responsibility and role of Government in the policy decisions which led in part to this crisis. Second, the establishment of the kind of commission being proposed by the Government would amount to a secretive whitewash, which is not in the interest of transparency or public accountability. Third, what the Taoiseach proposes would relegate the Oireachtas to a sideline position of no importance or centrality other than to be briefed by the Governor of the Central Bank and the regulator and to have reports laid before it which it would be invited to consider.
This proposal looks like a whitewash, a secretive concoction put together by Government. I contend that the Taoiseach, as leader of his party, is afraid to have the type of inquiry that the public wants, not in the interests of any individual but because of the ineffective regulatory reforms and lax approach the Government adopted and the policy positions driven principally by the Taoiseach in his former position as Minister for Finance, which put the economic ship of State on the rocks.
Deputy Enda Kenny: The only type of inquiry that will be fruitful, beneficial, transparent, accountable and that will be seen to work is one that has cross-party support in the Houses of the Oireachtas. I challenge the Taoiseach as Head of Government, if he is serious about sorting these matters out in such a way that the system will then be watertight and the same problems cannot recur, to leave aside his current proposal and to work with the Opposition parties to put in place an inquiry that will deal with these matters without crossing the lines of the Director of Corporate Enforcement or the fraud squad but in an effective manner such as the Oireachtas has proved in the past can be done. There must be that type of effective investigation into the regulatory and policy failures that occurred, and all those internal and external audit situations, in the public interest. It is important for our personal security, our international reputation and to ensure we have a functioning banking system.
Will the Taoiseach work with the Opposition parties to establish, by agreement, an Oireachtas committee with the capacity to deal with these matters in the way we know it can be done?
The Taoiseach: I reject Deputy’s Kenny’s political assertions on a whole range of fronts in respect of these matters. First, the Government has always said it will give careful consideration to this issue and that it requires such careful consideration. That is why we have come forward with our proposal. Second, we do not wish to cut across existing investigations, whether of a criminal or regulatory nature. Third, we wish to ensure that the Government, the Central Bank and an independent expert of stature will look at all aspects of this issue, including the back[31]ground to and causes of the current banking and financial crisis. The documents arising from that process will be published and the Oireachtas will have hearings into those reports. Moreover, in consultation with the Oireachtas, we will agree specific terms of reference arising out of those recommendations from eminent persons whose integrity will not be questioned by anybody in the House. That will enable a commission of investigation to be established.
Far from what has been suggested by Deputy Kenny, this is a tried and tested mode of investigation that has brought results in the public interest in other matters and can also do so in this case. Once that publication has been brought forward, the Oireachtas or the appropriate committee may have further hearings on it. That is the view of the Government as to how we should proceed. We will put in place a timely, cost effective, proven procedure in order to ascertain the facts of the situation and the background to and causes of what has occurred and to learn whatever lessons are to be learned for the future as a result of that expertise being available to us.
Deputy Enda Kenny: There is no mention in the Government’s publication of further hearings. It refers to the Oireachtas being briefed and reports being laid before the Houses for their consideration. In the public mind, the Government’s publication is the response of insiders for insiders designed to protect insiders.
Deputy Enda Kenny: That is not the way it should be. The situation that has blown up in the faces of hundreds and thousands of people arises in the context of a situation where we were told on many occasions that our banks were the best capitalised in the world. Yet a High Court judge said yesterday he was astonished at the laxity of approval of loans including one for €550 million. As leader of the Opposition, I attended, with party colleagues, a briefing by representatives of Anglo Irish Bank in November 2008 where we were given so-called facts that were completely and utterly untrue in respect of the work being carried out by that bank. When I asked whether there was anything else we should know about the bank, I was told there was not. Three weeks later serious revelations began to unfold.
The Fianna Fáil Party is being branded in the public perception as having been involved in some type of secret deal because of a fear of the truth that will emerge in respect of the regulatory and policy failures that occurred, many of which were conducted in the course of the tenure in government of the Taoiseach’s party. If the Taoiseach is interested in rectifying that he should look to the inquiry conducted by the late Jim Mitchell in regard to DIRT. That committee worked on the basis of findings from the then Comptroller and Auditor General and did its work in a timely fashion and with great cost effectiveness. This House should not be sidelined to irrelevancy by a Government publication that says it can only talk about issues long after they have been considered by a commission of investigation set up by the Government.
An Ceann Comhairle: Does the Deputy have a question for the Taoiseach?
Deputy Enda Kenny: The Taoiseach was involved in making policy decisions that in part have resulted in so many people facing negative equity, unable to pay their mortgages and being completely screwed by the banks when they seek credit. The Taoiseach must insist, in everybody’s interest, that our Parliament may inquire with proper accountability, transparency and effectiveness into the regulatory and policy failures which led to the current situation. That is extremely important. What the Taoiseach has done, however, is to condemn himself to being perceived as secretive, operating behind closed doors and whitewashing the truth so that the public will never discover it.
[32]An Ceann Comhairle: Will the Deputy put a question to the Taoiseach?
Deputy Enda Kenny: That approach has been deemed by the public to be a self-protection racket. The Taoiseach should not be afraid of the truth. He has said on many occasions that he stands over every decision he has made. Now is the time to prove it by working with the Opposition parties to establish an inquiry that is open, accountable and transparent and which will deliver in the public interest.
A Deputy: What we do not want is a cover-up.
The Taoiseach: Political jibes and attacks are no substitute for substance.
Deputy Michael Creed: The Taoiseach has a conflict of interest, that is the problem.
The Taoiseach: Deputy Kenny has just displayed his incapacity to look objectively at any aspect of this issue. We need people with expertise who will objectively assemble the facts and on the basis of those facts enable the Oireachtas to deal with them and to come forward with whatever recommendations they wish based on whatever proceedings are proposed in the appropriate Oireachtas committee. That is what needs to be done.
In regard to the Deputy’s attack on me, I have no problem with co-operating with an inquiry. Every Member of this House will assist in whatever way he or she is required to do in looking at the background to and causes of the banking crisis. I am no exception and I will willingly and fully co-operate in that respect. The point I have made is that the Government has decided, in the interests of not cutting across existing investigations, to utilise a proven means of investigation. Only last December the Deputy stood in this Chamber praising the commission of investigation procedure in terms of how it did its work on another important matter of public interest. That commission was able to uncover problems that were hidden in this society for decades. There is the capacity under that system to appoint people of expert ability to deal with these matters. All the documents that will emerge from this process will be available for public and Oireachtas scrutiny and further consideration and work by the latter as it sees fit. That is the way to proceed, namely, in a timely way that is cost effective and that will ensure matters will be dealt with properly and appropriately. We will take it from there. It is the Government’s belief that that is the way we should proceed.
Deputy Eamon Gilmore: When I asked the Taoiseach just before Christmas about holding an inquiry into what happened in the banking sector he was very reluctant to agree that there should be such an inquiry. He informed us today that he and the Government have given the matter careful consideration. That is true. They have given it very careful consideration. In the face of the Labour Party motion that is before the House tonight they have come up with a cleverly designed amendment that is calculated to make this an inquiry in name only; to keep it firmly behind closed doors, to drag it out for as long as possible and to exclude political accountability. What the Labour Party is proposing, and what the Fine Gael Party has proposed, is essentially a two-stage process, one which would involve a specialist investigation that would establish a book of evidence-type of document that would then be the subject of examination by an Oireachtas committee.
What the Government has proposed in its amendment is not a two-stage process but one which is three, arguably four stages long, designed to drag it on for as long as possible. I have a copy of the statement made by Senator Boyle in recent days in which we are told the Minister for the Environment, Heritage and Local Government, Deputy Gormley, put a few principles to the Taoiseach that the Green Party had agreed on, that the inquiry would be “public, open and have Oireachtas involvement”. I am quoting directly from Senator Boyle. The inquiry the [33]Taoiseach is proposing is not public, it will be held in private. It is not open, it will be conducted behind closed doors and it will have only a minimal amount of Oireachtas involvement. If the Minister, Deputy Gormley, thinks he has a compromise, it is one which replaces his call for a public inquiry with a concession of two private inquiries instead. That is totally deficient. First, it is three stages, arguably four if one includes the stage where the Governor of the Central Bank will be reporting on his own institution. The inquiry will be dragged out. I accept the Taoiseach has included dates for completion of each stage but if one takes the commission of investigation, for example, it will be set up in June, then one has the summer holidays. The Taoiseach says it will report within six months. We can safely predict that the first report from that commission of investigation will be to seek additional time.
Deputy Pádraic McCormack: After the election.
Deputy Eamon Gilmore: By the time that commission of investigation eventually reaches conclusions, we will be told, as we were in the case of the Murphy and Ryan reports, that we have to wait until persons who are named or identified in the report have seen the draft and have an opportunity to respond to it, all of which will put it safely beyond the next general election, which is where the Taoiseach wants to put it.
Deputy Pádraic McCormack: That is the catch.
Deputy Eamon Gilmore: In case the Taoiseach did not get it, he has amazingly excluded himself in his previous role as Minister for Finance and his Department from the inquiry. According to the amendment the Government has produced, these reports will consider the international, social and macroeconomic environment which provided the context for the recent crisis in the banking sector. There is no mention of the political or governmental environment, the role of the Department of Finance or the Minister for Finance, namely, the Taoiseach when he was in that capacity.
Deputy Michael Creed: Was there a conflict of interests?
Deputy Jim O’Keeffe: Afghanistan.
An Ceann Comhairle: Does the Deputy have a question?
Deputy Eamon Gilmore: I wish to ask the Taoiseach specifically why the Department of Finance and the Minister for Finance have been excluded from the remit of this so-called inquiry. Why, for example, does it say that this inquiry will investigate banking up to September 2008? What does up to September 2008 mean? Does it mean 31 August? If it does, does that not exclude the very month in which the Government introduced the guarantee on the banking system? If that is only a drafting mistake, why would one in any event end it at September 2008 when several significant events happened after September 2008 which would now be outside the remit of the inquiry? For example, the telephone call from Anglo Irish Bank staff to the Financial Regulator in October indicating that the bank was manipulating its balance sheet and that the figures they had were not real numbers.
The amendment the Government has proposed to the Labour Party motion tonight is a dodge. It is an attempt to replace what we in the Labour Party, Fine Gael, the public, the Governor of the Central Bank and most responsible opinion are looking for, namely, an inquiry into what happened to our banking system and for it to be conducted openly and in public. The Government is replacing that with a privately conducted behind-closed-doors three or four stage exercise that will be dragged on until the Government gets to the other side of a general election.
[34]The Taoiseach: Again, I reject the contentions made by Deputy Gilmore. First, on the question of the holding of an inquiry, I said it did require careful consideration. Absolutely. Issues require to be urgently dealt with by Government in the coming weeks and months on the restructuring of the banking system, the transfer of assets to NAMA, and the need to ensure that the recovery and stabilisation we are seeking to achieve in the financial industry is underpinned not undermined. That is the first point.
The second point is a two-stage process. I reject Deputy Gilmore’s contention that it is our intention to have the inquiry continue for a long time. We have indicated the timelines we have in mind.
Deputy Pádraic McCormack: In your mind.
The Taoiseach: If Deputy Gilmore on the one hand wants an inquiry to be prolonged and open-ended, we know how one goes about doing that.
Deputy Tom Sheahan: You sure do.
The Taoiseach: The benefit of the commission of investigation approach is that it provides tribunal-like powers without tribunal-like costs and tribunal-like timespans, which is what the public and everyone in this House is interested in. Deputy Gilmore quoted the Governor of the Central Bank. He indicated at the time that what we want to do is put the finger on any processes and structures in our entire system that contributed to this, namely, the background and causes to the financial problems we have. That is what we are seeking to do. Since then we have been involved in taking decisions, all of which have been opposed, with the exception of the guarantee which was supported by Fine Gael, a guarantee which obtained state aid approval from the European Union, precisely because and for the sole reason that it was necessary to avoid what it said would be a meltdown of the financial markets in this country. That is what the European Commission said. That is how necessary it was, although it was opposed by Deputy Gilmore at the time.
Deputy Eamon Gilmore: Dead right.
The Taoiseach: Those decisions that have been taken by Government have been democratically debated in this House, have been legislated upon and are part of the recovery we are seeking to achieve not only in the financial area but for the economy as a whole. More urgent work needs to be done on that issue in the future weeks and months, which the Government is committed to doing, as the Minister for Finance has set out over the Christmas period. That will be done, but in the meantime an exercise will take place which will be carried out by the Governor of the Central Bank, a person whose appointment was welcomed by all and sundry, rightly so given his reputation, who was not involved in any past activities or policies in the banks. I presume people will accept he is in a position to draw up a report as set out in the Government motion. There will also be an independent expert of international repute who could also consider the broader issues in the banking system itself.
When it comes to those reports being made available publicly and debated in the House or elsewhere within the Houses, the terms of reference for a commission of investigation would be drawn up on the basis of consulting with the Oireachtas and also drawing on the conclusions of two people in whom we have full confidence regarding their integrity and objectivity in this matter. The terms of reference for the commission of investigation are not predetermined at this point precisely because a two-stage process needs to take place. It is for all of those reasons that the Government is anxious to ensure we address the issue.
[35]I accept there is a need for an investigation into those matters. It must be carried out objectively and in a timely way with the required expertise. It will involve the Oireachtas at all stages in terms of meeting with the Governor of the Central Bank and the independent expert at the outset of their work to be briefed on the Oireachtas’s priorities for investigation. An Oireachtas committee will be given the task of considering the findings of the reports when they are concluded. The terms of reference of the commission will be informed following consultation with the Oireachtas. The report of the commission of investigation will be laid before the Oireachtas for its further consideration and action by an appropriate Oireachtas committee if it so wishes. That is where the Oireachtas is getting involved once the facts have been assembled.
Deputy Michael Creed: By somebody else.
The Taoiseach: However, it is clear also, if I may say so, in regard to what Deputy Gilmore has had to say publicly on these matters, even as late as last Sunday, that he has predetermined his decision as to what the situation was regarding this matter, so his objectivity is not really available to us either. Let it be dealt with by people with expertise, let the Oireachtas deal with it on the basis of the facts as they are assembled and let us get on with the business of doing it in a timely and cost-effective way. That is what is required in terms of meeting the public interest, and that is what the Government seeks to achieve.
Deputy Eamon Gilmore: First, nobody has proposed a tribunal style inquiry, so the Taoiseach is trying to shoot down something that has not been proposed at all. What the Labour Party proposed was an Oireachtas inquiry along the lines of the DIRT inquiry and to support that——
Deputy Michael Mulcahy: Abbeylara.
Deputy Michael Creed: Deputy Mulcahy has been given his lines.
Deputy Eamon Gilmore: We published a Bill to deal with the Abbeylara problem.
Deputy Dermot Ahern: As usual, it is not worth the paper it is printed on.
Deputy Eamon Gilmore: The purpose of it was to give an Oireachtas committee the power to deal with that.
The Taoiseach has not told us, first, why the Department of Finance and the Minister for Finance have been excluded from the remit of what is being proposed.
Deputy Eamon Gilmore: He has not explained why this inquiry is to be conducted in private. The last time he made an attempt to say he was not too keen on the idea of an inquiry, before Christmas, he told us that he did not want the time of officials and of people in the banking sector to be taken up with having to deal with an inquiry in these times.
The Taoiseach: I did not say that either.
Deputy Eamon Gilmore: Their time is going to be taken up dealing with these various three stages now rather than having them conducted in public. The Taoiseach has given us no explanation as to why this should be done in private rather than in public. He has cited the precedent of the commissions of investigation leading to the Ryan report and the Murphy report. Those were appropriate commissions of investigation dealing with sensitive matters involving individuals. That is what the commissions of investigation legislation was about; for example, if some[36]body was assaulted or injured in a Garda station, that is the type of issue that could be investigated by a commission of investigation.
This is public business. This is business that affects every single taxpayer in the country, people who will have to pay for years to come for the failings that happened in the banking system. The public are entitled to have this inquiry conducted in public so they can draw their own conclusions and see it carried out as a public exercise.
An Ceann Comhairle: Can we have a question?
Deputy Eamon Gilmore: The Taoiseach has not explained why it is to be conducted in private and why the Department of Finance is excluded. Neither has he addressed the issue as to whether September 2008 is in or not in the terms of this proposal he has put before us, and, if it is in, why is the period after September 2008 excluded from it?
The Taoiseach: The purpose of the inquiry is to look into the background and causes of the financial problems that arose. That is what we are doing. Since they arose, we had to take decisions, including emergency decisions. They have been debated in this House and their merits or demerits, according to how people have felt democratically, have been discussed and debated. Thankfully, the decisions have been taken because we now have a far greater degree of stability than would otherwise be the case if we did not take those decisions. That is the situation. When the governor first brought up these matters, we were asked to look into them and that is what we are going to do. We are in the process.
With regard to the question of exclusion, no one is excluded.
Deputy Eamon Gilmore: They are not in it. There is no mention of them.
The Taoiseach: Sorry, Deputy. If I may explain to the Deputy, no one is excluded. I said I am available at any time in respect of any decisions I have ever taken in public office at any time.
Deputy Pat Rabbitte: It is good he is available.
The Taoiseach: With regard to the idea that anyone is excluded, nobody is excluded. The terms of reference of the commission of investigation will be drawn up based on the reports which will be provided by Professor Honohan and the international experts.
Deputy Paul Kehoe: Will the Taoiseach remember? What will his memory be like?
An Ceann Comhairle: Order, please. Allow the Taoiseach to continue.
The Taoiseach: In the meantime, in respect of any reports they bring forward, if they wish to speak to any personages in this House or elsewhere, we will all be available to talk to them as well. There is no problem in regard to any of that.
Deputy Noel J. Coonan: The Taoiseach told us that before.
The Taoiseach: The point I want to make is that Professor Honohan said at the time that he did not think a witch hunt was the answer.
Deputy Eamon Gilmore: Nobody does.
The Taoiseach: He said we should get to the facts. This is a way of getting to the facts.
[37]Deputy James Reilly: It was a way of keeping the facts behind closed doors.
The Taoiseach: It is clear that the leaders and others in this House are not interested in getting to the facts. They wish to make a political point. I am confident that when the facts are established regarding any duties I had in regard to this matter——
Deputy Eamon Gilmore: In 2015.
The Taoiseach: It will not be in 2015. It will be reported on 31 May in the first report and thereafter we will seek to have it——
Deputy Eamon Gilmore: That is the first bit. Then we will have the next bit and then the next bit.
The Taoiseach: No. I am sorry. The Deputy wants to interrupt me as he has not been listening. I have explained the background to this as far as the Government is concerned. We want to see an outcome that assembles the facts——
Deputy Pádraic McCormack: It wants to bury the facts.
The Taoiseach: ——and allows the Oireachtas to discuss and deal with those matters as it sees fit thereafter. As Deputy Gilmore knows, there are problems in regard to how current committees work, based on Supreme Court decisions.
Deputy Eamon Gilmore: We have a Bill in that regard.
The Taoiseach: We also have a proven means of doing it now, of making sure we proceed right now——
Deputy Eamon Gilmore: The Government is not doing it now.
The Taoiseach: ——with the first two reports that will come in May and thereafter, based on the terms of reference that will arise.
Deputy James Reilly: Now, or in May?
The Taoiseach: That is what we are prepared to do, and we are prepared to come to the Oireachtas, as members of an Oireachtas committee or otherwise, to see what else people want to talk about as a result of it.
Deputy Eamon Gilmore: It is a cover up.
The Taoiseach: The only cover up is the way Deputy Gilmore has sought to cover up his attempt to prejudge and predetermine, as he has been doing all along in regard to this matter, in an irresponsible way.
Deputy Jim O’Keeffe: Methinks the Taoiseach protests too much.
An Ceann Comhairle: Before coming to the Order of Business, I propose to deal with a number of notices under Standing Order 32. I propose to deal with these topics separately and I will call on Deputies in the order in which they submitted their notices to my office.
[38]Deputy Catherine Byrne: I seek the adjournment of the Dáil under Standing Order 32 to raise a matter of national importance, namely, the need to urgently address the growing concern of parents, medics and gardaí over the sale of legal high drugs and the need to outlaw the sale of these products through head shops.
Deputy Finian McGrath: I seek the adjournment of the Dáil under Standing Order 32 to raise a matter of national importance, namely, the urgent need to support the residents of Killester, Artane, Cromcastle, Whitethorn, Coolock, Clontarf and Griffith Avenue with their significant water problems; and to call on the Minister for the Environment, Heritage and Local Government to support and work with Dublin City Council in resolving this crisis.
Deputy Seán Sherlock: I seek the adjournment of the Dáil under Standing Order 32 to raise a matter of national importance, namely, the current appalling condition of roads in County Cork; and to ask the Minister for Transport to increase funding for the maintenance of county and non-national roads in that county, and to examine why the road network in County Cork is severely under-funded and why funding for roadways in Cork is considerably lower per kilometre compared to most other counties in the State.
Deputy Caoimhghín Ó Caoláin: I seek the adjournment of the Dáil under Standing Order 32 to raise a matter of national importance, namely, the need for the Minister for Health and Children to reject the draft HSE plan for 2010 with its proposals for the closure of a further 1,100 acute hospital beds and the cutting of hospital admissions by some tens of thousands, all in the context of ongoing health cutbacks; an increase in the number of patients on trolleys in accident and emergency departments, 426 yesterday compared to 313 at the same time last year; overcrowding leading to the spread of hospital infections such as the recent C. difficile outbreak in the north east; and the continuing downgrading of hospitals, the latest being the decision to close the 40-bed psychiatric unit in South Tipperary General Hospital in Clonmel.
Deputy Fergus O’Dowd: I seek the adjournment of the Dáil under Standing Order 32 to raise a matter of national importance, namely, the need for the Government to explain how our national, regional and local roads will be repaired following the recent atrocious weather conditions and damage done to the transport infrastructure and the economy as a result.
Deputy James Bannon: I wish to seek the adjournment of the Dáil under Standing Order 32 to raise a matter of national importance, namely, the fact that one in five members of the Judiciary has failed to make a contribution towards the pension levy. I first raised the matter of the inequality arising from the exemption of the Judiciary from this levy almost one year ago on 17 February 2009, but the matter has not been resolved. In common with other higher civil servants, the Judiciary is being let off the hook.
Deputy Olivia Mitchell: I wish to raise the following matter of urgent public importance, namely, the threatened air traffic controller strike, which would be significantly damaging to the already ailing tourism industry and to Ireland’s reputation as a country open for business, and the need to avert this protest before it causes further disruption in international travel plans.
Deputy Phil Hogan: Under Standing Order 32, I wish to raise the need for the Minister for the Environment, Heritage and Local Government to outline to the House how people can be [39]assured that they will get the necessary remedies to alleviate and deal with matters relating to road, water and other infrastructure arising from the recent severe weather.
An Ceann Comhairle: Having considered the matters raised, they are not in order under Standing Order 32.
The Taoiseach: It is proposed to take No. 10, motion re ministerial rota for parliamentary questions; No. 11 — motion re referral to joint committee of a proposed approval by Dáil Éireann of the Horse and Greyhound Racing Fund Regulations 2010; and No. 23 — statements on banking.
It is proposed, notwithstanding anything in Standing Orders, that Nos. 10 and 11 will be decided without debate. Standing Order 56(3) shall not apply regarding No. 23 and the proceedings thereon will, if not previously concluded, be brought to a conclusion at 7 p.m. tonight and the following arrangements shall apply. The statements of a Minister or Minister of State and the main spokespersons from Fine Gael, Labour and Sinn Féin, who will be called upon in that order, will not exceed ten minutes in each case. The statement of each other Member called upon shall not exceed ten minutes in each case. Members may share time and a Minister or Minister of State shall be called upon to make a statement in reply, which shall not exceed five minutes. Private Members’ business shall be No. 80, motion re banking crisis.
An Ceann Comhairle: There are two proposals to be put to the House. Is the proposal for dealing with Nos. 10 and 11 agreed to? Agreed. Is the proposal for dealing with No. 23 agreed to? Agreed.
Deputy Enda Kenny: The Ceann Comhairle is in a state of shock that the proposals were agreed. Well done. It is a new year’s resolution.
One of the first acts of the so-called rainbow Government of 1994-97 was to make an exceptional fund available for the repair of county roads. What we witnessed on yesterday’s “Six One” news and the reports from all over the country require that some emergency Government funding be made available to local authorities. The current estimate is €150 million. Did the Government consider this matter at its meeting this morning and is there to be a response from the Minister for the Environment, Heritage and Local Government?
What is the expected publication date of the proposed wildlife (amendment) Bill, which is mentioned in section A of the Government’s legislative list? Is it to be published before the end of March?
I gave the Taoiseach notice of my next questions, as I have raised them previously. Upon the closure of the Dell complex in County Limerick, the Government set up a task force to deal with the consequences and opportunities for the mid-western region. Under the chairmanship of Mr. Denis Brosnan, that task force produced an interim report that was to be debated in the Dáil, but no such debate has occurred. Will the Taoiseach instruct the Chief Whip to make Government time available at an appropriate time so that the House can debate the recommendations in the task force’s report?
May I make a similar request in respect of the publication of the scheme dealing with the lost at sea situation, namely, that time be allocated for a debate in the House prior to the scheme being sent to a committee?
The Taoiseach: On the situation that has arisen as a result of the recent very severe weather, I first want to thank and congratulate everyone who has been involved at local authority level [40]and in the provision of local services on their efforts throughout that difficult period in keeping our road network going and helping communities at risk or vulnerable people who had to be looked after.
Obviously, there is an assessment taking place of the damage done to, as all of us will be aware, the national and regional roads. It would be important that local authorities would give priority to the surface dressing of the parts of the roads affected. Not all roads were affected, but this situation must take priority in the context of their existing allocations rather than looking to restoration or new road developments. Looking to this as a priority is something that local authorities will now need to consider.
The wildlife (amendment) Bill is due this session. I will ask the Chief Whip about any debate that could be arranged based on the Limerick situation.
Deputy Eamon Gilmore: Everyone in the House and the general public are horrified by the scenes of Haiti on our television screens and in newspapers. Will time be provided this week for a report from the Minister? I saw the Minister of State, Deputy Peter Power, at yesterday’s European meeting in connection with this matter, but some time should be provided this week for a statement from the Minister for Foreign Affairs or the Minister of State on what is occurring in terms of Ireland’s contribution to the aid and rescue efforts, as it would allow the House some short time to offer comments and to discuss how an Irish effort might be mobilised, improved or increased to assist in that significant humanitarian horror.
Before Christmas, I asked the Taoiseach about the Government’s proposal to have an election in June for a directly elected mayor of Dublin. I pointed out that our difficulty with the proposal was that we did not know what it was we were supposed to be electing. No legislation has been published or details announced by the Minister for the Environment, Heritage and Local Government regarding what the office will entail and how it will relate to the rest of the local government system in Dublin.
Deputy Seán Barrett: He does not know.
Deputy Eamon Gilmore: I was somewhat surprised not to see the Bill in the Government’s list of legislation to be published this session. It is still in section C of the legislative list, namely, a Bill for which the Government has not yet approved heads. Are there heads for the Bill? Does anyone know what the directly elected mayor of Dublin will do, what type of office it will be and what types of power it will have? Will the Taoiseach encourage the Minister who is not the “Minister for Snow” to tell the rest of the House what this office entails and to supply the House with the heads of the Bill if he has prepared them?
Does the Taoiseach have any indication as to when the heads of the Bill might be before the Government? Apart from the fact that we do not know what the office will entail and even if the Government’s proposal is a serious one with which the Government intends to go ahead, we have reached a stage involving a degree of electoral sharp practice. Were we to have an election in June for something as important as this, we would at least need a better state of knowledge about it than we currently possess. Once and for all, will the Taoiseach clarify whether there will be an office of a directly elected lord mayor of Dublin; will the election be in June; when will we see what the office entails; and can the House see the Bill’s heads, assuming they have been prepared?
Deputy Caoimhghín Ó Caoláin: On the same issue.
[41]Deputy Pat Rabbitte: Where are the Green Party Members? Are they attending a public event?
Deputy Bernard J. Durkan: Are they on the sun bed?
Deputy Michael Creed: Cá bhfuil an glasraí?
An Ceann Comhairle: Deputy Ó Caoláin without interruption, please.
Deputy Aengus Ó Snodaigh: They were eaten for dinner.
The Taoiseach: Where is the Workers Party?
Deputy Aengus Ó Snodaigh: A Sunday roast and greens.
Deputy Olivia Mitchell: They have been washed away.
Deputy Pat Rabbitte: Have they left the Government?
An Ceann Comhairle: Deputy Ó Caoláin without interruption, please.
Deputy Pat Rabbitte: Did they walk out when the Taoiseach stuffed them last night?
The Taoiseach: Did the Deputy buy up all “The Quiet Revolution” books?
An Ceann Comhairle: Allow Deputy Ó Caoláin to proceed without interruption.
The Taoiseach: I went to a book store twice and I could not get a copy of it.
Deputy Caoimhghín Ó Caoláin: Listed No. 51 under section C of the Government’s legislative programme is the local government (office of the Dublin mayor and regional authority of Dublin) Bill. This is promised legislation, for which the heads of the Bill has not yet been approved by Government. Yet the Minister for the Environment, Heritage and Local Government is telling us that an election for this office will be held in June. Such an office does not exist at this point, yet we have been told by the Minister that an election will happen on an undefined date, as of now, but a date in June.
I remind the Taoiseach that the position is that a vacant seat exists in this House. This seat has been vacant for the past seven months plus, but the Government has yet to indicate its intention to call a by-election in Donegal South-West. While the Minister for the Environment, Heritage and Local Government enthusiastically rants on about an election in June for a position that does not exist——
An Ceann Comhairle: The Deputy has drifted from the point he raised. He was speaking about the Lord Mayor of Dublin position but then went on to speak about a by-election; I ask him to return to his original point.
Deputy Caoimhghín Ó Caoláin: Deputy Carey has told us that the Government is too preoccupied to even set a date for a by-election in Donegal South-West. I do not know with what it is preoccupied but it is not with addressing the unemployment reality facing County Donegal where 15,000 people were unemployed in December 2008 and that number rose to more than 20,000 in December 2009. Will the Taoiseach move the writ for the by-election in Donegal [42]South-West? Will he further take notice that if he is not prepared to do so within a reasonable period, I have no doubt the Opposition certainly will do so?
The Taoiseach: Heads of that Bill are currently being circulated. It will be brought to Government for approval and thereafter published and debated in the House. As the Deputy said, there is a commitment in the programme for Government that an election on that matter will be held during 2010.
Deputy Eamon Gilmore: It is due to take place in 2010?
The Taoiseach: The indicative date is June.
Deputy Eamon Gilmore: The indicative date?
The Taoiseach: We have to pass the legislation, the heads of which are being circulated.
Deputy Pat Rabbitte: Perhaps we could do it after we elect a mayor?
Deputy Bernard J. Durkan: It might not happen at all.
An Ceann Comhairle: Allow the Taoiseach to continue without interruption.
The Taoiseach: I join others in the House in speaking of the terrible situation that has developed in Haiti. It is clear extreme hardship and great pain and suffering is being endured by that nation after the terrible earthquake that occurred there last week. The international community is seeking to mobilise itself to meet the scale of a problem that is regarded as unprecedented in emergency aid terms in modern memory. It is appropriate that we take some time in this House during the course of this week to have statements on the situation there, to express our solidarity with the Haitian people and to indicate to our own people the level of assistance and help, in terms of material help, financial help and personnel assistance, that we will try to bring to bear on that situation in an effort to assist these beleaguered people at this time.
Deputy Caoimhghín Ó Caoláin: What of the Donegal South-West by-election? Has the Taoiseach any announcement for the people there?
Deputy Caoimhghín Ó Caoláin: Is the Taoiseach prepared to indicate that a spring by-election will take place in Donegal South-West?
Deputy Bernard J. Durkan: Spring of which year?
An Ceann Comhairle: We were dealing with the first issue the Deputy raised. Could we leave that matter and address it some other day?
Deputy Bernard J. Durkan: Perhaps next year.
Deputy Caoimhghín Ó Caoláin: There is silence on this matter but it is a pressing one for the people of Donegal South-West in the first instance and also for the Members of this House. It cannot fail to have been noticed by many people that there is no appetite on the part of this Government to face the electorate of Donegal South-West——
[43]The Taoiseach: The Deputy should not worry.
Deputy Caoimhghín Ó Caoláin: ——yet a position that does not yet exist is being trundled about for an election in June.
Deputy Pat Rabbitte: We could have the two elections on the same day.
An Ceann Comhairle: I call Deputy Creed.
Deputy Michael Creed: When does the Government expect to publish the animal health and welfare Bill, as agreed in the revised programme for Government? This proposed instrument will abolish and close fur farms and prohibit stag hunting in the future. Will the Taoiseach clarify his response to the Deputy Kenny on the loss at sea scheme report?
The Taoiseach: What was the Deputy’s second point?
Deputy Michael Creed: The lost at sea scheme report was raised by Deputy Kenny but I did not catch the Taoiseach’s reply to that matter. Will there be a debate in the Dáil on that report?
The Taoiseach: Yes. The Whip says he will provide time for that.
In regard to the first matter, we do not have a date for that.
Deputy Fergus O’Dowd: In view of the serious allegations recently that a FÁS manager tried to force a member of his staff to approve dodgy exam results, thus breaking examine verification rules and bringing FÁS nationally into disrepute in terms of the way that some of the results are produced, will the Taoiseach order an immediate investigation into this matter?
The Taoiseach: That is ongoing.
An Ceann Comhairle: There is no legislation on this matter. The Deputy can table a parliamentary question on it and has many other ways of raising this matter.
Deputy Fergus O’Dowd: This is about a specific allegation.
The Taoiseach: I am guided by the Chair on this.
Deputy Fergus O’Dowd: Did the Taoiseach say an investigation into this matter is ongoing?
The Taoiseach: I believe an investigation is ongoing.
Deputy Fergus O’Dowd: Into this specific matter?
The Taoiseach: I believe that, but I am not the Minister dealing with it.
Deputy James Bannon: I opened the Government’s new legislation programme for spring 2010 with a degree of anticipation only to note that the national monuments Bill is still languishing in section C of it. Can the Taoiseach indicate if the words “publication expected in 2010” will carry more weight than the words “publication expected in 2009”? This Bill was due to be published in 2003. Can the Taoiseach give a guarantee that it will come before the House during this year or at least during the latter half of it?
Deputy Pat Rabbitte: It is widely anticipated.
[44]The Taoiseach: Draft heads of that Bill have been circulated. If the Deputy is awaiting that legislation, I advise him that to avoid disappointment in terms of making a contribution to that legislation, perhaps he would cast his eye over some other legislation as well.
Deputy Brian Hayes: The House agreed the Second Stage reading of the Student Support Bill more than 22 months ago and the Taoiseach wrote to me about this prior to the Christmas period. The Minister for Education and Science said over Christmas that he supports the principle of one body giving grants to students rather than the 33 proposed in the Bill. Is it the intention of the Government to withdraw the Student Support Bill or what is the Government’s intention in this respect?
The Taoiseach: I understand that Bill is awaiting Committee Stage.
Deputy Brian Hayes: The point is that the Minister for Education and Science has said that he now supports the principle of one agency doing this. Does that not require this Bill to be thrown out and a new Bill enacted? Has this matter come before Government?
The Taoiseach: I will have to come back to the Deputy on the specifics and the Minister’s intentions on this.
Deputy Michael Ring: I have asked the Minister for Health and Children about a matter and I now want the Taoiseach’s help on it. I cannot find the Minister for Health and Children, nor can I get her to take responsibility for anything. This matter relates to the prescription charges Bill. As the Taoiseach is aware, the administration of medical cards for those aged over 70 has been removed from the regions and centralised in Dublin. There is an ongoing dispute about this. People cannot get through to the office by telephone. Those over the age of 70 are worried about their medical cards and they are waiting for months to be notified about them.
An Ceann Comhairle: Is legislation promised in this area?
Deputy Michael Ring: Yes, there is the prescription charges Bill. Those with medical cards are to be charged for prescriptions, even though they are entitled to a medical card but they cannot get it because nobody in the office in Dublin will answer the telephone and nobody will take responsibility for this matter. I have written to the Minister and to Professor Drumm and the only reply I got from the Minister is to the effect that she has no responsibility for this. I have not even got a reply from the Professor Drumm, the real Minister for Health. Will the Taoiseach intervene and not have this abuse of the elderly who are worried about their medical cards and whether their nursing home care is being paid? Their chemists and doctors tell them that there medical cards have not been renewed and they do not have medical cards even though they qualify for them. It is an abuse of the elderly and I want something done about it.
The Taoiseach: That Bill is on the A list and it should be dealt with shortly.
Deputy Michael Ring: Will the Taoiseach talk to the Minister for Health and Children regarding a debate on the other issue?
Deputy Bernard J. Durkan: Notwithstanding the absence of a certain Minister with responsibility for the environment and his continued absence in this House on the Order of Business, I respectfully suggest that somebody might send the relevant Minister a note to the effect that issues that occupied the minds of members of the public during the past six to eight weeks are sufficiently serious to warrant his appearance in the House on the Order of Business on the first day of this session in 2010.
[45]An Ceann Comhairle: The Deputy is expanding the Order of Business to provide for that.
Deputy Bernard J. Durkan: There is a list of impressive legislation, from six to eight, on the pink order paper. We note them, but there are other important issues.
During the last session I and other Members raised questions about the company law consolidation and reform Bill and we were told it was not possible to indicate when the Bill would be published. As this legislation is urgently required and has been for some time, would it be possible for the Taoiseach to indicate when it might be likely to come before the House?
I and other Members also asked about the collective investment schemes consolidation Bill. The Bill was No. 46 on the Government legislation programme in the last session; it is now No. 45. We were told that publication was expected in 2010; now it is expected in 2011. What happened in the meantime? What frightened the Minister and those drafting the Bill to cause them to defer it in that fashion?
My last question pertains to the Multi-Unit Developments Bill 2009, which was supposed to progress in tandem with the landlord and tenant Bill. The former has been already abandoned in the Seanad, awaiting Committee Stage. Discussions are taking place between the various stakeholders, as the Taoiseach previously informed the House, but we do not see any evidence of progress. Since many of the——
An Ceann Comhairle: The Deputy is anticipating the debate on the Bill.
Deputy Bernard J. Durkan: No; I am talking about the Bill that is on the Order Paper. When is it likely that the Bill will come before the House in a realistic fashion, given that many of the residents of such multi-unit developments have found themselves up to their necks in water in the past six weeks?
Deputy Olivia Mitchell: Or without a roof.
The Taoiseach: We are still preparing amendments to the Multi-Unit Developments Bill based on submissions and on the Second Stage debate. The company law consolidation and reform bill will be published later this year at the earliest. I understand it is a massive Bill. The collective investment schemes consolidation Bill will be published next year rather than this year because consultations are taking place with the Department of Finance, and the Minister has other legislative priorities in the immediate future. There is no date for the landlord and tenant Bill.
Deputy Bernard J. Durkan: What about the Multi-Unit Developments Bill? I did not hear that part.
Deputy Dermot Ahern: It was the first one mentioned.
An Ceann Comhairle: It is currently in the Seanad, I am advised.
Deputy Bernard J. Durkan: I did not ask the Taoiseach where it was.
An Ceann Comhairle: If it is in the Seanad it is a matter for the other House.
Deputy Bernard J. Durkan: I am sorry; it is not. It is a matter for this House.
Deputy Olivia Mitchell: It is a matter for the Government.
Deputy Bernard J. Durkan: This Bill was promised five years ago in various shapes and forms.
[46]To what extent have discussions taken place — as he has previously stated in the House — between the stakeholders, whoever they are——
An Ceann Comhairle: We cannot have an extensive debate on this matter on the Order of Business.
The Taoiseach: I mentioned the Bill in my reply. The Deputy may not have heard it.
Deputy Bernard J. Durkan: I did not.
The Taoiseach: I am sorry. I spoke first about the last Bill the Deputy mentioned.
Deputy Bernard J. Durkan: Yes. It would be helpful if the Taoiseach could speak up a little. I am becoming hard of hearing in my old age.
The Taoiseach: I am sorry. Amendments to the Multi-Unit Developments Bill are being prepared in the Department based on consultations which have taken place and on the Second Stage debate in the Seanad.
Deputy Jimmy Deenihan: Following the closure of Dell this time last year, the Tánaiste set up a task force under the chairmanship of Dennis Brosnan, which reported last September. We have asked on numerous occasions in the House that this interim report be debated. Is it possible to allow time to discuss the report? The task force will meet with local representatives next Friday and I believe its members are becoming disillusioned because their proposals have not been considered by Government. Is it possible for us to have a debate in the House on the report?
The Taoiseach: I told the leader of the Deputy’s party earlier that it was a matter for the Whips.
Deputy Olwyn Enright: The Taoiseach will be aware that as far back as 2003, Fine Gael published detailed proposals for the vetting of those working with children, both in a paid capacity and as volunteers. In light of reports today that only one third of our teachers have been vetted, will any urgency be given to the national vetting bureau Bill, which is currently in section C of the Government legislation programme?
The Taoiseach: I understand that is being dealt with by the Minister of State with responsibility for children, Deputy Barry Andrews. There are complexities in the Bill, but it is receiving priority in the Departments concerned.
Deputy Joe McHugh: As the Taoiseach is aware, the Adoption Bill 2009 will go through the House on Thursday. With the passage of this Bill, the Hague Convention will be ratified. Up to 80 couples who are attempting to adopt from Ethiopia and Russia are currently in a transition phase, but after the ratification of the Hague Convention both of these countries will be excluded. I ask the Taoiseach to intervene and implement a transition arrangement to accommodate and facilitate these couples, many of whom have been already disappointed by the breakdown of the bilateral agreement with Vietnam.
I am surprised the Minister for Enterprise, Trade and Employment did not correct Deputy Ó Caoláin when he announced that 15,000 people were unemployed in Donegal.
Deputy Caoimhghín Ó Caoláin: That was the figure more than 12 months ago.
[47]Deputy Joe McHugh: As the Deputy should be aware, that figure is 20,000.
An Ceann Comhairle: We are on the Order of Business. That is nothing to do with legislation.
Deputy Caoimhghín Ó Caoláin: I am sorry, but the Deputy was not listening.
Deputy Joe McHugh: In addition, I thank the Taoiseach for holding off on the announcement of the by-election because Fine Gael is holding its convention on 12 February.
An Ceann Comhairle: That is for another day.
Deputy Eamon Gilmore: And the Labour Party on the fifth.
The Taoiseach: I am sure, in the best tradition, it will be the strongest possible candidate that comes through.
Deputy Billy Timmins: Is that a reflection of the Taoiseach’s thoughts? If Fianna Fáil has a good candidate, as we do, it will be all right.
The Taoiseach: It is just a bit of humour between me and Deputy McHugh. We get on well.
With regard to the Adoption Bill, I am aware of the situation to which he refers, as is the Minister of State, Deputy Andrews. The Minister of State has been in touch with various groups to discuss this matter. We will use our best endeavours but I do not wish to raise expectations or suggest that a serious problem does not arise. I am acutely aware that many people have invested much time and hope in the adoption process only to find their adoptions may be more difficult to finalise because of the legal situation. The Minister of State is acutely aware of this, as are other members of the Government and all of us in the House. We must try to assist as best we can and in a humane way, given the limitations of what can be done.
Deputy Thomas P. Broughan: As the Taoiseach is aware, the year has opened with a series of appalling assassinations in my constituency. Is the Minister for Justice, Equality and Law Reform planning any further measures or resources for the Garda Síochána to allow it to combat drug-fuelled crime? In the recent budget, the allocations of many anti-drug groups were slashed——
An Ceann Comhairle: This does not relate to promised legislation. The Deputy will have to find another way of raising this issue. There are so many other ways.
Deputy Thomas P. Broughan: This is the only time I see the Taoiseach. These groups work to combat drug use, but the Government has slashed their budgets by a third and they will be cut to zero next year.
An Ceann Comhairle: Deputy, you may raise this issue as a matter on the Adjournment or in a parliamentary question. There are so many ways.
Deputy Thomas P. Broughan: The end result is that my constituents are faced with desperate murders on their streets and the Government does not seem to be doing anything about it.
Deputy Bernard J. Durkan: Hear, hear. It is oblivious.
The Taoiseach: I commiserate with the families of the victims in recent instances in which there has been a callous disregard for human life. The Garda is carrying out rigorous investi[48]gations of the killings and persons have been charged with murder in respect of two of them. I do not want to go into detail about those instances, but the Garda Commissioner has kept the Minister for Justice, Equality and Law Reform briefed on events. With regard to the recent tragic stabbings, the Minister has been advised that Garda investigations are well advanced.
The Garda faces severe challenges in dealing with gangland murders. Often, it receives no co-operation from the associates of those affected. In some cases, persons who have been identified by the Garda as being at risk, rather than co-operating with it, seek to thwart the Garda so they can get on with their gangland activities.
It was against that background last year that the Minister, Deputy Dermot Ahern, introduced a series of strong anti-gang legislative measures, of which the Deputy will be aware.
Deputy Bernard J. Durkan: Will he implement it?
The Taoiseach: The Criminal Justice (Surveillance) Act facilitates the use as evidence in trials of material gained by secret surveillance. The Criminal Justice (Amendment) Act provides for trying certain crimes involving criminal gangs in the Special Criminal Court unless the Director of Public Prosecutions directs otherwise. It introduces several new organised crime offences with maximum prison sentences of 15 years to life, such as involvement in organised crime and directing or controlling a criminal organisation. It simplifies the procedures relating to extension of time for questioning of suspects and increases the penalties for intimidation of a witness or a juror. The Minister is publishing a DNA Bill today, which also will prove invaluable in the fight against serious crime. Legislation on the use of knives and similar weapons is extremely robust and heavy penalties are already in place. Last year, the Minister piloted through the Oireachtas the Criminal Justice (Miscellaneous Provisions) Act, which introduced a maximum penalty for possessing a knife in a public place from one to five years and gave the Garda extended power of search without warrant in respect of knives and offensive weapons. Quite apart from the legislative response, the Garda has the resources available to it when dealing with this serious issue.
I acknowledge to the Deputy that this is an issue about which there is universal concern throughout our society and not only, as he will be acutely aware because of recent activities, in his own constituency. I assure him that everything possible can and will be done to bring those who have been involved in such heinous murders to justice.
Deputy Billy Timmins: While the Taoiseach expressed sympathy to the residents of Haiti earlier, I wish to ask him a couple of questions. First, will he join with me in extending sympathy to the relatives and friends of Andrew Grene, an Irishman who holds Irish citizenship and whose body was recovered this afternoon in that country? Second, will he ask the Minister for Foreign Affairs to urge his colleagues at European Union level to make available the European Union battle group, which has a humanitarian role, to go to assist in the area if necessary? The United Nations General Secretary has sought assistance in the form of additional troops and personnel and the European Union has a ready-made body to do that.
The second issue pertains to the roads and was raised earlier. As the Ceann Comhairle is quite rightly about to inform me, it is on the Adjournment tonight.
An Ceann Comhairle: Yes, I was just going to do that.
Deputy Billy Timmins: Will the Taoiseach ensure that the Minister for Transport will be available for the Adjournment debate tonight? Simply, during the recent weather crisis——
An Ceann Comhairle: Deputy Timmins is anticipating——
[49]Deputy Billy Timmins: ——the Government abdicated its responsibility.
Deputy Bernard J. Durkan: Hear, hear.
An Ceann Comhairle: Deputy Timmins is listed as a contributor.
Deputy Billy Timmins: A photo opportunity on the steps of Government Buildings is not adequate.
Deputy Bernard J. Durkan: A guest appearance.
An Ceann Comhairle: The Deputy is listed as a contributor.
Deputy Billy Timmins: I refer to complete and utter chaos and to a Government in exile without either a plan or structures.
An Ceann Comhairle: The Deputy will be making all those points later on.
Deputy Billy Timmins: There was nothing but a photo opportunity on the steps of Government Buildings, which simply is not good enough.
Deputy Bernard J. Durkan: Hear, hear.
Deputy Dermot Ahern: The Deputy was nowhere to be seen.
An Ceann Comhairle: I call on the Taoiseach, briefly.
Deputy Billy Timmins: It simply was not good enough. In response to the Minister for Justice, Equality and Law Reform, I drove into Dublin that night——
An Ceann Comhairle: Deputy Timmins, please.
Deputy Billy Timmins: ——and did not see a single garda until I came to the gates of Leinster House.
Deputy Dermot Ahern: The Deputy was missing.
Deputy Billy Timmins: While the Minister can smile away, he is responsible for them.
The Taoiseach: First, I join Deputy Timmins in again sympathising with the Grene family. I understand that the body of Mr. Grene has been recovered today in the United Nations headquarters building. He was a person who was committed to public service and to helping the poor and deprived and was well regarded in the United Nations. The Government sends its deepest sympathy to his family. Other Irish citizens who are there at present have been involved in much good work in recent years, one of whom I know personally. I wish them well and hope they are able to contribute positively in the present as they have done in the past. I make the point that the Government established the rapid response corps in the aftermath of the tsunami and some personnel from that corps have gone to Haiti in recent days. While it is a small number, the people concerned are committed and have expertise in areas that would be of assistance in the emergency which has enveloped that country.
Third, I will not repeat my earlier comments to Deputy Kenny regarding the response of local authority personnel when dealing with what was an extremely difficult situation over Christmas. The emergency co-ordination unit, despite criticism from the Opposition, worked hard, co-ordinated well and ameliorated what could have been an even worse situation.
[50]Deputy Tom Sheahan: When will legislation be brought before the House to give a legal footing to the plebiscite that was held in Dingle-An Daingean more than three years ago? The plebiscite was held more than three years ago and resulted in a 98% majority in favour of giving back——
An Ceann Comhairle: The Deputy should table a parliamentary question on this matter.
Deputy Tom Sheahan: ——An Daingean its dual name of Dingle-Daingean Uí Chúis. It has been more than three years since the plebiscite was held.
Deputy Bernard J. Durkan: The auld triangle went Dingle-An Daingean.
An Ceann Comhairle: We will move on.
An Ceann Comhairle: Seanad Éireann has passed the Houses of the Oireachtas Commission (Amendment) Bill 2009 without amendment, the Forestry (Amendment) Bill 2009 without amendment, the Companies (Miscellaneous Provisions) Bill 2009 without amendment and the Financial Emergency Measures in the Public Interest (No. 2) Bill 2009 without amendment.
An Ceann Comhairle: The Select Committee on Justice, Equality, Defence and Women’s Rights has completed its consideration of the Criminal Justice (Money Laundering and Terrorist Financing) Bill 2009 and has made amendments thereto.
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): Molaim an rún:
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): Molaim an rún:
An Ceann Comhairle: I call on the Minister for Finance, Deputy Brian Lenihan, to make a statement under Standing Order 43. The Minister has ten minutes and the spokespersons for Fine Gael, the Labour Party and Sinn Féin, who will be called in that order, also have ten minutes.
Minister for Finance (Deputy Brian Lenihan): It goes without saying that the worst financial crisis this country has ever experienced requires an inquiry. The Government fully recognises that the public is entitled to a full examination of what went wrong in the banking system. More than that, an inquiry is needed to restore international and domestic confidence in our banks. As a country, we must understand the origins of this crisis to ensure that we do not make the same mistakes again.
Those mistakes required the Government to introduce the bank guarantee scheme in September 2008 and to make some significant interventions since then to ensure financial stability. These measures include the recapitalisation of our two biggest banks, namely, Allied Irish Banks and Bank of Ireland, the nationalisation and recapitalisation of Anglo Irish Bank, the establishment of the National Asset Management Agency and the recent introduction of the eligible liabilities guarantee scheme.
The State has been required to pour significant and scarce resources into our banks. As I have stated previously in this House, the banks owe a large debt of gratitude to the taxpayers of this country. It is essential that we learn the lessons of our recent experiences as we set about the task of refashioning our banking system to meet the needs of the economy and perform its proper duty to the citizens of this country. I welcomed the comments of the Governor of the Central Bank, Professor Honohan, when he appeared before the Oireachtas Joint Committee on Economic Regulatory Affairs just over a month ago and I made public that welcome on 4 January 2010. The Governor stated that he expected the Oireachtas would authorise some form of inquiry to try to understand the deeper underlying causes of this crisis in order that wider lessons could be learned for the future. The Government agrees with the views of Professor Honohan on the benefit and value of such an approach. The Government also agrees fully with the Governor on the need to engage a broad set of expertise to examine the events of recent years and to design and implement an investigation in such a way that a deeper understanding is arrived at of the root causes of the systemic failures that led to the need for extraordinary support from the State to the domestic banking system.
At its meeting today, the Government approved a framework for an inquiry and for its subsequent consideration by Dáil Éireann. The inquiry will have two stages. First, the Government will commission immediately two separate reports. One will be from the Governor of the Central Bank on the performance of the functions of the Central Bank and the Financial Regulator. A second will be from an independent “wise” man or woman with relevant expertise to conduct a preliminary investigation into the recent crisis in our banking system and to inform the future management and regulation of the sector. These reports also will consider the international, social and macroeconomic policy environment which provided the context for the recent crisis. I expect both reports to be completed by the end of May this year and laid before the Houses shortly thereafter.
[52]The second stage of the inquiry will be the establishment of a statutory commission of investigation, which will be chaired by a recognised expert or experts of high standing and reputation. The terms of reference for this commission will be informed by the conclusions of the two preliminary reports. The aim will be for the commission to complete its work by the end of this year. Its report will be then laid before the Oireachtas for further consideration and action by an appropriate Oireachtas committee.
We are all aware the global international crisis has created extreme stress for the financial system worldwide. The drying up of funding in international credit markets and the huge write-downs of securitised assets has generated a financial shock, which has resulted in the most negative economic conditions since the Second World War. Ireland’s exposure to the sharp deterioration in international financial conditions has been significantly exacerbated by practices that failed to address unrestricted credit growth in the domestic banking system. This growth was facilitated by access to wholesale financial markets with no exchange rate risk and low interest rates and was both driven by, and facilitated, an unprecedented property boom and an unsustainable increase in property development lending.
The proper functioning of the banking system is critical to the economy and, therefore, must be protected by the Government. We are not alone in this. Governments all over the world have had to make substantial interventions to protect their banking systems. These interventions have been difficult for all governments. They are not popular, they are not easy to explain or understand but they are necessary. In all the steps we have taken as a Government, our overriding objective has been to maintain a functioning banking system that will ensure a flow of credit to viable businesses and households in this economy. Today’s Government decision to commission two preliminary reports, to be followed by the establishment of the statutory commission of investigation into banking matters, will form another important step in the continuing reform of our regulatory systems and structures, as well as the internal governance of our financial institutions.
These reviews will not take place in a vacuum. They will build on important work being done at international level. Over recent months substantial analysis of the failures of the banking sector has been undertaken elsewhere. The analysis the Government will commission will complement and build upon, for example, the European Commission’s high level group on cross-border financial supervision — the de Larosière report — and the UK Financial Services Authority’s Turner report. These reports have recommended an extensive programme of reform of financial regulation at EU and international level which is being put in place. These reforms will make a major contribution to underpinning the stability of the financial system both in Ireland and in the EU in the future.
The commission of investigation will examine and report on the causes of the systemic failures such as corporate strategy, governance and risk management in the Irish banking sector. The terms of reference for the statutory inquiry will be shaped by the conclusions of the two preliminary investigations and in consultation with the Oireachtas but, clearly, a number of broad themes ought to be examined thoroughly. These include the performance of individual banks and bank directors where wrongdoing and bad and lax practices have contributed considerably to the crisis; the performance and structure of the banking system generally; the performance of the regulatory and Central Bank systems; and the response of the relevant Departments and agencies, including the linkage between the banking crisis and overall economic management.
The two preliminary reviews will prepare the ground for the formal inquiry and will ensure it is effective and efficient. Over the next number of months, significant work needs to be [53]completed to return our banking system to health. We need to complete the first stage of the critical “transfer of assets” to NAMA; agree the banks’ restructuring plans and their future capital requirements; and progress consolidation in the building society sector. I remind the House that the banking system is still fragile and we are not out of the woods yet. It is important that the work I have outlined is completed before we turn our attention to the formal inquiry we all agree must take place. That is why the Government is proposing the multistage investigation, which will be completed by the end of the year.
The Oireachtas will be involved at each stage of the planned inquiry process. An appropriate Oireachtas committee — the Joint Committee on Finance and the Public Service seems the most relevant — will meet both the Governor and the independent expert at the outset of their work to be briefed on the members’ priorities for investigation. The two preliminary reports, when completed, will be laid before the Houses of the Oireachtas and the Oireachtas committee will be invited to consider the findings in the reports. The terms of reference and draft Government order to establish the statutory commission will be laid before the Oireachtas and the commission’s report, when completed, will be laid before the Oireachtas for further consideration by the committee. It is open to the appropriate committee to hold public hearings on the report.
There has been some reference to the DIRT inquiry as a possible model for the inquiry into the financial crisis but the investigative work in that inquiry was done by the Comptroller and Auditor General. An Oireachtas committee cannot constitute itself into a court of judgment on private individuals and cannot make determinations on disputed issues of fact. That is why the Government decided to adopt the commission of inquiry mechanism, which all Members will agree has done a good job in its performance to date in regard to the inquiry in the Dublin archdiocese. It could be argued that an inquiry should ideally await the conclusion of existing criminal and regulatory investigations into wrongdoing at certain financial institutions. I accept the public appetite for known and determined consequence for those who have engaged in wrongdoing in these institutions and these investigations may take a significant time. However, the Government is firmly of the view that the approach I am setting out will allow these criminal and regulatory investigations to proceed without the possibility of prejudice.
The Government’s agreed approach will allow for the timely completion of expert, authoritative and structured examinations of the financial crisis. It will provide a comprehensive analysis, which will enable us to understand the origins of the crisis and help us to learn lessons which will inform our future management of the banking sector. The framework I have outlined will be transparent and constructive and it will involve the Oireachtas at each stage. It will be efficient and cost effective and, most of all, it will restore confidence in our banks in order that they can play their full and proper role in promoting economic recovery.
Deputy Enda Kenny: I am sure I speak on behalf of all Members in welcoming the Minister back to the House. I wish him every success in his personal challenge. I apologise to the House for the absence of Deputy Bruton but he had undertaken to fulfil an engagement in County Cork today some time ago and he agreed to do so.
We are having this debate arising from a realisation by the Government that there should be an inquiry into the banks, which has been driven by a public perception of a false summit between the Green Party and Fianna Fáil. I had the doubtful privilege of launching the Edelman international trust barometer for Ireland in 2008. It deals with trust in corporate affairs, business people and public life. For the first time ever, political representatives were above bankers on the ladder of trust. Bankers were trusted less than politicians arising from all the difficulties in recent years.
[54]Banks have moved on in other countries and people are in jail. I am conscious two inquiries are under way under the auspices of the Garda fraud squad and the Director of Corporate Enforcement but Fine Gael has made it clear, as has the Labour Party, that it is not intended that the inquiry we seek should infringe on either of these inquiries, which will result in the law taking its course. They should proceed more quickly and where prosecutions are necessary, they should be taken with the law taking its course.
The principle has been accepted by the Government that there should be an inquiry but the difficulty is it has sidelined the Oireachtas entirely. The Minister said the Oireachtas will be consulted and briefed by the Governor of the Central Bank. Nobody has a difficulty with Professor Patrick Honohan but he may need an inquiry into the Central Bank because it was one of the organisations telling us for a number of years that we had the best capitalised banks in the world and everything was rosy in the garden. Nobody would quibble with Professor Honohan’s credentials or his capacity to do the job we expect.
The banking crisis has resulted from the biggest failures in Government, public administration and private sector governance in the history of the State. If we are to move on from this economic disaster, the Dáil must be seen to fulfil its responsibility and to ensure accountability by those in positions of trust and responsibility. According to the IMF, the direct losses for Irish shareholders and taxpayers from the banking crisis are likely to exceed €24 billion. It will be many months before we know the final cost of recapitalising our broken banks and many years before we know the final bill from NAMA. However, it is clear that a very large proportion of these costs will fall upon taxpayers who had neither a moral nor a legal responsibility for the mistakes that were made; that is why the Oireachtas should be able to step into the breach and conduct this inquiry. People are furious because the taxpayer is being made to pay the piper for the damage that was done.
Shareholders in the banks certainly suffered. Many of the big earners who managed the reckless expansion have been able to go off into the sunset with massive bonuses untouched and golden handshakes to top it off. Their parting shot is always that nothing unlawful was done. The indirect costs of our failed banking and regulatory system for our country are likely to be much larger in terms of the damage inflicted by the credit crunch on jobs, small business and our international reputation for economic management. This is why the collapse in employment and the economic depression in the country have been and will continue to be far longer and deeper than those suffered by advanced economies since the Second World War.
Some of the causes of the Irish banking and wider economic crisis are known in broad terms. Put together, the dangerous concentration of the banks’ loan books in property, reckless loan to value ratios for first-time buyers and a banking model that became 60% reliant on foreign sources of liquidity created a toxic mix that lost the confidence of investors, depositors and the money markets following the collapse of Lehman Brothers. The banks themselves must accept responsibility for these mistakes. The property bubble was pumped up by a drive on the part of banks for short-term profits without proper regard for the risks involved. Consider the words uttered yesterday by a High Court judge who stated that he was astonished at the laxity and flexibility in giving out loans of €550 million merely on a letter of security. The banks, their managers and the boards failed miserably in their responsibility to invest savings prudently and to manage risk responsibly with obviously catastrophic consequences for hundreds of thousands of people throughout the country.
Traditionally, bankers received respect, which they earned through an austere frugality in a sphere that was always shrouded in mystery. When I was young, bank managers were looked up to because they managed people’s money. Whether it was greed, flexibility or all following [55]one out the gate they all went down the same road. People in the country completely lost the run of themselves. The austerity and mystery have been stripped back to reveal a banking system that was easily corrupted by buccaneer methods, that paid obscene bonuses for short-term profits and that had comfortable auditors and boards that offered no resistance. Many of the bank boards did not know what was going on and could not have known what was going on because they were not in possession of the information to ask the relevant questions. There is no appetite among the taxpayers of the country to return to that type of comfortable world.
It is clear that the lending process, corporate governance, accounting, risk management, compensation and funding practices and systems of financial institutions must be examined carefully by a bank inquiry as must accounting practices and the quality of internal and external audits. That is where the fundamental failures occurred. The debt-fuelled property bubble did not occur in a political or policy vacuum. It is much too convenient for the Government to blame the financial crisis on greedy and incompetent bankers alone. This crisis has as much been a failure of the politics of Government and public administration as it was of the private markets. Confident that their institutions were too big to fail, bankers always had an in-built incentive to take excessive risk. That is why it was the responsibility of the Government and its regulators to protect the economy from excessive risk-taking and speculation by banks whose failure would inevitably have systemically damaging consequences for the wider economy, and that has now happened.
Far from protecting economic stability and the taxpayer, those in public office — and the Taoiseach was the Minister for Finance for a number of those years — actively encouraged the debt-fuelled property bubble or did nothing to stop it. Short-term electoral gain and not long-term prudence was the order of the day. Toothless regulation, too many tax breaks for property speculators, developer-led land planning, inflationary fiscal policies, overt political support from the main governing party for the property development industry and the arrogant dismissal of any critic who warned of the dangers all added to this situation.
This is why we need a bank inquiry and why I differ from the Minister for Finance. I genuinely believe that the committee of the Dáil should set the terms of reference for the collection, collating and scoping of information on the chronological series of events that led to the current situation. The Dáil committee, composed of respected and experienced people would then be able to analyse and determine, supported by proper resources, the causes of those regulatory policy situations. I state this with all of the understanding that the House and personnel within it have this capacity. This is the difference between what the Government proposes and what the Opposition requires in terms of accountability, transparency and the stepping up to the plate by the Oireachtas to state that we can do this, as happened years ago following the provision of information by the Comptroller and Auditor General when the DIRT inquiry was conducted by Jim Mitchell.
If we are to restore any sense of trust and capacity in politics it is imperative to have an all-party committee conduct this inquiry, as I know it can. Supported by proper resources it would make the system watertight so the Minister can tell international banks and lending institutions, the European Central Bank and the European Commission that we have analysed what happened in our banking system, that we know the regulatory failures in the Central Bank and the regulator’s office and that we have ensured that it cannot happen again.
We propose to have a committee of inquiry at the same time as the Central Bank and the regulator’s office are to be amalgamated by law, without even finding out what were the fundamental reasons for failure. It is partly due to politics because the same party has been in government for all of this. However, it is also partly due to a looseness that crept in, where [56]rolled-up interest of €60,000, €70,000, €80,000, €100,000 or €200,000 was allowed to accrue on a weekly or monthly basis and where people lost the run of themselves.
Those being asked to pay are the ordinary taxpayers whose pensions have been wiped out, who are in negative equity and whose mortgages are unable to be paid. They are living in distress and with the pressure of something outside their control. It may well be that in the second or third quarter of this year the European Central Bank will raise interest rates as other European countries progress economically. We are very much behind the curve. I would have expected the Taoiseach and the Minister for Finance to step to the front and state that we can do this as an Oireachtas. Let the committee set the terms of reference for the experts to gather the information but let the politicians deal with the issues, analyse them, make recommendations and implement them in the interests of everyone in the country.
Deputy Joan Burton: On behalf of the Labour Party I want to be associated with Deputy Kenny’s remarks on wishing well the Minister for Finance.
I am not surprised at the terms of reference of the three-part bank inquiries that we are to have. It follows in the great tradition of Deputy Bertie Ahern and Charlie McCreevy in that it attempts to pull the wool over the eyes of most ordinary taxpayers who have a raw hunger and desire for some explanation for the suffering they are going through, whether that is losing their jobs or pension savings or the collapse of their small business. I was talking to somebody the other day who runs a small engineering firm and who employs 80 people. The firm is letting 40 people go now because it cannot get any access to finance.
The banking inquiry announced today by Fianna Fáil is a clever sidelining of the issue until the far shores of the aftermath of the next general election are reached. I think less of Fianna Fáil for that. As for the Green Party, much of Senator Boyle’s talk in the different television and radio studios was hot air. It would be very difficult for ordinary members of the Green Party to identify any of this as an open and transparent inquiry. However, as far as the ordinary person on the street is concerned, this is a Government that could not get salt or grit, that has left large parts of the west of Ireland under water, and which has left many parts of the country without water for at least the past two weeks. Why should we expect that such a Government would leap with alacrity to find out what actually went wrong with our banking system? Why should we expect it to find out how to avoid that happening again and how to restore our international reputation for probity in finance? At the moment, our extra borrowing costs are running to about €1 billion a year due to the premium we are paying over German bond market rates, as a result of the failures of the Irish Government and the collapse of the Irish regulatory and banking systems. Why should this Government be particularly concerned? What is €1 billion between friends? Last year, the €7 billion that was pumped into Anglo Irish Bank and the two main banks was almost double what was asked for in cuts from social welfare recipients in the budget delivered before Christmas.
I disagree with the references to de Larosière and Lord Turner in the UK. Our banking failure had one unique feature that was not related to the derivatives and complex financial instruments that were underneath the global financial collapse. We had a banking system with two banking institutions that were effectively rogue institutions, but because they were allied with the most powerful political protectors, they became a model for our two long-standing banks, whose greedy and incompetent managements those banks decided to copy. Anglo Irish Bank was a small niche bank which supplied developers who then funded Fianna Fáil. In that circle of self regard and in that toxic triangle lay the ruin of our system. A small minnow, Irish Nationwide Building Society, was able to do the same thing on a micro-scale, so we only have [57]to pick up €8 billion of its toxic debt and pump in €1 billion-€2 billion into that building society to merge it with another mutual institution.
Our banking crisis is home grown. As it has a unique and important political element, it is wrong for this Government to endorse the approach it is taking. Politicians, whether they are liked or not, are elected by the people to comment on what went wrong. While there are administrative lapses, regulatory collapses, and actions by the boards of management and directors of banks that are utterly reprehensible and properly the subject of inquiries and potential criminal investigations, there is a political dynamic at the core of our banking failure. The Government’s motion tries to divorce the political causes of the failures that are inextricably linked to the general business and financial ruin that faces this country. It has done itself a grave disservice, because it is only when we are able to say, post-Peter Bacon and the ruling Fianna Fáil Party, endorsed by a compliant Green Party, that we no longer support crony capitalism, that we will recover our ratings in the international bond markets.
The Government has made a catastrophic error of judgment on Ireland’s future with what it decided to lay before this House as terms of reference. I sympathise with the Taoiseach, who feels he was landed in this alphabet soup by his two predecessors, Charlie McCreevy and Bertie Ahern, because he inherited the tax breaks and so on and there was not much he could do in four years at the Department of Finance. That is possibly a defence that the Taoiseach can credibly put forward. It is not a defence that ordinary people accept, but I understand that it is a narrative that might apply to his understanding of how he got here. However, he is wrong to deny this country a proper and open bank inquiry.
Most democracies have inquiries. If a plane crashed tomorrow in Shannon Airport or Dublin Airport, a commission of inquiry would be automatically established to find out what went wrong. If there was a major natural disaster here, there would automatically be an inquiry. The banking collapse is the biggest financial disaster that has hit this country since the Second World War or since the economic war and the civil war, yet we are to be denied an open and accountable inquiry in the Oireachtas. There are open inquiries in democracies. Dictatorships refuse to have open inquiries and go for closed inquiries and trite explanations. The Government is not serving this country well with what it proposes.
A financial crisis inquiry commission was set up in the United States last week. The appointees to the commission are former office holders who are independent and bipartisan. The Democratic Party commissioner, Mr. Angelides, said that “we start with the belief that the financial crisis is not a past tense phenomenon.” It is not a past tense phenomenon. The notion that the Government would stop the remit of this inquiry up to September 2008 is an outrage. The phone calls in the autumn of 2008 which went between the Financial Regulator and people in Anglo Irish Bank were widely reported in the media. Mr. Willie McAteer, the finance director at that bank, told the then head of the Financial Regulator, Mr. Patrick Neary, that the bank would be “managing its balance sheet”, to which Mr. Neary is famously recorded as replying, “Fair play to you Willie”. This is a “fair play” bank inquiry, in which anybody who has a fondness for cuteness in Irish culture will be able to say: “Fair play to Brian and Brian. They fixed it.” As a consequence of the Taoiseach and Minister for Finance doing this for them — foolish as they are — the bankers will repeat much of the bad behaviour that systematically led us into this mess. They may not yet be up for bonuses and may stay their hand a little but as soon as they are out of the traps and telling their little scéalta in private with no one to ask the hard question or be awkward towards them, they will be back with the billion dollar bonuses they awarded themselves. The shareholders of the banks of Ireland will not thank the Government because they are not taking the patient into recovery but leaving us with a banking system which will limp on and perhaps have another disaster before the year is out.
[58]Deputy Arthur Morgan: Before I start attacking him I, too, extend my sincere best wishes to the Minister for Finance and his family at this difficult time.
The Government’s proposal is a whitewash before the inquiry even starts. What we are being offered are some token clippings in the form of the proposal to have a presentation by the Governor of the Central Bank. While Professor Honohan enjoys the respect of all Members of the House, that is not enough. We are also offered further token gestures in the form of some level of scrutiny at the beginning of the process and the process of an Oireachtas committee. The involvement of a committee of the House is not sufficient to get to the bottom of what transpired. The real business will be done by a commission.
A number of questions arise regarding the proposed commission. Who will be appointed to it? We know its members will be hand picked by the Government and will, in all likelihood, be highly sympathetic to the Government. We are expected to believe, however, that the commission will be independent and produce a warts-and-all report. I do not believe it will do so.
On the issue of cost, why not have an Oireachtas committee carry out the inquiry? Given that this is our job, why would Members not take off their jackets, roll up our sleeves and get stuck in to producing a proper report on the events of the recent past? There is no reason we could not do so. An Oireachtas committee would have further advantages in that it would be efficient, cost effective and would not produce a whitewash report as it would operate on an all-party basis. Is the reason that it might not bring in the result the Government would want published, particularly if it were to report close to an election period?
Credit control is one of the issues an inquiry would have to address. We know about the 120% mortgages which were provided as many Deputies are dealing with people in their constituency offices who were unfortunate enough to receive one of them. At the time such mortgages were available, I called for a cap of the order of 90% to be placed on mortgages. It was clear, however, that no one would listen to my proposal.
We know about the inappropriate lending practices in which the banks engaged. A few months ago, a plasterer came into my office and told me that four years ago, when he was 50 years old, he secured a 20 year mortgage. A 50 year old man in the construction sector was expected to work and pay a mortgage until he was 70 years of age. This is but one example and Deputies will be aware of many similar cases. Recently, for example, I asked a man who came to my office with similar difficulties how he had managed to secure such a large loan. When I asked whether his bank had required him to produce paperwork, he replied that he was not asked either for paperwork or evidence of income. All the lenders wanted to do was lend money and then wait and see.
One of the critical reasons the Government has not proposed to have an inquiry carried out by an Oireachtas committee is that the Taoiseach was Minister for Finance during a substantial part of the period in question. That is the real obstacle to an Oireachtas committee carrying out the investigation.
The Director of Corporate Enforcement, Mr. Paul Appleby, appeared before the Joint Committee on Enterprise, Trade and Employment this afternoon. In response to a number of questions on Anglo Irish Bank, Mr. Appleby indicated that approximately one third of his staff were involved in investigating the bank. This is a huge waste of resources which should never have occurred in the first instance and with proper governance and correct Government policy, it would not have occurred. It is a scandal that money is being wasted by having public servants investigate Anglo Irish Bank.
Mr. Appleby also stated he had no idea when his office’s investigation will be complete but that it would be at least a number of months before it is even near completion. The Garda fraud squad is also carrying out investigations at significant cost to the taxpayer. The problem [59]is due to downright bad policy and poor governance which are also evident in the proposal contained in the Government amendment to the motion proposed by the Labour Party on Private Members’ business this evening. The investigation proposed by the Government is a whitewash before it even starts.
We have seen examples of how business is done in the United States. We had, for instance, the sight of those involved in wrongdoing in Enron being marched away in handcuffs. While it may be becoming a cliché, justice is done quickly whereas in this country it clearly depends on the scale of corruption involved. If one robs a few cents, one will go to jail but if one robs several million euro one will not go to jail. On the contrary, one will be given a golden handshake and a large pension into the bargain to make sure one is tucked away in comfortable surroundings for a considerable period.
Deputy Ó Caoláin reminded me of a case involving a constituent of his, a woman who swiftly ended up in prison because she was unable to repay a meagre credit union loan. If she had worked for Anglo Irish Bank or another one of the scam banks which operated throughout the period in question, she may have been given a large loan. We are all aware of the household names who were involved in substantial, grossly illegal transactions and are now enjoying their golden handshakes and substantial pensions.
It is reasonable to have expected the Green Party to have had an input into this proposal, perhaps by acting as a watchdog when the terms of reference for the inquiry were being set. I would love to be in government with the Green Party because at every test it has proved to be a walkover. One need only consider what it did in the case of the National Asset Management Agency. Before the recent budget Green Party spokespersons informed us they were concerned about education. What did the party do for classroom assistants? As every Deputy will be aware, cutbacks are under way in this area. What about the cutbacks inflicted on people with disabilities as a result of the Green Party assisting the Fianna Fáil Party in government in everything it does? The party caved in again on the proposed inquiry.
Notwithstanding the position of the Green Party, my party will insist on an open and accountable inquiry which should be anchored in an all-party Oireachtas committee with proper scrutiny powers. I commend the Labour Party on its Private Members’ Bill to be tabled this evening which provides the foundation for such a process. It is a pity that this laudable legislation is being hijacked by an amendment that does not meet any of our requirements.
On an issue raised by Deputy Gilmore, why will the inquiry only address the period until September 2008? The deposit guarantee was introduced at the end of that month and Anglo Irish Bank was nationalised in January last year. Why will this period be excluded from the investigation? What is the reason for the wording of the Government amendment? It raises substantial concerns for me and my colleagues. I have no faith in what is offered. It is a whitewash before it begins. While there is still time, I invite the Minister to award the establishment of this inquiry to an Oireachtas committee charged with getting to the bottom of this carry-on. That should ensure the dreadful policies of this Government will not be repeated. The people of this State pay the price for those policy failures every day and perhaps their children will too, because of the debacle called NAMA. I hope the Minister will consider turning his policies around, ensuring such committees are established and conducting open and accountable business in this House.
Minister of State at the Department of Foreign Affairs (Deputy Peter Power): When the Governor of the Central Bank came before an Oireachtas committee and suggested there should be an inquiry into the scandal that beset the Irish banking and financial system in recent years, he reflected the widespread views of our citizens that we need to find out what caused the scandal, who caused the scandal and how we can avoid it happening again. Anyone in this [60]House listening to the Governor of the Central Bank agrees with what he said, as does the Government. The simple question in this discussion is how we achieve the objective.
There are several ways we could achieve the objective. We could go down the traditional and tainted road of having a public tribunal of inquiry. I was taken by the description used by the Minister for Finance of the inquiries as barrister fattening exercises, a comment many people will agree with. We can choose an Oireachtas inquiry. I have participated in several those. We could also opt for a staged approach to this inquiry, as suggested by the Government. I agree with the last suggestion.
The scandal requires effective and efficient examination. With all due respect to Members of this House, this cannot be carried out by the House. We must remember that other countries have had serious banking crises in their financial systems. We are not the only country to have suffered this crisis but the public demands accountability as well as an efficient, effective and cost-effective inquiry.
Let us examine the model proposed to examine this via the Oireachtas, principally proposed by the Labour Party. I was interested in the contribution made by Deputy Burton in this respect. I was a member of the committee investigating the Dublin and Monaghan bombings. We tried to establish the causes of the Dublin and Monaghan bombings and tried to establish where culpability lay. The advice to that committee again and again was that we could not make findings of culpability against anyone, nor could we ask questions about culpability in so far as it might suggest culpability. Every time we tried to ask an individual such a question, before we could get a response, our esteemed senior counsel, Mr. Mohan, advised us that we could not ask the question because the individual could go straight to the High Court and have our inquiry shut down. That this could happen fatally undermines the efficiency and effectiveness of an Oireachtas inquiry.
There is another more important reason an inquiry such as that would not be effective. Deputy Burton has formed her opinion on what she refers to as the toxic triangle between members of the Government, directors of banks and property developers. Under the Labour Party proposal, these individuals would come before a committee of this House. Is it credible that directors of banks would come before an Oireachtas committee where tough questions would be asked? These tough questions should be asked but questions impugning their standing or integrity would not be allowed to stand. Such witnesses would run straight to the High Court and the Supreme Court and 12 months later the inquiry would be mired in mud. Members of this House know that.
How do we conduct an efficient inquiry?
Deputy Michael D. Higgins: One gives oneself the powers.
Deputy Peter Power: The mechanism for conducting an inquiry was passed by this House. We recognised a way of doing that so that we could protect the constitutional rights of people and their reputations, which are strongly protected by our Constitution. We must recognise the situation. The commission of inquiry legislation and the report suggested by the Government provides us with a mechanism in which individuals can be cross-examined and adverse findings against those people can be laid before the House. At that stage, when the reports are published, Members of this House can clearly point to certain people and institutions. We can bring those institutions before the House and put it to them that the report of the independent statutory commission, under an Act enacted by the Oireachtas, has made certain findings against these people and their institutions. As politicians and public representatives, we can make them publicly accountable on foot of that investigation. As politicians, we could not do [61]that if we were to start out with an Oireachtas inquiry. That is no disrespect to anyone in this House. I see my constituency colleague, Deputy Noonan, in the Chamber. It has been suggested that Deputy Noonan should head this inquiry. He would carry out a very effective and efficient inquiry but we need someone who can do so armed with a statutory report of a statutory body based on an Act of the Oireachtas making the findings that we want to make as politicians but cannot make. Let us accept the reality we are faced with and try to create an effective mechanism by which we can tackle this problem. The proposal of the Government is to engage international experts, including the Governor of the Central Bank and an international bank expert, to collate the material and provide it to a commission of investigation, including someone of very high standing, which can then bring in the sort of people we cannot bring into this House even though we would like to. This method will get the questions and answers we want. Under such a process, they can compel answers to these questions. As Deputy Rabbitte knows from other inquiries, Members cannot do so.
I also had the privilege of chairing the Committee on Child Protection examining the circumstances surrounding the CC case. We examined what lessons could be learned to ensure that such a situation would never arise again. The same advice was available to us, namely that individuals who we may wish to question cannot be brought before an Oireachtas committee if it involves impugning their integrity. That is the reality of the situation and we must work within that. The Government’s suggestion is an initial engagement with experts and that such experts should come before the Oireachtas so that Members can suggest the road we want to go down, the questions we want to ask and the answers we want to receive. We can then ask for a report to be prepared on that basis and for the report to be handed to the independent statutory commission of inquiry, with all the powers such a committee has to seek the answers. At that stage, we will have our own political and public accountability. That is the most effective and efficient way in which it can be done. The Labour Party has suggested that this proposal is a recipe for kicking this issue beyond the next general election. The timeframes are set down in the Government’s motion. An initial report will be produced by the end of May and laid before the relevant Oireachtas committee. The members of the committee will tell the experts who come before them what they want to arise from the commission of inquiry. That commission will produce a report by the end of the year. The process, which will take 11 months, is cost-effective and efficient. It represents a way of getting the sorts of answers we want. I commend to the House the Government’s proposal to establish an effective and cost-effective commission to examine the banking scandal.
Deputy Michael Noonan: I suggest that 2008 is normally seen as the start of the international banking crisis. The collapse of Lehman Brothers on 15 September 2008 is taken as the kick-off point. When it became clear two weeks later that the Irish banking system was in dreadful trouble, leading members of the Government sat in Merrion Street all night. The following day, the Government introduced emergency legislation to provide guarantees for the banks. As the first Government intervention, it was the subject of a reasonable amount of support in this House. My party accepted the Government’s arguments at face value and decided, in such emergency circumstances, that the guarantee system deserved cross-party support. The same process has since been repeated in the United States. The main banks there have been rescued and inquiries have taken place. Events there have progressed so rapidly that the US banks which were capitalised have repaid to the federal authorities what they were given and are now trading profitably. When I last examined the statistics, I learned that more than 40 bankers in America were in jail. It is clear, therefore, that we have been very tardy. We have been very slow off the mark. Our banking crisis started a fortnight after the US banking crisis. The US is nearly through its crisis, while we are wondering about the establishment of an inquiry.
[62]I think the public wants an inquiry. These issues involve the public intimately. Many people lost their jobs because of the banks. Many people can no longer pay their mortgages because of the banks. Many people have seen their living standards reduced dramatically because of the banks. Many people are seeing their adult children heading for the airports, in order to travel to Australia and Canada with little enough hope of return, because of the banks. There is a feeling among the people I meet, including those in my constituency, that the banks need to be seen to be held to account in public. By getting involved in the legalities of the inquiry, rather than its primary principles, the Government has missed the point. There is public desire to see accountability in public. It is clear that if one wants accountability in public, it is appropriate to provide for an investigation by an Oireachtas committee, along the lines of the DIRT inquiry presided over by the late Jim Mitchell.
I fully agree that there is need for a preliminary phase of this process. No Oireachtas committee will be effective unless it has a kind of book of evidence, in effect, on which to draw. No court case would be effective, regardless of how eminent the barristers are, if it were not argued on the basis of a book of evidence. The same thing applies here. I have no problem with the proposal to provide for a preliminary stage. It is a very good idea. It was done in the case of the DIRT inquiry and it should be done now. I disagree with the suggestion made by my friend and colleague, Deputy Peter Power, that some kind of legal lacuna makes it impossible for an Oireachtas committee to inquire into these events. I do not believe that is correct. The Supreme Court judgment on the Abbeylara case was sufficiently focused. Nothing prohibits an Oireachtas committee from examining the policies, practices and procedures of the banks. Rather than having some kind of witch hunt that puts heads in baskets, we should consider the banking crisis as a failure of policy, procedure and practice. I refer to political policy, oversight policy and lending policy within the banks.
There is no reason an inquiry along the lines of the DIRT inquiry cannot stay on the right side of the Supreme Court judgment on the Abbeylara case. When he was interviewed on RTE radio’s “News at One” earlier today, an eminent senior counsel, Gerard Hogan, stated explicitly that he did not see any problem with such an inquiry. That point has been reinforced by the admirable piece of work produced by Deputy Rabbitte, which deals with another key aspect of the Abbeylara judgment. We have an adequate legal framework to allow for the kind of inquiry the public wants. The Government is missing the point, which is that people need some kind of public catharsis. That will not be achieved by an inquiry that is held behind closed doors, in which people tell their stories in private. Regardless of how eminent the relevant commissioner is, the report he produces and places before the House will be one man’s version of events, based on what he has heard in private. The public will have had no participation in that process — it will not have heard the evidence and will not know why certain conclusions have been reached. Ministers, like politicians of all parties, do not enjoy a high level of credibility at the moment. Bankers have very low credibility. Anything that is produced by means of hearings that take place behind closed doors will suffer from a low level of credibility too.
I will comment on two aspects of the proposal that has been made by the Government. It is proposed that both phases of the inquiry will be required to inquire into events up to September 2008. That is like running an inquest but excluding all the evidence that was gathered at the autopsy. It would be best to ascertain what was happening in the banks on the famous night when certain people came into the Minister’s office in Merrion Street to look for a guarantee. The Minister received advice from the Central Bank and the Department of Finance as the banks made their case. That file would cast more light on the causes of the banking crisis than the files on many other events would. Anglo Irish Bank did not go down until 8 December 2008 and was not nationalised until January 2009. Surely the events that led to the collapse of [63]Anglo Irish Bank are extremely relevant to this inquiry, as are the events that caused the Government to decide to recapitalise AIB and Bank of Ireland. Surely the justification for the recapitalisation of the banks must arise directly from the problems they faced. How better to cast light on the problems of the Irish banking system than to look at those events, in particular? The judgments of the judge of the commercial court, Peter Kelly, are casting huge amounts of light on, and giving us huge insights into, the lending practices of the banks. As such matters relate to the period after September 2008, that false deadline should be removed. The commission, like the expert who does the preliminary report, should not be told to inquire into everything that happened before 31 August 2008 but not to go any further because the Government was taking action after that date and driving on from there.
The second aspect of the proposal I would like to raise is a common feature of the terms of reference of other inquiries. Many speakers have laid the charge that the Government, in effect, is excluding an inquiry into its own actions. It has been suggested that the Government is prepared to consider the macro-economic causes of the banking crisis and the international crisis, but is not prepared to examine what the Taoiseach did when he was Minister for Finance, what the EU Commissioner, Charlie McCreevy, did when he was responsible for banking regulation in Europe, or any similar events. It is normal for a certain provision to be included in the terms of reference of tribunals of inquiry of this nature. There are several precedents for the inclusion of a catch-all provision that ensures that as well as examining certain events, the tribunal of inquiry also examines the adequacy of the response of the Government, the Departments and the State agencies to those events. I ask the Minister, in his reply, to give a commitment that such a provision will be included in this case.
The adequacy of the response of the Government, Ministers, Departments and State agencies, including the regulators, would also be examined. The Minister has not excluded this provision and, clearly, the amendments before us are not terms of reference. The Taoiseach has given his commitment to listen to the views of a committee of the House before drafting terms of reference. I ask the Minister to commit to including this catch-all provision so that the adequacy of his predecessors’ response, as well as those of all relevant Departments including the Department of Finance, can be examined. This would curtail any further accusations that he is attempting to evade political responsibility for these events.
Deputy Michael Mulcahy: An inquiry into the banking failure which occurred over the past two years is essential. I commend the Minister for Finance on the proposals he has drafted for an inquiry. I will adopt the reasoning used by the Minister and the Minister of State at the Department of Foreign Affairs, Deputy Peter Power, both of whom were very eloquent.
If one is a pensioner who has lost a pension, a shareholder who has lost value, a taxpayer who is at a loss or a stakeholder in society who has lost money through this crisis, one is entitled to an inquiry. As the Minister noted in his speech, there is an evident appetite for such an investigation. The debris from this crisis lies all around us. This morning’s newspapers revealed that one developer received loans totalling €550 million without any guarantee. No prudent bank would undertake this kind of conduct. However, the primary reason for an inquiry is to ensure that our system never again collapses. The Spanish philosopher, George Santayana, famously wrote: “Those who cannot remember the past are condemned to repeat it.” I do not think anybody here would wish a repeat of the problems we are experiencing.
Having established the need for an inquiry, the next question to be answered is the form it should take. It should be timely, efficient and successful in bringing forward a set of meaningful and comprehensive recommendations. The public does not want an inquiry which turns into a slanging match between politicians nor does it want the type of procedures proposed by Deputy [64]Burton. It wants a proper inquiry into the past which is carried out by professionals and subjected to the scrutiny of this House so that recommendations can be made for the future.
The motion proposed by the Labour Party is based upon a legal fallacy because it admits that the Oireachtas does not have the power to conduct an inquiry without the introduction of new legislation. I have read the Bill drafted by Deputy Rabbitte and do not believe it meets the requirements set out by Ms Justice Susan Denham when she struck down the Abbeylara inquiry. She made it clear that the Oireachtas does not have the explicit or implied power to make findings of fact detrimental to the reputation of persons. While I am aware Deputy Rabbitte’s Bill makes provision for potential criminal convictions, this is not sufficient to overcome the Supreme Court judgment in the Abbeylara case.
I commend the Minister on the fabulous work he has done. The Government amendment sets out the correct means to establish a meaningful inquiry into this most serious of matters.
Deputy Darragh O’Brien: Certain Members of the Opposition appear to have already made up their minds about the results of an inquiry into the banking system. Deputy Higgins should not be surprised at that.
Deputy Michael D. Higgins: The public has made up its mind.
Deputy Darragh O’Brien: We must approach the matter with open minds. This problem affects all citizens and members of every political party.
The Minister for Finance outlined the most efficient and effective means of inquiring into systemic failures in the banking sector. I hope that certain Members of the Opposition will leave their political differences at the door because the problems we must address are multifaceted and international in nature. The claim is sometimes made that the problem is completely Irish but we have experienced a global financial crisis and many other countries are investigating failures in their own banking system.
The Government’s approach to the banking crisis has been measured and effective. I was unsettled, although not surprised, by Deputy Burton’s comments today. Not once in this banking crisis has the Labour Party supported any Government initiative. It opposed the bank guarantee, the recapitalisation and nationalisation of Anglo Irish Bank and the establishment of NAMA, which will ensure credit flows to small and medium enterprises. These initiatives were opposed simply because they were Government policies rather than on the basis of the country’s best interests.
No bank has been given a free lunch by this Government. At every stage, we have ensured that they paid heavily for the support they received from taxpayers and we will continue to do so. A viable banking system is crucial in terms of supporting jobs and businesses.
Deputy Burton referred to the banking inquiry being conducted in the United States. The conduct and composition of that inquiry has received heavy criticism. The best way to proceed would be through an independent inquiry headed by people with the requisite knowledge and expertise. The Governor of the Central Bank, who will conduct his own investigation of that organisation’s role in this crisis, has said it is better to do things right than to do them quickly.
The method proposed by the Government is the most efficient and cost effective way of getting to the root of the problems that have occurred in the banking system. Everybody is aware that the DIRT inquiry by the Committee of Public Accounts some years ago was based on extensive investigations already undertaken by the then Comptroller and Auditor General. It did not happen overnight, nor should this inquiry. The Oireachtas must base its investigations on fact and expertise provided by those who know the system and who will report to Parlia[65]ment. The Minister has ensured that the Oireachtas will be involved in every step of this process. I commend these proposals to the House. The Government’s plan is the right way forward to deal with the problems that have occurred in the banking system.
Deputy Kieran O’Donnell: I begin by wishing the Minister, Deputy Brian Lenihan, a full recovery. This discussion is taking place because Professor Honohan stated at a meeting last December of the Oireachtas Committee on Economic Regulatory Affairs that he wanted an Oireachtas inquiry into the banking situation. The Minister went to great trouble to hire a person of the calibre of Professor Honohan as Governor of the Central Bank, yet rejected his first key recommendation. Professor Honohan asked for the establishment of an Oireachtas committee but that proposal has not been granted. It is not appropriate for the Governor of the Central Bank to conduct an investigation into his own organisation.
Deputy Brian Lenihan: He did not ask for the establishment of an Oireachtas committee.
Deputy Kieran O’Donnell: He asked for an Oireachtas inquiry; I was there.
Deputy Brian Lenihan: He asked for the Oireachtas to consider setting up an inquiry.
Deputy Kieran O’Donnell: I was at the meeting when he asked for an Oireachtas inquiry. It is inappropriate for the Governor to carry out an investigation into an organisation for which he is responsible. The public requires a clear and unambiguous inquiry into the banking system. The first difficulty with the Minister’s proposal is that the inquiry it envisages will be conducted in private. Second, it is a cumbersome process, comprising a maze of outlets that will not provide accountability in terms of the political process. It is important above all that any inquiry must be public. Moreover, if it does not have a political dimension it will be akin to a wedding without a bride.
One need only look to some of our European neighbours to see how matters were conducted differently there. For example, the Spanish regulator introduced more severe capital ratios for the banks to ensure there was no reckless landing. Why did we have a situation in this State where the Taoiseach, as Minister for Finance, could state in 2005 that there was no problem with the fundamentals of the economy and where no constraints were placed on the degree of lending by the banks? What is required to restore confidence in the banking system is an inquiry that is open, transparent and fully accountable. That can only be achieved through a public inquiry. The public will not accept the Government’s proposal, under which it will take almost a year before anything is achieved. It could take even longer if the various sections seek an extension of time.
Furthermore, the Government amendment to the Labour Party’s Private Members’ motion suggests that September 2008 will be the cut-off point for the report of the Governor of the Central Bank and the independent review, but the Minister’s speech included no reference to September. My concern is that the inquiry will encompass events only up to 31 August 2008, thus excluding the introduction of the guarantee scheme on 29 September of that year and the statement by Mr. Patrick Neary, the former Financial Regulator, at a meeting of the Oireachtas Committee on Economic Regulatory Affairs on 14 October 2008 that, in his view, all the banks were solvent. Within a short period, however, the Minister was obliged to nationalise Anglo Irish Bank. There must be an inquiry into these events of late September 2008 and beyond.
This is a defining moment for the Minister, the Government and this House. The Minister has nothing to be afraid of in establishing a fully accountable public inquiry if he has done nothing wrong. Why is the Government reluctant to establish such an inquiry? There is a view among the public that once the NAMA process is in train, the banks will close the doors behind [66]them, with interest rates increasing and far more severe lending criteria. The public is entitled to a public inquiry. I accept that there must be a scoping exercise at the beginning, and the Government should proceed to consult experts and so on as was done by the then Comptroller and Auditor General in the case of the DIRT inquiry. However, the Governor of the Central Bank should not investigate his own organisation. After the scoping exercise, the Minister must meet the Opposition leaders to agree the make-up of an Oireachtas committee that will conduct public hearings on the basis of those initial findings. It is only in this way that the process will have credibility.
However, what the Minister is putting in place is cumbersome and unwieldy and offers only a veneer of public inquiry. In reality the investigation will be conducted in private and those who are directly responsible for getting us into this situation will not be held accountable. For instance, how could a situation arise at Anglo Irish Bank, which was apparently of systemic importance to the economy of the State, where one individual effectively secured a stake of up to 28% by way of contracts for difference? Did the Financial Regulator know about this? He clearly knew about the 10% stake that was taken by the ten bold individuals, but was he aware of whether those particular shares were financed by the bank itself? Were the margins that arose in respect of the contracts for difference financed by the bank?
Deputy Brian Lenihan: There is an ongoing Garda investigation into these matters.
Deputy Kieran O’Donnell: The public is entitled to know precisely what went on. Any inquiry must ensure public accountability by the banks, the regulatory system and the Government. The Minister said he has nothing to fear from an investigation. I assume he wants the process to have credibility. Members of the Green Party have called repeatedly in recent days for a public inquiry. I will be interested to hear whether the Minister for Communications, Energy and Natural Resources, Deputy Ryan, agrees that what is proposed by the Minister constitutes a public inquiry that will satisfy the requirements of citizens. People are losing their jobs and homes, and small businesses cannot obtain credit from banks. The outgoing chief executive officer of Allied Irish Banks indicated recently before an Oireachtas committee that the bank would not use the NAMA bonds to provide low-cost credit before going on to suggest that it may or may not do so. Yet this is one of the key points on which the Minister sold the NAMA proposal to the public.
If the Minister wishes to have credibility in this process we must all work together. We cannot have a situation where the Government rams this proposal through. That will constitute a waste of taxpayers’ money because the public will not have belief in the system and its confidence in the banking system will not be restored. The Minister has major decisions to make in this area into the future. NAMA is to be established, whether or not we agree with it, and there is the question of further recapitalisation of Allied Irish Banks and Bank of Ireland and possible further injection of funds into Anglo Irish Bank and Irish Nationwide Building Society. How did we get to this situation whereby, to all intents and purposes, in a very short period of time the majority of our banking system could be nationalised. That is the question the public want answered. The only way we will get answers is in an open and transparent way. If we need expertise in terms of an Oireachtas committee, we can bring it in. We were elected to represent the people. This House exists to ensure the views of the public are taken on board. The public will accept no less than a public inquiry. The truth will out. It is extremely important that we find out why we have reached this point.
Acting Chairman (Deputy Johnny Brady): The Deputy’s time has elapsed.
[67]Deputy Kieran O’Donnell: I hope the Minister will explain in his response what are his reservations in terms of a public Oireachtas inquiry.
Acting Chairman: The Deputy is way beyond his time. The Minister, Deputy Eamon Ryan, has five minutes.
Deputy Pat Rabbitte: Will I get a chance to speak?
Acting Chairman: Deputy Rabbitte will not.
Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan): This is the right public inquiry, carried out by public bodies in the public interest in public as well as on the back of proper investigative work.
Deputy Kieran O’Donnell: It is to be held in private.
Acting Chairman: No one interrupted Deputy O’Donnell.
Deputy Eamon Ryan: It is up to everyone in this House to ensure that the investigation is timely, cost effective and that it delivers what we want, which is that we learn the lessons from this banking crisis and that we do not ever allow it to happen again,——
Deputy Kieran O’Donnell: Was the Green Party not seeking a public inquiry?
Acting Chairman: Please Deputy O’Donnell. No one interrupted you.
Deputy Eamon Ryan: ——that we hold people to account who are responsible for it and, crucially, that we bring confidence back to our system, primarily among people in this country but also abroad.
Deputy Pat Rabbitte: Was the Green Party not seeking a public inquiry?
Deputy Kieran O’Donnell: The Minister’s party sought a public inquiry.
Acting Chairman: Please Deputy O’Donnell.
Deputy Eamon Ryan: The method we are setting out is the way in which that can be achieved.
Deputy Kieran O’Donnell: With due respect, was the Minister’s party not seeking a public inquiry?
Acting Chairman: Deputy O’Donnell should please allow the Minister to conclude.
Deputy Eamon Ryan: The investigation has a timeframe. Other tribunals have taken up to ten years to do their work.
Deputy Pat Rabbitte: On a point of information.
Deputy Kieran O’Donnell: Will the Minister outline whether this is a public inquiry or a private one?
Acting Chairman: Deputy O’Donnell should please allow the Minister to speak without interruption.
Deputy Eamon Ryan: This investigation will be cost effective compared to other systems——
[68]Deputy Pat Rabbitte: Will the Minister take a question?
Deputy Kieran O’Donnell: This is a public inquiry.
Deputy Eamon Ryan: ——where they have cost up to €200 million to carry out their work.
Deputy Pat Rabbitte: The Minister said it would be a public inquiry.
Deputy Eamon Ryan: The investigation will be effective and democratic.
Deputy Pat Rabbitte: Will the Minister give way?
Acting Chairman: Deputy Rabbitte, please.
Deputy Eamon Ryan: I will not give way. I have five minutes.
Deputy Kieran O’Donnell: How will it be democratic?
Deputy Eamon Ryan: It will be democratic because at the very centre of it——
Acting Chairman: Please resume your seat, Deputy O’Donnell.
Deputy Kieran O’Donnell: This is a private, cosy inquiry, not a public inquiry.
Deputy Eamon Ryan: ——because at the very centre of it will be the work of an Oireachtas committee that will be required first and foremost to help steer it in the right direction.
Deputy Kieran O’Donnell: The public is entitled to get——
Acting Chairman: No one interrupted Deputy O’Donnell.
Deputy Eamon Ryan: Second, when the initial reports are concluded, they will be considered and acted upon as we move into the proper phase of the commission’s work. When that work is concluded, be it an interim report or a final report, we will conduct the necessary hearings——
Deputy Kieran O’Donnell: The Minister is waffling.
Deputy Eamon Ryan: ——based on the facts that have been found, which an Oireachtas committee would not as easily be able to find, to hold people to account and to ensure we have a cost effective, timely inquiry.
Deputy Joan Burton: In secret.
Deputy Eamon Ryan: The mechanisms set out will achieve those objectives.
Deputy Kieran O’Donnell: It is not a public inquiry.
Acting Chairman: Deputy O’Donnell.
Deputy Eamon Ryan: They will only work if we in this House stop playing political games and start working together in the interests of the people——
Acting Chairman: Please, no one interrupted the spokespersons.
[69]Deputy Eamon Ryan: ——to try to ensure that our banking system never again makes the mistakes that were made in recent years. The investigation needs to examine the regulatory side of the banks, what the banks are doing, while cognisant of the fact that it is the courts which have primary responsibility for convicting people, if appropriate, who have carried out illegal activities within the banks.
It should also look at the macro-economic lessons we have to learn on all sides of this House, in terms of the implications for our fiscal and monetary policies as determined by our membership of the European Union. We in the Green Party are committed to make this process work, to make it public so that there will be appropriate hearings based on facts that are discovered and uncovered according to due process.
Deputy Kieran O’Donnell: The Green Party said it wanted a public inquiry.
Acting Chairman: Please, Deputy O’Donnell. No one interrupted you.
Deputy Eamon Ryan: We have to take account of lessons that we learned in the course of the mini-CTC inquiry, which came to a dead end because it did not have the right structure. We have taken account of the likes of the DIRT inquiry, in which Deputy Rabbitte was involved. One of the reasons that worked is that a similar process was involved whereby a report was delivered first to establish some of the facts, which were then acted upon.
The timelines and the mechanisms that we set out are correct, appropriate and will deliver what we need, which is confidence in the banking system so that we do not make the same mistakes again, and that those who have made mistakes are held publicly to account. That will happen on the basis of the structure that we have set out, but it will require, first and foremost, an Oireachtas sub-committee. The structure of that will be subject to the agreement of the Whips. We must get down to work and stop squabbling over political points to serve the public interest by getting to the real point, which is why this happened——
Deputy Kieran O’Donnell: We need to have a public inquiry.
Acting Chairman: Deputy O’Donnell.
Deputy Eamon Ryan: ——and how we can stop it happening again. That can happen with the structure proposed.
Deputy Pat Rabbitte: On a point of order before the Minister for Finance replies. The record will show that the Minister for Communications, Energy and Natural Resources, Deputy Ryan, said that what we are embarking on is a public inquiry. I give him an opportunity to correct the record because whatever it is, it is not a public inquiry.
Deputy Eamon Ryan: There will be many occasions when the investigation will be done in public as well as being done on the back of investigative work to find the facts.
Deputy Arthur Morgan: Nonsense.
Deputy Eamon Ryan: It is a combination of public work and proper fact finding through the appropriate structure set up by the Oireachtas.
Deputy Joan Burton: No. The Minister is misinforming himself.
Deputy Kieran O’Donnell: No, the Minister is incorrect.
[70]Deputy Eamon Ryan: It is an inquiry carried out by the right public bodies, in public and in the public interest. That is the crucial requirement we have to meet and we will.
Minister for Finance (Deputy Brian Lenihan): The inquiry conducted by Judge Murphy was a public inquiry under the relevant legislation established by this House, which is a public Act of the Oireachtas. I am a little sceptical of some of the Opposition speakers in this debate. The real objective appears to be to continue to use the banking crisis as a political football. That has been the consistent pattern of events in this House for 18 months, with the honourable exception of Fine Gael in regard to the giving of the original guarantee. The steps that governments all over the world have had to take to support their banks are deeply unpopular, extraordinarily difficult to understand and explain but essential to the economic well-being of all countries. The measures we have had to take are amenable to misrepresentation and susceptible to political mischief. Opposition speakers naturally will not lose such opportunities, but the truth is that political circuses in this House for the next year and a half will not secure the future stability of our banking system. It is clear that for some Opposition speakers the economy comes a poor second to this political circus and the pursuit of office.
We have a duty as a Government and as Members of the Dáil to ensure that the origins of the crisis are understood, that lessons are learnt and that international and domestic confidence in the banking system is rebuilt. A major factor in rebuilding that confidence has been the appointment of Professor Honohan as Governor of the Central Bank and Mr. Elderfield as regulator. Let us look at what Professor Honohan actually said in his presentation at the Oireachtas committee on 15 December. He said that the banking crisis was bigger and more complicated than one that could be accommodated by an Oireachtas inquiry. Those were his words to the committee. He went on the say the question would not be sufficiently answered by a judicial inquiry because one is not simply trying to find out what happened and the sequence of events. He said we should think in terms of getting experts, including experts in economics and social science and blend them with politicians and arrive at a panel somewhat like the US congressional panels which consider particular issues on an ad hoc basis. He said, “The crisis is not simply a question of discovering who did what and who knew what. Uncovering the deep roots of the crisis will require expertise and broad social scientific understanding more than merely forensic skills.”
In the presentation made by Fine Gael and Labour, naturally the entire economic problems of this country are laid at the feet of a banking crisis. That is simply incorrect. This country had a completely inappropriate cost structure. That is a major reason we have had an economic crisis and that structure has been addressed in budgetary measures that have been consistently opposed by the parties opposite. Our adjustment in those cost structures has been widely welcomed in other parts of the world and recognised as clear evidence that the Government is taking decisive action to deal with the real economic problems of this country. The banking crisis has made a huge contribution to our difficulties.
The next issue, which was raised by Deputy Kenny, in a very fair-minded way, and by other Deputies, was the extent of Oireachtas involvement and supervision in any inquiry that will take place. Everyone agreed that there should be a scoping exercise. The details of the scoping exercise were announced today in the Government decision. It is clear that there will be scope, in the context of the scoping exercise for Members of the Oireachtas to identify the issues they want scoped. I say to Deputy Burton that I do not know what will be the reaction of various people in the context of the toxic triangle she believes existed between my party, the banking industry and the construction industry, for example. I do not know how they will scope that element into their work. Her comments in this House in that regard, which have been consistent for a long period, show how totally unfit she is to make judgments on this matter as part of an [71]Oireachtas committee because it is clear that she has arrived at a pre-judgment on the very issues she invites the House to consider as part of a committee determination. That is the fundamental difficulty about having disputed issues of fact brought before a committee such as this, in that it is clear that one either has a sharp report between a majority government and an Opposition minority or else one has chaos and confusion. It is open to the Deputy to raise that issue in the context of the scoping exercise.
At the conclusion of the scoping exercise — I accept this was not made clear to the House — it is essential that an Oireachtas committee examines the documents prepared by those doing the scoping exercise, and we are open to Whips’ discussions on this issue. It is not a matter of the Government devising terms of reference for the commission of inquiry in private or in secret, or without regard to the wishes of the Oireachtas. I would see an Oireachtas committee having a vital function in assisting in the formulation of appropriate terms of reference and with regard to where the inquiry goes at the conclusion of the scoping exercise.
Why opt for the commission of inquiry? We all know that if we establish a tribunal of inquiry under the 1920 Act, we might as well sign a cheque for several hundred million euro immediately on the floor of this House. The other option, advocated by Deputy Noonan and, I assume, by Deputy Rabbitte, is to see how far this House could go in examining these matters. However, there are severe constitutional limits, apart from the practical constraints on such an operation.
I conclude by noting that other questions were raised in this debate which I would like an opportunity to deal with. I will avail of that opportunity when I make a contribution tomorrow in the context of the Labour Party motion.
I wish to share time with Deputies Michael D. Higgins, Arthur Morgan and Caoimhghín Ó Caoláin.
An Leas-Cheann Comhairle: Is that agreed? Agreed.
Deputy Joan Burton: The motion concerns what is effectively a Dáil-based inquiry into the events that have led to the collapse of the banking system. We have had an hour or two to consider what the Government has proposed in its amendment, which proposes “to request the Governor of the Central Bank to report to him [namely, the governor will report to himself] on the performance of the respective functions of the Central Bank and Financial Regulator in the period since the establishment of the Financial Regulator up to September 2008 having regard to the statutory powers, roles and responsibilities of the Central Bank and Financial Regulator”.
I wish to make three points in this regard. First, I have much admiration for Professor Patrick Honohan. I welcomed his appointment and I welcome the fact he now holds his office in the Central Bank. However, I have a feeling this is a poisoned pill the Government is passing to Professor Honohan because I find it extremely difficult to understand how he, as the boss and chief executive of the Central Bank, can actually carry out an inquiry that involves the staff, papers and policies of the institution of which he is now the governor. I believe the Government is seeking to put Professor Honohan in an invidious position, which is not helpful to the future proper governance of the Central Bank, and is unfair to him.
If the Government has in mind a mere review which, as it were, points forward to what Professor Honohan, as governor in situ of the Central Bank, has in terms of thoughts about the new Central Bank-Financial Regulator legislation, that is a different issue because that is looking forward. It is not actually carrying out any kind of a review into what happened in the Central Bank from the time there was a turf war between Charlie McCreevy, Michael McDowell and the Department of Enterprise, Trade and Employment as to who should control financial regulation in this country.
[73]There is also the fact that, as the previous governor has been at pains to point out on several occasions, the Central Bank did in various reports include references to its concern about a property bubble. However, I have heard the previous governor comment on many occasions that he was powerless to impact and influence the banks because, if one likes, there was a zeitgeist, a political system in operation here then, led by the former Taoiseach, Deputy Bertie Ahern, and the former Minister for Finance, Charlie McCreevy, which said “Bubbles are good”, “When I have it, spend it”, and “Ramp up the property market, and help to ramp it up even further by means of tax breaks”. Therefore, to ask the governor to make any serious inquiry is, as I said, to put him in an invidious and contrary position because he would be asked to report on, or perhaps review and comment on, papers and people who are on his current staff. I do not see how that proposal would run.
Second, the Government wants “to commission an independent review from a recognised expert or experts of high standing and reputation to conduct a preliminary investigation”. In the Bill which Deputy Rabbitte and the Labour Party have put forward to correct the default in the Abbeylara judgment and the gap or lacuna in regard to powers of Dáil committees to inquire, we have sought to address this issue by providing for a preliminary investigation. As speakers on all sides have recalled, this was also done by the Comptroller and Auditor General in the preliminaries to the DIRT inquiry, which was a sub-committee of the Committee of Public Accounts but held its inquiry pre-Abbeylara. Abbeylara in its particular circumstances drew down a decision from the courts which has cast into doubt the power of an Oireachtas committee to ask questions and to get and require reasonable answers when put in an appropriate framework. The Labour Party, alongside this motion, has offered to the Government in a bipartisan spirit measures which will restore the proper powers of the Oireachtas to make reasonable inquiries into matters of public importance.
According to the Government amendment, these two reports “will consider also the international, social and macroeconomic environment”. It almost sounds like an environmental impact statement. That part is probably attributable to the Green Party, although it does not mean anything.
The Government amendment also states “that these reports shall have regard as appropriate to the de Larosière and Turner Reports”. The point about the de Larosière report is that it is designed to create a European-wide framework. Its French author has in mind a framework which would basically provide for what one might almost call a college of regulation, via and connected to the European Central Bank, which will try to ensure that the European banking system, particularly in the euro area, would not be subject to the kind of destabilisation that was visited on central mainland European countries, although not Ireland, because the reasons for the Irish collapse are absolutely different from the reasons that banks in Germany, Switzerland and so on collapsed.
We are being dishonest with ourselves if we do not recognise the peculiar homegrown banking collapse we have had. Our banking collapse is like what happened in Sweden in the early 1990s and to a lesser extent in Finland, which were caused by homegrown property bubbles. The de Larosière report is simply something to which future Irish Governments are likely to subscribe in a general sense as a reforming process, and in the context of a court of regulators or a college of regulators throughout the EU.
The Turner report obviously arises in a particular context. Lord Turner has been one of the principal advocates for open and accountable critiques of the financial institutions. His personal experience comes from working for a long period in the City of London.
The point is that bankers, wonderful people and all, are serial recidivists. If they sense any let up on the Government’s part or believe the Government wishes to cosy up to them again, [74]they will be out of the traps before one can snap one’s fingers and, as we have already seen, will return to the bonus culture and Gordon Gekko’s “Greed is good” and all of the other slogans that senior bankers have over their desks.
In the United States, the people at the top of Goldman Sachs are making a profound philosophical argument to the effect that, since they have made so much money and repaid the US Treasury for the bailout and more besides, they are entitled to recommence paying bonuses, given the market in the US. Irish banks cannot even put together a rights issue. What shareholder who has been already ripped and stripped by them would contribute tuppence to a rights issue? People who believe they can take comfort from what has occurred in the US should remember that the problems of the United States are different from ours.
I referred to a committee, just one of a number of American inquiries, that has begun its work. That commission is bipartisan and has the power to call and order papers. The Minister of State may have had an opportunity to listen into the Chilcot inquiry in the UK. Its members have been empowered to seek all of the papers, without restraint and as a basis for their questions, of serving and former Ministers and Prime Ministers in order that their country can get an answer as to why they went to war. Our equivalent question is why did our banks collapse and bring ruin to the general public.
This year marks the beginning of the decade in which we will celebrate the Easter rising and our first republic. If we cannot answer questions about our greatest financial collapse, Fianna Fáil should move out as soon as possible. There are those of us who want to see the establishment of a second republic that will have reform at its heart and will seek to defeat the corruption characterising so much of what has transpired during the past 12 years. The Labour Party is determined to embark on this political mission to bring about sustained change as soon as a general election is held.
I wish to address the business of inquiries. During the 1930s after the great crash, there was a major commission in the US called the Pecora Commission. The then financial oligarchs were brought before it in open inquiry. Startlingly, it emerged from their answers that some of the largest oligarchs paid no taxes at all. Finance capital was structured in the US much like it has been structured in Ireland during the past 12 years, namely, people at the top had arrangements that facilitated them in paying no taxes. Consequently, their super profits and accumulation of capital were so extraordinary that, as is usually the case in such situations, they began to believe they were more powerful than any mere democratic forum with all of its faults and weaknesses as well as its strengths.
It is historically disappointing that Fianna Fáil has tried to dodge the bullet of an honest and open inquiry. If we really want to give young people the hope of staying in Ireland and building their futures, we should opt for reform and openness. No matter how wealthy people are or were, they should be invited to come forward and tell their stories. There is nothing wrong with business failure. It is a feature of life in business around the world. People get up off the floor and rebuild their businesses. However, business corruption is wrong, as is a system that distorts a country’s structures, including the tax system and access to credit or finance, and favours the creation of an oligarchy as has developed in Russia. The Government is throwing away an incredible opportunity to have a genuinely bipartisan examination of what went wrong and to face up to the situation. For some current and former members of the Government, this would involve difficult questions because they would need to acknowledge their parts.
On Christmas eve, I received a single sheet in an anonymous letter to which I will briefly refer in my closing remarks. It concerns my old adversary in the finance brief, the then Minister for Finance and current Taoiseach, Deputy Cowen. In recent years, I had two arguments with [75]him. The first was about contracts for difference and what was done to make the Dublin Stock Exchange a casino in which the Quinn family sustained losses through those contracts. This matter must be examined. The second related to the fact that developers were constantly entering into arrangements to ensure that stamp duty could be avoided at the then rate of 9% compared with the 1% payable via a share transaction between companies.
The then Minister and I held long discussions about the wisdom of allowing this. I told him that, when one has no taxation structure in a bubble, no one will benefit. Rather, prices are encouraged to increase. The example I chose was one with which I had become reasonably familiar, namely, the Irish Glass Bottle site in Ringsend. All of this is on the record of the House and committee.
Deputy Peter Power: With respect, he was the first Minister for Finance to start eliminating tax breaks. That is also on the record.
Deputy Joan Burton: We need to find out about this issue. The letter sent to me, presumably by someone in an accounting firm, related to a company called Becbay and how it wanted the arrangements hurried up to be sure of avoiding stamp duty. Anyone who believes we can examine how the bubble was created without looking at the political complicity of Fianna Fáil, the developers and the bankers, led by Anglo Irish Bank, is fooling himself or herself.
An Leas-Cheann Comhairle: The Deputy has two minutes remaining.
Deputy Peter Power: Bipartisanship. Has Deputy Burton decided already? That is not bipartisanship.
Deputy Joan Burton: No. The letter I received, a copy of which I will give to the Minister of State and which I will read into the record, was only an ordinary letter about a commoner garden bit of tax avoidance. It only involved tax avoidance on a deal worth about €500 million and tax avoidance of approximately €48 million. In the whole scheme of things it was not that much. This kind of arrangement was core to why we lost the run of ourselves and why this Government ended up admiring Anglo Irish Bank.
Mr. Justice Peter Kelly talked yesterday about Zoe Developments and arrangements for a €500 million loan all secured on undertakings. The Minister of State present has a legal background. The son of a very prominent developer who has fallen on hard times wrote in TheSunday Tribune at theweekend about how personal guarantees were what banks came to rely on towards the end even though they were meaningless.
A developer in my constituency told me he is only liable to NAMA for approximately €75 million and therefore he is okay. Those are not the kind of figures in which I would deal but he seemed to be able to take it on the chin. The banks were contacting him by telephone to ramp up what he would bid and seek. Unless that area is included in this inquiry, we will simply encourage the bankers to go off as soon as this is over and repeat exactly what they have done to the economy. Perhaps they will be waiting for Fianna Fáil after it is ten years out of office to return to office and let them start all over again.
Deputy Michael D. Higgins: The only personal remark I want to make is to wish the Minister for Finance a speedy and rapid return to full health.
In the short time available I wish to address a fundamental issue. I speak as a political scientist; I am not a lawyer. If at 8.30 p.m. tomorrow Members vote down the Labour Party motion and the Bill at the heart of it, they will do a terrible disservice to this Parliament. I am in a position to know about parliament and its powers. This is an incredibly important moment. [76] What we are deciding to do is a little less than what the Labour Party proposes, which it does on the basis of the history of its party founded in 1912, that chose parliament as one aspect of politics that needed to be treated with respect and that should be used in a transparent and public way. It exercised a trust that there were was no issue that could not and should not be discussed in parliament. My first fundamental assertion in favour of the Labour Party motion is that there should be no aspect or administration of policy that is above parliament, from which parliament should be excluded or of which it should not be the prime agency.
Deputy Emmet Stagg: Hear, hear.
Deputy Michael D. Higgins: I will go further and say, having listened carefully to what has been said, that it is not a correct interpretation of Ms Justice Denham’s judgment to suggest that she said or that the Supreme Court held that the Parliament had no power to institute inquiries. Her judgment is entirely in regard to the Abbeylara case. It is also specifically on the issue as to whether the committee could effectively try somebody or reach a conclusion which was damaging to that person’s integrity, but it did not exclude nor did it place integrity in such a position as if it could defeat policy. What is happening here is the accepting of an under-labourer version of parliament. As one who believes in a rugged parliament committed to transparency, to its public work and to extending and deepening democracy, I go so far as to say that if this Bill, on which Deputy Rabbitte worked and which he produced, was found unacceptable and if we had to go to the extent of having a constitutional referendum on this issue, it would be the right thing to do. One cannot continue when a Member of Parliament, sadly and disgracefully in the case of the Minister, Deputy Eamon Ryan, describes oppositional voices and views in this Parliament, to which we are elected, as squabbles. That was a pathetic indicator of a party that is weak on its commitment to equality and democracy, even if it is strong on the environment. He can reply to that elsewhere and he and I can debate that elsewhere.
The nub of this issue relates to the role of parliament and parliamentarians and then one turns to the role of committees. We spent a great deal of time here recently talking about reform of the parliamentary process. It would be ridiculous to suggest that we would spend our energies deciding whether we would meet at 9.30 a.m. or 10.30 a.m. and would not express ourselves and say that we want no obstacle to be placed in the way of a committee of inquiry. If one considers Deputy Rabbitte’s Bill and examines it in detail, one will note it respects the integrity of the individual and does not dislodge the legal process within the division of powers. However, one could argue the case the other way. Parliamentarians are self-inflecting a wound on themselves by taking an interpretation of the Abbeylara judgment, which is excessive and which cannot be sustained.
Deputy Emmet Stagg: Hear, hear.
Deputy Michael D. Higgins: This is about democracy. If it is the view of the Minister of State that I am wrong, he should test the Bill and, if I am wrong about it, he should test it in a constitutional referendum. Ultimately the public elects representatives and representatives must never be excluded from examining any aspect of policy, its administration or its consequences. On another occasion I will expand on this and say that powers of this House have been given to the NRA, the HSE and elsewhere, which have effectively removed the power of accountability which representatives had. We are the worse for that. I will return to that issue on another occasion.
Regarding what is involved here, what of the concerns of the public, to which all of us return and who view our proceedings? I suggest something else. They would like to believe that the [77]Parliament they elect in a representative sense is capable of seeking and obtaining such expert and technical advice as is necessary to give the accountable democratic decision. They are not saying that those in Parliament must immediately say that they are not competent and should hand sideways, as it were, to an expert opinion that for which the public have elected them. If that is one’s view, one should get out of Parliament. We come in here and seek the expert opinions that are necessary to sustain us in an informational sense and to form a decision, but we take the decision and do not shirk from it. Unlike the Minister, Deputy Eamon Ryan, we take it as much as possible, as the Labour Party is committed, in public to doing, to answer the public’s concerns in a fully transparent way.
The public looking on will consider something else, namely, what would restore Ireland’s reputation internationally. Is the restoration of Ireland’s reputation served by the complex private structure, outlined in the Government’s amendment to the motion, or is it best served by what the Labour Party proposes in regard to giving full public ventilation to all the issues? The Labour Party would not have opposed a scoping report, as I had pointed out, to identify all the complex issues that might exist, but we are insistent on the role of parliament and we believe that we will damage ourselves irrespective of who forms the Government or the Opposition. It is important that we do not lose strength. Our committees are weak. I hope that in future committees being formed will be at arm’s length from Government. A committee system in which the Government of the day retains a majority does not have a sufficient arm’s length distance. In committees in the Scandinavian system or elsewhere, not only does the government not have a monopoly on investigation of or establishing legislation, such committees have autonomy to initiate, amend and change legislation. What we need are parliamentarians who will not say that this is too complex for them or who will not give to an unaccountable body policy decisions that they should be taking or who will say to another group when the public are concerned, as they are now on this issue, that we will have a scoping report. That is all right.
Following that, there will be another wise-man and wise-woman commission which will decide on the great issues that are beyond Parliament. However, they are not beyond the public. I am not particularly interested in the names of the individuals involved, but I am interested in the fact that a political decision was taken to implement light-touch regulation in this country. The Minister who did this later became a European Commissioner and went to various countries in Scandinavia to suggest they should also have light-touch regulation. That fundamental policy decision was taken by an elected representative.
As we face into this long year, the public will ask one question: is this exercise only about, as somebody put it, getting out of the storm? Is it about restoring calm so that the reckless navigation can begin all over again? Or is it, as the Minister remarked — I liked the remark when he made it — about establishing an entirely different culture of banking, politics and regulation? If it is, let us hear from all sides of the House and all political parties that they are in favour of a different system entirely, and that they will oppose any covert or overt attempt to keep the old racket going — and a racket it was. Let us also hear, in the reply to our debate, at least this much: that no individual will be protected in any way and no file will be retained from any of the investigations that are going on.
I am a Member of this House. This Parliament has many defects, but the most outrageous is that tomorrow night at 8.30 p.m. it can decide, without proper analysis, that it should lose the competence to give the lead in an investigation, and lose the opportunity to strengthen its committee structure to give it the power to investigate any matter of public policy.
Deputy Caoimhghín Ó Caoláin: I wish to record, on behalf of the Sinn Féin Deputies, our support of the Labour Party motion and our opposition to what I can only describe as the despicable cop-out of the amendment presented by Government. The inquiry we seek needs [78]to examine and expose in full how the banking sector played a central role in bringing the Irish economy to its knees. It must call to account Government Ministers and the so-called regulators who, instead of doing their duty, maintained a cosy relationship with the banks and, of course, the third element — the top bankers themselves across all institutions.
The Irish public has already poured €7 billion in recapitalisation payments into Anglo Irish Bank, AIB and Bank of Ireland; more than €50 billion will be spent on NAMA; and billions more will be required for future recapitalisation. Yet the public still do not know exactly how or why this situation came about. We should make no mistake about it: the figures I have cited, the true extent of which have yet to be exposed, are only part of the picture. The real cost for individuals and families, for whole communities and sectors of our society, is not reflected in those figures. Cutbacks, pay cuts and the 2010 budget, to name but three, are consequences of these failures — failure of Government, failure of regulation, and failure to oversee a banking sector in which business should have been conducted to the highest standards to engender the confidence of the people.
That is why the inquiry should be concerned predominantly with the failure of regulation and the role that Government played, as well as the conduct of the top management at the banks. The role of external auditors must also be examined. The inquiry must be public. We recommend an all-party joint Oireachtas committee with outside experts brought in to help with the investigation as required. The bulk of the work should be done in public; that is what the people have a right to and deserve.
Why do I place both Government and the regulatory authorities over the bank executives? I do so because I have been a Member of this House for 13 years and I have seen the failure of this Government, in a previous manifestation, to accept the recommendations contained in the report of the Joint Committee on Finance and the Public Service published in 2005. I participated directly in these deliberations, and the recommendations, if the then Government had the wherewithal and the commitment to effect real change, would have had an undoubted effect with regard to the conduct of the banking sector. There would have been protection for whistleblowers and an increase in the maximum fine for transgressions from €5 million to €50 million. We would have seen the continuation of the bank levy and the financial regulator would have ensured that low-income groups had access to borrowing that was equal to those more favoured in Irish society. Much work was put into that report, with the participation of representatives of all parties. It angers me greatly that the Government failed absolutely to grasp the nettle of the disgraceful, repeated ill conduct and bad management of the banks at the time and the subsequent failure of the so-called regulation that the Government put in place.
Deputy Arthur Morgan: In the debate immediately preceding this one, Deputy Mulcahy, on the Government side of the House, said that shareholders — people who had invested in the banks — wanted and were entitled to an inquiry. He said that taxpayers also wanted and were entitled to an inquiry. We all want an inquiry, but the three key words missing from Deputy Mulcahy’s contribution were “open and transparent”. A closed-shop inquiry is useless. We know what will result: absolutely nothing. We accept that if there are sensitive pieces of evidence to be presented, for example, the committee could go into private session by agreement. There is no question about that as applied to an Oireachtas all-party committee. We accept fully the need for preliminary evidence to be produced, similarly to a book of evidence in a court case; that is standard practice. Whatever our aspirations for an inquiry by a commission, we can get some indication from the Government amendment of what is likely to be estab[79]lished. The first paragraph of the amendment contains the type of proclamation that is liable to appear:
SMEs cannot get a red cent from the banks. We all know that from listening to their representative organisations and listening to their owners in our constituency offices and in our social spheres. Yet we are being told the policy being implemented by the Government is excellent. That is exactly the type of nonsense that will come back from any commission report. We are also told about the wonderful work done in recapitalising the two main banks. However, they will need to be recapitalised again. Several billion euro will have to be given to each of those banks in order for them to function in any meaningful way — that is, if they are not to be nationalised by stealth. Here we have evidence of the Government bringing nonsense before the House, in contrast to the very well crafted motion from Deputy Pat Rabbitte of the Labour Party, which I commend.
While the Government’s amendment refers to protection for homeowners, one need only read the newspaper reports on what is happening in the courts. The continuing and growing level of repossession of people’s homes is an absolute scandal. However, the amendment would do justice to Shakespeare, John B. Keane or someone similar in respect of putting together some kind of comic effort. It certainly bears no comparison with reality.
The people are demanding an open, public and transparent investigation into what went wrong. The people and taxpayers of this State are carrying the can for serious Government misconduct bordering on fraudulent policy. They are carrying the can for this and are likely to do so for several generations. This is grossly unfair and is completely unacceptable. If the Government is not listening to Members on this side of the House, I am sure it will get its answer from the public as soon as the latter has an opportunity to do so, namely, as soon as the general election is called.
Minister of State at the Department of Finance (Deputy Martin Mansergh): I wish to share time with the Minister of State, Deputy Peter Power, and Deputies Mattie McGrath and Niall Blaney.
I am pleased to speak to the House this evening on behalf of the Minister for Finance to elaborate further on the Government’s comprehensive approach to framing an inquiry into the banking sector. The Minister indicated that he will participate in this debate tomorrow.
“—commends the ongoing programme of actions being taken by the Government to restore banking stability and restructure the financial sector; including the recapitalisation of the two main banks, which will facilitate increased access to funding for SMEs and for first-time home buyers, as well as offering protections for existing homeowners in arrears;
At its meeting today, the Government agreed the proposed framework set out in the amendment for an inquiry into the banking sector proposed by the Minister for Finance and for its subsequent consideration by the Dáil. This framework envisages a cohesive two-stage approach. The first stage will consist of two separate preliminary reports to be commissioned immediately, that is, one from the Governor of the Central Bank on the performance of the functions of the Central Bank and the Financial Regulator and the second from an independent “wise” man or woman to conduct an examination into the recent crisis in our banking system to assess what lessons can be learned and to inform the future management and regulation of the sector. Both reports will be completed by 31 May 2010.
These two reports will constitute detailed groundwork in preparation for the undertaking of the second phase of the Government’s plan. This will involve the establishment of a statutory commission of investigation within one month, by 30 June 2010, which will be chaired by a recognised international expert or experts of high standing and reputation. The terms of reference for this commission will be guided and informed by the conclusions of the two preliminary reports in consultation with the Oireachtas. It will be completed by the end of this year and will be laid before the Oireachtas for further consideration and action by an appropriate Oireachtas committee. The need to examine and learn from recent events in the banking sector is paramount. A key part of this will be to learn lessons from these events and the Government’s announcement today, in seeking two preliminary reports to be followed by a statutory commission of investigation, will form another important input into the ongoing reform of Ireland’s regulatory systems and structures, as well as the internal governance of its financial institutions.
It is of course important that a retrospective look be taken at the banking sector in light of the significance of the measures that the Government has been obliged to take over the past 18 months and the substantial financial support it has proved necessary to provide to the [82]domestic banking system to secure financial stability and which have been the subject of extensive debate in the House over the past year or more. As Members will be aware, over the past year and a half the Government has moved decisively to ensure confidence in the financial system in Ireland by announcing a series of measures, starting with a guarantee arrangement for depositors and lenders to Irish credit institutions. That was the first essential step on the path to stabilising the banking system in this country. All are agreed that this is one of the key requirements for our economic recovery, which will serve the needs of the wider economy. In the absence of a properly functioning banking system, economic recovery will be significantly delayed and the economy’s medium-growth potential will not be fully realised.
The overall objective of the Government has been to stabilise the banking sector to ensure that Ireland is best placed to take advantage of the global economic recovery when it occurs. Needless to say, it also must ensure that the interests of the taxpayer have been protected to the maximum extent possible. The proper functioning of the banking system is critical to the effective performance of the economy and therefore must be safeguarded by the Government. In this context, it is worthwhile to outline briefly the various measures that have been taken by the Government to secure this objective here. I refer to the introduction of a bank guarantee scheme in September 2008, the €3.5 billion of recapitalisation of Ireland’s two largest banks, namely, Allied Irish Banks and Bank of Ireland, to assist in securing the banks’ funding base and the €4 billion recapitalisation of Anglo Irish Bank. In addition, a new code of conduct on mortgage arrears took effect on 27 February 2009 and a new code of conduct on business lending took effect on 13 March 2009. Other measures include the announcement of the reforms of our financial regulatory structures encompassing the establishment of a single fully integrated Central Bank of Ireland to replace the current board structure of the Central Bank and the Financial Services Regulatory Authority with unified responsibility for both the soundness of individual institutions, as well as the stability of the financial system overall, the establishment of NAMA to strengthen the banks’ balance sheets so as to considerably reduce uncertainty over bad debts and as a consequence facilitate the flow of credit on a commercial basis to the real economy, and the establishment of an independent credit review process together with a credit review system to examine the credit policies and practices of the banks in respect of SMEs. This review process will help the Minister to decide what further action might be necessary to secure the flow of credit.
It should be noted that the actions being taken by this Government are taking place against the backdrop of continued widespread and significant Government supports for, and reforms of, financial services sectors in the European Union and in other developed countries. The banking crisis has highlighted weaknesses in the financial regulatory and supervisory framework of the EU and its member states. This EU framework remains largely nationally based, despite the creation of a European Single Market in financial services more than a decade ago and the highly significant growth in cross-border provision of financial services, as well as the emergence of large and systemically significant pan-European financial institutions. A highly significant programme of reforms is, therefore, under way at EU level in the areas of financial supervision, prudential regulation and corporate governance, as well as crisis management.
These EU reforms are building upon the analysis for the European Commission of the high level group on cross-border financial supervision, the so-called de Larosière report. This and other reports, such as the United Kingdom’s Financial Services Authority’s Turner report, have provided the impetus for the international reform which is now under way. Ireland is a strong supporter of such international reforms, and has played, and will continue to play, its part at EU level to ensure that they are implemented swiftly and effectively. These reports also will [83]form a significant input into the work of the Governor and the wise person providing a detailed overview of the causes of the financial crisis internationally.
One must draw a link between the features that are particular to the crisis in the Irish banking system and the available international analysis and reforms that are under way. The completion of the reviews by the Governor and independent expert, together with ongoing disclosures regarding possible malfeasance in particular institutions, will provide the basis for identifying specific issues that warrant further investigation through a statutory commission of investigation. This statutory commission, to be established by 30 June 2010 and chaired by a recognised international expert of high standing and reputation, will be asked to pursue particular lines of investigation which will have been identified by the two preliminary reviews. The Government is aware that the potential scope of an inquiry into the banking sector is very broad and it is essential that the inquiry maintains a clear focus on key issues and is concluded within a reasonable timeframe. The terms of reference for the statutory inquiry will be shaped by the conclusions of the two preliminary investigations and in consultation with the Oireachtas. There clearly are a number of broad themes that require thorough examination. These include the performance of individual banks and bank directors where wrongdoing and lax practices have contributed considerably to the crisis, the performance and structure of the banking system generally, the performance of the regulatory and Central Bank systems and the response of the relevant Departments and agencies, including in respect of the linkage between the banking crisis and overall economic management.
There are valid reasons for the approach that has been agreed by the Government. Under the legislation, the commission will conduct specific parts of its investigation, for example, into the affairs of individual institutions, in private. This will minimise the risk of interfering with the ongoing Garda and ODCE investigations. Significant State resources are fully engaged in achieving the objectives of banking stability and restructuring of the financial sector, and these resources must continue to be devoted to the task at hand. The approach being adopted by Government will also ensure the ongoing criminal and regulatory investigations into alleged wrongdoing, which are expected to take some time, can proceed without the possibility of prejudice. Taking account of all these factors, the Government is proposing the multi-stage investigation to be completed by the end of the year. This approach will lead to an expert, authoritative, robust and structured examination of the financial crisis.
An important priority for Government will be to ensure the Oireachtas has a central role to play in these investigations and will be involved at each stage of the process, as set out in the Government’s amendment. This envisages that an appropriate Oireachtas committee will meet both the Governor and the independent experts at the outset of their work to be briefed on the priorities of the Oireachtas for investigation; the two preliminary reports, when completed, will be laid before the Houses of the Oireachtas and the appropriate Oireachtas committee will be invited to consider the findings of the reports; the terms of reference and draft Government order to establish the statutory commission of investigation will be laid before the Oireachtas; and the report of the commission of investigation, when completed, will be laid before the Oireachtas for further consideration and action. It will be open to the committee to hold public hearings on the report.
I refer to the social context of the financial crisis referred to in the Government amendment. In debates about responsibility for the present state of the country, there is constant and repeated reference to the triad of bankers, developers and politicians. Books published by columnists in the broadsheets, who are also, in many cases, broadcasters, excoriate poor decision-making and regulation and cronyism — real and alleged. There is rarely any reference to the relentless hype in property supplements, which fuelled what has been described elsewhere as “irrational exuberance”, which was the cause of many of our present problems and [84]which, in the prevailing climate, would be difficult enough to contain or control. It has been alleged that published guide prices were often very wide of the mark, auction results were not always faithfully reported, and headline prices could be manipulated by under-the-counter payments.
As a person said to me yesterday in another context, the media drive issues and they are not just passive reflectors. We all recall the campaign to abolish stamp duty in the autumn of 2006, running into 2007, intended to save and prolong the property boom. Was this just sincere concern for hard-pressed home buyers or was it dictated in part by commercial self-interest? There is much discretion about the parallel collapse of revenues and the sharp economies that news organs have experienced and have had to make. Was, taken as a whole, the Fourth Estate more provident than others, or did it, just like others, and indeed the State itself, become badly overextended? Were the property pages, at least for a time, an integral part of the forces driving the bubble? Without overstating its significance relative to other bigger factors, it would be good if this were examined, if any holistic explanations were sought and lessons learned, and if improved safeguards were provided for the future.
The preliminary reviews and the commission of investigation and their appropriate consideration by the Oireachtas, together with ongoing Garda and ODCE investigations, will form a comprehensive framework of investigation into the recent crisis in the banking sector. This will allow the Government to assess how lessons can be learned to inform our future management of the sector, both in regard to institutions and their management and direction and in regard to the management of risks and stability issues within the regulatory and governmental systems.
Minister of State at the Department of Foreign Affairs (Deputy Peter Power): I support the amendment. The debate arises from a public demand to find out what went wrong with our banking system and who is responsible for it. The people want to ensure this does not happen again and to restore our reputation on the international financial markets in a way that does not prejudice ongoing criminal investigations. People have lost their savings and pensions. Businesses in my constituency cannot obtain finance from banks because the banks cannot access credit following the wipe-out of their capital as a result of unwise decisions. People are demanding answers to these questions.
Everyone in the House agrees on the central objectives of an inquiry but we disagree on how we go about doing this. The Government wants to do this efficiently, effectively and in a way that works and we disagree fundamentally with the Opposition on this. The proposals of Fine Gael and the Labour Party, although they seek to achieve the same objective as the Government, cannot do so. We want an inquiry that will compel those who have information and who have difficult questions to answer to come before it and to be held to account. We want them to be subject to rigorous cross-examination. We want an inquiry that can make findings of fact and culpability about people who were centrally involved in the financial collapse of the country. Unfortunately, the Fine Gael and Labour Party proposals would not allow us to do that. The Government shares their desire to meet the public demand for culpability and accountability but the only way in which we will achieve that is through the Government’s three-pronged proposal to find out the questions that need to be answered, to identify the people who can answer them and then to use legislation, which the House passed, to allow an inquiry to take place where this information can be ascertained, witnesses brought forward, tough questions answered and a report made public.
That is a tried and tested method. We witnessed it recently in the inquiry into the Dublin archdiocese. Nobody has questioned whether that was a cost effective, efficient inquiry that got to the heart of the matter, and there is no suggestion that the Government’s proposal would [85]do otherwise. Unfortunately, many Deputies and members of the public are confused by a blood lust to hold an inquiry in the Dáil, which would replicate a tribunal of inquiry, discredited as such inquiries are. The Government wants to put before the House the report of the commission of investigation with its findings of fact and culpability in order that the House can have its own day. The people involved can be brought in on the basis of findings and allegations made against them in the report about them not doing their job or opening credit lines they should not have or making bad and imprudent credit decisions. The Government’s proposal will provide for such a report and, armed with this, the Joint Committee on Finance and the Public Service will be able to do what the people want, which is find out who is responsible, how we got to this point and how we can avoid arriving at this point again while, at the same time, ensuring people who broke the law and engaged in malpractice and misconduct and who should be brought before the courts can be still brought before them. The only way to achieve the objectives we all share in the House is through the Government’s proposal.
Deputy Burton sought a bipartisan approach to this affair but, unfortunately, the Deputy and the Labour Party had made up their minds that there was a toxic triangle between the banks, my party and developers, an allegation I reject. If they seek to have a bipartisan inquiry in the House having come to such a conclusion, it will go nowhere.
Deputy Mattie McGrath: I also support the amendment and I am delighted to have the opportunity to contribute to the debate on this most topical issue, which is affecting every man, woman and child and which will affect future generations. We must get answers on the failures visited upon our people. There was a monumental failure on the part of our banking services and I must condemn our regulation services which failed miserably to regulate and honour the jobs and positions they had.
As a public representative I believe the citizens of Ireland are entitled to know what happened, how it went wrong and what mistakes we made. More importantly, we must try to learn from those mistakes and, together, lift our country out of the deep mire it is in at present. We all know that not a red cent is available to any citizen whether for business, ordinary families, farming or anybody with a new idea to get the country off its knees and up and running. We hear pious platitudes from our bankers that credit is available for mortgages, to build new houses and to kick-start the building industry and business. However, we know the reality is that not a cent is available. We must accept that the banks do not have it.
Until we sort out those issues and get proper answers I will not call for anybody to be indicted without fair and due process. I support the procedures laid down by the Government to hold these inquiries and to do so in public where possible. It is imperative that the public sees what is going on and it is looking to us to bring these people to account, whether they be regulators, bankers or politicians who allowed the situation to continue and got us into the mess in which we are. It is vital for the future of the country that we have this investigation and that it is carried out speedily and effectively with the right people and expertise brought in to do so. We must then bring it back to the Oireachtas committees, as we have done in the past. We are dealing with a much greater challenge than any Oireachtas committee has had to deal with but it should return for debate to the floor of this Chamber.
Let whomever feels the cap fits wear it, whether banker, regulator or politician. We have to send out the message to our European partners, our international lenders and those with whom we transact business on a daily basis that Ireland does not have a kangaroo system but that it is a democracy with an effective and working banking system and thriving economy. To do so we must learn from our mistakes and put a new roadmap in place to chart out a course and go forward and, with the help of our people, lift our economy back to where we would all like to be, not to the mad years of the Celtic tiger but to a decent day’s pay for every man or woman [86]who wants to work for a day’s wages and not the crazy figures to which some people felt they were entitled and achieved.
I lend my support to this inquiry and I hope it will be constructive, that there will be no witch hunts but that there will also be no hiding place for any man or woman who in the end-game is found to be guilty of any wrongdoing. However, it must take place after due process is carried out.
Deputy Niall Blaney: I support the Government’s amendment to the motion before the House. Over the past 18 months, there has been much debate in the House on the stability of our economy and banking. It is with satisfaction that I discuss the matter again today as our economy is stabilising and our banking system is also showing signs of doing so. There have been many ups and downs during the past year or two and on many occasions we faced a crisis. Each time, the Government stepped up to the mark and provided the leadership required to inject stability into the economy. It is necessary to state that we provided the leadership to do so.
The ordinary people have made many sacrifices to ensure we get back on our feet. There has been much discussion in our recent past about our resilience as a nation and the concept of the Irish meitheal. As a nation, our meitheal has been thoroughly tested in recent times. It is against these tests that we show our true ability. It is only when we work together that we can show optimum ability as a nation and it is with that mindset that we must move forward.
The banking system has let us down. People did wrong and the system failed us. There is nobody in the country who does not want to see those responsible facing justice. There is no justification for debate on that issue. However, how it is investigated is certainly a matter of opinion and of those there are many. Unfortunately, in recent months there has been much fanfare on the Opposition benches about how we will bring the country to economic recovery.
I firmly believe in efficient Opposition and constructive criticism. It is time the Labour Party got real about what the country faces and offers real alternatives or gets behind the leadership being provided by the Government. The Government is responsible for the bank guarantee scheme against much criticism from the Labour Party. Other countries copied our technique as they appreciated the advantages of such a scheme. The Government was responsible for nationalising Anglo Irish Bank, not in an effort to save bankers but in an effort to save the bank itself and, more importantly, its depositors and shareholders. These are real people whose interests we must protect. I must also point out that it was under this Government that the Garda inquiry into the dealings in Anglo Irish Bank came about. The recapitalisation of Allied Irish Bank and Bank of Ireland followed. Again this was to bail out depositors and those seeking credit and not the bankers, as has been claimed by some. We are not in the business of bailing out bankers; we want to get the country back on its feet and that is our common purpose.
Clearly, the aim of the Labour Party is to destroy Ireland’s banking reputation and only then it may have a chance of electoral success and a return to Government. Only a fool could not see that the Labour Party’s position throughout the banking crisis has been one of political point scoring with a view to enhancing its electoral success but with no regard to the current difficulties of depositors and banks. It does not have an ounce of consideration for the recovery of the economy. The Government was responsible for the establishment of NAMA and we have been heavily criticised for that. However, I firmly believe it was the only show on the road. I look forward to credit being freed up by the banks in the near future when they are restructured.
[87]I could spend all my speaking time discussing the various suggestions made by the Opposition for stabilising our economy. However, I am not interested in rehearsing what has already been debated in depth in the House. Suffice it to say the Labour Party has been caught up in the business of opposing anything proposed by the Government. However, time will prove that the correct measures have been taken and the roots of stability are already showing.
We are too familiar with inquiries and tribunals and their benefits and lack thereof. It is vital that an inquiry of sorts is launched into the failures of our banking system. However, we must be acutely aware of issues such as time and cost. How we go about this is the crux of the debate before us. The proposal by the Minister for Finance, Deputy Lenihan, is sensible and measured. The Labour Party spokesperson on finance is more keen on trial by the Labour Party and letting the banks fix themselves, which has resulted in the position of the Labour Party which I already outlined. Let us not forget that the banks need help to recover as much as we need inquiries. It is our job as legislators and Government to provide real solutions and that is what we have been doing in the recent past. We will continue to do so even though it may not please the Labour Party or be in its political or electoral interests.
Deputy Kieran O’Donnell: I wish to share time with Deputies Lee and McHugh.
An Leas-Cheann Comhairle: Is that agreed? Agreed.
Deputy Kieran O’Donnell: I thank the Labour Party for tabling the motion. As a party, Fine Gael feels very strongly that there is a need for a public inquiry to be carried out by the Oireachtas. We were elected by the people to represent them. To restore confidence to the banking system and to bring credibility to this inquiry, it must be held in public and under the direction of an Oireachtas committee. This is critical because it will be open, transparent and show proper accountability.
The Government has brought forward a counter motion to the Labour Party motion. I listened with interest to the Ministers of State, Deputies Power and Mansergh, who spoke about how this would work. The Government is spinning that this is a public inquiry, but is like a wedding without the bride because it is completely outside the terms of reference of the Labour Party motion. The Government motion refers to bringing forward two reports from the Governor of the Central Bank. It is inappropriate to have a newly appointed Governor — an excellent man of great calibre — carrying out an investigation into an organisation that he has just taken over. The motion only deals with the Financial Regulator and the running of the Central Bank, and there is no reference to Government policy.
The Government motion also refers to carrying out an independent review, but once again it only looks at Ireland’s banking set up until September 2008. The Government has not clarified whether this means up to 31 August, in which case its guarantee scheme from 29 September 2008 is omitted, as is the appearance at the Joint Committee on Economic and Regulatory Affairs on 14 October of Mr. Patrick Neary, the former chief executive of the Financial Regulator. At this committee he stated “I believe that all banks are solvent.” However, Anglo Irish Bank was nationalised a short time later. These issues would not come under the terms of the Government inquiry.
The Government motion refers to appearances before the Oireachtas committee before and after the reports are completed. It also states that the terms of reference and a draft Government order establishing a statutory commission of investigation will follow the two reports. Those terms of reference would appear to be at the sole discretion of the Government. It is not allowing the Oireachtas committee to determine the terms of reference. The motion seems to infer that the Oireachtas committee will meet and brief the Governor and the independent expert at the outset on the priorities of the Oireachtas for the investigation. The two prelimi[88]nary reports will be laid before the House and the Oireachtas will be invited to consider to findings of the report. However, those reports will be determined ultimately by the terms of reference laid down by the Government.
The people want a public inquiry. The Government has nothing to hide and nothing to worry about. We in Fine Gael wish to have cross-party co-operation on this. The Opposition leaders can meet the Taoiseach and come up with the proper terms of reference for an Oireachtas committee. A scoping exercise can be carried out prior to any formal work done by the committee. The Governor of the Central Bank made a clear recommendation and the Minister for Finance went to much time and trouble to ensure that he got the best possible appointment. We all agree that Professor Honohan is an excellent appointee, yet the Government has tried to water down his first recommendation. He stated that there should be a complete inquiry, but this is a fudge and a whitewash. It is like water flowing through four or five funnels, with the result being that there is no water at the end. The Government is trying to ensure that we do not have an open and transparent inquiry. The public is entitled to nothing less.
The Minister for Communications, Energy and Natural Resources tried to represent this as a public inquiry. The Green Party Members have been shouting from the rooftops over the past three or four days that they would accept nothing less than a public inquiry. They are either not on top of their game or they are rolling over, but this is certainly not a public inquiry.
We must look at the key issues, such as banking regulation. Professor Honohan stated at the Joint Committee on Economic and Regulatory Affairs in December that one of the key reasons for the failure of the banking system was lack of regulation. We also need to look at Government policy. We need to look at the legislation that was brought in and why it was enacted. The Financial Regulator only functions according to the legislation that is implemented. We must have an open system to find out why the bulk of the banking system may soon be nationalised. Why did we get to a position where the loan book of a major bank doubled between 2005 and 2007? Why are we in a position where young couples have 100% mortgages that they could not afford?
The Labour Party has brought forward a Private Members’ Bill on compellability. We support it in principle, but we feel that it is possible to set up a committee without any further legislation to deal with Government regulations and policy on the banking system. I hope that when the Minister speaks tomorrow night, he will promise to take the views of the Opposition on board, we will have a public inquiry in the Oireachtas so that the people can regain trust and that we might have confidence restored in the banking system.
Deputy George Lee: In his speech, the Minister of State, Deputy Mansergh spoke about the need to examine and learn from recent event in the banking sector. He was absolutely right and nobody would disagree with him. However, the difficulty is that while we need to learn, we must recognise that learning about what happened is a necessary condition for fixing the banking system, but it will never be a sufficient condition. The core of the collapse in prosperity has been a collapse in trust. In addressing the banking problem, we do not just need to learn what went wrong; we also need to work very hard to re-establish trust.
The collapse in trust has led to the collapse in prosperity. The collapse in trust caused banks not to lend to each other, wiped out the share values of those banks and caused all sorts of difficulties in obtaining working capital for businesses, resulting in a loss of jobs. That is the real difficulty with recreating prosperity. We should learn what went wrong, but we should not pretend for a second that this will be enough. It is incredible that the Government is suggesting we can re-establish public trust behind closed doors. It just cannot be done.
[89]We are being asked to accept that the Central Bank will report on itself and expect that this will restore confidence. This simply cannot be true. The Central Bank itself has failed, although I do not mean to impugn Professor Honohan’s reputation in saying that. He was not involved in the Central Bank at the time. The bank failed and will now write a report on its own failure. From a public perspective, this is obscene. Members of the public who are picking up the tab for the failure of the banking system and the poor decisions that were made need to know the reason they are being asked to do so.
It is crucial to have a well informed contribution to the new form of banking regulation which is being discussed. Members of the public need to have confidence in the regulation that will be put in place. Unless they see questions being asked in public, there will be a lack of belief in the new system of banking regulation. The problem is they cannot trust insiders on this matter. The inquiry, as proposed by the Government, will be about insiders and will be conducted by insiders for the benefit of insiders. That will not do. It is not acceptable to conduct the inquiry in secret when the consequences of the collapse have been so public. While a private commission may help us to establish some facts, it will not restore trust.
I understand from international observations made by the OECD and others that the loss to taxpayers from the banking collapse could be as much as €24 billion. Ireland has only 1.8 million to 1.9 million people with jobs. Last year, the net loss of young people to emigration was of the order of 60,000. On the employment front, the cost to the public of having 420,000 people on the live register is enormous. The proposal to conduct this inquiry in private is breathtaking in its arrogance.
The Central Bank, Financial Regulator and Government told us everything would be all right when things were not all right. We are not trying to find out what went wrong. We know the effect of what went wrong. Unemployment, damage, hurt and lost prosperity are in everybody’s face. This is the reason we need this inquiry. The difficulty we have is that the commission will produce a report which will present a fait accompli to the public. We do not know for sure that it will ask witnesses the questions we would like it to ask. For this reason, it will be difficult to accept it.
In terms of believing the Government has the correct approach one only has to consider the issue of fallibility. In 2004, the current Taoiseach and then Minister for Finance, Deputy Cowen, outlined his view of the world in the context of his budget. He stated he hoped ordinary taxpayers would recognise the firm resolve of the Government to secure their welfare now and for the future, adding that the “country and its future are in safe hands with this Government.” This statement turned out to be waffle. The following year, the then Minister for Finance stated the Government would not put at risk the prosperity achieved by the Irish people, adding that prosperity could be a great gift that this generation would give to the next generation. This, too, turned out to be guff.
In 2006, the current Taoiseach and then Minister for Finance, Deputy Cowen, stated that the country’s success had been brought about by the hard work of our people — that part was true — in response to the policies of the Government. If he believes that, then the Government’s policies are the cause of what occurred and the public needs to see the matter thrashed out in public. The hard work, which is key to prosperity, was done by people. They want answers and need to see them given in public.
In December 2007, while the credit crisis was well in flow, the current Taoiseach and then Minister for Finance, Deputy Cowen, stated that the fundamentals of the economy were still good, adding that rather than adopting “a conservative, cautious stance, I believe we must respond to the challenge by taking determined action and pushing ahead with renewed vigour”. The Government is extraordinarily fallible and members of the public do not have confidence [90]in or trust it. If one examines its record in terms of everything it has done and said, there is good reason for this lack of public confidence and trust.
This also applies to the Central Bank. The bank produces a financial stability report each year. In November 2006, only months before the outbreak of the credit crisis, it stated that house price increases “may be easing somewhat” and that if these signs were to continue into 2007, the vulnerability posed by house prices would be reduced somewhat. This statement was rubbish.
The following year the Central Bank stated that the central expectation was that the shock absorption capacity of the banks left them well placed to withstand the pressures from any adverse economic and sectoral developments. This was drivel. The bank stated further that the health of the banking system remained robust. Its analysis described as benign the changes in the workings of the banking system and the fact that it was importing money. We cannot have the Central Bank investigate itself. No one has any trust in the proposal.
While the Government and Central Bank did not set out to make mistakes and wanted to do the job correctly, that they got it so wrong is the reason it is so important to have an independent report. It is impossible to support a proposal to have the people who got it wrong report on how they got it wrong. No one has confidence in the proposal.
Members of the public are in shock and sick of being spoken down to by people behind closed doors. The Government proposal in its amendment to the Labour Party’s Private Members’ motion is to do just this. It is not sufficient and the public deserves much better. Trust is lacking and the Government, by failing to live up to its responsibility, has shown it cannot be trusted. If the report is not debated in full in public, it will be an enormous error and a huge let down for the public.
Deputy Joe McHugh: I thank the Labour Party for tabling the motion. This debate offers the Government an opportunity to see sense. A committee of inquiry operating in an open and transparent manner would be a means of confirming and acknowledging what is being said in public. Most people seeking justice with only a small number seeking blood.
This proposal is an opportunity to have the House fulfil its democratic role and avail of the expertise required to find out what went wrong, when it went wrong and why, before making informed decisions. By tabling the amendment, the Government is refusing to afford members of the public a democratic opportunity to allow government to govern. Unfortunately, the Government made bad decisions and propagated and introduced light touch regulation. Now, however, it is preventing an opportunity to allow parliamentary democracy operate in an open and transparent manner.
The key issue is the absence of control over bankers and the banking institutions. We had a free-for-all caused by the displacement of good people from the banking system. In the 1980s senior banking personnel and managers knew how to bank and did not lend money willy-nilly. Systems and checks were in place and the good people running bank branches knew whether people could afford mortgages. These managers were replaced with others who had a sales philosophy and wanted to lend money regardless of whether borrowers could afford it.
A generation of people are going to bed at night with the fear that they will not be in a position to pay back their mortgages. The reason the Minister of State is not hearing about this is that it is a silent fear. That is where the danger lies.
We had an opportunity to seek out the expertise of those who were displaced, namely, retired bank managers and other banking personnel. An open and transparent committee of inquiry could have tapped into their expertise and asked them to explain the reason they did not lend [91]in a free-for-all fashion in the 1980s, what systems they had in place and what pressures they came under to change the philosophy of banking.
What new systems were established as a result of the light touch regulation introduced by the Government? The Minister of State, Deputy Mansergh, enjoys a good reputation as a historian, while my background is in teaching. What banking expertise do Members have? In the Fine Gael Parliamentary Party Deputy Terence Flanagan worked in a bank. Politicians cannot control bankers until we start to regulate them. The only way we can regulate is to know how banking works. However, because we do not know how the system works, the bankers are having a laugh and waiting for the National Asset Management Agency to acquire large parts of their books.
The silent mortgage holders and those who are not in a position to pay back their loans will not receive assistance or resources. The bankers will still be in control and a laissez-faire attitude will once again prevail.
Deputy Alan Shatter: The Government should publicly apologise for the indefensible and incompetent manner in which it has dealt with the issue of Vietnamese adoptions. It has neither acted in the best interests of children nor in the interests of prospective Irish adopters. The Minister of State with responsibility for children has serious questions to answer.
For five years there was a bilateral adoption agreement between Ireland and Vietnam. By 31 December 2008, 636 adoptions effected in Vietnam by Irish adopters had been recognised by the Adoption Board. At the start of 2009 there were an estimated 330 prospective adopters declared suitable to adopt by our Adoption Board who expected to adopt in Vietnam and who were assessed for adoption on the assumption that they would do so. For five years it was known that the bilateral agreement would terminate by 1 May 2009. However, the Government gave no warning or notice to the hundreds of people under adoption assessment by the HSE who intended to adopt in Vietnam that, following their obtaining a declaration of eligibility and suitability to adoption from our Adoption Board, this State would create any difficulty in their completing such adoptions.
The expired bilateral agreement contained provision for the establishment of a review group composed of Irish and Vietnamese officials to monitor the workings of the bilateral agreement and the adoption process in Vietnam involving Irish adoption applicants. During the five years of the agreement’s operation no report was ever published by this group warning of any difficulties. It is clear that up to March 2009 the Government intended to put in place a new bilateral agreement with Vietnam. The Minister of State with responsibility for children informed this House that at the beginning of March a new proposed draft agreement was forwarded by the Government to the Vietnamese authorities. Vietnam received the new draft agreement approximately seven weeks before the expiration of the original agreement and at that stage it was understood that the main difficulty related to the short period of time available to put in place a new agreement before 1 May 2009. It was only in August 2009 that the Minister made known the fact that, as a result of two international reports on Vietnamese adoptions, one of which was a draft report prepared by International Social Services, questions were being asked about the probity of the Vietnamese adoption process. It took six months [92]from the receipt by the Minister of State of the draft ISS report to announce a Government decision not to enter into any further bilateral agreement on adoption with Vietnam.
The Minister of State with responsibility for children should publicly answer the following questions. In his statement issued last Thursday, 14 January, he stated: “When any Government enters into a bilateral International Adoption Agreement, there is an expectation that the Government has satisfied itself that current policies and practices in the country of origin are robust.” What steps did the Government take to so be satisfied prior to entering into the bilateral adoption agreement which expired on 1 May 2009 and prior to furnishing to Vietnam a new proposed draft bilateral agreement in March 2009?
During the currency of the expired bilateral agreement, what action, if any, was taken by representatives of this State appointed to the Ireland-Vietnam review group to ensure that Vietnamese adoption practices met appropriate standards and what reports, if any, on this issue were made to the Minister of State with responsibility for children or his predecessors? Why has the Minister of State with responsibility for children refused to publish full details of meetings held by the review group and the reports, if any, furnished by it to him and the Department for Health and Children and why has the Department refused to make available relevant information and documentation when sought by me under the Freedom of Information Act?
The Minister is only now critical of the link between the provision of humanitarian aid in conjunction with adoption services by an adoption agency licensed by this State to assist Irish applicants in effecting Vietnamese adoptions. Why is this the case when the expired bilateral agreement, under which the agency operated, expressly envisaged the provision of such humanitarian aid and rendered it impossible for Irish applicants to effect Vietnamese adoptions without making a specific humanitarian aid payment?
What consideration, if any, was given by the review group during the lifetime of the expired agreement to any difficulties arising as a consequence of the link between humanitarian aid and adoption services? Why did the Minister for Children give assurances to 20 couples at an advanced stage in the Vietnamese adoption process after 1 May 2009 that satisfactory arrangements would be made to facilitate them completing Vietnamese adoptions and why have no such arrangements been made? As a result of publication of the ISS report, has Vietnam refused to continue negotiations on the conclusion of a new bilateral agreement with this State or has the Government simply decided to suspend indefinitely negotiations on a new agreement? What consideration, if any, did the Government give to negotiating a new agreement incorporating provisions to address any concerns resulting from the ISS report and the creation of structures to properly and transparently monitor the workings of such agreement?
Acting Chairman (Deputy Brian O’Shea): Deputy Shatter should conclude.
Deputy Alan Shatter: There is nothing to prevent the Minister negotiating and completing an agreement with the Vietnamese that is compliant with the Hague Convention on intercountry adoption. France, Spain, Italy and Canada, who have all ratified the Hague Convention, are continuing to facilitate adoptions from Vietnam and to ensure the necessary standards to protect the welfare of children are properly applied. As a consequence of the incompetent manner in which the Government has dealt with this sensitive issue, hundreds of Irish adoption applicants are now left in limbo and hundreds of children for whom adoption would provide a better life may remain in orphanages.
Acting Chairman: Deputy Shatter has gone far over time.
[93]Deputy Alan Shatter: I will conclude with two more sentences. Substantial HSE social work resources have been wasted in the assessment of adoption applicants with a focus solely on Vietnamese adoptions instead of a focus on foreign adoption generally. Many of those left in limbo are now confronted with the prospect of their declarations of suitability and eligibility expiring and will have to apply to the Adoption Board for extensions and, in some cases, to the HSE for updated assessments. Adopters are entitled to answers from the Minister of State.
Minister of State at the Department of Health and Children (Deputy Barry Andrews): I thank the Deputy for raising this issue and affording me the opportunity to update the House on this matter. The Adoption Bill 2009, which will give force of law to the Hague Convention on the Protection of Children and Co-operation in Respect of Intercountry Adoption, is continuing its progress through the Oireachtas and the debate on Second Stage is scheduled to resume on Thursday. A core principle of the Hague Convention, which represents the international standard for adoption, is that intercountry adoption should be child centred. The child’s interests must be paramount throughout the adoption process. The legislation and specifically the regime of the Hague Convention is designed to provide an assurance for individual children, their families and the State, that appropriate procedures have been followed and that adoptions are effected in the best interests of the child. As such, it is our intention that all intercountry adoptions must meet the standards of the Hague Convention.
Against this background, and after serious deliberation, the Government decided on 13 January to suspend indefinitely negotiations on a new bilateral intercountry adoption agreement with the Socialist Republic of Vietnam. As a result of this decision, all intercountry adoptions from Vietnam will be suspended until such time as the Adoption Bill 2009 has been enacted and both Ireland and Vietnam have ratified the provisions of the Hague Convention.
Having met with many individuals and representative groups throughout this process, I am fully aware of the great disappointment this decision has caused and will cause for those hoping to adopt from Vietnam. It is important to reiterate that this decision was not taken lightly and was based on information brought into the public domain by the Vietnamese Government in the first instance and subsequently by UNICEF with the co-operation of the Vietnamese Government. Serious questions regarding adoption practices in Vietnam were raised in these two recent reports. Such information cannot be ignored and the Government was obliged to act on foot of this information.
Of greatest concern is the question of whether the child is adoptable. The issues of consent and the exchange of fees were also raised. Where questions on these fundamental issues remain, it would be remiss of the Government to allow adoptions from Vietnam to continue. The Government has committed to providing technical assistance to the Vietnamese authorities in the area of child welfare and protection to help prepare the way for ratification of the Hague Convention should the Vietnamese wish to avail of such an offer. Based on my discussions with the Vietnamese authorities, I am confident that Vietnam will ratify the Hague Convention in the near future, at which time I would hope and expect adoptions to resume.
To state as Deputy Shatter has that the Government gave no warning to those hoping to adopt from Vietnam that a new bilateral agreement might not be put in place is not just wrong, it is most disingenuous. On several occasions in recent months in both Houses, I stated that real concerns had been raised in the context of intercountry adoption from Vietnam and these would have to be addressed before a new agreement could be entered into. When I shared a television studio with Deputy Shatter last October, I clearly explained the difficulties in putting in place a new bilateral agreement and said that there could be no certainty about the successful conclusion of the process.
[94]Deputy Shatter contends that the Government was dilatory in dealing with the UNICEF ISS report. He claims the report was received last August and that it took the Government six months to act on it. I remind the Deputy that the report was finalised in late November. I said last October that I would await the finalisation of the report before making a recommendation to the Government. I did not think it was correct to make a decision on the basis of a draft report that could not be made available to the adoption community. The timeframe for the publication of the report was beyond the control of the Government. The time that elapsed between the circulation of the draft report and the publication of the final report is a matter for the ISS. To my mind, it involved dialogue with the Vietnamese Government and the embassies based on the ground in Hanoi.
Following the Government decision, I met representative groups last week to update them on the situation. I shared with them the contents of my statement prior to its circulation to the media. The Adoption Board has agreed arrangements for people who had hoped to adopt from Vietnam. All couples or individuals who possess a declaration of eligibility and suitability for Vietnam may select a new country from which to adopt, subject to submitting the usual change of country report to the Adoption Board. They may also retain their current place on the helping hands list for Vietnam, which is being maintained. In the event of Vietnam reopening, those on the Vietnamese waiting list whose declarations have not been used in the meantime to effect an adoption in another country will be in a position to proceed without delay, having regard to their position on the Vietnamese list. All couples or individuals who have a declaration of eligibility and suitability for Vietnam but have sought to change in recent months will be in a position to avail of the foregoing arrangements.
At all stages of the process, which has caused great anxiety and ultimately disappointment for couples or individuals hoping to adopt from Vietnam, I have consulted the adoption community and informed them of my actions. I have no difficulty in standing before this House and accounting in full for the decisions I have made. I suggest that Deputies on all sides should continue to have regard to the sensitivity of the matter at hand and respect the position of children who have been adopted into this country from Vietnam in recent years. We all have a responsibility to these children. The status of their adoptions is not in question. The adoptions have gone through a lengthy legal process and have been entered into the register of foreign adoptions. The Government must do its best to ensure that the interests of any child being adopted by Irish citizens are promoted and protected. Deputy Shatter mentioned that 20 adoptions were at an advanced stage when negotiations were suspended. It continues to be the position of the Government that it will try to facilitate the finalisation of such adoptions, subject to the serious legal difficulties that apply.
Deputy Pat Breen: I thank the Ceann Comhairle for giving me an opportunity to raise this important issue tonight. I am extremely disappointed that neither the Minister for the Environment, Heritage and Local Government nor the Minister for Transport is present to respond to this Adjournment matter, which has been raised by five Deputies. I am angry because the Ministers have not taken the time to come to the House to speak about an issue that is affecting every county. Given that they were not here during the freeze itself, perhaps I should not expect them to be here tonight.
This has been one of the harshest winters of the past 50 years. We have had frost and snow in County Clare since 22 December last. I suppose it was not until the bad weather hit the city of Dublin that the Government decided to take some action. We did not have the leadership needed to deal with the crisis, unfortunately. We had no Taoiseach and no Tánaiste. The only [95]response was from the Minister, Deputy O’Dea. When he was asked why the Army was not being called in, he said it had not been asked to come in. The Minister, Deputy Gormley, blamed everybody other than the Government for the crisis.
In the absence of leadership from the Government, local communities and local authorities stepped up to the plate to assist elderly people and grit neighbourhood roads. I commend and compliment Clare County Council, which did a great job in keeping the main arteries open, despite its limited resources. The problems caused by the big freeze were compounded when the thaw set in and the state of the roads became apparent. Motorists have to contend with huge potholes as they go about their daily business. Having driven on the roads of County Clare over recent days, I am familiar with the problems on the R465 between Limerick and Broadford, for example. Roads like the N68 are badly afflicted with potholes.
I remind the Minister of State, Deputy Barry Andrews that the county councils do not have the money to deal with this situation. Road maintenance grants have been slashed by 10%. Like the other Deputies who are about to contribute to this debate, I want funding to be provided in my local area so that the roads which are in an atrocious condition can be repaired. This is a road safety matter, in so far as lives will be saved if action is taken.
Deputy Joe Carey: I express my gratitude to those who helped to keep roads open throughout the crisis in County Clare. I refer to Mr. Tom Tiernan, who is the senior engineer in Clare County Council, his engineering staff, the outdoor staff and those who drove the gritting trucks. I pay tribute to the voluntary efforts of communities throughout County Clare. Many people played their part and put their shoulder to the wheel. Such leadership and involvement was sadly lacking from the Government, however. When the Minister, Deputy Gormley, eventually commented on the issue, he practically laughed at people. The reality is that road maintenance grants were cut by 10% in last month’s budget. Those cuts followed the €7 million cut that Clare County Council experienced in 2009. The council simply does not have the money to return the county’s roads to the required and proper standard.
I have listened to the statements made by the Minister, Deputy Gormley, and his colleague, the Minister for Transport. It is unacceptable that they have said they will not fund local authorities. Money will have to be forthcoming. The Ministers cannot pretend that this did not happen. Roads are being left in a very dangerous condition. I travelled on many roads in County Clare over the weekend. The road from Ennistymon to Kilfenora is falling apart. The road from Broadford to Limerick is in a terrible condition, as is the road between Sixmilebridge and Newmarket-on-Fergus and other roads in the Clarecastle, Mountshannon and Whitegate districts. This is a road safety issue. I was encouraged by the reply to a parliamentary question that I received today, in which the Minister said he is looking for an audit of roads from local authorities. I ask the Government to come up with the goods if such an audit is presented. This is a road safety issue.
Deputy Andrew Doyle: Wicklow County Council has been given €850,000 to maintain its roads in 2010. With three weeks gone in the year and 49 weeks to go, I estimate that between €500,000 and €600,000 of that annual fund has been spent already. One of today’s newspapers reported that approximately €150 million — I imagine that was an educated guess — is needed to repair the damage done to this country’s roads in recent times. That equates to an average of approximately €4 million for each affected local authority. It is encouraging that the Minister of State from the capital city is present in the Chamber. It seems that his senior colleague, the Minister for the Environment, Heritage and Local Government, who represents a neighbouring constituency, did not take this crisis seriously until it started to affect the city. As my colleagues have said, road infrastructure is the key to road safety. It is also the key to attracting investment, business and tourism. It is right that the road from the hotel in Glendalough to the upper lake [96]car park was repaired last Sunday to make the road passable. However, another section of road not too far away, which is used for access by a milk lorry, was not repaired. If something positive is to come out of all of this, it is that local employment will have to be created as money is spent locally to repair our roads. If this is not addressed, we will have no road infrastructure in 12 months’ time.
Deputy Paul Kehoe: Like Deputy Breen, I am disappointed that neither the Minister for Transport, the Minister for the Environment, Heritage and Local Government, nor one of the Ministers of State at those Departments, has had the courtesy to come here this evening to address this matter.
Deputy Paul Kehoe: I seek an emergency aid package for County Wexford to address the disastrous state of the county’s roads. Since 17 December, heavy frost, snow and flooding have left our roads in a dangerous condition. I call on the Ministers for Transport and the Environment, Heritage and Local Government to provide the director of services in Wexford County Council with the funds needed to address this serious problem.
I commend the council’s staff on the excellent work they have done over the past several weeks. They are working within the funding constraints imposed by this Government. It is an indictment of the Government that their budgets have already been drastically cut. The first act taken by the rainbow Government in 1994 was to make a significant investment in county roads. I call on the Minister for Transport to take a similar initiative.
Deputy Billy Timmins: I do not expect the Minister for Transport to be in the country every day of the year because he is entitled to his holidays. However, no command and control systems were in place to provide leadership in the aftermath of the weather crisis. I drove into Dublin on the Wednesday night of the snowfall and encountered complete chaos. I did not see a single figure of authority on the roads. Emergency planning was non-existent.
I recognise that it will be difficult to provide additional funding but it is important that the Minister determine the extent of the damage at the earliest opportunity. I regret that he decided to transfer responsibility for funding non-national roads to the NRA. I advise him to drive through parts of Wicklow, north Carlow, such as Clonmore, Hacketstown, Aughavanna and Deputy Doyle’s country around Glendalough. Unless he sees the devastation for himself, he will not understand the extent of the problem. I do not know whether additional funding can be obtained from the EU but this issue needs to be addressed urgently because our roads were in a better condition 50 years ago.
Deputy Barry Andrews: I thank the Deputies for raising this important matter. The Minister for Transport would like to express his sympathy to all who have been badly affected by the recent severe weather. Indeed, some parts of the country have been hit more than once by the impact of the earlier flooding and the recent severe cold weather. He also expresses his appreciation of the work done by the local authorities and the NRA and commends local authority frontline staff in particular on the exceptional work they did to deal with the impact of the recent extended period of severe weather.
As well as the impact on the daily lives of citizens, there has been a serious impact on parts of the road network, as has become evident in recent days. Damage to road surfaces is an inevitable consequence of the type of weather we have had in recent times. Ireland has a uniquely extensive road network, with more than 96,000 km of road, or 2.5 times the EU [97]average. The maintenance and improvement of this network places a substantial financial burden on local authorities and the Exchequer.
Considerable resources have been spent in recent years on both the national and regional and local road networks. The first priority therefore has to be to safeguard this investment in so far as this is possible, taking account of the recent weather impacts and the current difficulties with the public finances. The response to recent events will have to carefully target the available resources to address the most urgently required repairs, taking account of key factors such as safety, the strategic importance of the individual road and traffic levels.
The improvement and maintenance of regional and local roads is the statutory responsibility of each local authority, in accordance with the provisions of section 13 of the Roads Act 1993. Works on those roads are funded from local authorities’ own resources and supplemented by State road grants which are paid by the Department of Transport. The initial selection and prioritisation of works to be funded is also a matter for each local authority. When road grants for regional and local roads are allocated each year, the Department of Transport does not hold back a reserve allocation at central level to deal with weather contingencies because such an arrangement would mean a reduction across all local authorities in the road grant allocations to them at the beginning of each year. Rather, the allocation made to local authorities is inclusive of the weather risk factor. Local authorities are expressly advised that they should set aside contingency sums from their overall regional and local roads resources to finance necessary weather related works. Applications for additional funding to carry out remedial works to roads and bridges following bad weather and flooding can only be considered in exceptional circumstances.
Earlier this year the Department of Transport asked those local authorities particularly affected by flooding to provide an assessment of the additional road costs incurred. Last week, the Department requested all local authorities to provide information on the likely additional costs of the recent severe weather over and above their normal winter maintenance expenditure and to identify the principal components of the additional costs. While the Department has received some information on the impact of the November flooding, the collection of information on the recent cold weather is still ongoing. It will take some time to establish costs as the damage is still becoming evident and is being quantified on a daily basis. However, the Minister has asked all local authorities to provide information as soon as possible to enable him to assess the full impact of the severe weather when deciding on the 2010 regional and local road grant allocations. In allocating those grants the Minister will prioritise expenditure to deal with damage caused by the recent exceptional weather.
It is particularly important that local authorities carefully reassess their planned road programmes for 2010 in light of the impact of the recent bad weather on their road networks. The Minister asks them to prioritise necessary repairs to damage caused to roads by weather. The first priority has to be the protection of the existing road network and particularly the massive Exchequer investment of €5.6 billion since 1997.
The National Roads Authority generally fully reimburses local authorities for their expenditure on winter maintenance on national primary and national secondary roads. The Minister is aware this expenditure has also increased substantially due to the bad weather. The NRA will also be reviewing its expenditure priorities for 2010 in the light of the damage caused to national roads.
Deputy Michael Creed: By nature of the matter under discussion, I will speak about correspondence between the Department of Social and Family Affairs and elderly people and pen[98]sioners. Major distress has been caused by correspondence sent in recent days to a significant number of elderly people which cites section 110(1) of the Social Welfare (Consolidation) Act 2005 as the basis for informing them that their pensions are being withdrawn and refunds of payments sought. In some cases, people are being notified that the payments for which they are awaiting approval are being withdrawn.
The basis for this decision is that the people in question did not pay PRSI contributions before they reached the age of 66. However, the correspondence sneakily omits section 110(2), which states: “Notwithstanding subsection (1), the Minister may, where he or she is satisfied that in all the circumstances of the case it would be appropriate to do so, direct that subsection (1) shall not be applied in that case.” I contend the individuals in question have been approved under section 110(2) of the Act and, having carried these applications across the threshold of eligibility by establishing that a farm or business partnership existed and that retrospective PRSI payments could be made, the Minister for Social and Family Affairs cannot now decide to retrospectively withdraw her discretionary approval to pay the pension.
If a satisfactory response is not given to us tonight, we will raise the issue by every parliamentary device available to us to ensure the Government recognises the folly of the course it is attempting to follow.
Deputy Olwyn Enright: I support the points made by my colleague, Deputy Creed. I do not understand the rationale behind the Minister’s approach to this matter other than as a money-saving mechanism. The section of the legislation to which Deputy Creed referred makes clear this is a matter of ministerial responsibility. It is clearly the Minister who has made the decision to contact these people to indicate that their pension entitlement will be withdrawn. I questioned the Minister on this issue earlier today in the House and am disappointed she is not here to address it on the Adjournment. She told us that 87 people are currently affected by the change, but this number does not take account of the many more who will be affected when they reach the age of eligibility.
The Minister has it entirely in her power to withdraw the notice sent out to the persons concerned. Her staff throughout the State made the relevant calculations on the applicants’ behalf and told them how much they would have to contribute in order to be eligible for the allowance. Some people have been making contributions and have now received a letter asking that they withdraw the moneys submitted. This is unfair and miserly. It makes little of the legitimate expectation of those involved in the commercial partnerships in question, as set out to them by departmental staff. That expectation was fulfilled by way of payment in the case of at least 87 of them. Like my colleague, I call on the Minister to act upon the power accorded to her under subsection 110(2) of the Social Welfare Consolidation Act 2005 to ensure those payments are made.
Deputy Jimmy Deenihan: The scheme in question was announced on 25 June 2008 by the Minister, Deputy Hanafin. She said at the time that it was “hugely important” for women who have over many years contributed greatly to family commercial partnerships and that it would “primarily benefit women who are approaching pension age but are not covered for a contributory pension”. The details of the scheme were published in social welfare booklet SW124. The booklet, which I and many of my colleagues have used in advising clients and constituents, makes no mention of the fact that the individual must have paid at least one contribution prior to turning 56 years of age. It is important to note that when a spouse is assessed by the Department and qualified to back pay PRSI for earlier years, the PRSI then collected includes, in the majority of cases, PRSI for years prior to the applicant’s 56th birthday.
[99]In the letters sent out to applicants informing them that they will not qualify for the pension, the Department has, as Deputy Creed noted, only referred to subsections 110(1)(a) and 110(1)(b) of the Social Welfare Consolidation Act 2005. There is no reference to subsection 110(2) which states:
In other words, the Minister has the power to overturn this decision in respect of those persons who have made contributions. At the very least, those who have already been awarded a pension should retain that entitlement.
Deputy Barry Andrews: I am taking this Adjournment matter on behalf of the Minister for Social and Family Affairs. Spouses who are actively engaged in a commercial partnership, including the operation of a farm, as opposed to simply being the joint owners of a property, are treated as individual self-employed contributors and are thus liable to social insurance contributions. On foot of a programme for Government commitment, an information leaflet, entitled “Working with your spouse: how it affects your social welfare contributions and entitlements”,was developed between the Department of Social and Family Affairs and the Revenue Commissioners to set out the social welfare and tax implications of families co-working in a shared business. It was published on 25 June 2008.
The leaflet clarifies that spouses who operate in a commercial partnership may be brought into the social insurance system, subject to certain criteria. In this way, both spouses incur a liability to pay self-employed PRSI and build up entitlement towards a contributory State pension and other social welfare benefits. Following the above campaign, more than 1,000 applications for commercial partnership status were received, of which 579 applications have been finalised, including 508 that were approved. Applications for pension or benefit are submitted and processed in the usual way.
To qualify for a contributory State pension, several conditions must be satisfied. A person must have at least 260 paid social insurance contributions, with a yearly average of at least ten contributions paid or credited since entry into the social insurance scheme. Applicants must have entered into social insurance before attaining the age of 56 years. In addition, subsection 110(1) of the Social Welfare Consolidation Act 2005 provides that a self-employed contributor shall not be regarded as satisfying the qualifying conditions for a contributory State pension unless he or she has paid self-employment contributions in respect of at least one contribution year before attaining the pensionable age of 66 years and all self-employment contributions payable by him or her have been paid. The above condition in respect of one year’s paid self-employed contributions before reaching age 66 has been in existence since 5 April 1995.
A State pension is a valuable benefit and it is important that the conditions applied ensure that those qualifying for payment have an adequate and sustained history of contributions to the social insurance fund over their working lives. Approximately 268 applications for a contributory State pension have been received under this scheme. Following a review of these pension claims, it was discovered that several individuals who had been in receipt of a pension did not satisfy the condition whereby they were required to have paid at least one year’s self-employment contributions before reaching age 66. As they did not satisfy this condition, they have been notified that their claims have been disallowed from the date of pension award. To date, 97 claims for contributory State pension which were in payment have been disallowed and 16 customers have had their rates reduced. However, following the provision of additional information by some customers and further investigation in conjunction with Revenue, ten of [100]the 97 cases above have had their payments reinstated. A further 46 customers have failed to satisfy the qualifying conditions and accordingly their claims have been refused. One further case is currently under investigation. Overpayments will be determined in the above cases and the customers will be notified and requested to repay the amounts involved. However, a recovery officer may reduce or cancel an overpayment based on the circumstance of an individual case, in line with the governing legislation.
There are 121 additional applications for commercial partnerships currently being processed by the scope section of the Department where the persons concerned have not paid any self-employment contributions prior to reaching age 66. If a favourable partnership decision is reached these persons may incur a PRSI liability for the years in question. These customers will not satisfy the condition that they paid self-employment contributions prior to reaching age 66. Last week the Department contacted all applicants to advise them of the position and to ascertain whether they wish the Department to continue its investigation or if they wish to withdraw their application.
While the publication of the leaflet to which I referred clarified existing procedures in regard to the recognition of commercial partnerships between husbands and wives for social insurance purposes, including retrospective payment of social insurance, it did not involve a change in existing policy or administration. In particular, the clarification of the position did not alter people’s potential entitlements, and all applicants for the contributory State pension must continue to satisfy the eligibility conditions contained in legislation.
The Dáil adjourned at 9.10 p.m. until 10.30 a.m. on Wednesday, 20 January 2010.
———————— The following are questions tabled by Members for written response and the ministerial replies as received on the day from the Departments [unrevised]. ————————Questions Nos. 1 to 8, inclusive, answered orally.
Questions Nos. 9 to 76, inclusive, resubmitted.
Questions Nos. 77 to 84, inclusive, answered orally.
85. Deputy Emmet Stagg asked the Minister for Social and Family Affairs the level of interaction between her Department and the Department of the Environment, Heritage and Local Government and local authorities on achieving savings in the cost of rent supplement by switching more tenants to the rental accommodation scheme. [1808/10]
124. Deputy Enda Kenny asked the Minister for Social and Family Affairs the number of persons claiming rent supplement more than 18 months; and if she will make a statement on the matter. [1688/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Questions Nos. 85 and 124 together.
There are currently over 93,000 tenants benefiting from a rent supplement payment — an increase of almost 26% since the end of 2008. Over 35,000 or 38% have been in payment for 18 months or more.
The Rental Accommodation Scheme or RAS, which was introduced in 2004, gives local authorities specific responsibility for meeting the longer term housing needs of people receiving rent supplement for 18 months or more. Details of these tenants are notified regularly by the Department to the local authorities. Local authorities meet the housing needs of these individuals through a range of approaches including the traditional range of social housing options, the voluntary housing sector and, in particular, RAS.
The Department of the Environment, Heritage and Local Government has advised that, at end November 2009, local authorities have transferred almost 9,000 rent supplement cases to private sector RAS units. An additional 4,000 rent supplement cases have been transferred to voluntary sector RAS units. Housing authorities have also transferred a further 11,000 recipi[102]ents to other social housing options, making a total of over 24,000 transfers since 2005. Almost 7,000 recipients were transferred in 2008 with a further 6,000 transferred up to November 2009.
It is accepted that progress in relation to RAS was initially slower than expected. However the pace of delivery has improved significantly, and in 2010 a target has been set of transferring an additional 8,000 households from rent supplement. The number of unsold affordable housing stock around the country and the move to long term leasing by local authorities, creates an opportunity to accelerate transfers and the current market conditions should contribute to achieving further savings.
Rent supplement tenants are required to make a minimum contribution towards their rent. This contribution was increased by €11 to €24 in two phases in 2009 as a budgetary measure. This change allows for a better alignment with the contribution payable under the differential rent scheme applying to RAS tenants. This will encourage more people to take up RAS offers.
A Value for Money and Policy Review of RAS is being conducted by the Department of the Environment, Heritage and Local Government Department and will commence this month. Officials of my department will participate in the review and will also continue to work closely with the Department of the Environment, Heritage and Local Government and local authorities in ensuring that RAS meets its objective of catering for those on long term rent supplementation while enabling rent supplement to return to its original role of a short-term income support.
86. Deputy Liz McManus asked the Minister for Social and Family Affairs the estimated fraud rate within each scheme and the target savings she is setting for each scheme in 2010. [1793/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): In order to identify fraud and error levels in schemes the Department carries out detailed fraud and error surveys on individual schemes. These surveys provide evidence based indicators for the levels of fraud and error within those schemes at that particular time.
As reported by the Comptroller and Auditor General the percentage of expenditure resulting from fraud identified in these surveys ranged from 0% for pensioners, to 0.1% for Illness Benefit, 0.8% for the Family Income Supplement, 1.8% for Child Benefit, 2.3% for the Disability Allowance and 6.4% for the One Parent Family Payment. A fraud and error survey is currently underway on Jobseeker’s Allowance and the results of that will be available by quarter 2, 2010.
Although the level of fraud on most schemes is very low, within schemes, some categories of claimants can be a much higher risk than others and when these are identified the Department moves to address the issue.
Because of the resources involved, the Department’s goal is to carry out fraud and error surveys on each of the major schemes every two years. This frequency is considered reasonable having regard to the need to consider the impact of measures taken to address issues raised in previous surveys.
The amount of money recorded as control savings by the Department at the end of 2009 was €484 million. This represented an increase of €8 million on 2008 figures.
In 2009 over 750,000 claims were reviewed, 20% more than the target for the year. The total control savings target for 2010 is €533m.
Additional savings are being sought on the One Parent Family and Illness Benefit payments, bringing the total targets for these schemes to approximately €100m and €110m respectively. [103]A target of €110m has also been set for pensions, including additional savings on the non-contributory scheme.
Over €82million is being targeted on Child Benefit, approximately €81m is being targeted on jobseeker’s payments and €16.5m is expected to be saved on carers payments.
The remaining sums are €17m on the Family Income Supplement, €10m on the Supplementary Welfare Allowance and €6m in the PAYE and PRSI areas.
The vast majority of people who seek a Social Welfare payment are doing so correctly and within their entitlement. However, I am determined to ensure that abuse of the social welfare system is prevented and is dealt with effectively when detected. To this end, the control programme of the Department is carefully monitored and the various measures are continuously refined to ensure that they remain effective. The 2010 targets take account of the extra anti-fraud powers provided in the Social Welfare Bill.
87. Deputy Billy Timmins asked the Minister for Social and Family Affairs the processing time for each individual social welfare office to deal with a claim for jobseeker’s allowance; and if she will make a statement on the matter. [1713/10]
106. Deputy James Reilly asked the Minister for Social and Family Affairs the average processing time in respect of a claim for jobseeker’s benefit to be dealt with; and if she will make a statement on the matter. [1708/10]
112. Deputy Alan Shatter asked the Minister for Social and Family Affairs the processing time for each individual social welfare office to deal with a claim for jobseeker’s benefit; and if she will make a statement on the matter. [1709/10]
119. Deputy Fergus O’Dowd asked the Minister for Social and Family Affairs the average processing time for a claim for jobseeker’s allowance to be dealt with; and if she will make a statement on the matter. [1704/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Questions Nos. 87, 106, 112 and 119 together.
I fully appreciate that becoming unemployed and having to claim a jobseeker’s payment is stressful enough in itself and that it is vital that people get access to financial supports as quickly as possible.
As Deputies will be aware, the number of people on the live register grew by over 45% in the 12 months to December 2009.
The Department of Social and Family Affairs has sought to manage this increase as well as it possibly can and to keep delays to a minimum. Improved processes and procedures have helped to increase productivity among existing staff, over 400 extra people have been assigned to claim processing since May 2008 and centralised units have been set up to relieve some of the pressure on the busiest offices.
The average processing times for claims decided in December was two weeks for jobseeker’s benefit and just over six weeks for the jobseeker’s allowance. This is the average nationally and there are fluctuations between offices. In December, 4 out of every 5 claims for jobseeker’s benefit were processed within 3 weeks and 2 out of every 3 claims for the means tested payment jobseeker’s allowance were processed within 6 weeks.
Processing times can vary depending on the complexity of the claim and the availability of the necessary documentation from the applicant and or their employer. In the case of jobseeker’s [104]allowance claims, carrying out means assessments and determining whether a claimant satisfies the Habitual Residence Condition can also take time.
Processing times can also vary from office to office due to the extent of the increased claimload, the number of staff vacancies, the duration of such vacancies and the turnover of staff in the office.
From time to time the average processing time for an individual office can vary considerably. This can occur where, for example, an office concentrates on clearing the claims that have been awaiting a decision the longest.
I am making available a tabular statement showing the average processing time for claims decided in December for each local and branch office. Claims for branch offices are decided in their parent local office.
While I know that processing times are still too long in some areas, it should be noted that the additional resources and process improvement measures that have been put in place are having an impact. For example, the number of jobseeker’s claims awaiting a decision on 9th January last was 30% lower than in July.
While every effort is made to ensure that applications are processed as quickly as possible, anyone who is under financial pressure while awaiting a decision on their claim for a jobseeker’s payment can apply for supplementary welfare allowance which is subject to a means test and other qualifying conditions. It is open to anyone who is not satisfied with the decision on their claim to appeal that decision to the Social Welfare Appeals Office.
I assure the House that the Department will continue to prioritise reducing the unacceptable delays in deciding welfare claims that are evident in a small number of offices.
88. Deputy Shane McEntee asked the Minister for Social and Family Affairs the position regarding the waiting times to access the Money Advice and Budgeting Service money advisers; and if she will make a statement on the matter. [1691/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): Responsibility for the Money Advice and Budgeting Service (MABS) transferred to the Citizens Information Board (CIB) in 2009 and will provide strong management support to the local voluntary MABS companies. MABS assists people who are over-indebted and need help and advice in coping with debt problems. The role of money advisors is to help clients to assess their financial situation, make a budget plan and deal with creditors. MABS is now dealing with increasingly complex debt situations in respect of clients who are presenting with multiple creditors/debts. It is important that people coping with debt difficulties take early action and approach MABS for help and guidance. This can be the first positive step for people in addressing debt difficulties.
There are 52 independent MABS companies operating the local MABS services from 65 locations throughout the country, with national support provided by the MABS NDL. In addition, the MABS National Telephone Helpline is available from 9am to 8pm Monday to Friday and the MABS website can be accessed 24 hours a day at www.mabs.ie. The helpline dealt with 24,000 callers in 2009 and 11,000 in 2008. The number of calls received in 2009 remained constant throughout the year at 6,000 per quarter. Some 19,000 new clients approached MABS for assistance in 2009. This compares with 16,600 new clients in 2008 and 12,734 in 2007.
In 2009, funding of almost €18m was allocated to MABS and included provision for 19 additional money advisers, bringing the total number of staff to 271. The MABS funding for 2010 is included in the CIB allocation of €46.2m.
All MABS companies operate an appointment system for clients. Clients with urgent difficulties are prioritised for attention and are dealt with promptly. Less urgent cases are referred to the MABS Helpline and to the MABS website in the first instance. 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 assistance.
From first point of contact to first appointment with a money advisor the average waiting time is currently 4.5 weeks. This is the average nationally and there are fluctuations between offices. During the waiting period, clients are assessed and those in need of immediate assistance are given a priority appointment, others are provided with assisted self-help to ensure that they have taken steps to assess their situation and if appropriate they are supported to take holding action with their creditors.
I am satisfied that the additional resources provided to MABS will assist them to meet the demand for their services.
89. Deputy Ruairí Quinn asked the Minister for Social and Family Affairs the action she is taking to improve processing times for all social welfare claims. [1801/10]
[108]Minister for Social and Family Affairs (Deputy Mary Hanafin): The Department is committed to delivering the best possible service to its customers. To this end, operational processes and procedures and the organisation of work are continually reviewed in all areas of the Department. These reviews are supported by modern technology, the potential of which is continuously harnessed. Claims are processed in the most efficient and expeditious way possible, having regard to the eligibility conditions that apply to each scheme.
Processing times vary across schemes because of both the volume of applications and the differing qualification criteria. For example, means assessments are required for all of the social assistance schemes; medical examinations are required for illness related schemes and customers must also satisfy the habitual residence conditions. In the case of the insurance based schemes, it may be necessary to ascertain details of foreign insurance records.
It should also be noted that many factors outside the Department’s control can impact upon claim processing times e.g. the supply of relevant information by the customer, employers or other third parties.
From January 2009, new processing targets, based on processing 90% of claims within a particular timescale, varying from scheme to scheme, were introduced for all schemes.
Specific process improvements have been introduced across many areas of the Department. Some recent examples of these are as follows:
90. Deputy Willie Penrose asked the Minister for Social and Family Affairs when she plans to reform the back to education allowance to make it more compatible with the Central Applications Office application process for third level courses and the academic year. [1798/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The back to education allowance (BTEA) scheme is designed to help those in receipt of a social welfare payment to improve their employability and job-readiness by acquiring additional educational qualifications. It is a second chance education opportunities scheme that recognises the special difficulties that people on social welfare can face when attempting to gain a foothold in the labour market. It is designed to remove the barriers to participation in second and third level education.
The scheme enables eligible people who have been getting a social welfare payment to continue to receive a payment while pursuing an approved full-time education course. The scheme is self-selecting in nature and responsibility for securing a place on an approved course rests with the applicant. Once a place has been secured, an applicant can check with the Department as to whether the other eligibility criteria for participation in the back to education scheme are fulfilled. Payment under the scheme covers the relevant academic year and the scheme caters for approved courses where the starting date is not aligned to the standard academic year.
In order to qualify for participation, an applicant must be in receipt of a relevant social welfare payment for 3 months if pursuing a second level course or 12 months if pursuing a third level course. The qualifying period for access to third level courses is reduced to 9 months for those who are participating in the national employment action plan process or engaging with the Department’s facilitator programme.
People who are awarded statutory redundancy may access the scheme immediately, provided an entitlement to a relevant social welfare payment is established prior to commencing an approved course of study.
The requirement to be in receipt of a relevant social welfare payment for a minimum period has always been a feature of the back to education scheme. A waiting period is considered essential to confer entitlement to income support for an indefinite period and is considered necessary in the context of targeting scarce resources at those who need it most.
The number of participants in 2008/2009 academic year was 11,646. Final figures for the current academic year are not yet finalised. However, the number of people on the scheme at the end of November 2009 was 20,418 which is 88% higher than the figure of 10,854 at the end of November 2008.
The back to education scheme has been subject to review and modification over the years to ensure that it continues to assist those furthest from the labour market. The qualifying conditions will continue to be monitored in the context of the objectives of the scheme and the changing economic circumstances.
[110]91. Deputy Brian O’Shea asked the Minister for Social and Family Affairs the details of the planned vouched fuel allowance scheme for low income families to offset the increases in fuel costs associated with the introduction of the carbon tax. [1795/10]
110. Deputy Ulick Burke asked the Minister for Social and Family Affairs the action she will take to alleviate the impact of the carbon tax on lower income households that are more likely to rely on higher carbon fuels and to live in badly insulated homes; and if she will make a statement on the matter. [1655/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Questions Nos. 91 and 110 together.
The household benefits package is payable throughout the year to almost 380,000 pensioners, people with disabilities, and carer households to assist them with their heating, light and cooking costs. This scheme cost approximately €200m in 2009.
In addition, the national fuel allowance scheme assists householders on long-term social welfare or health service executive payments with meeting the additional cost of their heating needs during the winter season. The allowance represents a contribution towards a person’s heating expenses. It is not intended to meet those costs in full and must be seen in the context of the overall level of income available to the family.
In Budget 2009, the duration of the payment was increased by an extra 2 weeks to 32 weeks, while the weekly value of the allowance was increased by €2 to €20 a week, or €23.90 in designated smokeless areas. This compares with just €14 and €17.90 respectively in 2006.
Proper household insulation is absolutely vital in tacking fuel poverty. Initiatives such as the Warmer Homes Scheme, operated by Sustainable Energy Ireland, under the aegis of the Department of Communications, Energy and Natural Resources have a very valuable role to play in that regard, as does funding from the Department of the Environment, Heritage and Local Government to improve the quality of existing local authority housing. Considerable progress has been made in this area in recent years.
The Government has announced its intention to introduce a carbon tax, which will come into effect on heating products from May 2010 and on solid fuels at a date to be set by commencement order.
Before the tax is applied to fuels for home heating, arrangements are being made to assist those most at risk of fuel poverty.
In his Carbon Budget Statement, the Minister for Environment, Heritage and Local Government, outlined details of €130 million in funding for insulation, €76 million of which will be used to assist low income families. The Government is also conscious that families at risk of fuel poverty will need extra income support to meet the increasing costs of fuel as a result of the carbon tax.
The Department of Communications, Energy and Natural Resources has overarching responsibility for the energy portfolio and has convened an Inter- Departmental/Agency Group on Affordable Energy to coordinate and drive Government policy in this area. The objective is to ensure a shared understanding of the challenges and actions underway and to ensure a fully cohesive strategic approach to delivery of affordable energy initiatives and programmes.
The Inter Departmental/Agency Group has been asked to draw up an Energy Affordability Strategy for consultation early in 2010. This strategy will set out existing and future approaches to addressing energy affordability and will have regard both to the impact of the carbon tax on [111]low income households and the range of supports outlined above in making its recommendations.
As part of its work, the Group will make recommendations as to the precise package of measures, including in the area of income support, that should be put in place to assist those at risk of fuel poverty in advance of the implementation of the carbon tax on home heating products.
92. Deputy Charles Flanagan asked the Minister for Social and Family Affairs the position regarding fraud control measures put in place by her Department; and if she will make a statement on the matter. [1677/10]
101. Deputy Denis Naughten asked the Minister for Social and Family Affairs the savings made in 2009 by her as a result of fraud detection; if she achieved her departmental target; and if she will make a statement on the matter. [1480/10]
116. Deputy Brian O’Shea asked the Minister for Social and Family Affairs her estimate of the fraud detection rate arising from calls from members of the public. [1794/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Questions Nos. 92, 101 and 116 together.
The prevention of fraud and abuse of the social welfare system is an integral part of the day-to-day work of the Department. A key objective of the Department’s control strategy is to ensure that the right person is paid the right amount of money at the right time.
The Department processes in excess of 2 million claims each year and it makes payments to over one million people every week. The vast majority of people are receiving the entitlement due to them.
Welfare fraud is theft. It is a serious crime and the Department is doing everything that it can to crack down on people who abuse the system. There are over 620 staff working in areas related to control of fraud and abuse of the welfare system.
The level of fraud on most schemes is very low. As reported by the Comptroller and Auditor General, the percentage of expenditure resulting from fraud identified in the Department’s Fraud and Error surveys was 0% for pensioners, 0.1% for Illness Benefit, 0.8% for the Family Income Supplement, 1.8% for Child Benefit and 2.3% for the Disability Allowance.
Nonetheless, the Department is conscious that in a small number of schemes, some groups of claimants present a higher risk than others and we have made changes to address this. For example, a number of individual surveys have highlighted a high level of risk that non-Irish nationals could claim welfare payments to which they are no longer entitled after they have left the State. Having identified this risk, the Department has sought to minimise it by removing the option to receive payments by Electronic Fund Transfer (EFT) for new claimants of jobseeker payments.
Targeted control measures have also been put in place in relation to other customer segments in schemes where any form of high risk has been identified. Since the department started the cross-border operations, the percentage year-on-year increase in people signing on for jobseeker’s payments in virtually all of the border offices had reduced.
Fraud detection systems have also been improved through data matches with organisations such as the Revenue Commissioners on commencement of employment data, the General [112]Registrars Office on Marriages and Deaths information, and many other organisations including the Departments of Justice, Environment, Education and other state bodies. In addition, a data matching programme is now in place to ensure that relevant information available in one area of the Department is applied to all schemes.
Greater emphasis was also placed last year on prevention of fraud and error at the claim application stage. While this is of course the most cost effective mechanism of reducing unwarranted welfare expenditure, it should be noted that savings achieved in this way are not included in the published figures for control savings.
For 2009, the Department set a target of reviewing almost 620,000 individual welfare claims. In fact over 750,000 reviews were actually carried out last year — 20% more than the annual target. The total fraud and error savings recorded for the year was approximately €484 million. While this was lower than the target set for 2009, it represented an increase of €8 million on the 2008 figure.
In considering the level of savings recorded in 2009, it is important to note that the final average live register figure for the year, at 395,500, was significantly lower than the 440,000 that had been predicted when the annual target was set. Also, while it is difficult to identify exactly why the above-target number of reviews did not generate higher savings, it may be partially due to decreased opportunities for people to work and claim. Increased emphasis on preventing unwarranted claims at the initial application stage may also have led to a reduction in the number of claims having to be stopped after they have gone into payment.
It is also worth noting that the 2009 control savings from several schemes were ahead of target. These include Child Benefit, One Parent Family Payment, Illness payments and Pensions.
The number of anonymous reports from members of the public has increased dramatically in the past year, with over 6,400 reports made at end 2009 compared to approximately 1,000 reports made in 2008. Each report is followed-up and savings are included in the savings reported within the individual scheme areas.
The Department is committed to ensuring that social welfare payments are available to those who are entitled to them. In this regard the control programme of my Department is carefully monitored and the various measures are continuously refined to ensure that they remain effective. As Deputies will be aware, the recent Social Welfare Bill included extra anti-fraud powers for the Department.
93. Deputy Denis Naughten asked the Minister for Social and Family Affairs further to Parliamentary Question No 62 of 11 November 2009, if a final decision has been taken as to the appropriate response; and if she will make a statement on the matter. [1481/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The earlier question, to which Deputy Naughten makes reference, asked about “plans to review the habitual residence condition rules or the existing legislation in view of the recent decisions of the appeals office regarding cases by asylum seekers”.
Section 15 of the Social Welfare and Pensions (No. 2) Act 2009, passed by this House on 15 December 2009, provided for an amendment to the habitual residence provisions to deal with this matter. The new provisions list those who have a legal right to reside in the State and [113]those who do not have such a right, and state that those who do not have such a right shall not be regarded as habitually resident for the purposes of any claim for social welfare.
A deciding officer or appeals officer may not therefore rule that a person, who has been refused permission to remain in the State, or whose application has not yet been determined, satisfies the habitual residence condition. Where a decision is given granting permission to remain, the question of whether that person is habitually resident will be made in the light of the factors set out since 2007 in the Social Welfare Consolidation Act. The determination will be made with effect from the date that permission is granted, or from the date of application for the payment in question if the application was not lodged until after that date.
94. Deputy John O’Mahony asked the Minister for Social and Family Affairs the number of persons on a national, county and local social welfare office basis awaiting for their application for jobseeker’s allowance and benefit to be processed; and if she will make a statement on the matter. [1719/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The total number of jobseeker’s awaiting a decision on their claim at 9th January 2010 was 58,878. A table showing the breakdown between Jobseeker’s Benefit (JB) and Jobseeker’s Allowance (JA) claims at each local office is as follows. This information has been compiled from data that is maintained on a Local Office catchment area basis and these figures do not correspond exactly with county boundaries.
Over the past number of months the Department has introduced a range of process improvement initiatives to deal with the increased volume of claims which include:
A more streamlined procedure for claimants moving to jobseeker’s allowance when their jobseeker’s benefit expires.
A streamlined process for people who had a claim in the previous two years.
Application forms for the jobseeker schemes are now available on the Department’s website. This means that anyone who wants to make a claim can print the form at home and bring it to the local office completed. This helps reduce queuing times.
More straight-forward procedures for providing evidence of identity and address have been introduced
The process for casual employees has been streamlined and the employee can now self certify on a weekly basis without recourse to the employer. A compensatory periodic control measure has been introduced for employers.
One of the most significant initiatives introduced recently aimed at reducing queuing times and waiting times, involves the customer attending the office by appointment at which time the claim is taken and decided. This system has already been introduced in 20 offices. The Department plans to extend it up to a further 25 offices and over the next few weeks it will be introduced in Cavan, Clonmel, Ennis, Tralee, Arklow, Wexford, Finglas, Navan Road, Kilbarrack, Swords and Dun Laoghaire.
I realise the importance of getting claims decided as quickly as possible and I want to assure the Deputy that staff in local offices and in the Department’s inspectorate are doing all they can to reduce the numbers of claims awaiting a decision.
95. Deputy Róisín Shortall asked the Minister for Social and Family Affairs the way she intends to achieve the €20 million projected savings on rent supplement as announced in budget 2010; and if these savings are based on the 2009 estimate, the 2009 outturn or otherwise. [1806/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): Rent supplement is payable to people who are unable to meet the cost of renting private accommodation and is intended as a short-term support. There are currently over 93,000 tenants benefiting from a rent supplement payment — an increase of 26% since the end of 2008. The provisional outturn on Rent Supplement for 2009 is €507.68 million. Budget 2010 provided for expenditure of €509m in 2010, after the achievement of €20m savings.
Rent limits are set at levels that enable eligible households to secure and retain basic suitable rented accommodation, having regard to the different rental market conditions that prevail in various parts of the state.
[117]It is essential to ensure that state support for rent supplemented tenants, who form a substantial section of the rental market, does not give rise to inflated rental prices with particular negative impact on those tenants on lower incomes, including people in low paid employment. The Government is determined to ensure that reductions in rent levels generally in the year to date result in savings for the taxpayer.
Maximum rent limits are prescribed in regulations and are time limited so that they can be adjusted in the light of rent levels generally. The most recent regulations cover the period 1 June 2009 to 31 May 2010. Rent limits can, however, be reviewed at any time. Notwithstanding rent limits, the Community Welfare Service may, in certain circumstances, exceed the rent levels as an exceptional measure to meet special needs. Equally the Community Welfare Service also pays below prescribed rent limits in the light of rent levels in the local rental market.
Budget 2010 provided for €20m savings in the rent supplement scheme arising from a review of the maximum rent limits. To this end, the maximum level of rent supplement payable by the State will be reviewed early in 2010 on the basis of the latest data available on general trends in rental prices.
The review will be conducted with reference to analysis of rents recorded with the Private Residential Tenancies Board, the CSO private rent index and data from the Daft.ie property website. The maximum rent limits payable will then be adjusted and new limits will apply in respect of all new tenancies or renewals of tenancies from April 2010.
Indications are that rents in the private rented sector continue to fall since limits were reviewed in 2009. Based on current information available about decreases in rent levels, the Department expects the rent review to lead to savings of €20 million.
96. Deputy James Bannon asked the Minister for Social and Family Affairs her plans to change the one parent family payment; and if she will make a statement on the matter. [1647/10]
127. Deputy Seán Sherlock asked the Minister for Social and Family Affairs when she plans to end the cohabitation ban for lone parents. [1804/10]
720. Deputy Olwyn Enright asked the Minister for Social and Family Affairs her plans to change the one parent family payment; and if she will make a statement on the matter. [2060/10]
787. Deputy Aengus Ó Snodaigh asked the Minister for Social and Family Affairs her plans to change the criteria for lone parents benefits; when these changes will take effect; and if she will make a statement on the matter. [1941/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Questions Nos. 96, 127, 720 and 787 together.
The Government discussion paper, “Proposals for Supporting Lone Parents,” put forward proposals to tackle obstacles to employment for lone parents and other low income families. These included proposals for the extension of the National Employment Action Plan to focus on lone parents, focused provision of childcare and the introduction of a new social assistance payment for low income families with young children.
The current duration of the One-Parent Family Payment (OFP) is not in the best interests of the recipient, their children or society. Social welfare supports for lone parents should be [118]designed to: Prevent long term dependence on social welfare income support and facilitate financial independence. Recognise parental choice with regard to the care of young children but with the expectation that parents will not remain outside of the labour force indefinitely. Change the expectations surrounding receipt of the OFP, introducing an expectation of participation in education, training and employment, with supports provided in this regard.
Income supports are only one element of the supports required by those parenting alone. Other co-ordinated supports and services required include access to childcare support, education, training and activation measures. These must also be addressed by the relevant Departments and Agencies if lone parents are to be enabled to access employment.
It has not been possible to progress the proposals as outlined in the Government discussion paper, including the removal of the cohabitation rule, due, in part, to current economic conditions. These proposals have, however, informed deliberations regarding the scheme. The Government is considering various options for limiting the length of time for which the One-Parent Family Payment (OFP) can be paid (including the age of the youngest child). Any such changes would be phased in over a period of years for existing recipients to enable lone parents to access education and training and to prepare for their return to the labour market.
97. Deputy David Stanton asked the Minister for Social and Family Affairs the number of applications received for domiciliary care allowance from April to December 2009, inclusive; the number refused; the number appealed to the social welfare appeals office; the number of same for which the decision was overturned on appeal; and if she will make a statement on the matter. [1779/10]
125. Deputy David Stanton asked the Minister for Social and Family Affairs the number of domiciliary care allowance applications received by her Department each month from April to December 2009 inclusive; the number of these claims which were refused each month; the number of same for which appeals were submitted; the reason children were judged not to be eligible; and if she will make a statement on the matter. [1780/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Question Nos. 97 and 125 together.
Domiciliary Care Allowance is payable in respect of children who have a disability so severe that it requires the child needing care and attention and/or supervision substantially in excess of another child of the same age. The care and attention received must be given by another person, effectively full-time so that the child can deal with the normal activities of daily life. The child must be likely to require this level of care and attention for at least 12 months.
Eligibility for Domiciliary Care Allowance is not based primarily on the medical or psychological condition, but on the resulting lack of function of body or mind necessitating the degree of extra care and attention required. Each application is assessed on an individual basis taking account of the evidence submitted by the applicant.
In the period 1st April 2009 to 31st December 2009 a total of 3,389 applications were received, of which 2,823 cases have to date been fully processed by the Department. Of these applications, 1,031 were awarded and 1,792 refused as they were deemed not to be eligible for Domiciliary Care Allowance. 566 applications are still to be decided. The tabular statement sets out the number of applications received and the number of applications processed each month from April to December 2009. During 2009, decisions made on 564 claims were reviewed [119]at the applicants request as new or additional medical evidence was available, of these 117 claims were subsequently allowed.
Where claims are deemed to be ineligible on medical grounds, it is because it is considered that the requirement of care and attention and/or supervision is not substantially in excess of another child of the same age who does not have a disability. Where a person is not satisfied with the decision of a Deciding Officer they may appeal the decision to the Social Welfare Appeals Office.
There were 836 appeals of Domiciliary Care Allowance decisions received by the Social Welfare Appeals Office in 2009 which variously consisted of appeals in relation to the commencement date of the claim, satisfying the Habitual Resident Condition or meeting the medical criteria for the scheme. The Social Welfare Appeals Office made decisions on 11 cases in 2009 and overturned the decision in 6 cases.
All claims that have had the original negative decision revised have been processed by the Department and payment has issued to the customers.
98. Deputy Olivia Mitchell asked the Minister for Social and Family Affairs the additional supports given to job facilitators to deal with the increased demand for access to support; and if she will make a statement on the matter. [1726/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): Facilitators work with social welfare recipients to identify appropriate training or development programmes which will enhance the skills that the individual has and ultimately improve their employment chances, as well as help them to continue to develop personally. They work in close co-operation with other agencies and service providers including FÁS, VEC, other education and training providers and the local and community and voluntary sector. In addition, they provide advice and support to customers who wish to access the back to education scheme, the back to work scheme, and the short term enterprise allowance scheme of the Department.
The facilitator service is available locally to all social welfare recipients via the local network. Facilitators are assigned to cover a geographical area. They hold open clinics and meet with people who have been referred either by the social welfare local office, the employment support section or by other agencies.
[120]Since September 2008, 23 additional facilitators have been appointed. The number of facilitators currently in place is 63. It is envisaged that this number will increase to 70 in the coming months.
99. Deputy Michael Creed asked the Minister for Social and Family Affairs the future plans she has for carers following the decision not to publish the national carer’s strategy; and if she will make a statement on the matter. [1734/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The Government is acutely aware and appreciative of the contribution made by carers. It was for that reason, that when resources were available, we invested heavily in improving social welfare rates and services for all those who are reliant on the State for income support.
Over the past decade, weekly payment rates to carers have greatly increased, qualifying conditions for carer’s allowance have significantly eased, coverage of the scheme has been extended and new schemes such as carer’s benefit, half-rate carer’s allowance and the respite care grant have been introduced and extended. Where people are caring for more than one person they receive a higher payment. This equates to the personal rate for a person with the same means who is caring for one person plus 50% of the maximum personal rate. Recipients with children also receive a qualified child increase in respect of each child.
Following this year’s Budget, the carer’s allowance rates for carers over 66 years of age have not been changed and remain at €239. The rate of carer’s allowance for someone under 66 is €212.
Since the introduction of the carer’s allowance in 1990 payments to carers have been increased and expanded. Carer’s allowance was increased in 2007, 2008 and 2009 by 12.1%, 6.5% and 3.3%, respectively. As a result, even with the reductions announced in last year’s Budget for carers under 66, the weekly rate of payment for the carers allowance is still almost 20% higher this year than in 2006 and more than 147% higher than in 1997.
The means test for carer’s allowance has been significantly eased over the years, and is now one of the most generous means tests in the social welfare system, most notably with regard to spouse’s earnings. Since April 2008, the income disregard has been €332.50 per week for a single person and €665 per week for a couple. This means that a couple with two children can earn in the region of €37,200 and qualify for the maximum rate of carer’s allowance as well as the associated free travel and household benefits. A couple with an income in the region of €60,400 can still qualify for a minimum payment, as well as the associated free travel, household benefits package. These levels surpass the ‘Towards 2016’ commitment to ensure those on average industrial earnings continue to qualify for a full carer’s allowance.
From June 2005, the annual respite care grant was extended to all carers who are providing full time care to a person who needs such care, regardless of their income. The rate of the respite care grant has also been increased to €1,700 per year in respect of each care recipient since June 2008.
During 2008, an interdepartmental group, chaired by the Department of the Taoiseach, with secretariat support provided by my Department, undertook work, including a public consultation process to develop a National Carers’ Strategy. However, because of the prevailing economic situation, it is not possible to set targets or time limits which could be achieved. In that context, rather than publishing a document which did not include any significant plans for the future, the Government decided not to publish a strategy. This position remains unchanged.
100. Deputy Joe Costello asked the Minister for Social and Family Affairs the involvement of her Department on the inter-departmental group on affordable energy. [1785/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The Department of Social and Family Affairs assists social welfare recipients with heating costs, both through their basic payments and through the fuel allowance scheme and the household benefits package of electricity and gas allowances. These schemes have been improved significantly in recent years.
The Department of Communications, Energy and Natural Resources has overarching responsibility for the energy portfolio and convened an inter-departmental /agency group on affordable energy, in June 2008, to coordinate government policy in this area. The group, which is co-chaired by the Social Inclusion Division of this Department, comprises officials of the departments of the Taoiseach, Communications, Energy and Natural Resources, Finance, Environment, Heritage and Local Government, Health and Children, Social and Family Affairs, the Commission for Energy Regulation, Sustainable Energy Ireland, the Institute of Public Health in Ireland and the ESB and Bord Gáis. Officials of the Department of Social and Family Affairs who have responsibility for the fuel allowance and household benefits schemes participate in the group. The objective of the group’s work is to ensure shared understanding of the challenges and actions underway and to ensure a fully cohesive, strategic approach to the delivery of affordable energy initiatives and programmes.
The group has been asked to develop an affordable energy strategy encompassing the policies and initiatives required to improve energy affordability in Ireland. As part of its terms of reference, the group will seek to identify an appropriate methodology for the measurement and reporting of energy poverty in Ireland and to assess the extent of energy poverty in Ireland. I am advised that the group will commence its deliberations this month with a view to finalising the strategy following a period of consultation.
Question No. 101 answered with Question No. 92.
102. Deputy Noel J. Coonan asked the Minister for Social and Family Affairs if she is satisfied with the method of recording and calculating fraud control savings; and if she will make a statement on the matter. [1664/10]
128. Deputy Liz McManus asked the Minister for Social and Family Affairs her plans to change the methodology by which savings on fraud and overpayments are calculated by her Department. [1792/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Questions Nos. 102 and 128together.
Control savings are calculated by applying validated multipliers to the difference in the rate of payment before and after the control activity. Multipliers used in assessing control savings estimate the total future savings to the Department of a revocation or reduction resulting from a control action. The multiplier used is based on the average amount of time the person whose payment is stopped will remain off the books before returning. This time varies from scheme to scheme.
There is a comprehensive control guideline which sets out:
(a) What constitutes a control saving in the various control activities;
[122](b) The various multipliers to be used in determining saving;
(c) The method of reporting reviews and savings.
Control Division carry out on-going validation exercises to ensure control savings are recorded correctly. There are no plans to change this method of identifying savings.
103. Deputy Pat Breen asked the Minister for Social and Family Affairs the funding made available to the humanitarian assistance scheme for flood claims; the number of applications for support; the average time it takes to process an application; the number of applications refused support; and if she will make a statement on the matter. [1652/10]
769. Deputy Denis Naughten asked the Minister for Social and Family Affairs the value to date of urgent needs payments paid to flood victims; the number of applicants involved; the corresponding figure for payments under the humanitarian assistance towards flood damage scheme; if the humanitarian scheme will consider permanent housing relocation payments; and if she will make a statement on the matter. [1618/10]
775. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs her proposals to address the issues of hardship arising from recent flooding with particular reference to a simplification of assessment and process of applications for supplementary or emergency assistance; and if she will make a statement on the matter. [45570/09]
780. Deputy Ciarán Lynch asked the Minister for Social and Family Affairs if she will provide additional emergency funds to help defray the extra energy costs incurred by persons affected by the recent flooding; if any relief is available to persons carrying third party insurance whose cars were damaged in the recent icy conditions; and if she will make a statement on the matter. [1866/10]
785. Deputy Michael Ring asked the Minister for Social and Family Affairs the number of families that have applied for a payment under the humanitarian assistance scheme or an exceptional urgent needs payment; the number of applications that have been approved and paid out; the details of the average and total payments; and if she will make a statement on the matter. [1899/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Question Nos. 103, 769, 775, 780 and 785 together.
In recognition of the devastation suffered by people in many areas of the country as a result of the flooding from November 2009 onwards, the Government set up a Humanitarian Assistance Scheme to provide income tested financial support to people who have suffered damages to their homes not covered by insurance. An initial sum of €10 million has been set aside by the Government for this purpose.
The Department and the Community Welfare Service of the HSE are working with the various statutory and other agencies also working in this area, to ensure that the humanitarian assistance scheme will go towards alleviating the hardship which many hundreds of families have had to endure.
Community Welfare Service staff throughout the country have been providing support to families since this flooding occurred. Up to the 8th January 2009 they had already made over [123]1,748 payments to 1,038 individuals to the value of €652,000. The average payment per individual is €628, with the largest payment to an individual in excess of €8,000. All payments to those affected by the flooding are being provided for under the Humanitarian Assistance Scheme.
While the timescale for determining applications for Humanitarian Assistance claims is dependant, among other things, on the availability of the required information, there is no backlog of undecided claims. According to the information available from the HSE, as of 8th January 2010, there were approximately 50 applications currently being assessed. Only one claim refused.
Payments have been provided for emergency financial and other assistance to cover items such as clothing, food, bedding, heating, hire of dehumidifiers and emergency accommodation needs. The Community Welfare Service will continue to make these payments as long as there is a requirement to do so. Such emergency payments under the Humanitarian Assistance Scheme are made without delay and without regard to the household income as the primary objective of these payments is to address the person’s immediate needs.
As the flood waters have receded in some areas, individuals are now in a better position to assess the extent of the damage to their homes. In these cases, payments have been made in respect of essential household items such as carpets, flooring, furniture and white goods. Assistance is also available for structural repairs to homes not covered by household insurance.
Very few large scale claims have been made at this stage as homeowners have not yet established the cost of repair. In many cases, they are awaiting builder’s estimates. It is expected that large scale claims will be received over the coming weeks. These claims will take somewhat longer to process as they will require verification of the loss and the possible use of a loss assessor.
The level of payment available under the aid scheme to any qualified individual depends on the severity of the damage to that person’s home and the extent of the loss experienced as well as household income and general family circumstances. The scheme provides hardship alleviation as opposed to full compensation. As on previous occasions, commercial or business losses are not covered by the scheme nor are losses which are covered by household insurance. The repair of cars damaged in the recent icy conditions is also not covered by the Humanitarian Assistance Scheme.
The question of permanent housing relocation payments is a housing issue to be dealt with by the relevant housing authorities. However, the Community Welfare Service will continue to work with any families in this position to ensure that the objectives of the humanitarian aid scheme are fully achieved in their case.
Applications under the scheme are being income tested to ensure that available assistance is prioritised for those who are most vulnerable. The basic objective of the income test is to determine the household’s capacity to meet the costs of restoring their home to a habitable condition. All household income is considered when determining entitlement to payment.
Detailed guidelines have been provided to the HSE in relation to the income test. These guidelines also contain a list of the type of goods/appliances that are generally covered by the scheme and what replacement value should typically be attributable to each item. This list is not exhaustive and is intended as a guide only. The Community Welfare Service has full discretion to make payments at a higher level than a strict application of the income test would warrant in any individual case where it considers it appropriate to do so. This income test and guidelines simplify the assessment process and to allow for the speedy processing of applications.
[124]People seeking assistance should contact their local Community Welfare Office. Further information and applications forms in relation to the Humanitarian Assistance Scheme are available from the Community Welfare Service in the affected areas and from the Department’s website (www.welfare.ie) and the HSE’s website (www.hse.ie).
104. Deputy Ciarán Lynch asked the Minister for Social and Family Affairs when she will publish the outcome of the review of mortgage interest supplement. [1788/10]
113. Deputy Dan Neville asked the Minister for Social and Family Affairs her plans to amend the mortgage interest supplement scheme; if she will make the revised guidelines publicly available; and if she will make a statement on the matter. [1697/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Questions Nos. 104 and 113 together.
The mortgage interest supplement scheme provides support for people who have difficulty meeting their mortgage repayments and whose means are insufficient to meet their needs. The scheme provides a short-term income “safety net” within the overall social welfare system to ensure that people do not suffer hardship due to loss of employment or other changes in circumstances.
A supplement in respect of mortgage interest only may be paid to eligible people who are unable to meet their mortgage interest repayments in respect of a house which is their sole place of residence. There are currently over 15,100 people in receipt of mortgage interest supplement, an increase of almost 87% (7,000) over the numbers in payment at the end of December 2008.
The assessment for the mortgage interest supplement scheme provides for a gradual withdrawal of payment as earnings increase. Those availing of part-time employment and/or training opportunities can continue to receive mortgage interest supplement subject to their satisfying the standard means assessment rules.
A review of the administration of the mortgage interest scheme is progressing. The main purpose of the review is to examine how the scheme can best meet its objective of catering for those who require assistance on a short-term basis where they are unable to meet mortgage interest repayments on their sole place of residence.
The review group includes representatives from this Department, the Community Welfare Service, the Departments of Finance, and Environment, Heritage and Local Government together with a representative from the Office of the Financial Regulator. The group is examining trends in programme and administrative costs, the impact of the Financial Regulator’s statutory Code of Practice on Mortgage Arrears on the mortgage interest supplement scheme and legislative and operational issues arising, including the cap on hours of employment. The review is also considering whether alternative approaches to achieving the scheme’s objectives are warranted in the light of recent changes in the economic climate and the mortgage market. The full review should be complete and available for publication by the end of Q1 2010.
Guidelines on certain operational issues for community welfare officers administering the scheme, were updated in June 2009. The guidelines are available on the Department’s website www.welfare.ie
105. Deputy Jan O’Sullivan asked the Minister for Social and Family Affairs when she will provide legislation for the planned PRSI exemption for employers who take on a person who has been on the live register for six months or more. [1797/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): It is proposed that legislation for the PRSI Job Incentive scheme will be brought before the Houses of Oireachtas in the Social Welfare (Miscellaneous Provisions) Bill in spring of this year.
Question No. 106 answered with Question No. 87.
107. Deputy Joe McHugh asked the Minister for Social and Family Affairs if she is satisfied with the capacity of the Money Advice and Budgeting Service to negotiate on persons’ behalf with financial institutions and sub-prime lenders in relation to mortgage arrears; and if she will make a statement on the matter. [1696/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The money advisers throughout the country focus on providing assistance, advice and intense support to people who have financial difficulties. The money adviser works out a budget and negotiates on behalf of the client with all creditors, including financial institutions and sub-prime lenders, to secure better terms for the client in managing the repayment of their debts. Where required by the client, the money adviser can assist with setting up a special account with a local Credit Union into which an agreed amount of money is lodged regularly and from which each month the money adviser makes the repayments to the creditors on behalf of the client. In 2009 some 2,618 special accounts were set up with the local Credit Unions.
Focused training programmes designed to equip money advice staff and local management boards to meet the demands on the services are provided by MABS NDL, the national support company. In addition, MABS NDL has introduced a number of community education and other initiatives to assist the services in managing their increased caseloads. These include a money management education programme for people facing redundancy to inform them about managing on a reduced income and how to avoid getting into debt.
Under the statutory code of conduct on mortgage arrears published by the Financial Regulator, all financial institutions including the banks and sub-prime mortgage lenders must, where circumstances warrant it, refer a borrower in difficulty for guidance to a local MABS office or to an appropriate alternative.
An operational protocol ‘Working Together to Manage Debt’ is in place and is the result of almost 2 years work by MABS NDL and the Irish Banking Federation (IBF), the main representative body for the banking and financial services sector. The Protocol applies to all client debts, including mortgage debt owed to the major lending institutions in Ireland and includes a commitment that no legal action will be taken as long as there is compliance by the client with an agreed repayment plan.
Last year an additional 19 money advisers were recruited by MABS between September and December, bringing the number of MABS staff to 271. The additional advisors have been appointed to MABS companies throughout the country.
I am confident that the MABS is well equipped to provide a high quality personal service to assist people in overcoming their indebtedness and managing their finances.
108. Deputy Michael D. Higgins asked the Minister for Social and Family Affairs the reason back to work education allowance scheme is available to persons who are pursing higher diploma courses but not Masters courses; her plans to address the limitations with this scheme; and if she will make a statement on the matter. [1786/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The objective of the back to education allowance scheme is to equip people on social welfare payments with qualifications that will enable them to obtain employment in the labour market. The scheme covers courses of education from second level to Higher Diploma level in any discipline (level 8 in National Framework of Qualifications (NFQ)) and to a Graduate Diploma in Education (Primary and Secondary Teaching, level 9 in NFQ) which add significantly to a person’s employability. Other postgraduate qualifications (level 9 or level 10) are not included.
The possession of qualifications at level 9 or above in the NFQ is not regarded as a prerequisite to re-entering the workforce. A small number of cases have arisen where a college has granted an exemption from the requirement to hold a primary degree and has admitted a person to a Master’s course on the basis of relevant life experience. In the context of the ongoing review of the operation of the scheme, it was decided to extend entitlement to BTEA in these instances on an exceptional basis.
The focus of the back to education allowance is on providing assistance to the highest possible number of those in greatest need in terms of meeting the requirements of a modern labour market. People in possession of a third level qualification have already achieved a high level of academic attainment which should impact positively on their employment prospects. There are no immediate plans to extend the scheme to cover Master’s courses in general. The scheme will continue to be monitored in the light of the changed economic circumstance in order to ensure that it continues to meet its objectives.
109. Deputy Joanna Tuffy asked the Minister for Social and Family Affairs the action she is taking to progress the introduction of a unified means test. [1811/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The Department administers a number of social assistance schemes to meet the income support needs of certain people. The associated means tests are designed to reflect the particular circumstances of these individuals and their families as well as the different life cycle stages. Over the years, various developments in means testing have led to the system becoming complex and difficult for the individual to comprehend. The Department would wish to move to a simpler more unified approach to means testing, especially for those of working age.
As a separate but related exercise, the Department is currently examining the feasibility of introducing a single social assistance payment for people of working age. The review will examine the rules and conditions, including the means testing rules, that currently apply and the various supports available to people of working age with a view to ascertaining how these could be rationalised in the context of a single payment to meet the objective of supporting people back to work, education and/or training and other development opportunities, as appropriate. It is expected that the feasibility report will be finalised by early 2010.
An inter-departmental working group was established in March 2009, on foot of a recommendation in the Task Force Report Transforming Public Services, to undertake a detailed study on the feasibility and value of introducing mechanisms to simplify the provision of means [127]information to all public bodies. This working group is chaired by a senior official of this Department. While the group is not examining a proposal for a unified means test, its work will include consideration of all possibilities in relation to simplifying and achieving other efficiencies across all public bodies with regard to means testing arrangements. The work of the group is progressing well.
Question No. 110 answered with Question No. 91.
111. Deputy Phil Hogan asked the Minister for Social and Family Affairs the average time it takes to process social welfare appeals; and if she will make a statement on the matter. [1684/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I am informed by the Social Welfare Appeals Office that during 2009 the average time taken to process all appeals (i.e. those decided summarily and by way of oral hearing) was 24 weeks. However, if allowance was made for the 25% most protracted cases, the average time fell to 15.8 weeks. This represents an increase of 2 weeks in the time taken to process appeals when compared to 2008, but must be seen in the context of an increase of 46% in the number of appeals received during 2009.
The processing time for appeals covers all phases of the appeal process including the submission by the Department of its comments on the grounds for the appeal, further examination by the Department’s Medical Assessors in certain illness related cases, further investigation by Social Welfare Inspectors where required and circumstances may also arise where further information is sought from the appellant.
To deal with the increased workload being experienced by the Social Welfare Appeals Office, two additional Appeals Officers were appointed during the year. However, the Chief Appeals Officer and five experienced Appeals Officers retired during 2009. Although their positions have now been filled these retirements impacted on the processing of appeals.
The matter of assigning additional Appeals Officers is kept under constant review but any consideration of extra assignments must be taken in the context of overall government policy on civil service numbers.
I am assured by the Chief Appeals Officer that she is keeping current processes under continuous review with a view to achieving a more effective throughput of appeals, while ensuring that any progress does not conflict with due process in terms of the rights of appellants and adherence to the requirements of natural justice.
Question No. 112 answered with Question No. 87.
Question No. 113 answered with Question No. 104.
114. Deputy Andrew Doyle asked the Minister for Social and Family Affairs if she has plans to develop a national fuel poverty strategy; and if she will make a statement on the matter. [1775/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The Department of Communications, Energy and Natural Resources, which has overarching responsibility for the energy portfolio, has convened an inter-departmental/agency group on affordable energy, to coordinate government policy in this area. The group comprises officials of the departments of [128]the Taoiseach, Communications, Energy and Natural Resources, Finance, Environment, Heritage and Local Government, Health and Children, Social and Family Affairs, the Commission for Energy Regulation, Sustainable Energy Ireland, the Institute of Public Health in Ireland and the ESB and Bord Gáis. Officials of the Department of Social and Family Affairs, that has responsibility for the fuel allowance and household benefits schemes, participate in the group and it is co-chaired by the Social Inclusion Division of the Department.
The objective of the group’s work is to ensure shared understanding of the challenges and actions underway and to ensure a fully cohesive strategic approach to the delivery of affordable energy initiatives and programmes.
The group has been asked to develop an affordable energy strategy encompassing the policies and initiatives required to improve energy affordability in Ireland. As part of its terms of reference the group will seek to identify an appropriate methodology for the measurement and reporting of energy poverty in Ireland and to assess the extent of energy poverty in Ireland. The group will commence its deliberations shortly with a view to finalising the strategy following a period of consultation.
115. Deputy Kathleen Lynch asked the Minister for Social and Family Affairs when she will publish the national pensions framework. [1791/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): As Deputies are aware, the Green Paper on Pensions outlined the challenges facing the Irish pensions system in the years ahead, including the sustainability of the system over the longer term in light of demographic change and the adequacy of contribution levels and benefits. The consultation process which followed publication of the Green Paper reflected the wide range of views and interests held by individuals and organisations throughout the country. While there was no consensus on ways to respond to the challenges facing our pension system, it was clear that there were significant issues and problems that people wanted addressed.
Since the Green Paper was published in October 2007, the economic environment has changed considerably and the Government need to ensure that any decisions we make in the pensions area will be robust enough to withstand the challenges which will arise in the future. We must make decisions now to ensure the adequacy of retirement incomes for this and future generations while, at the same time, develop a system which is affordable and sustainable for the State and for those who sponsor and provide pension schemes.
In the past 18 months or so the Government has taken a number of steps to respond to the immediate difficulties facing pension scheme members, particularly members of defined benefit schemes. These include the establishment of a pensions insolvency payment scheme and a reordering of wind-up priorities so that, in any defined benefit wind-up situation, employees and former employees who have not yet retired may still receive a large proportion of their benefits. Legislation to support these measures was passed in the Social Welfare and Pensions Act 2009. The Government has also introduced provisions to allow for more flexible restructuring of pension benefits and stronger regulation regarding remittance of pension contributions. We have also protected people in receipt of the State Pension by retaining the rates of pension and other social welfare payments for older people in the recent Budget.
The Government is aware that the wider and longer-term pensions policy issues require a comprehensive and co-ordinated response and we have been considering a number of options to address the challenges facing our pension system. Uncertainty in the economic climate has [129]increased the complexity of the decisions we must make but it does not prevent or deter the Government from making these vitally necessary decisions. However, it does require us to give very careful consideration, and it is precisely because the development of the framework involves decisions on such a wide range of future and complex issues that we have been spending a considerable amount of time working on it. I hope to be in a position to publish the framework shortly.
Question No. 116 answered with Question No. 92.
117. Deputy Thomas P. Broughan asked the Minister for Social and Family Affairs the action she is taking to deal with the eight month delaying in processing PRSI refund applications. [1781/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The Department endeavours to process applications for refunds of PRSI as efficiently as possible. However, the volume of applications for refunds of PRSI has increased dramatically in recent years; some 23,400 applications were received in 2009 compared to 14,000 in 2008 and 9,000 in 2007. The increased volume of applications has inevitably given rise to a delay in processing refund applications.
In order to speed up the processing of refund applications, the processes and procedures in the section have been reviewed and appropriate changes implemented along with new technical supports. Furthermore, in December 2009, an additional five staff were assigned to the area on a temporary basis to help clear the number of applications on hand. The Department is also continuing to examine ways of making better use of modern technology, e.g. payment of refunds by electronic fund transfer, online applications and enhancement of the current calculation functionality.
The additional staff, more streamlined processes and procedures and technical supports have already shown positive results. In December 2009, refunds were processed for about 265 applicants per week compared with about 160 per week in October and November 2009.
With the implementation of further process improvements and technical supports, I am confident that further improvements will be made in the processing of applications for refunds.
118. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs the steps she has taken or proposes to take to streamline and speed up the process of applications for various social welfare payments with particular reference to means testing and assessment with a view to eliminating concerns, anxiety and hardship for those who find themselves unemployed, ill or otherwise dependent on a social welfare payment; if her attention has been drawn to the procedures in place in some respects; if she will acknowledge the need for a prompt and caring response in such cases; and if she will make a statement on the matter. [1778/10]
813. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs the steps she has taken to address the delays in the process of application for social welfare payments; and if she will make a statement on the matter. [2183/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Question No. 118 and 813 together.
Every effort is made to process claims for social welfare payments as quickly as possible. Staff in the Department are aware of the concerns of claimants who find themselves in need [130]of a payment. Delays can occur in the processing of claims where additional information is required or where all documentation is not to hand. On means-tested schemes it may be necessary for the person to be visited in their home by a Social Welfare Inspector for the purpose of assessing the means and this can add to the time involved in finalising the claim. Cases involving self-employment or property (other than the family home) can also take longer to investigate.
The Deputy will be aware of the particular difficulties presented due to the huge rise in unemployment in the past 18 months or so and the pressure this has brought to bear on the network of local offices and in the inspectorate. To alleviate some of this pressure since May 2008, some 400 extra staff have been assigned to local offices, new Central Support Units and the Departments Inspectorate. At the same time the Department has been examining all aspects of the work associated with the processing of claims and streamlining them wherever possible without, of course, compromising scheme controls.
One of these streamlining initiatives, which is being trialled at present, relates to customers who are applying for jobseeker’s allowance on the termination of their jobseeker’s benefit entitlement. In any of these cases where there are no elements of self-employment or property involved in the means assessment, the person will self-certify the various components of their means and a decision will be made by the Deciding Officer without the need to refer the claim to an Inspector. As a control measure a certain proportion of these claims will be selected at random and will be referred to an inspector for verification of the declaration of means. It is expected that this initiative will be rolled out to the network of local offices in the coming months. In the State Pension Non-Contributory area a desk assessment process has been introduced whereby claims are processed and decided based on the information provided by the customer on their application form. This initiative has removed the requirement on Social Welfare Inspectors to investigate all claims and has led to a reduction in processing times for claims received under the scheme. Over the past year some 40% of all claims for State Pension have been fully processed by desk assessment. It is hoped to extend this initiative to other means-tested schemes. Anyone who is under financial pressure while awaiting a decision on their claim can apply for Supplementary Welfare Allowance from the Community Welfare Officer which is subject to a means test and other qualifying condition.
Question No. 119 answered with Question No. 87.
120. Deputy Deirdre Clune asked the Minister for Social and Family Affairs the details on the public service card with photo ID to be rolled out from 2010; and if she will make a statement on the matter. [1659/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): Legislative provisions in relation to the introduction of the Public Service Card have been included in Section 263 of the Social Welfare Consolidation Act 2005 (as amended by Section 32 of the Social Welfare and Pensions Act 2007).
These specify that the Minister for Social and Family Affairs may issue a Public Service Card in the format that she deems fit, with the person’s name, personal public service number, photograph, signature, card issue number and card expiry date to be inscribed on the card. Provision is also included for the person’s name, personal public service number, date of birth, sex, all former surnames (if any) of the person’s mother, photograph, signature and card expiry [131]date to be electronically encoded on the card. In addition, provision is made for any other information that may be prescribed to be either inscribed or electronically encoded on the card.
There is still a number of outstanding parts of the project that need to be undertaken. Decisions regarding the final design of the card will be taken as part of this process. It will be necessary to develop a technical infrastructure within the Department to support the management and administration of the cards. Procurement for this development has just commenced. In addition, the managed service provider has significant preparatory work to undertake. For example it will be necessary to develop a secure site for the personalisation of the cards. These processes are expected to take several months to complete and, accordingly, it is not anticipated that cards will begin to issue before the latter half of this year.
121. Deputy Michael D’Arcy asked the Minister for Social and Family Affairs the estimated number of families eligible for the family income supplement; the number of families in receipt of the family income supplement; her views on the low uptake of the family income supplement; and if she will make a statement on the matter. [1667/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The Family Income Supplement is designed to provide support for people with families who are on low earnings. This preserves the incentive for them to remain in employment in circumstances where they might only be marginally better off than if they were claiming other social welfare payments. FIS is a central element of a programme of reforms targeted specifically at addressing child poverty.
There are currently some 25,963 people in receipt of a weekly FIS payment. In 2009 the Department received 46,542 new and renewal FIS claims compared to 42,940 in 2008 and 37,861 in 2007 — an increase of over 8% on 2008 and over 22% on 2007.
With regard to the level of take up, it is not possible to estimate from administrative sources the number of families who would be eligible but do not apply for their FIS entitlements. Accordingly the department completed a research project in 2008 to examine factors behind the level of take up for the scheme.
This research project included a survey of over 3,000 families which appeared to satisfy conditions for receipt of FIS. From over 1,000 valid responses received the survey identified that only 23% might actually be eligible.
The research also found that overall awareness of Family Income Supplementamong potential recipients is high with nearly three in four claiming to have heard of the scheme. Despite high levels of awareness, there was a lack of awareness and understanding of the eligibility requirements with only one in three claiming to be aware of the qualifying criteria for FIS.
The report recommends that the Department needs to ensure that information about the scheme is advertised in a focused way with the eligibility and qualification criteria communicated as clearly as possible. The Department is addressing this by ensuring such information is highlighted as part of its ongoing information strategy.
122. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs the methodology used to determine whether partnership exists or is established to qualify for widows, widowers or old age pension entitlement in respect of the surviving partner or spouse in the case of the self employed with particular reference to those who have made contributions in respect of one or both partners over a ten year period; if her attention has been drawn to the [132]number of such persons who do not qualify; if she intends to ease the qualification entitlements with a view to ensuring that the surviving partner will in all cases qualify for widows, widowers or old age pension even when self employed contributions were made in respect of one person only; and if she will make a statement on the matter. [1777/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): Spouses who operate in a commercial partnership may be brought into the social insurance system, subject to meeting some of the general criteria outlined as follows:
There is a written partnership agreement
Each partner writes cheques on the business accounts in their own right
There is a joint business account
It is apparent to those doing business with the partnership that a partnership exists
Business accounts and activities are in joint names of the partners
Each partner makes a significant contribution to the running of the business
The business is owned jointly by the partnership
The profits and losses of the partnership are shared by each partner
The business stationery reflects the existence of a partnership.
Applications received in Scope Section are forwarded to Social Welfare Inspectors who interview the parties concerned and report back to Scope Section. A Deciding Officer subsequently issues a formal decision on whether a partnership exists or not. To date, of 579 applications finalised, 508 cases have been approved.
When approved, both spouses may incur a liability to pay self-employed PRSI contributions and must discharge their liability before the contributions can be awarded. The person(s) concerned can then apply for pension or benefit in the normal way. Widows and widowers can qualify for one of a number of different schemes depending on their particular circumstances.
The widow(er)’s contributory pension is available to those who satisfy the necessary PRSI contribution conditions, either on their own record or that of the deceased spouse and, therefore, there are no disqualifications from entitlement to pension where relevant PRSI contribution conditions are satisfied.
In relation to the widow’s contributory pension, the pension is automatically awarded, provided all other qualifying conditions are satisfied, where the late spouse was in receipt of either a state pension (transition or contributory) which included an increase for a dependent spouse (or would have but for the fact that the spouse was in receipt of state pension non-contributory, blind pension or carer’s allowance).
While there are no plans to further ease the qualifying conditions at present, any further reforms to the state pension (contributory) will be addressed in the forthcoming national pensions framework.
To qualify for a state pension (contributory), a number of minimum qualifying conditions must be met. A person must have at least 260 paid social insurance contributions, a yearly average of at least 10 contributions paid or credited since entry into social insurance, and must [133]have entered social insurance at least 10 years before state pension age. In addition, self employed contributors must have a minimum of one year’s paid self employed contributions before reaching age 66 and have all self-employed liability, payable by them paid. From 6 April 2012, a minimum of 520 paid contributions will be required.
These conditions have been designed to ensure that those qualifying for payment have an adequate and sustained history of contributions to the social insurance fund over their working lives. The requirements for minimum pensions have been eased over the years and a number of special pensions were introduced.
123. Deputy Jim O’Keeffe asked the Minister for Social and Family Affairs the number of job facilitators; the average waiting times to access support from a job facilitator; and if she will make a statement on the matter. [1723/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The number of facilitators currently in place is 63. It is envisaged that this number will increase to 70 in the coming months. The facilitator service is available locally to all social welfare recipients via the local network. Facilitators are assigned to cover a geographical area. They hold open clinics and meet with people who have been referred either by the social welfare local office, the employment support section or by other agencies.
In the current economic climate the demand for the facilitator service is elevated. Actual waiting times for individual facilitators, which vary nationwide, are not available. An appointment can be made by contacting the facilitators directly or via the appropriate local office. Facilitators make every effort to contact customers as quickly as possible.
Question No. 124 answered with Question No. 85.
Question No. 125 answered with Question No. 97.
126. Deputy Seán Sherlock asked the Minister for Social and Family Affairs the reason the back to education allowance does not cover participants in the labour market activation programme; if her attention has been drawn to the fact that participants who start a course in receipt of jobseeker’s benefit but who subsequently move to jobseeker’s allowance at a reduced rate are faced with financial hardship particularly when they have dependants; if her further attention has been brought to the fact that there is no cost of attendance allowance; and if she will immediately review the terms of the scheme. [1805/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The Department’s back to education programme includes the back to education allowance (BTEA) and the part-time education option (PTEO). The back to education allowance is a second chance educational opportunities scheme for people on welfare payments who wish to participate in full time education and who would not other wise be able to do so. The allowance is paid at a standard weekly rate equivalent to the maximum rate of the social welfare payment that qualifies the applicant for the scheme. In addition, an annual cost of education allowance of €500 is payable.
In a joint initiative announced last year between the Department of Enterprise, Trade and Employment, the Department of Education and Science and the Higher Education Authority, 1,500 part-time undergraduate places and 1,000 part-time postgraduate places are being pro[134]vided to people who are unemployed and on the live register for at least 6 months or have an entitlement to statutory redundancy.
A jobseeker who wishes to participate in a part-time course may do so under the Department’s part-time education option (PTEO). Participants may continue to receive their existing social welfare entitlements provided they continue to satisfy all the existing terms and conditions of their jobseeker scheme including availability for work. Approval to undertake a course must be obtained in advance from the local social welfare office.
Participation in a part-time course does not attract any increase in the rate of payment, a cost of education allowance or any extension of the payment period. A participant whose entitlement to jobseeker’s benefit ceases during the period on the course is eligible to apply for jobseeker’s allowance, entitlement to which is based on a means-test. Someone who qualifies for that allowance at reduced rate would therefore have existing assessable means. In such a case, the combination of the existing means and the reduced rate of jobseeker’s allowance awarded would normally exceed the rate payable to a participant who qualifies for maximum rate of jobseeker’s allowance.
The back to education programme will continue to be monitored in the light of changing economic circumstances to ensure that it continues to meet its objectives.
Question No. 127 answered with Question No. 96.
Question No. 128 answered with Question No. 102.
129. Deputy Joan Burton asked the Minister for Social and Family Affairs the action she is taking to improve the recovery rate of employer PRSI arrears. [1783/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): Contributions due to the Social Insurance Fund are collected in the main by the Revenue Commissioners, together with income tax due. The Department’s Inspectorate, appointed under Section 250 of the Social Welfare (Consolidation) Act 2005 is responsible, inter alia, for ensuring that employers and self employed people comply with the Act in relation to Pay Related Social Insurance contributions.
Employer compliance, in this regard is monitored through inspections which include detailed examinations of employers’ records to ensure that correct PRSI payments are being made in respect of all employees. In addition, any irregularity in a customer’s PRSI record detected at claim processing stage or reported directly by the customer, is referred to the Inspectorate for follow up action.
The Department currently employs some 403 Social Welfare Inspectors throughout the country whose duties involve the investigation of eligibility to a broad variety of means tested schemes, as well as ensuring compliance by employers in regard to PRSI matters. Of the 403 Inspectors 86 are assigned to the Department’s Special Investigation Unit and also work with the Revenue and the E.T. & E. Inspectorate in carrying out joint investigations of employment records of employers.
Employer inspections carried out by the Department’s Inspectorate are comprehensive and involve:
[135]detailed examination of employer records to ensure that accurate records of employees are being maintained and that correct PRSI payments are being made in respect of all their employees and that the correct PRSI class is being applied;
checks to ensure that employees are not concurrently working and claiming social welfare payments;
outlining employers responsibilities with regard to Social Welfare legislation and where Revenue staff are part of the inspection team, tax legislation;
general advice and information to employers on matters such as the operation of the PRSI system, incentives available to employers, the correct classes of contributions, employees’ entitlements etc.
Where PRSI undercharges are established, the Inspector sets out PRSI arrears/underpayment in respect of each employee for each tax year and issues a demand to the employer for payment. Should the employer fail to respond satisfactorily, a statutory demand will issue by registered post and the employer given 14 days to respond. If the employer fails to respond the case is considered for prosecution.
The Department is committed to delivering an effective and efficient regime of employer inspections, and ensuring that PRSI deductions and remittances are made in an accurate and timely manner.
130. Deputy Joe Costello asked the Minister for Social and Family Affairs her plans to temporarily increase the rate of fuel allowance to offset the significant increase in fuel costs during the recent prolonged cold weather. [1784/10]
723. Deputy Róisín Shortall asked the Minister for Social and Family Affairs her plans to use the increased VAT revenues arising from increased fuel consumption during the recent prolonged cold weather to provide a once off increase in fuel allowance to poor families. [2064/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): I propose to take Questions Nos. 130 and 723 together.
The Department’s role is to assist social welfare recipients with heating costs, both through their basic payments and through the fuel allowance scheme and the household benefits package of electricity and gas allowances.
The national fuel allowance scheme assists householders on long-term social welfare or health service executive (HSE) payments with meeting the cost of their heating needs during the winter season. The allowance represents a contribution towards a person’s normal heating expenses. It is not intended to meet those costs in full.
Fuel allowance is payable for 32 weeks a year. The standard allowance is €20 a week while the rate in smokeless zones is €23.90 a week. The scheme benefits almost 318,000 people a year at an estimated cost of €217 million in 2009.
Electricity and gas allowances under the household benefits package, are payable throughout the year to almost 380,000 pensioners, people with disabilities, and carer households towards their heating, light and cooking costs at an estimated cost of €200m in 2009. The electricity [136]allowance covers standing charges plus VAT and up to 2,400 units of electricity in each billing period.
The gas allowance covers a cash equivalent amount. Up to 30% of customers availing of the electricity allowance consistently carry forward unused units to the next billing period.
The supplementary welfare allowance scheme, administered by community welfare officers, can be used to assist people in certain circumstances with specific heating needs due to infirmity or a particular medical condition. Heating needs can also be met under the exceptional needs payments provisions of the scheme where a person is unable to meet such needs out of his/her resources. Eligible people would normally be in receipt of a social welfare or health service executive payment.
Since the onset of the adverse weather conditions, community welfare officers have provided assistance to people to purchase additional fuel, heaters and clothing and also towards the payment of heating bills and for repairs arising from burst pipes. Over €72,000 has been paid out since 1 January 2010 in respect of such claims. Assistance will continue to be provided towards the payment of heating bills for those in need.
The exceptional needs payments scheme is considered to be the appropriate response to heating needs arising from the recent cold weather. Community welfare officers are best placed to deal with the situation having local knowledge and taking individual circumstances into account.
An increase in the fuel allowance, irrespective of need, would have significant cost implications and would have to be considered in the light of resources available for improvements in social welfare payments generally.
131. Deputy Joanna Tuffy asked the Minister for Social and Family Affairs if she has completed her deliberations and her conclusions on the Commission on Taxation report. [1810/10]
Minister for Social and Family Affairs (Deputy Mary Hanafin): The Commission on Taxation’s report directly addresses a number of areas within my Department’s broad area of responsibility, most notably in relation to the social insurance system, the taxation of retirement savings and social welfare benefits including Child Benefit.
Given the very diverse nature of the issues which arise, I do not intend at this stage to present a single set of detailed conclusions around the relevant Commission’s recommendations. I envisage that the proposals of the Commission will be considered on an ongoing basis in the light of emerging policy in these areas. For instance, in relation to retirement savings, the pension elements of the Commission on Taxation report are being considered in the context of the development of the National Pensions Framework. In relation to Commission’s recommendation in relation to the taxation of Child Benefit, the Government decided not to tax this payment in the recent Budget.
132. Deputy Michael McGrath asked the Taoiseach the number of persons in employment in the public sector and in the private sector, including persons working part-time. [1054/10]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): The table shows the estimated numbers of full-time and part-time employees in the public and private sectors [137]in the second quarter of 2009, the latest period for which information is available. The figures are based on the Earnings, Hours and Employment Costs Survey (EHECS). As this is a survey of enterprises, persons with more than one job may be counted twice in the figures but the effect of this on the estimates is expected to be very low.
The EHECS figures do not include self-employed persons or enterprises with less than three employees. Estimates from the quarterly national household survey indicate that there were 330,000 self employed persons in the state in the second quarter of 2009, in addition to the number of employees given in the table.
133. Deputy Michael McGrath asked the Taoiseach the number of employees who work in businesses with fewer than ten employees. [1055/10]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): The latest annual Business Demography statistics were published in June 2009 with respect to the year 2007. In 2007 there were 254,679 persons employed in active enterprises with less than 10 employees. Business Demography coverage is limited to NACE Rev 1.1 sectors C — K and does not include the non-traded service sectors or other community, social and personal services.
134. Deputy Paul Kehoe asked the Taoiseach the number of constituency staff working for the Ministers of State in his Department in 2008 and 2009; and the cost involved. [47935/09]
The Taoiseach: The number of whole time equivalent staff in the constituency office of the Government Chief Whip and Minister of State in my Department in 2008 and 2009 was 4. The total salaries including overtime and allowances paid to staff in the constituency office was €200,078 and €166,769 in 2008 and 2009 respectively.
[138]The Minister of State for European Affairs does not have a constituency office in my Department.
135. Deputy Phil Hogan asked the Taoiseach if he will consider the inclusion of a question in the 2011 census in order to fill a void in the statistics that relates to the disability autism or autistic spectrum disorder; and if he will make a statement on the matter. [47936/09]
149. Deputy Ciarán Cuffe asked the Taoiseach when the content of the Central Statistics Office census 2011 is expected to be approved by him; the interdepartmental procedure for compiling such content; his views on the inclusion of autistic spectrum disorder as a category question; and if he will make a statement on the matter. [48497/09]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): I propose to take Questions Nos. 135 and 149 together.
The Government at its meeting on 11 December 2009 agreed to the topics to be included in the questionnaire for the 2011 census.
As part of the preparatory work for the 2011 census the CSO conducted a public consultation by inviting members of the public and various interest groups to make submissions on the topics to be covered, and on the outputs to be produced. A notice to this effect was published in the national press in September 2008 seeking submissions, and all government departments were contacted for their input.
A Census Advisory Group was set up in Autumn 2008 to consider the submissions received and advise on the questions to be tested in a pilot survey planned to be carried out in April 2009. The Census Advisory Group was representative of central and local government, the social partners, universities, research bodies and other users of census data along with the relevant CSO personnel.
Over 90 submissions covering 31 topics were received in total, among them submissions on the subject of disability, and in particular on the subject of autism. A specific sub-group was convened to consider the disability questions on the census form. This sub-group was composed of representatives from the National Disability Authority, the Equality Authority, the Disability Federation of Ireland and the National Federation of Voluntary Bodies. The proposal to list specific disabilities within the disability question, namely to make specific reference to autistic spectrum disorder, or downs syndrome, in the category ‘A learning or intellectual disability’ was considered at the second meeting of the group.
The group concluded that it would not be appropriate, nor would there be enough room on the census form, to list all individual disabilities. However, in order to go some way towards accommodating this request the existing (2006) category ‘A learning or intellectual disability’ was split into two categories ‘An intellectual disability’ and separately ‘A difficulty with learning, remembering or concentrating’ for testing in the pilot survey. The group felt that this approach narrowed the categories and thus helped address the issue of autism, while allowing the question to remain as inclusive as possible.
The new wording of the disability questions which were tested in the Census Pilot Survey in April 2009 were as follows:
136. Deputy Paul Kehoe asked the Taoiseach the number of persons unemployed on 1 January 2007 to 31 December 2007 in each district office (details supplied); and if he will make a statement on the matter. [48233/09]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): The Live Register series gives a monthly breakdown of the number of people claiming Jobseeker’s Benefit, Jobseeker’s Allowance and other registrants as registered with the Department of Social and Family Affairs. Figures are published for each county and local social welfare office.
The table contains monthly Live Register information for each local social welfare office in County Wexford, from January 2007 to December 2007 inclusive. It should be noted that the Live Register is not a definitive measure of unemployment as it includes part-time workers, and seasonal and casual workers entitled to Jobseeker’s Benefit or Allowance.
137. Deputy Paul Kehoe asked the Taoiseach the number of persons aged under 25 years unemployed each month from 1 January 2008 to 31 December 2008 for each district social welfare office (details supplied); the gender of each person unemployed; and if he will make a statement on the matter. [48234/09]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): The Live Register series gives a monthly breakdown of the number of people claiming Jobseeker’s Benefit, Jobseeker’s Allowance and other registrants as registered with the Department of Social and Family Affairs. Figures are published for each county and local social welfare office.
The table contains monthly Live Register information for those aged under 25 in each local social welfare office in County Limerick by gender, from January 2008 to December 2008 inclusive. It should be noted that the Live Register is not a definitive measure of unemployment as it includes part-time workers, and seasonal and casual workers entitled to Jobseeker’s Benefit or Allowance.
138. Deputy Paul Kehoe asked the Taoiseach the number of persons who were unemployed on 1 January 2007 to 31 December 2007 in each district office (details supplied); and if he will make a statement on the matter. [48235/09]
[143]Minister of State at the Department of the Taoiseach (Deputy Pat Carey): The Live Register series gives a monthly breakdown of the number of people claiming Jobseeker’s Benefit, Jobseeker’s Allowance and other registrants as registered with the Department of Social and Family Affairs. Figures are published for each county and local social welfare office.
The table contains monthly Live Register information for each local social welfare office in County Limerick, from January 2007 to December 2007 inclusive. It should be noted that the Live Register is not a definitive measure of unemployment as it includes part-time workers, and seasonal and casual workers entitled to Jobseeker’s Benefit or Allowance.
139. Deputy Michael D’Arcy asked the Taoiseach the number of staff employed by his Department on 1 January 2009; the number of staff employed by his Department on 10 December 2009. [48236/09]
147. Deputy George Lee asked the Taoiseach the number of Civil Service staff in his Department; the number of these staff who hold an economics degree; the number of these staff who hold a post graduate economics degree; the number of these staff who hold a PhD in economics; and if he will make a statement on the matter. [48319/09]
163. Deputy Joan Burton asked the Taoiseach the number of whole time equivalents serving in his Department in the grades of Secretary General, Deputy Secretary General, Assistant Secretary General, higher principal officer, principal officer, higher assistant principal officer, assistant principal officer, higher executive officer, executive officer, staff officer and clerical officer on 1 January 1998, 1 January 2007 and the latest date for which figures are available. [1953/10]
The Taoiseach: I propose to take Questions Nos. 139, 147 and 163 together.
Statistics in relation to whole-time equivalent staff numbers in my Department are compiled at the end of each calendar month. On 31st December 2008, there were 211.96 whole-time equivalent staff in my Department, while on 31st December 2009, there were 198.1 whole-time equivalent staff in my Department, that is 13.86 fewer whole-time equivalent staff of year end.
It is not possible to give an accurate breakdown for the grades requested who were serving in my Department on 1st January 1998. The earliest records held in my Department in the format requested only go back to 2000. The information requested in relation to the grades who were serving on 31st December, 2001, 31st December 2006 and 31st December, 2009 is set out in the table.
While a number of staff in my Department hold primary degrees and post graduate qualifications in a range of subjects, including economics, the specific information requested by the Deputy is not available.
140. Deputy Paul Kehoe asked the Taoiseach the number of persons aged under 25 years who were unemployed each month from 1 January 2008 to 31 December 2008 for each district social welfare office (details supplied); the gender of each person unemployed; and if he will make a statement on the matter. [48237/09]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): The Live Register series gives a monthly breakdown of the number of people claiming Jobseeker’s Benefit, Jobseeker’s Allowance and other registrants as registered with the Department of Social and Family Affairs. Figures are published for each county and local social welfare office.
The table contains monthly Live Register information for those aged under 25 in each local social welfare office in County Wexford by gender, from January 2008 to December 2008 inclusive. It should be noted that the Live Register is not a definitive measure of unemployment as it includes part-time workers, and seasonal and casual workers entitled to Jobseeker’s Benefit or Allowance. It should be noted that the Live Register includes only those aged 17 years and over.
141. Deputy Ruairí Quinn asked the Taoiseach the breakdown, by programme, agency or other institution, of the programme changes that will be made by his Department to achieve the savings estimated for his Department in budget 2010; and if he will make a statement on the matter. [48238/09]
159. Deputy Richard Bruton asked the Taoiseach the savings outlined in the Report of the Special Group on Public Numbers and Expenditure Programmes which were accepted in budget 2010 for his Department in tabular form; the savings which will be achieved in 2010; and if he will make a statement on the matter. [1262/10]
The Taoiseach: I propose to take Questions Nos. 141 and 159 together.
The total allocation for my Department in the Estimates set out in the Budget Book for 2010 is €28,818 million. This is an overall decrease of 11.8% on the 2009 Revised Estimate allocation.
The following table details the programme changes to achieve the savings by my Department in the 2010 budget.
142. Deputy Ruairí Quinn asked the Taoiseach the actions taken by him to implement the proposals set out in Building Ireland’s Smart Economy; and if he will make a statement on the matter. [48239/09]
148. Deputy Ruairí Quinn asked the Taoiseach the actions taken by him to implement the proposals set out in Building Ireland’s Smart Economy; and if he will make a statement on the matter. [47883/09]
The Taoiseach: I propose to take Questions Nos. 142 and 148 together.
The Government’s Smart Economy Framework for sustainable economic renewal was produced in December 2008. Implementation is the responsibility of relevant Ministers but is [148]overseen by the Cabinet Committee on Economic Renewal, which I chair. Some examples include:
market testing of the Innovation Fund proposed is currently being undertaken by the NTMA, testing the best way to design the Fund with venture capital companies and other stakeholders;
tax changes to support the Smart Economy include an improved R&D tax credit, new tax arrangements for IP, tax incentives for start-up companies and to encourage venture capital companies to locate in Ireland;
the Innovation Alliance announced by Trinity and UCD to create a critical mass of research activity and dramatically increase the commercialisation of research outputs;
major new technology initiatives to support the Smart Economy including, development of a new International Content Services Centre and making Ireland the leading location for energy efficient data centres, like the Microsoft Centre I opened last September;
a smart metering initiative is being rolled out and there is an electric vehicles plan to have 10% of all vehicles powered by electricity by 2020. Progress is also being made towards our ambitious renewable energy target of 40% by 2020, including investment in new ocean wave technology research;
the Green Enterprise Group has reported with detailed proposals for the creation of new jobs and businesses in the Greentech area. As a result of that report, we are pressing ahead with ideas like the Green IFSC and Green Enterprise Zones; and the home insulation initiative which delivered in over 30,000 homes in 2009 is being increased dramatically with new funding for 2010.
a review of our Capital Programme to realign our capital investment — which is still over 5% of GNP — with the goals of the Smart Economy has been undertaken and as a result we will invest over €600m in the Strategy for Science, Technology and Innovation this year, even at a time of great budgetary pressure.
The Smart Economy Framework is a comprehensive strategy, covering not just innovation and R&D, but all aspects of our economic renewal strategy. The Government expects to publish an overall progress report within the next month. Responsibility for individual measures rests with relevant Ministers, to whom any specific questions should be directed.
143. Deputy Richard Bruton asked the Taoiseach the number of agencies under his remit who process entitlement payments; the number of staff who process entitlement payments broken down by agency; and if he will make a statement on the matter. [48253/09]
The Taoiseach: None of the agencies under the remit of my Department process entitlement payments.
144. Deputy Richard Bruton asked the Taoiseach the number of agencies under his remit that have a role in carrying out inspections; the number of staff involved in the carrying out of inspections broken down by agency; and if he will make a statement on the matter. [48270/09]
The Taoiseach: None of the agencies under the remit of my Department carry out inspections.
[149]145. Deputy Richard Bruton asked the Taoiseach the number of agencies under his remit that have a role in the issuing of licences; the number of staff involved in the issuing of licences broken down by agency; and if he will make a statement on the matter. [48287/09]
The Taoiseach: None of the agencies under the remit of my Department have a role in issuing licences.
146. Deputy Richard Bruton asked the Taoiseach the agencies under his remit who have a role in the collection of payments; the number of staff involved in the collection of payments broken down by agency; and if he will make a statement on the matter. [48304/09]
The Taoiseach: None of the agencies under the remit of my Department have a role in the collection of payments.
Question No. 147 answered with Question No. 139.
Question No. 148 answered with Question No. 142.
Question No. 149 answered with Question No. 135.
150. Deputy Ruairí Quinn asked the Taoiseach the progress made in establishing the innovation fund Ireland as proposed in Building Ireland’s Smart Economy; the total outlays from this fund to date; and if he will make a statement on the matter. [47884/09]
The Taoiseach: Introduction of ‘Innovation Fund Ireland’ is a commitment of Building Ireland’s Smart Economy — A Framework for Sustainable Economic Renewaland the Renewed Programme for Government. It aims to ensure greater availability of venture capital to help achieve our vision for transforming Ireland into the innovation and commercialisation hub of Europe by supporting innovative SMEs and help scale indigenous companies. It is also an objective to use the Fund to help attract leading Venture Capital companies to locate their European operations here.
Since the fund was announced the relevant Departments and Agencies have been working to design a detailed structure for establishing the Fund, which raises a number of complex issues which need to be resolved.
In particular, we want to ensure the design and operation of the Fund best reflects inputs from people with experience of venture capital markets, including the members of the Innovation Taskforce.
As agreed in the recent programme for Government, market testing is underway to engage with potential participants amongst US and other relevant Venture Capital companies as well as other Stakeholders. This process which should be completed towards the end of this month will provide the basis for putting the most suitable legal and financial structures in place to operationalise the Fund.
It is important to recognise that the Innovation Fund is just one aspect of the overall strategy to increase a world class innovation system, so it is important that it is brought forward as part of a coherent approach. For example, it will complement the existing seed and venture funds operated by Enterprise Ireland as well as the forthcoming Report of the Innovation Taskforce.
151. Deputy George Lee asked the Taoiseach the number of persons on the live register in September 2007 broken down by gender in each county; and if he will make a statement on the matter. [48483/09]
[150]152. Deputy George Lee asked the Taoiseach the number of persons aged 15 years to 24 years on the live register in September 2007 broken down by gender in each county; and if he will make a statement on the matter. [48484/09]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): I propose to take Questions Nos. 151 and 152 together.
The following table contains live register information as requested for each geographical county. It should be noted that the Live Register includes only those aged 17 years and over.
153. Deputy George Lee asked the Taoiseach the number of persons on the live register in the areas of Dublin City Council, Dun Laoghaire Rathdown County Council, Fingal County Council, South Dublin County Council, Galway City Council, Galway County Council, Limerick City Council, Limerick County Council, Waterford City Council, Waterford County Council, Cork City Council and Cork County Council in September 2007 and September 2009 broken down by gender in each county; and if he will make a statement on the matter. [48485/09]
[151]154. Deputy George Lee asked the Taoiseach the number of persons aged 15 to 24 years on the live register in the areas of Dublin City Council, Dun Laoghaire Rathdown County Council, Fingal County Council, South Dublin County Council, Galway City Council, Galway County Council, Limerick City Council, Limerick County Council, Waterford City Council, Waterford County Council, Cork City Council and Cork County Council in September 2007 and September 2009 broken down by gender in each county; and if he will make a statement on the matter. [48486/09]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): I propose to take Questions Nos. 153 and 154 together.
The basis of the area classification used in the collection of Live Register data is the Department of Social and Family Affairs local office of registration. The areas served by Local Employment Offices do not correspond to specific geographic boundaries. Therefore, registrants at a given local office do not necessarily come from a particular region or area which can be precisely delineated. For example, the figure for the Cork City Local Office of Registration refers to all persons signing on in the Cork city office but may include persons resident outside the boundaries of Cork City. Consequently data from the Live Register are not considered to provide an exact breakdown of claimants by local authority administrative areas.
The following table contains Live Register information for each local social welfare office in the counties and cities requested, with a breakdown by gender and the age group under 25 years. For that age group, it should be noted that the Live Register includes only those aged 17 years and over.
155. Deputy George Lee asked the Taoiseach the number of persons in the labour force broken down by gender in each county according to the 2006 Census; and if he will make a statement on the matter. [48487/09]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): The Census of Population 2006 shows the number of people in the Labour Force as 2,109,498 on Census Night. The table shows the breakdown by gender and County.
156. Deputy Eamon Gilmore asked the Taoiseach if the recruitment of Parliamentary Counsel from other jurisdictions has raised any difficulties in achieving a uniform drafting style for legislation. [48538/09]
The Taoiseach: A small number of Parliamentary Counsel from other jurisdictions have been recruited to the Office of the Parliamentary Counsel to the Government to provide legislative drafting assistance given the historical lack of qualified drafters in the State. They are all experienced in their home jurisdictions and are carefully chosen by the senior staff in the Office of the Parliamentary Counsel to the Government having regard to their experience and expertise. They are required to conform to the same drafting conventions and legal requirements of all parliamentary counsel working in that Office.
157. Deputy George Lee asked the Taoiseach the labour force in the third quarter 2007 broken down by gender and region; and if he will make a statement on the matter. [48581/09]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): The Quarterly National Household Survey (QNHS) is the official source of estimates relating to the labour force. The data requested by the Deputy are presented in the table in respect of the third quarter of 2007.
158. Deputy George Lee asked the Taoiseach the details of the labour force in the third quarter 2009 broken down by gender and region; and if he will make a statement on the matter. [1038/10]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): The Quarterly National Household Survey (QNHS) is the official source of estimates relating to the labour force. The data requested by the Deputy are presented in the table in respect of the third quarter of 2009.
Question No. 159 answered with Question No. 141.
160. Deputy Leo Varadkar asked the Taoiseach the purpose of the hire of a hotel room (details supplied) on 30 September 2008 and two rooms on 11 November 2008; and if he will make a statement on the matter. [1379/10]
The Taoiseach: As the Stewards House, Farmleigh was not available to the Taoiseach on the dates in question, the costs incurred relate to the Taoiseach being unable to return home due to Dáil and other official commitments.
Question No. 161 answered with Question No. 1.
162. Deputy Fergus O’Dowd asked the Taoiseach the details of each gift, favour and hospitality received, both over and under the value of €650, since May 2007 to date in 2010; and if he will make a statement on the matter. [1516/10]
The Taoiseach: The receipt by office holders of gifts of goods or services is regulated by the Ethics in Public Office Acts. Issues of compliance with the Acts are matters for the Standards in Public Office Commission (SIPOC). The particular arrangements to be observed by office holders in respect of gifts of goods or services are set out in the Code of Conduct for Office Holders issued by the SIPOC.
Statements made annually by office holders must include all gifts of goods and services which exceed €650 in value. These statements are published in Iris Oifigiúil and are available on the Houses of the Oireachtas website. Records are not maintained by my Department in relation to gifts of lesser value received from time to time.
Question No. 163 answered with Question No. 139.
164. Deputy Denis Naughten asked the Taoiseach the number of staff in his Department, broken down by division and section, annually since 2007 to date in 2010; and if he will make a statement on the matter. [2174/10]
The Taoiseach: In accordance with the business needs of my Department, divisions and sections change from time to time. The tables give a breakdown of the staff working in the various divisions in my Department since 2007 to date in 2010. As statistics in relation to whole time equivalent staff numbers in my Department are compiled at the end of each calendar month, the current position is as at 31st December, 2009.
165. Deputy David Stanton asked the Taoiseach when he will publish call for tenders for printing of the census 2011 forms; and if he will make a statement on the matter. [2203/10]
Minister of State at the Department of the Taoiseach (Deputy Pat Carey): The printing contract for the 2011 census was part of a comprehensive census tender which was published on etenders in April 2009. The tender covered the software solution for the processing system, which was based on the system used for the 2006 census, the provision, installation and commissioning of the necessary hardware to carry out the processing and the printing of the census forms and enumerator record books. Following an open public tender the contract was awarded to a UK company, CACI UK Ltd in July 2009. The printing of the census forms and enumerator record books was sub-contracted by CACI to an Irish based printer DCK Ebrook.
166. Deputy Finian McGrath asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will support a matter (details supplied). [48329/09]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): While the decision of SR Technics to move operations from Ireland is regrettable, the relocation of companies, and with them jobs, is a reality of the modern global economic environment for a highly developed economy such as Ireland. This shift in the structure of international trade poses challenges to economic policy makers in all developed countries, not just Ireland. It must be remembered that Ireland also experiences the benefits resulting from globalisation as new markets and business opportunities open up for Irish companies.
The Government, through IDA Ireland, is committed to continued marketing of Ireland as a location for companies interested in establishing aircraft maintenance and aviation engineering businesses. The decision by Aer Lingus to undertake line maintenance operations, previously contracted to SR Technics, is a commercial decision, which is solely a matter for Aer Lingus. As regards any financial assistance provided to a company for establishment of operations in Malta or any Member State, the application and monitoring of exemptions to the general prohibition on State Aid in the EC Treaty rests exclusively with the European Commission.
The current Irish law in the area of “transfer of undertakings” is the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003— Statutory Instrument (S.I.) No. 131 of 2003. The Regulations implement the mandatory (i.e. mandatory to transpose) provisions of EU Council Directive 2001/23/EC of 12 March 2001 which is aimed at safeguarding the rights of employees in the event of a transfer of an undertaking, business or part of a business to another employer as a result of a legal transfer (including the assignment or forfeiture of a lease) or merger. Section 21 of the Employees (Provision of Information and Consultation) Act 2006 transposed a provision of the European Directive relating to the information to be provided by the original employer to the new employer.
Complaints relating to alleged contravention of the Regulations on Transfer of Undertakings can be brought in the first instance to a Rights Commissioner and, on appeal, to the Employment Appeals Tribunal. An application to a Rights Commissioner can be made by the [159]employee, or by a representative (including a trade union representative) by contacting the Rights Commissioner Service of the Labour Relations Commission, Tom Johnson House, Haddington Road, Dublin 4, or phone 01 6136700.
167. Deputy Martin Ferris asked the Tánaiste and Minister for Enterprise, Trade and Employment the reason community employment schemes are having their wages cut by 5.5% in comparison to cuts in jobseeker’s allowance for those of that age group at 4.1%. [48465/09]
169. Deputy Michael Ring asked the Tánaiste and Minister for Enterprise, Trade and Employment the reason the reduction in community employment scheme payment was higher than the cut in jobseeker’s allowance in view of the disincentive this may be to those who are working on the scheme (details supplied). [2002/10]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): I propose to take Questions Nos. 167 and 169 together.
The Community Employment Scheme participant payments are comprised of their Social Welfare entitlement and a weekly allowance. The Jobseeker’s Allowance was reduced by 4.1% in the December budget while the CE allowance was reduced by from €24.40 to €20 per week. The cuts in CE were necessary to fund increased activation measures in 2010 including an additional 500 CE places to bring the total number of CE places to 23,300.
168. Deputy Mary Upton asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will give a commitment that the minimum wage will not be targeted as part of an agenda to drive down wages here; and if she will make a statement on the matter. [48603/09]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): The Government continues to monitor wage movements in the labour market, and related developments in Employment Regulation Orders, Registered Employment Agreements and Social Welfare rates, so as to ensure that the National Minimum Wage, at its current rate, is not having an adverse effect on vulnerable workers and enterprises in a time of rising unemployment and declining nominal wages.
The guiding principles that inform adjustments to the level of National Minimum Wage under the provisions of the National Minimum Wage Act, 2000, require account to be taken of the likely impact of any proposed change on employment, unemployment, overall economic conditions and national competitiveness.
Question No. 169 answered with Question No. 167.
170. Deputy George Lee asked the Tánaiste and Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 114 of 17 November 2009, if further details are now available; when she expects examination and collation of the returns received in October 2009 to be completed; and if she will make a statement on the matter. [48241/09]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The Government Decision of 19 May 2009 regarding the reduction of payment periods by Government Departments to 15 days included a requirement for Departments to report quarterly to my Department on their performance in meeting this target. These reports are to be submitted by the 15th day of the month following the end of the quarter. The Reports provide details of [160]invoices paid within 15 days, between 16 and 30 days and over 30 days. The first returns by Departments cover the period 15 June to 30 September 2009.
Tables 1 and 2 contain the payment details received from Government Departments. In summary, these returns show a total of 62,860 payments were made by Departments in the above period amounting to €1.92bn; 49,890 payments totalling approximately €1.76bn were paid within 15 days. These payments represent 80 % of total payments made by Departments; in value terms 91% were paid within 15 days. A further 17% or almost 11,000 payments were made between 16 and 30 days and overall, 97% of payments during the period amounting to €1.86bn were paid within 30 days. Although there was some variation between the performances of individual Departments, 5 Departments were paying in excess of 90% of invoices within 15 days, a further 7 Departments were paying in excess of 83% of invoices within 15 days, while the remaining three had paid almost 50% of their payments within 15 days.
Some 9 Departments had paid between 98% and 100% of their invoices within 30 days and a further 5 had paid between 93% and 96% of their invoices within 30 days, while the remaining Department had paid 87% of invoices within 30 days. It is evident from the returns received, that Departments are playing their parts in assisting the cash flow of their suppliers, many of whom are Small and Medium Enterprises. The new procedures and processes introduced are having an impact in assisting Irish SMEs cash flow in the current difficult economic environment and I welcome this development. Future quarterly returns will show the overall consistency of Departments in meeting the 15-day payment requirement and any changes in the performance of individual Departments.
171. Deputy Michael D. Higgins asked the Tánaiste and Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 3 of 17 September 2009, if the report mentioned was sent to the bodies concerned; and if she will make a statement on the matter. [48242/09]
172. Deputy Michael D. Higgins asked the Tánaiste and Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 3 of 17 September 2009, if the report mentioned was sent to the bodies concerned; if not, the reason for same; and if this will now be rectified. [48246/09]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): I propose to take Questions Nos. 171 and 172 together.
I can advise the Deputy that the position as outlined in the reply given on 17 September last remains largely unchanged. As outlined at that time, following the successful appeal to the Supreme Court in this case, judgment was issued on 30th April 2009. The final step in the legal process is the granting of a final perfected Order by the Supreme Court which the Court asked the Minister to prepare. A draft Order has been prepared and is with the Office of the Chief State Solicitors Office for presentation to the Supreme Court. The Order, when perfected, will contain the definitive list of the parties to whom the report may be circulated. I am therefore not currently in a position to circulate this report until the Order has been perfected. Upon delivery of the perfected Order, I will ensure that the contents of the report are promptly brought to the attention of the parties specified in the Order.
173. Deputy George Lee asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of Civil Service staff in her Department; the number of these staff who hold an economics degree; the number of these staff who hold a post graduate economics degree; the number of these staff who hold a PhD in economics; and if she will make a statement on the matter. [48312/09]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): Some 1,056 civil servants are currently employed in my Department and the Offices under its aegis. This equates to 988.98 in fulltime equivalent terms. A number of the staff of my Department have studied economics, or economics-related subjects, prior to joining the Department. As my Department does not currently have a comprehensive record of the educational qualifications achieved by staff prior to joining the Department, I am not, therefore, in a position to answer the question fully at present. However, it is envisaged that a comprehensive skills audit of the staff of my Department will be undertaken in the near future as part of the development of longer-term workforce planning in the Department.
Information on the number of staff whose qualifications in economics were funded by my Department is given below. In common with other Government Departments, my Department operates the Refund of Fees Scheme. Under the Scheme, fees for approved courses of study undertaken by staff members in their own time are repaid on successfully completing their examinations. Courses are approved based on their relevance to the business needs of the Department. The number of staff currently working in the Department who have attained third-level qualifications in which economics formed part of the course of studies, and who were refunded their course fees by the Department is as follows:
| Number | |
|---|---|
| Primary Degree | 35 |
| Post-graduate qualification | 5 |
| Ph D | Nil |
In addition, my Department has sponsored 15 staff to participate in the Diploma and M.Sc programmes in economic policy analysis. To date 8 staff have successfully completed the Diploma programme and 7 staff have completed the M Sc programme. The Department also has access to considerable economic expertise through its Agencies such as Forfás, IDA and Enterprise Ireland. Economics is but one of the areas of expertise required to assist the Department to achieve its strategic mission. Consequently, my Department has sponsored its staff to pursue relevant qualifications across the range of studies relevant to the work of the Department.
174. Deputy Finian McGrath asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will support a matter (details supplied). [48331/09]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): The matter referred to in the Deputy’s question is a call from the Restaurant Association of Ireland for the abolition of the Joint Labour Committee (JLC) system and the reduction in the minimum wage in the Catering sector to €8.65 per hour. The Government is committed to upholding the arrangements for the making of the Employment Regulation Orders under the Joint Labour Committee (JLC) system. The Government has undertaken to [163]provide for the modernisation of the existing system through the implementation of a series of measures, including the introduction of new legislation. This commitment is being met within the framework of the Industrial Relations (Amendment) Bill 2009 which has recently passed all stages in the Seanad.
It is the parties represented on a JLC that are best placed to address the impact of the economic crisis on employment levels and the viability of services in the relevant sector. This shared capacity for co-operation has already been demonstrated by the employer and trade union interest in the catering sector when agreement was reached in 2009 to fix a uniform set of terms and conditions in the sector, including the harmonisation of the Sunday premium to time plus one third.
I intend to bring forward proposals to include in the Industrial Relations (Amendment) Bill 2009 a provision providing for the inclusion of an inability to pay provision in future Employment Regulation Orders. I consider such a provision to be necessary in order to reconcile the current demands of both trade unions and employers through continuing to modernise and streamline the JLC system, while also alleviating the pressures that employers facing financial difficulty currently experience. The final details of this provision have still to be settled and I intend to introduce an amendment to the Bill in the Dáil to give effect to this objective.
175. Deputy Joanna Tuffy asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of State aided jobs which have been created in County Meath since 1998; the breakdown of same by job description and location; and if she will make a statement on the matter. [48350/09]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The Forfás Annual Employment Survey reports on job gains and losses in companies that are supported by the industrial development agencies. Data is compiled on an annualised basis and is aggregated at county level. Therefore, information on individual locations or breakdown by job description is not available. As companies provide data on a confidential basis, for statistical purposes only, information on individual companies is not disclosed for reasons of client confidentiality. Details of the number of IDA supported jobs created in County Meath, for the period in question is set out in the following tabular statement.
Enterprise Ireland monitors the employment trends in the companies it supports through the Annual Employment Survey, conducted in conjunction with Forfás. The results of this survey are released each January. In 2009 total employment in Enterprise Ireland client companies in County Meath was 3,787. Enterprise Ireland does not collect statistics on employment by job description, and employment numbers are collected on a county basis only. Gross employment gains by Enterprise Ireland client companies in County Meath, for the period in question, are illustrated in the following tabular statement.
Statistical information on job creation in companies supported by the County Enterprise Boards is held by the Department on an individual board basis rather than by specific locations within the Board’s locality. Figures in respect of 2009 will not be available until early February 2010. Statistical information in relation to jobs created in companies supported by Meath County Enterprise Board, for the period in question is presented in the following tabular statement.
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 114 | 116 | 145 | 73 | 62 | 35 | 65 | 149 | 55 | 111 | 83 | 24 |
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 363 | 313 | 722 | 483 | 260 | 507 | 405 | 597 | 973 | 396 | 282 | 291 |
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | Total 1998-2008 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 243 | 139 | 259 | -15 | 148 | -128 | 46 | 92 | 84.5 | 2 | -39 | 830.5 |
176. Deputy Joanna Tuffy asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of State aided jobs which have been created in County Louth since 1998; the breakdown of same by job description and location; and if she will make a statement on the matter. [48351/09]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The Forfás Annual Employment Survey reports on job gains and losses in companies that are supported by the industrial development agencies. Data is compiled on an annualised basis and is aggregated at county level. Therefore, information on individual locations or breakdown by job description is not available. As companies provide data on a confidential basis, for statistical purposes only, information on individual companies is not disclosed for reasons of client confidentiality. Details of the number of IDA supported jobs created in County Louth, for the period in question is set out in the following tabular statement.
Enterprise Ireland monitors the employment trends in the companies it supports through the Annual Employment Survey, conducted in conjunction with Forfás. The results of this survey are released each January. In 2009 total employment in Enterprise Ireland client companies in County Louth was 4,541. Enterprise Ireland does not collect statistics on employment by job description, and employment numbers are collected on a county basis only. Gross employment gains by Enterprise Ireland client companies in County Louth, for the period in question, are illustrated in the following tabular statement.
Statistical information on job creation in companies supported by the County Enterprise Boards is held by the Department on an individual board basis rather than by specific locations within the Board’s locality. Figures in respect of 2009 will not be available until early February 2010. Statistical information in relation to jobs created in companies supported by Louth County Enterprise Board, for the period in question is presented in the following tabular statement.
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 162 | 351 | 1012 | 155 | 179 | 39 | 101 | 150 | 289 | 198 | 121 | 34 |
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 579 | 319 | 268 | 537 | 269 | 214 | 508 | 469 | 427 | 661 | 447 | 318 |
177. Deputy Charles Flanagan asked the Tánaiste and Minister for Enterprise, Trade and Employment when a person (details supplied) in County Offaly will expect to receive their state redundancy payment; and if she will make a statement on the matter. [48551/09]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): My Department administers the Social Insurance Fund (SIF) in relation to redundancy matters on behalf of the Department of Social and Family Affairs. There are two types of payment made from the SIF — rebates to those employers who have paid statutory redundancy to eligible employees, and statutory lump sums to employees whose employers are insolvent and/or in receivership/liquidation.
I can confirm that my Department received a statutory lump sum claim for the individual concerned on 15 September 2009 claiming inability to pay on behalf of the employer. This claim awaits processing. The Redundancy Payments Section of my Department is currently processing rebate applications submitted by post from April 2009 and those filed online from May 2009, so that the waiting time is approximately 8 to 9 months depending on the manner of filing the application. In respect of lump sum payments paid directly to employees, such as in this instance, the Section is, in general, processing claims dating from July 2009.
Given the unprecedented increase in Redundancy Payment claims lodged with my Department since late 2008 it has proved impossible to maintain the customer service targets that previously obtained. The scale of the challenge is evident from the statistics that show incoming redundancy claims with a cumulative figure for 2009 of 77,001. This figure exceeds the claims lodged for 2008 (40,607) by 90% and 2008 was, of itself, an exceptional year as compared with earlier years when claims received were of the order of 25,000. Efforts continue to be made by my Department to deliver more acceptable turnaround processing times for redundancy payments given the difficulties that this gives rise to for both individual employees and the business community.
Measures already taken include: the reassignment of 26.7 additional staff (full time equivalents) from other areas of the Department to the Redundancy Payments area since early 2009 with ongoing review of trends and demands. The current number of staff serving in the Redundancy Payments Section in terms of full time equivalents is 52.5. There has also been the prioritisation of the Department’s overtime budget towards staff in the Redundancy Payments Section to tackle the backlog outside normal hours; the establishment of a special call [166]handling facility to deal with the huge volume of telephone calls from people and businesses who are naturally concerned about their payments, using the facilities and cooperation of the National Employment Rights Authority (NERA), with the centre having received an average of 12,500 calls per month this year with an estimated 60% relating to redundancy payments; the provision of better quality information relating to current processing times on the Department’s website; engagement with the Revenue Commissioners to facilitate the offset of redundancy rebate payments by employers against outstanding tax liabilities with the Revenue Commissioners.
The Tánaiste and I continue to monitor closely the impact of these changes against the continuing influx of redundancy claims and we are currently looking at ways in which additional resources can be allocated to the area in the first quarter of 2010.
178. Deputy Mary Upton asked the Tánaiste and Minister for Enterprise, Trade and Employment her plans to develop a hub for game development here; her further plans to explore this area as part of the smart economy; and if she will make a statement on the matter. [48607/09]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): Enterprise Ireland is the lead government agency responsible for the development of indigenous enterprise. It supports companies employing 10 or more people and start-up companies which have the potential to employ 10 or more people and reach or exceed €1m in exports over three years. Enterprise Ireland offers a comprehensive range of services, including both financial and non-financial supports, to companies with a business strategy that encompasses the elements required for business success.
Enterprise Ireland has been very active in the digital sector through ongoing funding support for third level institutions, start-up companies and also established and scaling companies. Enterprise Ireland has labelled the digital sector TIME (Telecom Internet Media and Edutainment). The sector consists of approximately 350 EI client companies and growing. Approximately 60 companies have a high profile having closed significant deals (between €200k and €12m) with telecom operators, such as Telefonica, Sprint and Vodafone and also with media/entertainment companies including Nickelodeon, CBBC, Disney and Facebook. The establishment of Facebook’s European headquarters here in Ireland, follows the positive trend set by Google, Microsoft, eBay and Intel.
In relation to developing a hub for game development, Enterprise Ireland has funded or co-funded the majority of incubator/hub space in Ireland for early stage business. Incubator space for start-ups in the Gaming/Entertainment sector is focused in Dublin and provided by the Digital Depot located in Thomas St and Media Cube in Dun Laoghaire’s Institute of Art, Design and Technology. Both centres provide spaces for over 50 digital related companies. Other incubator centres around Ireland have assisted in developing successful digital companies over the last number of years.
However, while the prospect of a dedicated hub focused on just gaming/entertainment has been investigated, the Digital Hub approach appears to be the preferred approach at the moment. Enterprise Ireland will continue to monitor and influence changes in strategic focus of the digital hubs as new business models emerge. Enterprise Ireland’s new Software Strategy document (launched in 2009) has highlighted the importance of specific clusters with internet/gaming clusters as one of the clusters highlighted for growth. Enterprise Ireland continues to support the games sector in Ireland and actively engages with the companies involved with regard to clustering and sectoral development.
179. Deputy James Bannon asked the Tánaiste and Minister for Enterprise, Trade and Employment his views on whether it appropriate that the new chief executive officer of FÁS should be given a €60,000 car; and if she will make a statement on the matter. [48614/09]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The Director General of FÁS is provided with a car by FÁS in accordance with the terms of his contract of employment.
180. Deputy Joe McHugh asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on a possible enterprise start-up (details supplied) in County Donegal; and if she will make a statement on the matter. [1007/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): My Department does not provide direct funding or grants to businesses but provides funding to a number of State Agencies, including the County and City Enterprise Boards (CEBs) and Enterprise Ireland, through whom assistance is delivered directly to businesses.
Subject to certain eligibility criteria new and developing micro-enterprises may qualify for financial support from the CEBs in the form of priming, expansion/development and feasibility/innovation grants. In addition, the CEBs deliver a range of non-financial supports to improve management capability development within micro-enterprises designed to help new and existing enterprises to operate effectively and efficiently so as to last and grow. All of the CEBs operate to the same criteria in relation to the assistance which they can offer i.e. they can support the establishment and/or the development of enterprises provided that the projects have the capacity to achieve commercial viability and which over time may develop into strong exporting entities.
However, I would stress that priority is given to projects in the manufacturing and internationally traded services sectors. It is considered inappropriate to support other areas such as retail enterprises, personal services (e.g. hairdressers, gardeners, etc), professional services (accountants, solicitors, etc) lacking export potential, construction, as it is considered that these enterprises generally give rise to unacceptable deadweight (where projects would have proceeded anyway) and/or displacement (where the projects simply displace business from other players in the market) concerns.
In order to more fully explore the range of options that may be available to them the company are advised to contact their local CEB to discuss their business needs with the relevant staff of the Board. Contact details for individual CEBs can be found by accessing the following website: www.enterpriseboards.ie.
181. Deputy Brian O’Shea asked the Tánaiste and Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 94 of 12 November 2009, the further discussion she has had with the industrial development agencies with a view to securing replacement jobs in the Waterford Constituency. [1014/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): As stated in my previous reply, IDA Ireland continues to actively promote the Waterford region to overseas investors. Currently there are 31 IDA Ireland supported companies in Waterford City and County employing approximately 5,960 people. Clear evidence of a transition to more knowledge based and higher value activity is seen in the resilience of companies such as [168]Bausch & Lomb, Honeywell, and GlaxoSmithKline, as well as newer additions to the county’s portfolio, such as Citi Hedge Fund Services, Genzyme and Sun Life Financial.
Key interventions in support of attracting investment in recent years have been the development of the Waterford Business & Technology Park (28 hectares), the Dungarvan Business Park (additional 14 hectares developed) and a large scale 55 hectare Greenfield site in Belview, specifically targeted for larger scale utility intensive overseas investments. A further 20 hectare site (Knockhouse lands) adjacent to the Genzyme facility on the Kilmeaden road in Waterford City is also available for Greenfield investment. In addition, Enterprise Ireland and the Cork County Enterprise Board offer a range of supports to businesses to facilitate them in the creation and retention of jobs, and to assist those wishing to start their own business.
182. Deputy Brian O’Shea asked the Tánaiste and Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 60 of 10 December 2009, the position regarding the European globalisation adjustment fund application containing proposals for the co-financing of a range of measures including occupational guidance, training, upskilling, entrepreneurship and educational opportunities for a total of 653 workers who were made redundant at companies (details supplied) in County Waterford. [1015/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The European Globalisation Adjustment Fund was submitted to the European Commission on 25 September 2009. The application has been circulated by the Commission’s EGF Unit in the Directorate General for Employment, Social Affairs and Equal Opportunities to other relevant Directorate Generals within the Commission for consideration. Thereafter, and subject to any further clarifications required, the application will be placed before the College of Commissioners for approval. The application must also be considered and approved subsequently by the Council of Ministers and the European Parliament. This procedure can, as in the previous case of the application lodged by Ireland on behalf of redundant DELL workers, take a significant period of time to complete.
183. Deputy Joe McHugh asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on an advertisement (details supplied) that is currently being run by the Consumer Agency; if she will take steps to address same; and if she will make a statement on the matter. [1022/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The protections afforded consumers in circumstances where they purchase goods which turn out to be faulty are set out in the Sale of Goods legislation, principally the Sale of Goods Act 1893 and the Sale of Goods and Supply of Services Act 1980, and also in the European Communities (Certain Aspects of the Sale of Consumer Goods and Associated Guarantees) Regulations 2003 (S.I. No. 11/2003 refers). The essential protection provided in Irish law in cases of breaches of a condition under a sales contract, such as instances concerning the sale of faulty goods, entitles a consumer to reject the goods and repudiate the contract. Where the consumer has paid for the goods then he or she may sue for damages and /or seek recovery of the price paid.
Notwithstanding the essential right of consumers to reject faulty goods and seek recovery of the price paid, provisions were inserted into the Sale of Goods legislation allowing consumers who purchase goods which turn out to be faulty a choice of remedies. This choice affords the [169]consumer the opportunity on the one hand to seek a remedy to the fault or a replacement of the goods whilst still retaining the entitlement to reject the goods or have them repaired elsewhere where the seller fails or refuses to facilitate the request. In practical terms the consumer is afforded the right to “cure” the defect without losing the right to reject. Thus the consumer has a second chance to reject where the seller fails to facilitate the request for repair or replacement.
Insofar as the European Communities (Certain Aspects of the Sale of Consumer Goods and Associated Guarantees) Regulations 2003 are concerned, these Regulations added a broader dimension to the palate of remedies available to Irish consumers. It is important to point out, however, that these remedies are in addition to and not in substitution for the protections afforded consumers under the Sale of Goods legislation. The Regulations essentially require that goods delivered under a contract of sale to a consumer must be in conformity with that contract. The Regulations provide that goods are in conformity with the contract for sale if they comply with the description given by the seller, are fit for the purposes for which such goods are normally used, demonstrate the quality and performance which are normal in goods of the same type and which the consumer can reasonably expect etc. The Regulations further provide that where there is a lack of conformity in relation to a contract for the sale of goods, the seller shall be liable to the consumer for any lack of conformity and that the consumer is entitled to a range of remedies, including that the goods are brought into conformity, free of charge, by repair or replacement, or an appropriate reduction is made in the price, or the contract is rescinded with regard to those goods.
As regards the suggestion that there is a 30 day limit on vendors’ liability in respect of refunds, I am not aware of the provenance of that suggestion. It may be that the 30 day limit may refer to the returns policy operated by some retailers, whereby they allow consumers to return goods, which are not faulty, within a particular period subject to certain conditions. I would wish to assure the Deputy, however, that there is no such limit in relation to the statutory protections afforded consumers in instances where they purchase goods which turn out to be faulty, indeed any policy which would seek to limit those protections would not be binding on the consumer.
I am satisfied, therefore, that the information campaign being run by the National Consumer Agency is not misleading and indeed is providing useful and timely advice to consumers as to their rights in instances where they purchase goods which turn out to be faulty.
184. Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will cut the amount received by participants on community employment schemes beyond what was reduced as a result of social welfare cuts in budget 2010; and if she will make a statement on the matter. [1210/10]
191. Deputy Denis Naughten asked the Tánaiste and Minister for Enterprise, Trade and Employment the position regarding plans of FÁS to cut payments to community employment participants; the impact that this will have on the rural social scheme; and if she will make a statement on the matter. [1398/10]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): I propose to take Questions Nos. 184 and 191 together.
[170]As part of Budget 2010 a number of savings were identified in relation to Community Employment (CE). These changes were mainly in the area of training allowances that are linked to Social Welfare payments and certain FÁS Allowances that are provided in addition to the core training allowances. The FÁS training allowance for Community Employment and Job Initiative participants has been reduced from €24.40 and €48.80 per week to €20 and €40 per week respectively. In addition, new entrants to FÁS training programmes will only be paid an allowance if they had been entitled to Job Seekers Allowance or Job Seekers Benefit.
The funding in respect of training and materials for those on CE programmes will be reduced from €1,500 to €750 per head per annum. These savings will allow for an increase of 500 CE places bringing the total number of places available to 23,300. The changes in CE do not have implications for the Rural Social Scheme which is under the aegis of the Department of Community, Rural and Gaeltacht Affairs.
This Government will continue to support the positive role of CE in meeting the needs of long-term unemployed persons while at the same time providing essential services to communities. I am keeping the operation of the Scheme under constant review in the context of the current difficult unemployment situation.
185. Deputy Caoimhghín Ó Caoláin asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will provide details of the activation fund announced in budget 2010 that is intended to assist those who have lost their jobs, in the construction and other sectors, secure work, education or training; if the fund has commenced; the way in which an application is made; the amount approved to date in 2010; if the community sector can access this fund; and if she will make a statement on the matter. [1248/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The Labour Market Activation Fund announced in the Budget 2010 is intended to provide additional effective training and education opportunities to the unemployed through a market-driven and innovation seeking mechanism. It will specifically target the low skilled, the under 35s and those suffering from structural unemployment in the manufacturing, construction and retail sectors. The Government has made €20 million available for the Labour Market Activation Fund in 2010 and it is expected that a call for proposals will issue in the coming weeks with successful proposals starting to come on stream as soon as possible. All sectors of the economy including the public, private and community and voluntary sectors will be able to submit their proposals.
186. Deputy Richard Bruton asked the Tánaiste and Minister for Enterprise, Trade and Employment the savings outlined in the Report of the Special Group on Public Numbers and Expenditure Programmes which were accepted in budget 2010 for her Department in tabular form; the savings which will be achieved in 2010; and if she will make a statement on the matter. [1255/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): Details of savings arising out of recommendations in the Report of the Special Group on Public Service Numbers and Expenditure Programmes which are incorporated in my Department’s [171]Estimate for 2010 are provided on the table. In addition to the savings outlined on the table, further savings will be realised in 2010 through the reduction in staff numbers and in pay levels across my Department and its agencies. The 2010 Budget Day Estimates for my Department included an indicative provisional adjustment to public service pay of €39.658 million, to be apportioned across my Department, its Offices and its agencies in the Revised Estimates Volume.
My Department is continuing to examine all of the proposals made by the Special Group in respect of my Department and its agencies, to determine the scope for the implementation of the recommendations and for the achievement of further savings going forward. Some proposals, such as the rationalisation of agencies, may be quite complex to implement and may require legislative provision if they are to be achieved. There are also a number of recommendations in the report affecting my Department which will require cross-Departmental consideration. However, my Department will examine these proposals and will also look at alternative ways of finding savings which meet the general thrust of the Special Group report.
187. Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will explain the term one time staff vendors with respect to purchases made by FÁS; and if she will make a statement on the matter. [1319/10]
[172]Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): The term referred to by the Deputy relates to a sundry costs account maintained in FÁS. The account, which is operated on a vouched basis, is used for the reimbursement of costs to FÁS personnel for the purchase, by staff members in the first instance, of sundry items on behalf of the Agency.
188. Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment if her Department has made representations to the European Commission regarding the fact that many retailers cannot purchase from suppliers’ sterling price lists and may only purchase goods from Euro price lists; and if she will make a statement on the matter. [1321/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): Responsibility in relation to the negotiation of commercial contracts between parties such as retailers and suppliers is essentially a matter for the contracting parties themselves. It should be appreciated that such negotiations are not homogenous in their nature and reflect the fact that considerations may apply in relation to negotiations between a supplier and a particular retailer that do not apply in relation to negotiation between that supplier and another retailer. Such considerations would include issues such as volume discounts etc. The Deputy will appreciate, therefore, that the fact that a supplier and a retailer may agree to contract for the supply of goods at a particular price does not necessarily mean that price will apply in respect of every negotiation between the supplier and other retailers for the supply of those goods given the variants that apply in relation to different negotiations.
In so far as competition law has an effect on business relationships in the grocery goods sector, Section 4 of the Competition Act 2002 and Article 101 of the Treaty prohibit agreements, decisions and concerted practices that have as their object or effect the prevention, restriction or distortion of competition. Anti-competitive practices such as price fixing, limiting or controlling production and markets, market sharing, applying dissimilar conditions to equivalent transactions with other trading parties (thereby placing them at a competitive disadvantage) and making the conclusion of contracts subject to the acceptance of supplementary obligations are specifically prohibited.
However certain agreements or concerted practices entered into between two or more undertakings operating at different levels of the production or distribution chain, which relate to the conditions under which the parties may purchase, sell or resell certain goods or services within the State may fall outside the scope of Section 4 or Article 101. For example, non-exclusive distribution agreements whereby the supplier agrees with the buyer to supply the contract goods or services to the buyer for a certain territory but without any restriction on supplying other buyers within that territory are deemed to be outside the scope of section 4. It is also the case that certain agreements and practices can avail of a block exemption from competition rules, others require assessment on a case by case basis while hard-core anti-competitive practices (e.g. price fixing) is always prohibited.
Section 5 of the Act 2002 and Article 102 of the Treaty prohibits abuse of a dominant position. The creation or existence of a dominant position does not breach competition law, rather it is the abuse of that position that constitutes the breach. The Competition (Amendment) Act 2006 strengthens the provisions of the 2002 Act by prohibiting practices such as: the imposition of resale price maintenance in regard to the supply of grocery goods (resale price maintenance is the practice whereby manufacturers or suppliers specify the minimum prices at which their goods may be resold); unfair discrimination in regard to the supply [173]of grocery goods. This is a reference to a supplier offering preferential terms to one buyer over another even though the transactions involved are equivalent in nature.
The legislation outlined above provides for the investigation of a breach by the Competition Authority and for prosecution on indictment by the Director of Public Prosecutions, which the Deputy will be aware are both independent bodies in the exercise of their statutory functions. Alternatively, aggrieved suppliers may take a private action for relief by way of injunction, declaration or damages including exemplary damages. Depending on the specific details of any individual case the EU Commission may also have a role.
With regard to the practices referred to in the Deputy’s question, there may be jurisdictional considerations given that the practices may have a cross border dimension. I would urge the Deputy to bring any details of the practices concerned to the attention of the Competition Authority in order that the relevant competition body can be identified to follow up on the matter and to investigate if the said practices are in conformity with the provisions of competition law.
189. Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment the way in which the moneys provided from the European Globalisation Fund for former Dell and associated workers will be allocated and monitored. [1322/10]
192. Deputy Pat Breen asked the Tánaiste and Minister for Enterprise, Trade and Employment further to Parliamentary Question No 63 of 13 October 2009 the way the monies from the EU Globalisation Fund will be allocated to former employees of a company (details supplied); the timeframe involved for spending these funds; and if she will make a statement on the matter. [1428/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): I propose to take Questions Nos. 189 and 192 together.
Since the announcement of the DELL and related redundancies in Raheen in January 2009, FÁS has already provided guidance service and training courses to over 1,500 workers made redundant. Enterprise Ireland and the local Vocational Education Committees also continue to promote and offer their business advice, grant aid and educational services. A number of affected workers have already enrolled on training courses and in further and third level education at institutions in the Mid-West region to date.
The application for co-funded assistance from the European Globalisation Adjustment Fund (EGF) towards the costs of a personalized package of occupational guidance, training, employment, entrepreneurship and educational measures for workers made redundant at the DELL plant in Raheen, Co. Limerick, and in ancillary enterprises, was made by my Department in mid-June 2009. It was subsequently approved by the European Union budgetary authorities in late December 2009. The transfer of EU funds is anticipated later this month. Provision has been made in my Department’s Vote for the national financing element required. The timeframe permitted for eligible expenditure under the Fund is 24 months from the date of submission of an application, or from the date of commencement of relevant measures provided this is no later than 3 months after the application’s submission. As such in the case of the DELL related application the latest date for expenditure is September 2011.
My Department will be the managing authority for EGF funding in the State while the Department of Education and Science, FÁS and Enterprise Ireland will be designated intermediate bodies for funds transfer, reporting and monitoring purposes. Approved funding will [174]be made available to public beneficiaries delivering services on the ground to the eligible redundant workers. All intermediate bodies shall certify expenditure in their particular area of responsibility and report to my Department. All relevant EU and national accounting and auditing procedures and requirements must be adhered to by the relevant intermediate bodies and public beneficiaries.
It is imperative that the wide range of measures being provided to eligible redundant workers is co-ordinated in the most effective and efficient manner locally and regionally. To that end, I have charged FÁS to establish a dedicated EGF Co-ordination Unit in Limerick to ensure that all relevant supports across all service providers are coordinated on the ground in a timely, effective and efficient manner. The Unit shall act as the primary coordination agency for the Department in the implementation of the EGF programme for DELL worker related supports.
The EGF Co-Ordination Unit is now contacting all potential beneficiaries of the Fund from DELL and the other ancillary enterprises to outline the supports on offer. They are also inviting the workers to a 2 days information fair in Limerick early next month at which all service providers will be in attendance to explain their programmes and supports, to answer queries and to provide for course registrations. In parallel, a steering group is being established to include worker representative bodies in order to ensure that the views of the redundant workers and other key stakeholders are made known and fed into the implementation process.
The Minister for Labour Affairs will be meeting the DELL Redundant Workers Association as part of this process in the coming days. A review of the operation of the Fund shall be undertaken by the Department in June 2010.
190. Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment her plans to apply for funding from the European Globalisation Fund with respect to regions other than the mid-west; and if she will make a statement on the matter. [1323/10]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): To date my Department has made two applications, and is in the process of finalising a third application, for assistance under the European Globalisation Adjustment Fund (EGF). These applications are in relation to major redundancies at the DELL plant in Raheen, Co. Limerick, the Waterford Crystal plant in Kilbarry, Co. Waterford and the S R Technics facility at Dublin Airport.
Strict eligibility criteria apply under the EGF Regulation in order for a Member State to sustain the making of an application for assistance under the Fund. My Department continues to monitor all relevant redundancy and related information sources on a national basis to ensure that where it is considered that a viable application can be made and sustained under the EGF, irrespective of geographic location, it will be duly made.
Question No. 191 answered with Question No. 184.
Question No. 192 answered with Question No. 189.
193. Deputy Pat Breen asked the Tánaiste and Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 222 of 16 September 2009 the status of the mid-west jobs task force report; when the final report will be finalised; the number of recommendations of the interim report which have been implemented; and if she will make a statement on the matter. [1430/10]
[175]Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The wide range of recommendations in the Mid-West Task Force report cover both local and national issues. In that respect, the Government has been responding to the economic downturn generally and has taken numerous initiatives, for example in relation to competitiveness and cost competitiveness, industrial employment stabilization, and employment activation measures. All of these measures have benefited regions affected by or threatened with job losses, including the Mid West region. Workers in the Mid West are the subject of a substantial package assembled by the Government in response to the redundancies arising from developments at Dell in Limerick and knock-on effects in other companies in the region.
In addition, the State agencies IDA, Enterprise Ireland, Shannon Development and the County Enterprise Boards have redoubled their efforts to stimulate industrial employment in the Mid West region. For example, IDA is supporting eight industrial projects with a job potential of 1,073 which were announced by multinational companies in the Mid West in 2008 and 2009 and are now being brought into operation.
The measures mentioned above are outlined more fully in an initial response to its recommendations which I sent to the Task Force in late September. Given the wide range of recommendations in the report, I have also brought the report to the attention of my colleagues in Cabinet and it is currently being further considered in a number of other Government Departments as well as in my own Department following the recent budget. I am very grateful for the work Mr Brosnan and the other members of the Task Force have undertaken to date. I shall continue to keep the Task Force informed on the Government’s work on matters covered in the interim recommendations. The Task Force has identified a number of issues for further study in its Final Report which I look forward to receiving in the coming months.
194. Deputy Jack Wall asked the Tánaiste and Minister for Enterprise, Trade and Employment if changes have been made in community employment schemes following Budget 2010; if so, if a person can remain on a CE scheme longer than three years; and if she will make a statement on the matter. [1462/10]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): 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. CE helps unemployed people to re-enter the active workforce by breaking their experience of unemployment through a return to a work routine and to assist them to enhance/develop both their technical and personal skills.
Budget 2010 contained some changes to Community Employment Schemes however, the qualifying criteria and rules for participation remain unchanged. A number of savings were identified, mainly in the area of training allowances that are linked to Social Welfare payments and certain FÁS Allowances that are provided in addition to the core training allowances. The FÁS allowance for CE and JI participants will reduced from €24.40 and €48.80 per week to €20 and €40 per week respectively. In addition, new entrants to FÁS training programmes will only be paid an allowance if they had been entitled to Job Seekers Allowance or Job Seekers Benefit.
The funding in respect of training and materials for those on CE programmes will be reduced from €1,500 to €750 per head per annum. These savings will allow for an increase of 500 CE places bringing the total number of places available to 23,300. A person can remain on a CE [176]Scheme for longer than 3 years if they are aged 55 years or over. In addition persons in receipt of the following disability-linked Social Welfare payments may be eligible for an additional 1 year’s participation: Disability Allowance; Blind Pension; Invalidity Pension; Illness Benefit for 6 months or more.
195. Deputy Joe McHugh asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will, through FÁS, explore the possibility of developing community employment schemes on developing walkways and cycle routes on disused railway lines nationally in view of the fact that there are more than 400,000 persons unemployed here; and if she will make a statement on the matter. [1487/10]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): 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 purpose of CE is to help unemployed people to re-enter the open labour market by breaking their experience of unemployment through a return to a work routine and to assist them to enhance/develop both their technical and personal skills.
Eligible projects are those which: respond to an identified community need; provide development for participants in areas involving heritage, arts, culture, tourism, sport and the environment; have the agreement of relevant trade unions; do not displace or replace existing jobs; offer valuable work experience for participants. FÁS would welcome proposals from Local Sponsors to carry out projects such as those mentioned by the Deputy. All proposals would be considered within allocated budgets and participant numbers.
196. Deputy Fergus O’Dowd asked the Tánaiste and Minister for Enterprise, Trade and Employment the details of each gift, favour and hospitality received, both over and under the value of €650, since May 2007 to date in 2010; and if she will make a statement on the matter. [1509/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): Under the Ethics Acts, gifts, favours and hospitality given to office holders and valued at over €650, must be included in the “Annual Statement of Registrable Interests” made to the Standards in Public Office Commission. During the period in question one gift, favour or item of hospitality valued in excess of €650 was received: Miniature Gilded Boat presented by the Minister for Foreign Trade of the United Arab Emirates during a Trade Mission to Dubai and Abu Dhabi in November, 2008. This gift was surrendered to the State and declared in my Statement of Registrable Interests submitted to the Standards in Public Office Commission. Gifts, favours or hospitality received under the threshold are not recorded because they are not subject to declaration.
197. Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment the charges levied or set by his Department or agencies for the provision of goods or services to individuals or businesses; if those charges have been changed during 2008 or 2009; the revenue in 2009 accrued from these charges; the anticipated income from such charges in 2010; and if she will make a statement on the matter. [1592/10]
[177]Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): In the time available since this Question was tabled my Department has not been able to collect information on all the issues raised by the Deputy. In this regard, I would point out that my Department includes such Offices as the Companies Registration Office and the Patents Office, which provide several services for which charges are made. I will forward the information to the Deputy.
198. Deputy Thomas P. Broughan asked the Tánaiste and Minister for Enterprise, Trade and Employment the reason former employees and pension holders of a company (details supplied) are not covered under the Protection of Employee Rights on Transfer of Undertakings Regulation 2003; and if she will make a statement on the matter. [1642/10]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): The current Irish law in the area of “transfer of undertakings” is the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003— Statutory Instrument (S.I.) No. 131 of 2003. The Regulations implement the mandatory (i.e. mandatory to transpose) provisions of EU Council Directive 2001/23/EC of 12 March 2001 which is aimed at safeguarding the rights of employees in the event of a transfer of an undertaking, business or part of a business to another employer as a result of a legal transfer (including the assignment or forfeiture of a lease) or merger. Section 21 of the Employees (Provision of Information and Consultation) Act 2006 transposed a provision of the European Directive relating to the information to be provided by the original employer to the new employer.
Complaints relating to alleged contravention of the Regulations on Transfer of Undertakings can be brought in the first instance to a Rights Commissioner and, on appeal, to the Employment Appeals Tribunal. Any such case should be taken within six months of the date on which an employee considers that there has been a contravention of the Transfer of Undertakings Regulations. I understand that no complaint has been made to the Rights Commissioners Service in relation to this case. In accordance with the Transfer of Undertaking Regulations, it would be a matter for a Rights Commissioner to determine in law if any particular case does, in fact, constitute a transfer of undertakings situation. Thus, the circumstances of each individual case would have to be considered by a Rights Commissioner, in the first instance, in the light of all previous case law including European Court of Justice case law.
An application to a Rights Commissioner can be made by the employee, or by a representative (including a trade union representative) by contacting the Rights Commissioner Service of the Labour Relations Commission, Tom Johnson House, Haddington Road, Dublin 4, or phone 01 6136700.
199. Deputy John McGuinness asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on expanding the role of the registrar of friendly societies in line with the role and function of the certification officer in the United Kingdom; and if she will make a statement on the matter. [1817/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): As the Deputy will be aware I have directed my Department to extend the scope of the reviews of the existing legislation relating to industrial and provident societies (co-operative societies) and friendly societies to include the functions of the Registrar of Friendly Societies under the Trade Union Acts. The Deputy may also be aware that the McCarthy report made a [178]recommendation in relation to the Office of the Registrar of Friendly Societies, and this too is being taken into consideration in the context of the reviews.
Our trade union legislation is very much based on the UK Acts, the principal Act being a UK Act of 1871, and whilst there have been some amending Acts in the intervening years the basic registry functions have remained relatively similar in the two jurisdictions. I would anticipate, insofar as the review of the legislation will consider the functions of the Registrar under the Trade Union Acts, that it will have due regard to the functions discharged by comparable regulatory bodies in other jurisdictions, in particular the UK, given the historic linkages.
200. Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of staff working in FÁS; the number of staff grouped by grade; the number of staff employed on a temporary short term contract; the number of staff on a fixed contract; the number of staff involved in providing direct training; and if she will make a statement on the matter. [1857/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The table shows the number of staff working in FÁS broken down by grade. Of the total number indicated below 10.5 persons are employed on fixed term contracts and the remainder are permanent FÁS staff. A total of 456.75 persons are involving in providing direct training. Information on temporary staff is currently being compiled and will be communicated to the Deputy when it is available.
| Grade | Total |
|---|---|
| 1 | 1.00 |
| 3 | 5.00 |
| 4 | 25.00 |
| 5 | 2.00 |
| 6 | 88.00 |
| 7 | 136.84 |
| 8 | 786.53 |
| 9 | 150.46 |
| 10 | 197.04 |
| 11 | 569.14 |
| 13 | 94.39 |
| Total | 2,055.4 |
201. Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of FÁS premises; the number of FÁS premises grouped by function; the amount of rent paid by FÁS in 2009; and if she will make a statement on the matter. [1858/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The current total number of FÁS owned or leased premises is 130. This number breaks down by function as follows:
FÁS-owned main Training Centres: 17
[179]FÁS-leased main Training Centres: 2
FÁS-leased main Training Centre sites: 1
FÁS-leased temporary Training Centre satellite units: 45
FÁS-leased Head Office premises: 5
FÁS-owned Head Office sites: 1
FÁS-leased Employment Services Offices: 54
FÁS-owned Employment Services Offices: 2
FÁS-leased Community Services/Service to Business premises: 3
The information above excludes leased Employment Services temporary “clinic” type premises, Local Employment Service premises and all Community Training Centre type premises. The provisional estimated rent for 2009 is €10.805m.
202. Deputy Leo Varadkar asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of training courses provided directly by FÁS; the number of training courses sourced by FÁS in other educational institutions and in the private sector; and if she will make a statement on the matter. [1859/10]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): I understand that FÁS is currently collating the information requested by the Deputy. I will write to the Deputy again once this has been completed.
203. Deputy Thomas P. Broughan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will report on her application for funding under the European globalisation adjustment fund for former employees at a company (details supplied); when a decision will be made on the application; the structures she is putting into place to disperse funding allocated to former employees under the European globalisation adjustment fund; and if she will make a statement on the matter. [1879/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): Last October, my Department submitted a provisional application to the European Commission seeking co-financing support from the European Globalisation Adjustment Fund (EGF). The application relates to the provision of a personalised package of training, educational and entrepreneurial supports to workers made redundant at SR Technics. The Commission has recently sought additional information in relation to the application which my Department is currently preparing. State agencies such as FÁS, Enterprise Ireland and local Vocational Education Committees have made, and continue to make, the full range of their employment, training, guidance and advisory services available to workers made redundant at S.R. Technics.
204. Deputy Michael Ring asked the Tánaiste and Minister for Enterprise, Trade and Employment when a person (details supplied) in County Mayo will receive their redundancy payment. [1884/10]
[180]206. Deputy Michael Ring asked the Tánaiste and Minister for Enterprise, Trade and Employment when a person (details supplied) in County Mayo will receive their redundancy payment. [1886/10]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): I propose to take Questions Nos. 204 and 206 together.
My Department administers the Social Insurance Fund (SIF) in relation to redundancy matters on behalf of the Department of Social and Family Affairs. There are two types of payment made from the SIF — rebates to those employers who have paid statutory redundancy to eligible employees, and statutory lump sums to employees whose employers are insolvent and/or in receivership/liquidation. I can confirm that my Department received statutory lump sum claims for the individuals concerned and some former employees of the company on 26 November 2009 claiming inability to pay on behalf of the employer. These claims await processing.
The Redundancy Payments Section of my Department is currently processing rebate applications submitted by post from April 2009 and those filed online from May 2009, so that the waiting time is approximately 8 to 9 months depending on the manner of filing the application. In respect of lump sum payments paid directly to employees, such as in this instance, the Section is, in general, processing claims dating from July 2009.
Given the unprecedented increase in Redundancy Payment claims lodged with my Department since late 2008 it has proved impossible to maintain the customer service targets that previously obtained. The scale of the challenge is evident from the statistics that show incoming redundancy claims with a cumulative figure for 2009 of 77,001. This figure exceeds the claims lodged for 2008 (40,607) by 90% and 2008 was, of itself, an exceptional year as compared with earlier years when claims received were of the order of 25,000. Efforts continue to be made by my Department to deliver more acceptable turnaround processing times for redundancy payments given the difficulties that this gives rise to for both individual employees and the business community.
Measures already taken include the reassignment of 26.7 additional staff (full time equivalents) from other areas of the Department to the Redundancy Payments area since early 2009 with ongoing review of trends and demands. The current number of staff serving in the Redundancy Payments Section in terms of full time equivalents is 52.5; the prioritisation of the Department’s overtime budget towards staff in the Redundancy Payments Section to tackle the backlog outside normal hours; the establishment of a special call handling facility to deal with the huge volume of telephone calls from people and businesses who are naturally concerned about their payments, using the facilities and cooperation of the National Employment Rights Authority (NERA). This centre has received an average of 12,500 calls per month this year with an estimated 60% relating to redundancy payments. There has also been the provision of better quality information relating to current processing times on the Department’s website and engagement with the Revenue Commissioners to facilitate the offset of redundancy rebate payments by employers against outstanding tax liabilities with the Revenue Commissioners. The Tánaiste and I continue to monitor closely the impact of these changes against the continuing influx of redundancy claims and we are currently looking at ways in which additional resources can be allocated to the area in the first quarter of 2010.
205. Deputy Michael Ring asked the Tánaiste and Minister for Enterprise, Trade and Employment when a person (details supplied) in County Mayo will be awarded their statutory redundancy. [1885/10]
[181]Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): My Department administers the Social Insurance Fund (SIF) in relation to redundancy matters on behalf of the Department of Social and Family Affairs. There are two types of payment made from the SIF — rebates to those employers who have paid statutory redundancy to eligible employees, and statutory lump sums to employees whose employers are insolvent and/or in receivership/liquidation. I can confirm that my Department received a statutory lump sum claim for the individual concerned on 4 August, 2009 claiming inability to pay on behalf of the employer. This claim awaits processing.
The Redundancy Payments Section of my Department is currently processing rebate applications submitted by post from April 2009 and those filed online from May 2009, so that the waiting time is approximately 8 to 9 months depending on the manner of filing the application. In respect of lump sum payments paid directly to employees, such as in this instance, the Section is, in general, processing claims dating from July 2009.
Given the unprecedented increase in Redundancy Payment claims lodged with my Department since late 2008 it has proved impossible to maintain the customer service targets that previously obtained. The scale of the challenge is evident from the statistics that show incoming redundancy claims with a cumulative figure for 2009 of 77,001. This figure exceeds the claims lodged for 2008 (40,607) by 90% and 2008 was, of itself, an exceptional year as compared with earlier years when claims received were of the order of 25,000. Efforts continue to be made by my Department to deliver more acceptable turnaround processing times for redundancy payments given the difficulties that this gives rise to for both individual employees and the business community.
Measures already taken include the reassignment of 26.7 additional staff (full time equivalents) from other areas of the Department to the Redundancy Payments area since early 2009 with ongoing review of trends and demands — the current number of staff serving in the Redundancy Payments Section in terms of full time equivalents is 52.5; the prioritisation of the Department’s overtime budget towards staff in the Redundancy Payments Section to tackle the backlog outside normal hours; the establishment of a special call handling facility to deal with the huge volume of telephone calls from people and businesses who are naturally concerned about their payments, using the facilities and cooperation of the National Employment Rights Authority (NERA). This centre has received an average of 12,500 calls per month this year with an estimated 60% relating to redundancy payments. There has also been the provision of better quality information relating to current processing times on the Department’s website and engagement with the Revenue Commissioners to facilitate the offset of redundancy rebate payments by employers against outstanding tax liabilities with the Revenue Commissioners.
The Tánaiste and I continue to monitor closely the impact of these changes against the continuing influx of redundancy claims and we are currently looking at ways in which additional resources can be allocated to the area in the first quarter of 2010.
Question No. 206 answered with Question No. 204.
207. Deputy Michael Ring asked the Tánaiste and Minister for Enterprise, Trade and Employment when a person (details supplied) in County Mayo will receive payment under the insolvency payment scheme. [1887/10]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): I can confirm to the Deputy that my Department received an application under the Insolvency Payments Scheme on 27 November 2009 for Arrears of Wages, Holiday Pay and [182]Minimum Notice on behalf of the person concerned and some former employees of this company.
The impact on business of the severe economic circumstances currently pertaining has resulted in a significant rise in the level of company receiverships and insolvencies. Consequently, an increasing number of claims are being submitted to the Insolvency Payments Section, with 21,411 new claims lodged in 2009 — a 78% increase over the volume received in 2008. My officials endeavour to process all claims as quickly as possible and claims are dealt with in order of date of receipt. Current processing times indicate that the individual’s claim should be paid by end February/beginning of March, however my Department is constantly endeavouring to achieve earlier completion and payment dates.
208. Deputy Michael Ring asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of site visits to County Mayo conducted by Industrial Development Authority in 2008 and in 2009; and if she will make a statement on the matter. [1904/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): I have been informed by IDA that in the years 2008 and 2009 there was a total of 4 site visits by potential investors to County Mayo. During 2009 there was one visit to Ballina, while in 2008, there were two visits to Westport and one visit to Claremorris. For reasons of commercial sensitivity and client confidentiality, details of the potential investors involved are not disclosed.
209. Deputy Michael Ring asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of persons currently employed in Industrial Development Authority supported companies in a location (details supplied); the comparison figures for each of the past five years; and if she will make a statement on the matter. [1905/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The Forfás Annual Employment Survey reports on job gains and losses in companies that are supported by the industrial development agencies. Data is compiled on an annualised basis. The numbers of persons employed in IDA supported companies in County Mayo in each of the past five years is set out in the following tabular statement.
| Year | 2005 | 2006 | 2007 | 2008 | 2009 |
|---|---|---|---|---|---|
| Numbers employed | 3,038 | 2,973 | 3,004 | 3,010 | 2,992 |
210. Deputy Michael Ring asked the Tánaiste and Minister for Enterprise, Trade and Employment the position regarding a project (details supplied) in County Mayo; the number of units that are available at that location; the number of units that have been occupied; if there is any active interest in the location by investors; and if she will make a statement on the matter. [1906/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The management of IDA Ireland’s industrial property portfolio, including the creation and [183]development of business parks, are day-to-day operational matters for the agency and not matters in which I have a function.
I have been informed by IDA that the Westport Business and Technology Park consists of 14.88 hectares of which 9.56 hectares are available for investment projects. One unit has been built on the park and is currently occupied. There are no other units available on the Park. IDA continues to market the Park to potential investors but, in the final analysis, it is the investor who decides where to locate.
211. Deputy Róisín Shortall asked the Tánaiste and Minister for Enterprise, Trade and Employment the way a person on a FÁS course with child dependants is to be compensated for the cut in child benefit. [2055/10]
Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): Budget 2010 provided an increase of 14.6% in the weekly child dependent allowance for qualifying participants on FÁS training and employment schemes.
212. Deputy Denis Naughten asked the Tánaiste and Minister for Enterprise, Trade and Employment the number of staff in her Department, broken down by division and section, annually since 2007 to date in 2010; and if she will make a statement on the matter. [2167/10]
Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan): The table outlines the number of staff in my Department, broken down by division and section, annually since 2007 to date in 2010. The figures reflect the number of staff (full time equivalents) serving at the end of December each year and to date in 2010. In addition to the figures, my Department has 3 staff serving in the Irish Mission in Geneva.
213. Deputy Mary Upton asked the Minister for Finance his views on the recently introduced carbon levy as a environmental measure in view of the fact that public transport operators have been forced to cut services due to reduced funding; his further views on whether this will force persons back into private cars thus negating environmental benefits; and if he will make a statement on the matter. [1062/10]
214. Deputy Mary Upton asked the Minister for Finance his views on whether the carbon levy is appropriate as an environmental measure in view of the fact that it has not been accompanied by increased support for public transport to encourage a modal shift in behaviour but has instead been accompanied by further funding and service cuts by public transport operators; and if he will make a statement on the matter. [1063/10]
[186]Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 213 and 214 together.
The Deputy must bear in mind that the emissions from the transport sector account for around 30% of non-ETS emissions. The carbon tax is about sending price signals to the sector as a whole. The carbon tax does not differentiate between private and public transport per se, however, the impact on public transport will be far less than on private transport by virtue of the fact that the higher cost of fuel is dispersed amongst more people, for example, using a bus compared to an individual in a car. Consequently, the carbon tax will be proportionately less for users of public transport which should be an incentive for its use. In addition, the carbon tax provides an incentive for both private motorists and providers of public transport to invest in fuel efficient cars and buses when they are making future purchasing decisions.
It should also be noted that the Government has invested record levels of public funds in developing transport infrastructure and services over the last decade. In particular, under Transport 21, over €3bn has been invested in public transport since 2006. In rural areas, in addition to the provision of more buses for Bus Éireann, the Rural Transport Programme funding has more than doubled since 2005, and funding levels in 2010 is being be protected at that provided in 2009 (€11m).
215. Deputy Edward O’Keeffe asked the Minister for Finance if he will assist a person (details supplied) in County Cork in obtaining her P45. [1548/10]
Minister for Finance (Deputy Brian Lenihan): I am advised by the Revenue Commissioners that an Officer from Roscommon District will call to the taxpayer’s former employer, who is based in Roscommon, and will give priority to securing the outstanding P45.
216. Deputy Michael Ring asked the Minister for Finance the number of persons that have applied for the position of Secretary General at his Department following recent advertisements; if a person has been appointed; when the appointment will be made; the location at which the secretary general will be located; and if he will make a statement on the matter. [1891/10]
Minister for Finance (Deputy Brian Lenihan): Fifteen persons applied for the post of Secretary General, D/Community, Rural & Gaeltacht Affairs. An appointment was made today Tuesday 19th January 2010. On foot of Government decisions on the Decentralisation Programme, the headquarters of the Department will move to Charlestown, Co Mayo and the person appointed Secretary General will serve at that location.
217. Deputy Jim O’Keeffe asked the Minister for Finance the policy regarding the term of office of Secretaries General; the policy regarding the renewal of such terms; if such renewals are consistent with the terms of the strategic management initiative and other policy documents in this area; and if he will make a statement on the matter. [1933/10]
218. Deputy Jim O’Keeffe asked the Minister for Finance the number of Secretaries General whose term of office as head of a Department or office has expired and whose term of office as head of a Department or Office has been renewed; and if he will make a statement on the matter. [1934/10]
219. Deputy Jim O’Keeffe asked the Minister for Finance the number of Secretaries General whose term of office as head of a Government Department or office has expired and who have [187]stepped down as head of that Department or office but remain as civil servants; if, in each instance, the salary of such persons is equivalent to or lower than a Secretary General who is currently the head of a Government Department or office; and if he will make a statement on the matter. [1935/10]
Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 217 to 219, inclusive, together. Secretaries-General are appointed for not more than 7 years and are obliged to retire at 60 years of age. If, on appointment as Secretary, a person is between 56 and 60 years of age, the Government may, at its discretion, (a) waive that person’s obligation to retire at 60 and (b) permit the person to serve as Secretary for a period not exceeding 4 years in any case.
In the case of a Secretary-General appointed for not more than seven years, who has served a term of office before reaching 60, the Government should then formally decide on one of the following courses: to appoint him or her to an appropriate position (carrying the same remuneration) elsewhere in the civil service; to arrange for such an appointment (in agreement with the officer) in another area of the public service or in an international institution; to allow him or her to opt for early retirement on a voluntary basis with immediate pension and lump sum and a special severance gratuity of one half of annual salary on the term specified in Sections 6 and 7 of the Superannuation and Pensions Act 1963.
Secretaries General appointed for a seven year period may, during their fifth year of office, be invited to indicate their interest in a further appointment, either in their existing or another Department, for a total of ten years at the discretion of the Government.
Two serving Secretaries General have had their original terms extended and two Heads of Offices who are at Secretary General level have also had their terms extended.
Currently no Secretary General who has stepped down as head of a Department or Office remains as a civil servant.
220. Deputy George Lee asked the Minister for Finance the purpose of the National Asset Management Agency meetings with county managers and if NAMA had been lobbying to have land rezoned to increase its value; and if he will make a statement on the matter. [2048/10]
296. Deputy George Lee asked the Minister for Finance the purpose of the National Asset Management Agency’s meetings with county managers; if the National Assets Management Agency will be lobbying to have land rezoned to increase its value; and if he will make a statement on the matter. [1931/10]
Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 220 and 296 together.
I am informed that NAMA officials held a meeting with local authority officials at the request of the latter. As NAMA had not acquired any assets, the meeting was limited to a discussion of general issues and did not focus on how NAMA would operate in detail.
As regards the matter of lobbying referred to by the Deputy, I can assure the House that NAMA has not been lobbying to have land rezoned in order to increase its value. Neither do I expect such lobbying to occur in the future.
221. Deputy George Lee asked the Minister for Finance the changes to mortgage interest relief outlined in the budget 2010; and if he will make a statement on the matter. [48244/09]
[188]262. Deputy Joe McHugh asked the Minister for Finance if he will explain the nature of all reliefs for first-time house buyers pursuant to budget 2010; if first time buyers receive just tax relief for seven years in total irrespective of the date of purchase; if reliefs for first-time buyers in certain categories of first--time buyers extended to 2017; if so, the reason therefore; and if he will make a statement on the matter. [1203/10]
Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 221 and 262 together.
The position in relation to mortgage interest relief is as I stated in my Budget speech on 9 December 2009. As a support to homeowners who may now find themselves in negative equity, I am extending mortgage interest relief up to the end of 2017 for those who took out qualifying loans from 2004.
To encourage those who want to buy a house over the next three years I will provide that qualifying loans taken out before 1 July 2011 will continue to get relief at current levels, and transitional arrangements will apply to loans taken out in the subsequent 18 months at a reduced level and duration.
It is my intention to abolish mortgage interest relief entirely by the end of 2017. Full details in relation to the new rates, ceilings, duration of the relief and other provisions required will be set out in the Finance Bill.
222. Deputy Ruairí Quinn asked the Minister for Finance if, further to his budget 2010 speech, he will apply the proposed public sector pension reforms to public servants who are due to retire in 2011 and beyond; if these proposed reforms will only apply to new public servants in the future; and if he will make a statement on the matter. [48276/09]
Minister for Finance (Deputy Brian Lenihan): In the Budget I announced that there would be a new single public service pension scheme introduced for new entrants to the public service. Relevant legislation will be introduced in 2010 and the scheme will be in place by the end of the year. The introduction of a single pension scheme will provide a standard, consistent and efficient structure for the future management and control of public service pensions. As this reform is for new entrants, it will not apply to those who are currently in the public service.
The Budget also made clear that the Government will consider using the Consumer Price Index as the basis for post-retirement increases for both existing and future pensioners.
I would add that the term public sector is usually taken to comprise all those who are employed, both directly and indirectly, by a public body. The public service is, broadly speaking, the public sector less the commercial semi-state bodies.
223. Deputy Joan Burton asked the Minister for Finance if he will provide an analysis of the numbers of individuals on interest returns made by financial institutions received by the Revenue Commissioners by county for the years 2007 and 2008 within the following bands, up to €10,000, between €10,001 and €25,000, €25,001 and €50,000, €50,001 and €100,000, €100,001and €200,000, €200,001 and €300,000, €300,001 and €400,000, €400,001 and €500,000, €500,001 and €600,000, €600,001 and €750,000, €7500,001 and €1,000,000 and in excess of €1,000,001; and if he will make a statement on the matter. [48295/09]
[189]Minister for Finance (Deputy Brian Lenihan): I am informed by the Revenue Commissioners that the information requested is as follows, insofar as it is available.
Financial Institutions report each party to an account where the account is a Joint Account. This could mean that a joint account is included more than once i.e. for each of the parties.
The figures relate to all accounts not just those of individuals. The Financial Institutions do not classify the accounts into individuals, companies, trusts, charities etc.
A county-by-county breakdown is not provided. Financial Institutions made their returns to the Revenue Commissioners on behalf of their entire organisation. To provide a breakdown by county would require text analysis of address details reported which would be very labour intensive and, in any event, the results would not be accurate.
224. Deputy George Lee asked the Minister for Finance the number of civil service staff in his Department; the number of these staff who hold an economics degree; the number of these staff who hold a post graduate economics degree; the number of these staff who hold a PhD in economics; and if he will make a statement on the matter. [48314/09]
Minister for Finance (Deputy Brian Lenihan): At 31 December 2009 there were 606 people (560.78 wholetime equivalent) employed in my Department.
There are currently 57 officers who hold degrees in Economics and related disciplines, 44 who hold a Masters graduate qualification in Economics and related disciplines, and 2 officers who hold a PhD. Some officers will, of course, be included in more than 1 of these categories.
My Department has a long-standing policy of recruiting economists. Individuals with skills and qualifications in economics are employed at almost all levels in the Department. The Deputy will be interested to know that, of the last 7 appointments at Assistant Secretary level in the Department, 5 had Masters qualifications in economics or related disciplines, while 2 had primary degrees in economics or related disciplines.
225. Deputy Pat Breen asked the Minister for Finance further to Parliamentary Question No. 141 of the 21 October 2009, if the report of the interdepartmental committee on the issues [190]of ethical investment in the National Pensions Reserve Fund has been completed; if this report will be presented to the House of the Oireachtas in the near future; and if he will make a statement on the matter. [48338/09]
Minister for Finance (Deputy Brian Lenihan): Further to my reply to the Deputy on 21 October 2009, I understand that considerable progress has been made towards completion of this report. Many of the issues involved are of a complex nature and have required considerable discussion and consideration by members of the Committee and their respective Departments. The Committee is now finalising its report and I look forward to receiving it in the near future.
226. Deputy John O’Mahony asked the Minister for Finance the position regarding the case of a person (details supplied) who is on the central application facility transfer list for transfer to any Department in counties Mayo, Sligo, Galway, Roscommon and Longford; if the transfer will happen in the short term; and if he will make a statement on the matter. [48344/09]
Minister for Finance (Deputy Brian Lenihan): My Department does not hold details on the status of individual applications made through the Central Applications Facility (CAF). Responsibility for the implementation of the projects included in the decentralisation programme is a matter for the individual organisations concerned and these would be best placed to advise in relation to the status of applications made in respect of their decentralised or decentralising location.
I have forwarded the details you have provided to the relevant Government Departments and have asked each Department to provide you with an update in relation to any application made by the person concerned to that organisation, or to any agencies under its aegis, as soon as possible.
227. Deputy Joanna Tuffy asked the Minister for Finance if the national public procurement operations unit has begun the process of implementing green public procurement principles into government procurement practices; if a timeframe has been drawn up for the implementation of EU directives 17 and 18 of 2004; and if he will make a statement on the matter. [48355/09]
Minister for Finance (Deputy Brian Lenihan): The National Public Procurement Operations Unit (NPPOU) has begun the process of implementing green procurement principles by having a systemised referral of all procurement projects to a working group consisting of the Department of the Environment, Heritage and Local Government, Department of Communications Energy and National Resources and the Department of Enterprise, Trade and Employment.
The purpose of the referral is to identify policies and national targets that can be supported through the procurement process. This leads to the inclusion of green, social and commercial principles and objectives in the NPPOU’s procurement strategies.
The NPPOU operates in full compliance under the terms of Directive 2004/18/EC. Directive 2004/17/EC applies to the utilities sector. The NPPOU has not acted in that sector to date. When it does so, the requirements of the Directive will be complied with fully.
228. Deputy Michael McGrath asked the Minister for Finance if he will respond to a query regarding the calculation of income tax liability (details supplied). [48366/09]
Minister for Finance (Deputy Brian Lenihan): The position is that neither income levy nor employee PRSI are allowable deductions in arriving at an individual’s taxable income for income tax purposes. However, the public sector pension-related deduction is an allowable deduction in arriving at an individual’s taxable income for income tax purposes.
229. Deputy Paul Gogarty asked the Minister for Finance the reason an increase in general taxation might lead to a reduction in revenues at this point in time; and if he will make a statement on the matter. [48369/09]
Minister for Finance (Deputy Brian Lenihan): Budget 2009 and last April’s Supplementary Budget introduced measures designed to yield around €3.8 billion in additional revenue in 2009. This was a considerable figure, particularly in the context of falling economic growth. A third set of increases in the tax burden over such a short period would have a negative impact on enterprise and on growth prospects in general for 2010. As I outlined in the Budget 2010 Statement in relation to tax increases, a limit had been reached and job creation would be impacted by further increasing the penalty on work and investment.
230. Deputy Paul Gogarty asked the Minister for Finance the course of action recommended by the European Central Bank regarding the measures that need to be taken to reduce our borrowings by €4 billion in 2009, in terms of taxation policy, public sector bill, social welfare bill; and if he will make a statement on the matter. [48370/09]
232. Deputy Paul Gogarty asked the Minister for Finance the reason the cost of borrowing would increase under the agreement with the European Central Bank if action were not taken on reducing the social welfare and public sector bills, as opposed to a general increase in taxation; and if he will make a statement on the matter. [48372/09]
Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 230 and 232 together.
The Government has set out a multi-annual framework to restore sustainability to the public finances and to reduce the General Government Deficit to below 3% of GDP by end-2014. Over the course of 2008 and 2009 the Government has already taken significant action on curbing expenditure and raising revenue. Budget 2010 represented a further phase in the consolidation of the public finances and as I outlined in my statement on Budget day, taking account of the fact that there had already been tax increases in the previous two budgets, a limit had been reached and job creation would be impacted by further increasing the penalty on work and investment. Consequently, Budget 2010 delivered an adjustment of €4 billion (2½% of GDP) for 2010. The adjustment mainly focused on reducing expenditure, including measures to further reduce the public sector pay bill, reduce Social Welfare spending and also to reduce other Departmental spending including an adjustment on capital expenditure.
The measures taken to date by the Government, including those in Budget 2010, have been welcomed by the EU Commission and the European Central Bank.
[192]On foot of these measures it is forecast that the General Government Deficit will stabilise in 2010 at the 2009 level. Failing to stabilise the deficit in 2010 and to progressively reduce it to below the Stability and Growth Pact limit by 2014 would necessitate further increases in borrowing. This would in turn lead to an unsustainable rise in our debt servicing costs. Debt servicing costs have a first call on available resources, therefore an increase in these costs impacts on the resources available for other priorities. This serves to underline the ongoing importance of the corrective measures to be introduced in the period to 2014 and the Government is determined to take the necessary action as set out in Budget 2010.
231. Deputy Paul Gogarty asked the Minister for Finance the cost of the public sector and social welfare sector as a proportion of the overall State bill; and if he will make a statement on the matter. [48371/09]
Minister for Finance (Deputy Brian Lenihan): I take it that the State bill referred to is gross Voted current spending. The Public Service pay bill is estimated at €18,675 million in gross terms for 2010, or 34% of gross Voted current spending. Social Welfare expenditure, net of pay, is estimated at €20,879 million or 38% gross Voted current spending.
Question No. 232 answered with Question No. 230.
233. Deputy Joan Burton asked the Minister for Finance if he will explain the application of section 19 of the 1994 Finance Act; the rationale for the introduction of this section; if this section is still in force or has been subject to amendment; the number of applications made in each year since enactment under this section; the number of such applications approved each year since enactment; the cost to the Exchequer of this provision each year since enactment; the number of persons, businesses or organisations that have benefitted from this provision each year since enactment; and if he will make a statement on the matter. [48373/09]
Minister for Finance (Deputy Brian Lenihan): Section 19 of the Finance Act 1994 (now section 236 of the Taxes Consolidation Act 1997) allows a company to make a loan of an art object, being a work of art or a scientific collection, to an employee or a director, without that individual suffering an income tax charge on the loan as a benefit in kind or as a distribution.
The art object must be on display and available for viewing by members of the public in an approved building or garden, as defined in section 482 of the Taxes Consolidation Act 1997, which is owned or occupied by the individual and to which reasonable public access if afforded.
The section was introduced in the Finance Act 1994 following representations made by the Irish Georgian Society who were concerned about the possibility of art objects leaving the country. The Society suggested a tax relief for collections on view to the public in houses approved under section 482 and the then Department of Arts, Culture Heritage and the Gaeltacht supported the proposal.
I am advised by the Revenue Commissioners that only one taxpayer has ever made a claim under section 19 of the Finance Act 1994 and that the income tax exemption was granted to that taxpayer. The cost to the Exchequer of tax foregone cannot be determined as an individual who claims the exemption is not required to establish the cost incurred by his/her employer in relation to the loan of the art object.
234. Deputy Fergus O’Dowd asked the Minister for Finance the cost of public relations incurred by Anglo Irish Bank in the past two years by company and contract price in each case; if tenders were sought; and if he will make a statement on the matter.
Minister for Finance (Deputy Brian Lenihan): Anglo Irish Bank is run on an arms length commercial basis by the Board of Anglo. Consequently, matters which relate to the normal commercial business of the bank, including public relations and other business services contracted by the bank, are a matter for the Board of Anglo.
Information on the bank’s contracts and contracting processes are commercially sensitive and it would therefore not be appropriate to release such information. As the Deputy may be aware, comprehensive financial information on Anglo is published in bank’s annual accounts in line with the requirements for publicly quoted companies. These requirements however, do not extend to the level of individual service contracts concluded by the bank.
235. Deputy Pat Breen asked the Minister for Finance the status of a report (details supplied); when he expects this report to be finalised; and if he will make a statement on the matter. [48442/09]
Minister of State at the Department of Finance (Deputy Martin Mansergh): Following flooding, in February 2008, of the railway line running between Limerick and Ennis at Ballycar, OPW Engineers met with Iarnród Éireann officials, at their request, to discuss the matter. The OPW’s environmental consultants for the Ennis Flood Relief Scheme were subsequently requested to submit a costed proposal for a flood study of the area at Ballycar. A proposal and quotation to undertake a flood alleviation study of the flooding at Ballycar was subsequently received from the consultants. OPW has referred the consultants’ study proposals to Iarnród Éireann for their consideration. As the body responsible for the maintenance and safety of the railway line network, any works relating to the permanent way that may be recommended by the consultants in their study would be a matter for Iarnród Éireann to implement.
236. Deputy Joe Carey asked the Minister for Finance if, in the interest of balanced regional development, the adjustments he will make in the Finance Bill to abolish the air travel tax applying to Shannon Airport; and if he will make a statement on the matter. [48463/09]
280. Deputy Michael McGrath asked the Minister for Finance the amount raised in 2009 by the travel tax; and the estimate of the amount expected to be raised in 2010. [1378/10]
Minister for Finance (Deputy Brian Lenihan): I propose to take Question Nos. 236 and 280 together.
I am informed by the Revenue Commissioners that since the introduction of the air travel tax on 30 March 2009, it has yielded a total of €84.4 million in 2009. The expected yield for the full year in 2010 is approximately €125 million.
It should be recognised that tourists are only subject to the tax on their return journey. The additional €10 or €2 in the context of a much larger purchasing decision involving travel, hotel expenditures etc. should have only a limited effect on tourist numbers. The Government [194]appreciates the airline industry continues to go through a difficult period. However, this difficult trading period arises primarily from weak world economic activity.
We currently face significant financial challenges and the air travel tax is an important revenue raising measure. The Government has tried to be as fair as possible in looking at areas for additional tax revenues. It is also worth noting that fuel used by commercial airlines is completely exempt from tax, so it’s a sector that already has considerable preferential treatment. I have no plans to abolish the air travel tax.
237. Deputy Joanna Tuffy asked the Minister for Finance the number of persons earning between €26,000 to €27,480; the amount of money raised by the Exchequer from the health levy from persons earning between €26,000 and €27,480 on a yearly basis; the amount that was raised in County Meath; and if he will make a statement on the matter. [48464/09]
Minister for Finance (Deputy Brian Lenihan): I am advised by the Revenue Commissioners that the numbers of income earners with income between €26,000 and €27,480, estimated by reference to the income tax year 2009, is of the order of 60,500.
The amount of health levy payable by these income earners in respect of 2009 is estimated to be about €47 million; a breakdown on a geographical basis is not available.
The figures are estimates from the Revenue tax-forecasting model using actual data for the year 2007, adjusted as necessary for income and employment trends for the year 2009. They are therefore provisional and likely to be revised. Figures are rounded to the nearest hundred.
It should be noted that a married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.
238. Deputy Emmet Stagg asked the Minister for Finance the amount refunded under section 848A of the Tax Consolidation Act 1997 in 2008; the details of the amounts received, brought down, benefits, charities, overseas aid groups and religious congregations. [48540/09]
Minister for Finance (Deputy Brian Lenihan): Section 848A of the Taxes Consolidation Act 1997 provides for a scheme of tax relief for donations to eligible charities and other approved bodies. The precise arrangements for allowing tax relief on donations vary depending on whether the donor is a PAYE taxpayer, a person subject to self-assessment or a company.
For PAYE-only taxpayers, the relief is given on a “grossed-up” basis to the approved body rather than by way of a separate claim to tax relief by the donor. The claim is therefore made to the Revenue Commissioners by the approved body. In the case of a donation made by an individual who pays tax on a self-assessment basis, the individual claims the relief and there is no grossing up arrangement. In the case of a company, it will claim a deduction for the donation as if it were a trading expense and there is no grossing up arrangement
I am informed by the Revenue Commissioners that, because of the different arrangements, as outlined above, for claiming the tax relief and the fact that the records maintained by them do not readily differentiate between the different types of charities and approved bodies availing of the relief, the detailed information sought by the Deputy cannot be easily compiled.
However, the following table sets out the estimated cost to the Exchequer of tax relief on donations to approved bodies and eligible charities, insofar as they are available, for the years [195]2007 and 2008. The figures shown for companies relate to accounting periods ending in 2007 and 2008. I am advised by Revenue that they are not yet in a position to provide data for 2008 in respect of self-employed donors, as all tax returns filed for that year have not yet been processed.
| 2007 | 2008 | |
|---|---|---|
| €m | €m | |
| PAYE | 25.3 | 29.5 |
| Self-Employed | 18.6 | N/A |
| Companies | 0.6 | 1.2 |
239. Deputy Terence Flanagan asked the Minister for Finance if he will support a matter (details supplied); and if he will make a statement on the matter. [48543/09]
Minister for Finance (Deputy Brian Lenihan): As the Deputy will be aware the Special Civil Service Incentive Career Break Scheme was introduced as a once-off measure that was included in the Supplementary Budget on 7 April 2009. Following implementation on 30 April the measure was extended to staff in the different areas of the public service, including the local government sector and the HSE. The closing date for participation in this scheme has expired. There is no current proposal to extend the scheme.
240. Deputy Paul Connaughton asked the Minister for Finance if his attention has been drawn to losses incurred by a small wholesaler of wines and spirits (details supplied) as a result of the downward change in excise duties; and if he will make a statement on the matter. [48550/09]
Minister for Finance (Deputy Brian Lenihan): The Deputy will be aware that some difficult choices had to be made in framing recent Budgets. The Government has over the past 18 months made very significant budgetary adjustments including those announced on 9 December last. Those reductions had to be made in many areas, including reductions in Social Welfare expenditure, cuts in public service pay rates and the deferral, reduction or withdrawal of various schemes, to mention just a few.
Despite having to make those considerable reductions in other areas, I nevertheless, following requests from the drinks industry, decided to make reductions in alcohol excise duty. The reductions were designed to provide some relief to the business community, but represent a significant concession which is projected to cost the Exchequer some €90 million in a full year. Consequently, to provide further relief to the drinks industry as is now being suggested is out of the question.
In that regard, I would also point out that in my Budget speech, I stated that “I expect the drinks industry to play its part in making the cost of alcohol more competitive. There was no burden placed on traders to reduce prices immediately following Budget night. I would hope that those involved in the drinks industry would be able to find some arrangement with individual traders, and between the various sectors of the industry, to balance out any effects of the excise reductions.
[196]I want to take this opportunity to re-confirm that the reductions in excise duty apply to stock taken out of bond on or after 10 December 2009, and that no compensation will be given by the Exchequer to traders in respect of stock purchased before 10 December 2009.
241. Deputy Joan Burton asked the Minister for Finance the number of whole time equivalents serving in the grades of chairman, commissioner, assistant secretary general, higher principal officer, principal officer, higher assistant principal officer, assistant principal officer, higher executive officer, executive officer, staff officer and clerical officer in the Revenue Commissioners on 1 January 1998, 1 January 2007 and the latest date for which figures are available. [48582/09]
Minister for Finance (Deputy Brian Lenihan): I am advised by the Revenue Commissioners that, historically, there were several departmental grade structures in Revenue which have, through a series of collective agreements in accordance with the C&A scheme, been integrated into the general service. Some departmental grades were still in existence in January 1998 but for the purpose of this reply, the nearest general service grade equivalent has been used throughout.
242. Deputy Joan Burton asked the Minister for Finance the number of whole time equivalents serving in the Public Appointments Service in the grades of secretary general, deputy secretary general, assistant secretary general, higher principal officer, principal officer, higher assistant principal officer, assistant principal officer, higher executive officer, executive officer, staff officer and clerical officer on 1 January 1998, 1 January 2007 and the latest date for which figures are available. [48583/09]
Minister for Finance (Deputy Brian Lenihan): The following table contains the information sought by the Deputy in relation to the Public Appointments Service (PAS).
243. Deputy Mary Upton asked the Minister for Finance the estimated saving that would occur from the standardisation of all pension tax reliefs at 20%; his views on the recent report by the Economic and Social Research Institute that showed that €8 out of every €10 of tax relief in this area goes to the top 20% of earners; and if he will make a statement on the matter. [48600/09]
Minister for Finance (Deputy Brian Lenihan): I assume that the Deputy is referring to individual pension contributions, the tax relief on which is allowed at the taxpayer’s marginal tax rate, that is, at the standard or higher rate of income tax as appropriate in each case.
A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by income tax rate, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans — Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) — by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers. The latest full historical data available in this regard is in respect of the tax year 2007.
There is, therefore, no statistical basis for providing definitive figures. However, by making certain assumptions about the available information, it is estimated that the full year yield to the Exchequer from confining tax relief to the standard rate of 20% in respect of individual contributions to occupational pension schemes, RACs and PRSAs would be about €500 million.
I assume that the ESRI Report referred to by the Deputy is that entitled Pension Policy: New Evidence on Key Issues published in November last. The Report deals mainly with the question of whether existing tax incentives for private pension provision would be better targeted to encourage improved coverage by allowing relief on contributions at the standard income tax rate or at a hybrid rate of 30% rate. While apparently seeing merit in both approaches, the Report favours tax relief on pension contributions at the standard income tax [198]rate in conjunction with sustaining the State Pension and schemes to increase pension coverage among lower to middle income earners.
The recently published Renewed Programme for Government includes a commitment to introduce a single 33% rate for tax relief on private pension provision in the context of the National Pensions Framework. This would result in a reduction in the tax relief on pension contributions available to higher rate taxpayers and an additional incentive to pension savings for standard rate taxpayers. However, the full detail and timing of the introduction of this measure have yet to be decided. I will bear the ESRI Report in mind in the context of delivering on the Government’s commitment in this area.
244. Deputy Mary Upton asked the Minister for Finance the average effective tax rate including all levies for a person earning €15,000, €25,000, €35,000, €45,000, €55,000, €75,000 and €100,000; and if he will make a statement on the matter. [48602/09]
Minister for Finance (Deputy Brian Lenihan): I assume the Deputy is referring to a taxpayer on PAYE and paying the full rate of PRSI. On that basis, the effective average tax rates for the annual earnings as requested are set out as follows:
| Income | Effective Average Tax Rate |
|---|---|
| € | % |
| 15,000 | 0.0 |
| 25,000 | 10.3 |
| 35,000 | 18.8 |
| 45,000 | 25.3 |
| 55,000 | 30.0 |
| 75,000 | 35.6 |
| 100,000 | 39.2 |
| Income | Effective Average Tax Rate |
|---|---|
| € | % |
| 15,000 | 0.0 |
| 25,000 | 4.9 |
| 35,000 | 11.0 |
| 45,000 | 15.2 |
| 55,000 | 21.6 |
| 75,000 | 29.4 |
| 100,000 | 34.6 |
These rates include income tax, PRSI, health levy and income levy, as appropriate.
245. Deputy Mary Upton asked the Minister for Finance the reason he did not impose a one off wealth tax on high net worth persons; his views on the fact that many high net worth persons are suffering in the economy, there are many who continue to be wealthy; if he will consider [199]introducing a one off wealth tax as part of a call to patriotic action; and if he will make a statement on the matter. [48604/09]
Minister for Finance (Deputy Brian Lenihan): As part of my recent Budget I announced a “domicile levy”, full details of which will be announced in the Finance Bill. The levy of €200,000 will apply to Irish-domiciled individuals whose worldwide income exceeds €1 million and whose Irish-located capital is greater than €5 million.
Although all taxes and potential taxation measures are constantly reviewed in the context of the Budget and Finance Bill, I do not have any plans at present to introduce a Wealth Tax. One of the difficulties with such a tax is that asset values can fluctuate considerably over time and the potential yield from such a tax may not be significant in the current climate.
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 to 25% in the 2009 Supplementary Budget.
246. Deputy James Bannon asked the Minister for Finance when a person (details supplied) in County Westmeath will receive compensation for extensive damage to their lands. [48615/09]
Minister of State at the Department of Finance (Deputy Martin Mansergh): The Office of Public Works does not provide compensation for losses sustained to property as a result of flooding. However, in recognition of the devastation suffered by people due to the recent flooding, the Government has launched a Humanitarian Assistance Scheme, which is being administered by the Community Welfare Service on behalf of the Department of Social and Family Affairs. The aim of the scheme is not to provide compensation but rather to provide financial support subject to certain conditions to people who have suffered flood damage to their property. It is a matter for the individual concerned to apply direct to the Community Welfare Service for any Humanitarian Assistance.
The Minister for Agriculture, Fisheries and Food also launched a Fodder Aid Scheme of €2 million. The scheme requires farmers to demonstrate that the fodder was damaged, the extent of the damage and that it is necessary to purchase feed supplies to prevent animal welfare problems.
247. Deputy Michael Creed asked the Minister for Finance if he will review the impact of tax individualisation on a married couple, when one of the partners, due to a personal disability is not in a position to take up employment opportunities outside the house; his views on introducing some specific tax relief for persons in these circumstances; and if he will make a statement on the matter. [48621/09]
Minister for Finance (Deputy Brian Lenihan): As stated in my reply to Parliamentary Question No 81 of 17 December 2009, the position is that a married one income couple benefit from a standard rate band of €45,400 which is €9,000 higher than the band for a single person. They also have the benefit of the married person’s credit in the amount of €3,660, which is double the single person’s credit. Where the stay-at-home spouse in a married one earner couple cares for a dependent person, e.g. their child or an elderly relative, the couple may benefit from an entitlement to the home carer tax credit, which has a value of €900.
[200]The Commission on Taxation considered the issues associated with tax individualisation in its 2009 report. The Commission concluded that the present arrangements with regard to band structure and credits which apply to married one-earner and married two-earner couples should remain in place.
With regard to the question of introducing a specific tax relief for persons in the circumstances outlined by the Deputy, the position is that tax relief provisions are reviewed regularly, particularly as part of the annual Budget and Finance Bill process.
248. Deputy Michael McGrath asked the Minister for Finance if he will respond to the suggestion made in correspondence (details supplied) in relation to the administration of the research and development tax credit. [48642/09]
Minister for Finance (Deputy Brian Lenihan): A tax credit of 25% of the incremental expenditure incurred by a company in an accounting period on Research and Development (R&D) activities can be offset against a company’s corporation tax liability. Finance (No.2) Act 2008 contained a number of very significant enhancements to the R&D tax credit scheme including: an option to carry-back unused tax credits for set-off against a company’s previous year’s corporation tax payments, if there is insufficient corporate tax liability in the current year, thereby creating a tax refund; a further option, if unused tax credits still remain, to claim payment of the remaining unused credits which will be paid in instalments over a 3 year period.
Other positive changes made to the scheme in Budget 2009 and Finance (No. 2) Act 2008 include an increase in the rate of tax credit from 20% to 25% and the permanent setting of 2003 as the base year under the scheme. The scheme has been improved in most Budgets and Finance Acts since its introduction and the latest enhancements introduced in Budget 2009 and Finance (No. 2) Act 2008 will act to make the scheme one of the most competitive of its kind anywhere.
There are difficulties in allowing companies to offset the R&D tax credit against payroll taxes, not least the fact that these taxes are paid over to the Exchequer by companies on behalf of their employees on a fiduciary basis. Given the significant improvements already made to the scheme, notwithstanding the current difficult economic and fiscal environment which we face, I regret that I am not in a position at this time to agree to the suggestion contained in the details supplied with the question.
249. Deputy Eamon Gilmore asked the Minister for Finance if the cuts in pay provided for in the Financial Emergency Measures in the Public Interest (No. 2) Bill 2009 applies to employees of organisations funded under section 30 of the Health Act 2004 who currently qualify for a pension under the nominated Health Agencies Pension Scheme; and if he will make a statement on the matter. [48643/09]
301. Deputy Joan Burton asked the Minister for Finance if he will confirm that recently introduced public sector pay cuts only apply to those already subject to the public sector pension levy; if there are any instances where individuals are subject to the pay cuts but were not subject to the pension levy; if he will clarify the position in respect of the Health Service Executive funded posts in grant aided agencies which were not subject to the earlier pension levy and were not included in the Financial Emergency Measures in the Public Interest (No. 2) Act; and if he will make a statement on the matter. [2047/10]
[201]Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 249 and 301 together.
The definition of a public servant in the legislation governing the pension levy and the pay reductions is the same. Therefore, in general the reductions in pay under the Financial Emergency Measures in the Public Interest (No. 2) Act 2009 will apply to employees who are paying the pension related deduction. However, there are a small number of situations where the pay reductions could apply to a public servant who was not subject to the pensions levy. The pay reductions apply to employees of public service bodies, whether or not the public servant is a member of a public service pension scheme or receives a payment in lieu. Furthermore, the income exemption threshold that applies to the pensions levy does not apply to the pay reductions.
Sections 38 and 39 of the Health Act 2004 apply to HSE service providers and other bodies in receipt of funding assistance from the HSE. Organisations that are directly funded by the HSE under Section 38of the 2004 Act are public service bodies, as defined in the Financial Emergency Measures in the Public Interest Act which provided for the pension levy deduction and the Financial Emergency Measures in the Public Interest (No. 2) Act 2009, which provided for the reduction in public service pay. Employees in these bodies have access to public service pension schemes or, in a small number of cases, the state funds an employer contribution to a private pension scheme. The pension levy and the reduction in salary apply to all these employees. Accordingly, the pay reduction legislation applies to all members of the Nominated Health Agencies Superannuation Scheme.
Under Section 39 of the 2004 Act, the HSE provides a grant towards the overall costs of running certain organisations. Neither the pension levy nor the reduction in salary applies to such employees.
250. Deputy Joe McHugh asked the Minister for Finance if he will clarify a matter (details supplied); and if he will make a statement on the matter. [1008/10]
Minister of State at the Department of Finance (Deputy Martin Mansergh): The Government has decided to defer the proposed decentralisation moves to Carlow and Mullingar for further consideration until 2011. Any matters relating to the sites in question will be clarified following that consideration.
251. Deputy Niall Collins asked the Minister for Finance the number of persons in tabular form analysed by county registered as tax exiles for the year 2006, 2007 and 2008; the amount of tax paid by these persons in each year to the Revenue here; and if he will make a statement on the matter. [1023/10]
Minister for Finance (Deputy Brian Lenihan): I am informed by the Revenue Commissioners there is no register or list of so called ‘tax exiles’ and there is nothing in Irish tax law that makes reference to ‘tax exile’ status.
The taxation of individuals in the State is in line with that prevailing in most other OECD jurisdictions, that is to say (a) individuals who are resident in the State for tax purposes (based on the number of days presence in the State) are taxable here on their worldwide income; and (b) individuals who are not resident here for tax purposes pay tax here only on income arising in the State and on income derived from working here.
[202]I am informed by Revenue that for the 2007 tax year (the latest year for which figures are available), 7,228 non-resident individuals filed Irish tax returns in respect of their Irish-source income or income derived from working here. The total amount of tax paid by these persons was €43m. For the 2006 tax year, 5,993 non-resident individuals filed Irish tax returns in respect of their Irish-source income or income derived from working here. The total amount of tax paid by these persons was €44.5m.
The equivalent figures for 2008 are not yet available. Returns for 2008 were due by 31 October 2009 or, in the case of returns made on ROS (Revenue Online System), by 16th November 2009. The data capture of information of these returns is currently under way and when completed will facilitate the compilation of statistics for 2008.
Many of the individuals that show on their tax return that they are non-resident in the State do not have an Irish address. It is not therefore possible to provide an analysis of the total number of persons claiming to be non-resident for tax purposes on a county basis.
It should be noted that many of these non-residents are foreign nationals or have a foreign domicile; and many of the non-resident Irish citizens or Irish domiciliaries included in this figure may have become non-resident for reasons unrelated to taxation, but who may have retained Irish investments (such as rental property). These individuals could not be categorised as ‘tax exiles’ under any reasonable definition of that term.
252. Deputy Niall Collins asked the Minister for Finance if a person who passes information to the Revenue Commissioners which results in an investigation and possible tax liability by a third party will be assured that their identity will not be disclosed by the Revenue to the third party; and if he will make a statement on the matter. [1024/10]
Minister for Finance (Deputy Brian Lenihan): I am advised by the Revenue Commissioners that where a person, who does not wish their identity to be disclosed, passes information to them, it is their policy to protect the identity of that person.
However there may be circumstances where disclosure would be ordered by a judge, for example, if the information triggers a criminal investigation and a prosecution, it may be a matter for the Trial Judge to determine whether the interests of a fair trial require disclosure of the name of an informant.
There is also strong protection under the FOI Acts for the non-release of the identity of a person who passes information to Revenue. However for completeness, it should be also noted that every FOI case is subject to review on appeal by the Office of the Information Commissioner and that in such circumstances a situation might possibly arise where Revenue might be obliged to disclose the identity of such a person.
It should also be noted that individuals always have the option to pass information to Revenue anonymously.
253. Deputy Brian O’Shea asked the Minister for Finance further to Parliamentary Question No. 117 of 1 December 2009, the stage of the process that the proposed extension to the Waterford court house has reached; and if he will make a statement on the matter. [1032/10]
Minister of State at the Department of Finance (Deputy Martin Mansergh): The provision of court accommodation is, in the first instance, a matter for the Courts Service. Preliminary [203]plans have been prepared for the refurbishment and extension of the Courthouse in Waterford, taking account of initial discussions with the Judiciary locally, staff, and court users. Further consultations regarding these plans will be undertaken in January 2010. It is intended to complete the planning process and to prepare tender documents in the course of 2010 with a view to work commencing on site in 2011, subject to the availability of resources.
254. Deputy Brian O’Shea asked the Minister for Finance the position regarding the proposed pensions insolvency payments scheme; and if he will make a statement on the matter. [1043/10]
Minister for Finance (Deputy Brian Lenihan): Section 22 of the Social Welfare and Pensions Act 2009 provides for a Pensions Insolvency Payment Scheme (PIPS) for the making of payments to or in respect of the relevant pensioners of participating pension schemes.
I have recently signed the statutory instrument giving effect to PIPS from 1 February 2010 for a pilot period of three years. From that date, it is open to any pension scheme that meets the criteria to apply to participate. The principal qualifying conditions for PIPS are that the sponsoring employer must be insolvent (in accordance with the definition used in the Protection of Employees (Employers’ Insolvency) Act 1984) and the defined benefit pension scheme must be winding up in deficit.
Details of the application procedure and other guidance is being made available on my Department’s website www.finance.gov.ie
255. Deputy Jim O’Keeffe asked the Minister for Finance the reason the duty drawback relief which on 9 December 2009 was to be made available to those holding stocks of alcoholic drinks was withdrawn, giving rise to substantial losses to those holding such stocks, even though a methodology had been agreed with the Revenue Commissioners for the taking and the verification of such stocks; and if he will make a statement on the matter. [1050/10]
Minister for Finance (Deputy Brian Lenihan): I want to draw to the Deputy’s attention that, in relation to the reduction in excise duty on alcohol products announced in my Budget Statement of 9 December 2009, no excise duty relief was provided in respect of alcohol products released prior to 10 December 2009.
I am advised by the Revenue Commissioners that the communication regarding the excise duty drawback relief, was unauthorised and issued in error on Thursday 10 December 2009 by a Revenue officer to a small number of traders that were dealt with by that particular officer. As soon as the error was identified, the recipients were notified by lunch-time on Friday 11 December 2009 and the communication was withdrawn. The Revenue Commissioners also issued a clarification to all staff to the effect that there was no provision for the application of the reduced rates before midnight on 9 December; and that the previous rates of tax were to apply in all such cases. This clarification was also posted on the Revenue website. There is no provision in law to allow the refund of the difference in excise duty rates applicable pre- and post-Budget 2010.
256. Deputy Michael McGrath asked the Minister for Finance the position regarding the sale [204]of a property to a person (details supplied) in County Cork; and if he will make a statement on the matter. [1051/10]
Minister of State at the Department of Finance (Deputy Martin Mansergh): OPW and the Purchaser agreed to carry out certain works on the premises prior to closing the sale. OPW has discharged its responsibilities, but the Purchaser has yet to carry out the works he agreed. OPW will complete the sale when the Purchaser has executed these works.
257. Deputy Niall Collins asked the Minister for Finance if his decision to cease performance bonus payments to certain grades in the civil and public service includes the cessation of such payments to local authority managers and directors of service; and if he will make a statement on the matter. [1102/10]
Minister for Finance (Deputy Brian Lenihan): I confirm that the scheme for the payment of performance awards in the local authorities has been terminated.
258. Deputy Joe McHugh asked the Minister for Finance his views on whether the VAT margin scheme that was introduced in budget 2010 imposes credit flow problems and cash flow problems on vendors of agricultural machinery, who heretofore traded via the special VAT scheme for used agricultural machinery; his further views on whether the new VAT margin scheme makes allowances for the seasonal nature of the agricultural machinery trade; if these considerations will be taken into account when structuring the Finance Bill 2010; and if he will make a statement on the matter. [1119/10]
Minister for Finance (Deputy Brian Lenihan): The VAT Margin Scheme was introduced on 1 January 2010 in respect of second-hand means of transport and agricultural machinery. Under the Margin Scheme, dealers will account for VAT on their profit margin, that is, on the difference between the cost of acquiring the means of transport and agricultural machinery and its reselling price. This will apply to all second-hand means of transport and agricultural machinery sold on or after 1 January 2010.
Up to now all EU Member States applied the Margin Scheme to second-hand vehicles with the exception of Ireland and Denmark. When the Margin Scheme was introduced under the EU VAT Directive in 1994, Ireland, following strong representations from the industry, negotiated a derogation in the form of the Special Scheme which applied up until December last, which is also provided for under the VAT Directive. Introducing the VAT Margin Scheme brought Ireland into line with the vast majority of other Member States.
Although under the new Margin Scheme dealers may experience a cash-flow change where they will be no longer entitled to claim VAT input on the purchase of a second-hand vehicle, this is being compensated for by appropriate transitional measures. In this respect, second-hand vehicles or agricultural machinery acquired by dealers before 1 January 2010 and resold after 1 July 2009 are taxed on their resale price. In effect this means that there will be no clawback of VAT in the case where such vehicles or agricultural machinery are sold at a loss.
In addition, as part of the transition measures, for second-hand vehicles or agricultural machinery purchased from 1 January 2010, dealers will be entitled to claim VAT input credit on those vehicles for six months up to June 2010 at a reducing scale of 40% in the period January/February 2010, 30% in the period March/April and 20% in the period May/June.
[205]It should be noted, as already stated, that moving to the VAT Margin Scheme brings the VAT treatment of second-hand means of transport and agricultural machinery in the State into line with the treatment applying in the vast majority of other Member States.
259. Deputy Joe McHugh asked the Minister for Finance the Departments and grades of the 600 managers and senior civil servants who will be exempted from the salary cuts outlined in budget 2010; and if he will make a statement on the matter. [1158/10]
266. Deputy Paul Gogarty asked the Minister for Finance the rationale for reversing the pay cuts of senior civil servants who will now take much less of a wage cut than lower paid civil servants; the reason the final pensions should not be similarly affected irrespective of bonus cuts, like those struggling to make a living at the lower end; if his attention has been drawn to the anger amongst the general public as a result of harsh but necessary measures to reduce our growing deficit, but who feel additionally discriminated against as a result of this measure; and if he will make a statement on the matter. [1272/10]
Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 259 and 266 together.
The remunerations packages of Assistant Secretaries and Deputy Secretaries in the civil service and related grades in other parts of the public service included a scheme of performance-related pay which gave an average payment of 10% of salary. The related grades in other areas of the public service include groups at comparable levels in the local authorities, HSE, some State Bodies, Garda Síochána and Defence Forces. In 2009, it was decided this scheme would be terminated subject to discussion on the implementation of the decision with the relevant staff association.
In applying the recent reductions in pay, I considered that account had to be taken of the reduction in remuneration for Assistant Secretaries, Deputy Secretaries and related grades arising from the termination of the scheme of performance-related pay. Otherwise, the total reduction in remuneration for these grades would have been greater than those for other public servants including higher paid groups at the level of Secretary General or above. I decided that the reductions should comprise both a reduction in the salary scale and the termination of the scheme of performance-related pay previously payable to the grades. The resulting adjustments including the effect of the termination of the scheme of performance-related pay produce significant reductions in remuneration of 14% in the case of the grade of Deputy Secretary and 11.8% in the case of the grade of Assistant Secretary. These reductions are higher than those applying to other groups at lower salary levels.
As regards pensions, the arrangements applying to these grades in 2010 are the same as those applying to all public servants under the provisions of the Financial Emergency Measures in the Public Interest (No. 2) Act 2009.
260. Deputy Darragh O’Brien asked the Minister for Finance further to Parliamentary Questions Nos. 215 and 223 of 16 September 2009, the reason the €41 million of imports from Israel in 2008 did not qualify for preferential duty; if he will give assurances that the reason was not due to the fact the these imports were of produce from Israeli settlements; and if he will make a statement on the matter. [1162/10]
[206]Minister for Finance (Deputy Brian Lenihan): As the Deputy will be aware, in September 2009, in response to the parliamentary questions mentioned, the Tánaiste explained that it was not possible to state with any certainty the reasons a preferential duty was not claimed in respect of particular imports. Accordingly it is not possible to give the assurance that the Deputy seeks.
However, it may be helpful for the Deputy to note that, I have been advised by the Revenue Commissioners that apart from the possibility that the goods were the produce of non-qualifying settlements, there are a number of other reasons why preference might not be claimed. The goods may not qualify under the rules of origin in as much as that they may have been originally imported into Israel from another country or may have been manufactured in Israel using raw materials sourced in another country. It may also be the case that, in the case of particular imports, claiming preference would have no impact on the duty payable and the importers saw no necessity or commercial benefit in claiming preference to which they had a technical entitlement.
261. Deputy George Lee asked the Minister for Finance the protection that is provided to employees by legislation when a pension scheme (details supplied) is wound down; and if he will make a statement on the matter. [1195/10]
Minister for Finance (Deputy Brian Lenihan): Section 22 of the Social Welfare and Pensions Act 2009 provides for a Pensions Insolvency Payment Scheme (PIPS) for the making of payments to or in respect of the relevant pensioners of participating pension schemes. The Act does not provide for the inclusion or exclusion of any particular pension scheme in PIPS.
I have recently signed the statutory instrument giving effect to PIPS from 1 February 2010 for a pilot period of three years. From that date, it is open to any pension scheme that meets the criteria to apply to participate. The principal qualifying conditions for PIPS are that the sponsoring employer must be insolvent (in accordance with the definition used in the Protection of Employees (Employers’ Insolvency) Act 1984) and the defined benefit pension scheme must be winding up in deficit.
Details of the application procedure and other guidance is being made available on my Department’s website www.finance.gov.ie
Question No. 262 answered with Question No. 221.
263. Deputy Seán Sherlock asked the Minister for Finance when funding will be approved for the second phase of the Fermoy flood relief scheme in County Cork; and if he will make a statement on the matter. [1205/10]
Minister of State at the Department of Finance (Deputy Martin Mansergh): Detailed design of the second and final phase of the overall Fermoy flood relief project, including the Fermoy South and South West schemes, is currently under way and is expected to be completed by the third quarter of 2010, after which the procurement process for the appointment of a civil engineering contractor will be commenced. The contractor is expected to be appointed in late 2010 or early 2011. OPW has profiled expenditure for this scheme in its 2009-2013 budget for the flood relief programme.
264. Deputy James Bannon asked the Minister for Finance the number of public servants who received sanction from him to receive fees on top of their normal salary for sitting on state boards, commissions or other such bodies in 2005, 2006, 2007, 2008 and 2009 in each Department; the numbers in each grade who received permission; the number of applications that he rejected and the boards involved; and if he will make a statement on the matter. [1234/10]
Minister for Finance (Deputy Brian Lenihan): The general policy is that public servants should not receive additional remuneration for undertaking other duties in the public service, such as acting as chairpersons or directors of State-sponsored bodies or serving on commissions or other such bodies. The principle, usually referred to as the “one person one salary” principle, or OPOS, was first enunciated by the review body on higher remuneration in the public sector in 1972, and it has been a feature of the public service since then.
The review body on higher remuneration in the public sector subsequently recommended that payment of fees could be sanctioned in exceptional circumstances. This policy has been implemented on the basis that each of the following conditions must be met:
(1) that the duties involved are neither a part nor an extension of the officer’s normal duties,
(2) that a rigid insistence on the principle of one person-one salary would deny scarce skills to the State,
(3) that payment is permitted for one additional appointment only,
(4) that the approval of the Department of Finance for additional payments is required in each case,
(5) that in no case should payment exceed the normal fee for the activity concerned, and
(6) that the duration of such payment should be limited to one term or five years whichever is greater.
Twenty one public servants received such a sanction in the years 2005 to 2009.
The personnel in question were five civil servants ranging in grade from clerical officer to assistant secretary, five employees of State bodies, four HSE staff, three local authority staff, two teachers and two lecturers.
The Boards in question were as follows:
Audit Committee of the Department of Agriculture Fisheries and Food
Health Information and Quality Authority
[208]National Library of Ireland
National Treatment Purchase Fund
Property Registration Authority
As written instructions are available on the limited circumstances in which a public servant may receive a fee and as oral advice in provided, as required, applications for payments of fees to public servants are made only where the Department concerned considers that all the necessary conditions have been fulfilled.
However, during the period in question, five applications which were made for an exception to the OPOS principle were rejected. The boards in question were the Property Registration Authority and the Irish Auditing and Accounting Supervisory Authority. There are many other cases where public servants serving on State boards do not receive a fee but no application for an exception was made.
Separate arrangements apply to the chief executive officers of State-sponsored bodies and are incorporated in the code of practice for the governance of State bodies which is available on the website of my Department —www.finance.gov.ie
265. Deputy Richard Bruton asked the Minister for Finance the savings outlined in the report of the special group on public numbers and expenditure programmes which were accepted in budget 2010 for his Department in tabular form; the savings which will be achieved in 2010; and if he will make a statement on the matter. [1257/10]
Minister for Finance (Deputy Brian Lenihan): As the Deputy is aware the report of the special group on public numbers and expenditure programmes outlined a wide range of proposals across all Departments, a number of which can only be achieved through restructuring over a number of years. The implementation of the proposals for my Department and the Offices under its aegis is ongoing, and initial progress has been made in this regard in budget 2010.
The savings outlined for my Department and the Offices under its aegis together with savings identified as being achievable in budget 2010 are set out in the following table.
[209]21 recommendations were made by the special group in respect of the finance group of votes. At present, 14 of these have either been implemented or are in progress, with the remainder under consideration. €58.179 million is the projected 2010 saving arising from the recommendations that will be fully or partly completed in 2010. The remaining savings are expected to be achieved over a number of years.
Question No. 266 answered with Question No. 259.
267. Deputy Paul Gogarty asked the Minister for Finance if he will introduce a referendum facilitating a reduction in pay for members of the Judiciary, similar to other public servants; if he will outline a reason for not considering this option in view of the anger amongst members of the public who have had to suffer as a result of pay cuts; and if he will make a statement on the matter. [1273/10]
Minister for Finance (Deputy Brian Lenihan): The introduction of referenda on the Constitution is a matter for the Government.
In its report late last year, the review body on higher remuneration in the public sector concluded that the Constitution precluded them from recommending a reduction in judicial pay. Had they not been so precluded, they would have considered a downward adjustment. For the same reason the pension levy was not applied to the Judiciary, though many judges have contributed an amount on a voluntary basis. As I indicated in budget 2010, the Chief Justice and the Presidents of the Courts have urged all judges to make appropriate voluntary contributions from salary in respect of the levy and I will make provision in the Finance Bill to facilitate these payments.
I also indicated that since the review body would have considered a reduction of judicial salaries, I have decided that there will be no increase in judges’ pay during the lifetime of this Government. Future Governments may choose, as in the past, to continue this course of action.
268. Deputy Bobby Aylward asked the Minister for Finance if he will exclude the surcharge on undistributed investment income under section 440 of the Taxes Consolidation Act 1997 to construction and manufacturing companies and allow these companies to use the funds from the franked investment income for productive investment in their companies and safeguard employment in the current difficult economic climate; and if he will make a statement on the matter. [1286/10]
Minister for Finance (Deputy Brian Lenihan): Section 440 Taxes Consolidation Act 1997 provides for a surcharge of 20% on any investment and rental income of a close company which is not distributed within 18 months of the end of the accounting period in which that income was earned. Broadly, a close company is a company under the control of five or fewer participators (including associates), or of participators who are directors. Most Irish owned companies are close companies.
The purpose of the close company surcharge is to prevent avoidance of personal income taxation through the accumulation of income within a corporate structure. With company profits subject to the 12.5% rate of corporation tax there would be a strong incentive, in the absence of a surcharge, for persons to earn and accumulate their income within a company and thereby avoid income tax at the higher 41% rate.
Aside from the strong arguments for retaining the surcharge as an anti-avoidance measure, it would be invidious to remove or reduce the surcharge for particular sectors while retaining [210]it for other sectors. Moreover, such an approach would have State-aid implications from an EU perspective, in that it would favour certain companies and sectors here over others. For these reasons, I would not propose to change the existing arrangements along the lines suggested by the Deputy.
269. Deputy Bobby Aylward asked the Minister for Finance if he will arrange a refund of stamp duty to a person (details supplied) in County Kilkenny; and if he will make a statement on the matter. [1287/10]
Minister for Finance (Deputy Brian Lenihan): I am informed by the Revenue Commissioners that the relevant instrument for stamping was lodged by the solicitors acting for the person concerned on 29 June 2009, together with the appropriate payment of Stamp Duty.
To date, the Revenue Commissioners have not received an application for a refund of the duty paid. If the person concerned wishes to claim a refund he should apply in writing to the Dublin Stamping Office, Dublin Castle, Dublin 2.
270. Deputy Michael McGrath asked the Minister for Finance his views on the progress of the investigations into certain transactions at Anglo Irish Bank; if he is satisfied with the progress and pace of these investigations; and if he will make a statement on the matter. [1308/10]
Minister for Finance (Deputy Brian Lenihan): As the Deputy will be aware, several regulatory bodies are carrying out investigations of behaviour at Anglo Irish Bank including in particular, the Office of the Director of Corporate Enforcement, the Garda Fraud Office
