11 o’clockPrelude
Leaders’ Questions
Ceisteanna — Questions
Departmental Bodies
Social Partnership Issues
EU Summits
Tribunals of Inquiry
Requests to move Adjournment of the Dáil under Standing Order 32
Order of Business
EU-IMF Programme of Financial Support: Motion
Priority Questions
Irish Red Cross
Overseas Missions
Defence Forces Strength
Defence Forces Recruitment
Other Questions
Defence Forces Personnel
Decentralisation Programme
Civil Defence
Departmental Expenditure
Adjournment Debate Matters
Credit Institutions (Stabilisation) Bill 2010: Order for Second Stage
Credit Institutions (Stabilisation) Bill 2010: Second Stage
Biological Weapons Bill 2010: Message from Select Committee
Credit Institutions (Stabilisation) Bill 2010: Committee Stage
National Minimum Wage: Motion (Resumed)
Credit Institutions (Stabilisation) Bill 2010: Committee Stage (Resumed) and Remaining Stages
Multi-Unit Developments Bill 2009 [Seanad]: Order for Report Stage
Multi-Unit Developments Bill 2009 [Seanad]: Report and Final Stages
Adjournment Debate
School Accommodation
Garda Training
Water and Sewerage Schemes
Message from Seanad
Written Answers
Maritime Surveillance and Security
Commemorative Events
Defence Forces Strength
Naval Service-Air Corps Operations
Irish Red Cross
Overseas Missions
Irish Red Cross
Army Operations
White Paper on Defence
Defence Forces Personnel
Medical Corps
Defence Forces Reserve
Naval Service Operations
Departmental Expenditure
Irish Red Cross
Defence Forces Recruitment
Severe Weather Events
Irish Red Cross
Naval Service Vessels
Irish Red Cross
FÁS Training Programmes
Schools Funding
Special Educational Needs
Departmental Expenditure
Special Educational Needs
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Departmental Correspondence
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FÁS Training Programmes
Departmental Bodies
Community Employment Schemes
Training and Work Experience Programmes
Vocational Training Opportunities Scheme
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Tax Reliefs
Credit Review Applications
Tax Code
Pension Provisions
Banking Sector
National Lottery Funding
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Tax Collection
EU Directives
Civil Service Staff
State Assets
Tax Collection
Proposed Legislation
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Tax Code
Services for People with Disabilities
Vaccination Programme
Health Services
Health Service Staff
Services for People with Disabilities
Hospital Services
Departmental Funding
Medical Cards
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Vaccination Programme
Child Care Services
Health Services
Services for People with Disabilities
Hospital Staff
Health Services
Tax Code
Hospital Waiting Lists
Homeless Persons
Children in Care
Medicinal Products
Hospital Accommodation
Disabled Drivers
Legislative Programme
Garda Equipment
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Proposed Legislation
Departmental Expenditure
Public Service Recruitment
Garda Training
Garda Recruitment
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Visa Applications
Asylum Support Services
Prison Building Programme
Public Order Offences
Substance Misuse
Passport Applications
Departmental Staff
Social Insurance
Social Welfare Benefits
Pre-retirement Allowance
Social Welfare Benefits
Rural Social Scheme
National Carer’s Strategy
Social Welfare Appeals
Social Welfare Benefits
Social Welfare Code
Social Welfare Benefits
Social Welfare Code
Departmental Expenditure
Social Welfare Benefits
Departmental Expenditure
National Lottery Funding
Sports Capital Programme
Departmental Expenditure
Waste Management
Local Authority Housing
Local Authority Funding
Motor Taxation
Water and Sewerage Schemes
Traveller Accommodation
Election Management System
Motor Taxation
Strategy on Homelessness
Local Authority Housing
Departmental Funding
Telecommunications Services
Energy Conservation
Grant Payments
Departmental Expenditure
Grant Payments
Forestry Sector
Grant Payments
Fishing Quotas
Intervention Stocks
Grant Payments
Industrial Development
Motor Fuels
Redundancy Payments
National Minimum Wage
Industrial Development
Industrial Relations
Disability Strategy
Defence Forces Equipment
Severe Weather Events
Defence Forces Personnel
Naval Service Operations
Defence Forces Training
National Emergency Plan
Defence Forces Training
National Emergency Plan
Defence Forces Property
Chuaigh an Ceann Comhairle i gceannas ar 10.30 a.m. Paidir. Prayer.Deputy Enda Kenny: Information given to Deputy O’Dowd through a series of parliamentary questions indicates a bonus culture exists within elements of State agencies and some Departments. This creates an enormous credibility problem. Outrage was felt across the country at the proposal to pay bonuses to bankers in particular areas. The Minister for Finance, after a degree of consideration despite the advice of the Attorney General that claimed nothing could be done about the bonuses and which the Minister put on the record, did a solo run and rightly stopped their payment. Today’s newspapers indicate a bonus culture still exists in State agencies and Departments, however.
In 2008 the Minister for Finance issued a circular stating this bonus system should cease. From the majority of parliamentary replies to Deputy O’Dowd on this matter, it seems to have been applied in all Departments expect the Department of Finance and several State agencies. In 2009, performance related bonuses were paid to the chief executive of the National Treasury Management Agency, amounting to €200,000, to the chief executive of the Personal Injuries Assessment Board, amounting to €31,000 and to the chief executive of Horse Racing Ireland amounting to €40,539.
These payments present a credibility problem. Last week’s budget, presented as fair and equitable, asked ordinary public servants, be they teachers, gardaí, nurses, cleaners or carers, to take salary reductions and pay more levies and taxes. Now they find in some areas of the public sector that a bonus culture is alive and well. It is as if a separate club exists.
Will the Taoiseach confirm this bonus culture will be ended across the public sector and the Civil Service? As the Minister for Finance has direct control over the pay of senior civil servants above the level of assistant secretary, how does he propose to end this bonus culture which has caused outrage and separation within public sector ranks? Have the proposals in the Minister’s 2008 circular been implemented? What does the Taoiseach propose to do about the information given to Deputy O’Dowd on bonuses in certain areas?
The Taoiseach: It is important to make a distinction in these cases. It is not correct to conflate the banking sector bonus system, in which a large, additional to basic pay, discretionary bonus based on meeting certain objectives was in place, with payments to middle-ranking public servants at principal officer and assistant principal level.
[278]In 1994, the programme for competitiveness and work provided for a 1% pay increase for people at that level. In some Departments it was incorporated into the full pay pot for those grades while in others it was used to recognise work of exceptional merit. This is against the background where those grades have seen a reduction in their pay of 17% through Government decisions. It is important not to conflate those two issues as being the same, as they are not.
The special service payment in the Department of Finance was based on criteria concerning special demands of the job or whatever occurred in a previous year. The average payments were between €2,000 and €2,500 per year. That should not be conflated with bank bonuses.
Deputy Tom Hayes: These payments are bonuses.
The Taoiseach: No, they are not. They are part of the overall pay bill.
Deputy James Reilly: They are called bonuses.
Deputy Tom Hayes: Will the Taoiseach explain why they are called bonuses then?
Deputy James Reilly: One has to apply for them.
The Taoiseach: Will the Deputies please allow me to explain?
An Ceann Comhairle: Deputies, please allow the Taoiseach to continue without interruption.
The Taoiseach: This applies to middle-ranking public servants. Under a previous pay agreement there is a certain pay bill aggregate for those grades. As part of that pay award at the time, back in 1994, in some instances it was incorporated into the full pay bill. In other words, part of the full pay bill of that grade was incorporated as part of their pay rate. In other instances in the Department of Finance, 1% of total pay in that grade was used as a means of doing so.
Deputy Tom Hayes: What bonus did the carers get?
The Taoiseach: Last year, for example, some people obtained a special payment on that basis. That is the position regarding that matter. The total special service payments and seniority payments together amount to 1% of that Department’s payroll, which is against the background of a 17% pay cut for those grades. To conflate that with what has been happening in the banking sector is not to compare like with like because it is not a discretionary payment.
Deputy Tom Hayes: They are still bonuses.
The Taoiseach: At higher grades — Secretary General and assistant secretary general level — those were discontinued because 10% of the total pay bill was involved in that situation.
With regard to non-commercial semi-State bodies, the decision on such payments is a matter for the boards themselves and are often built into the contracts of the individuals concerned. As regards those schemes, the Department of Finance wrote to Departments about performance-related payments for chief executives or other senior staff of non-commercial bodies and agencies, indicating it would be appropriate that consideration of bonus payments should be suspended. That remains our position and it will be followed up.
Deputy Bernard Allen: Has it happened?
The Taoiseach: It has happened in the vast majority of cases.
[279]Deputy Enda Kenny: I have no problem with public servants being fairly and equitably paid. Those salaries should be accounted for as well as being in line with best practice. Within the ranks of the public service itself, however, there is outrage at the apparent — and, in some cases, proven — level of performance-related pay or bonuses allocated to particular sectors and particular individuals in some sectors. That is what is causing real anger because people were told by the Minister for Finance that the budget was fair, equitable and just. They do not see that, however, because carers and others looking after those with mental health problems at the lower levels are being asked to pay increased taxes, levies and charges of one sort or another. They also see evidence of serious money being paid, either as performance-related increases or bonuses, to particular individuals. That is what is causing the problem.
The Minister for Finance sent out a circular about this. I am glad the Taoiseach has confirmed that the practice has been discontinued at assistant secretary, deputy secretary and Secretary General levels. In respect of the Department of Finance, are these discretionary bonuses that are paid by the Minister for Finance? I understood that any individual from the rank of principal officer upwards in the Department of Finance is graded higher than an equivalent category in any other Department. Are these discretionary bonuses that are paid by the Minister for Finance?
Can the Taoiseach confirm that, in accordance with the circular issued by the Minister for Finance, there is an end to the bonus culture in the semi-State agency sector? It appears as if that is not the case. Some of the payments that have been made are extraordinary. I do not know whether the payment made in the Dublin Airport Authority, the harbour authorities or CIE were discretionary ones.
An Ceann Comhairle: The Deputy is taking an inordinate amount of time on this subject.
Deputy Enda Kenny: Can the Taoiseach confirm that the payments were discretionary on the instruction of the Minister or by the agency involved? There is complete confusion about these payment levels.
An Ceann Comhairle: As I have advised the House previously, there is limited time for Leaders’ Questions.
Deputy Enda Kenny: It would be worth the Government’s while to have a complete review of higher public servants’ pay in respect of it being equitable, accounted for and transparent. The current situation is not transparent and causes more hurt and anger among ordinary public servants who do their jobs diligently every day, yet find themselves facing more levies, charges and increased taxes. Meanwhile, they can see and read about exceptional bonuses being paid to some individuals far up the line.
The Taoiseach: I have explained the situation regarding the Department itself but it is not correct to conflate that with what we have been discussing in recent days. It is part of the existing pay pot of those departmental grades. As was the case in many public service pay review recommendations, it concerns how one can incentivise and recognise exceptional merit, far more modestly than what is suggested was happening in the banks. It is part of the existing pay pool. Other Departments incorporated it across the board into those departmental pay grades. The average was about €2,000 to €2,500, which is totally different than what we were talking about yesterday.
The boards of non-commercial semi-State bodies have a responsibility to ensure that is being done. The Minister issued a circular to that effect. I am checking it out to ensure that it is being dealt with properly across all those agencies.
[280]The commercial semi-State sector has a commercialised agenda. It has commercial contracts to their boards, which have to be dealt with in that way. It is important, however, not to conflate what was happening with middle-ranking public servants with what was discussed yesterday.
Deputy Bernard Allen: The Taoiseach should talk to NAMA and see what it is paying.
A Deputy: The Taoiseach should haul them in.
Deputy Eamon Gilmore: Later this morning, we will be debating the EU-IMF deal. I wish to ask the Taoiseach about one aspect of that deal, which relates to an issue that was the subject of an RTE news report. It concerns the rate of interest which is being charged on one of the components of the deal. As we know, the deal is in three parts: the IMF, the European Financial Stability Mechanism, and the Luxembourg-based facility. The RTE report confirmed this morning that the European Union will be borrowing money using its triple-A rating and would then make that money available to Ireland, but at a much higher interest rate — that is, 3% higher than the rate at which it is borrowing. In other words, it will be making a profit of 3% on the money it is lending to Ireland.
Deputy Thomas Byrne: They were not saying that this morning.
Deputy Eamon Gilmore: If the entire amount of €22.5 billion is drawn down from that fund, the cost to Ireland of the additional interest which the European Union will be charging us will be close to €5 billion over the lifetime of the loan. When RTE questioned the European Court of Auditors about this, it confirmed that there is no precedent for the European Union charging a margin of that kind on moneys being made available to other countries. For example, when Latvia, Hungary and Romania got money through the European Union previously, a margin of that kind was not applied to the interest they were charged. Before we begin the debate on the EU-IMF motion, will the Taoiseach tell us why Ireland is being charged a very high 3% interest penalty on this money which is coming through the European Union? Why is it that there is no precedent for this level of interest penalty being charged to a country that is borrowing money through the European Union, and why did the Government agree to it?
The Taoiseach: The reason there is no precedent is that we are the first country to utilise funds under this new finance mechanism. That is the first point. It is easy to know why there is not a precedent; this is the first time this money has been provided for this purpose.
Second, in the cases of the other aid that was provided to the countries the Deputy mentioned, whether humanitarian or other restructuring aid, the EU was not acting as a lender of last resort. This is the first time this has happened. Similarly, the Greek situation, which predated the decision of the ECOFIN Council in May on the terms upon which this aid would be disbursed, was a bilateral loan arrangement between countries and was at rates similar to this loan. Indeed, the Greeks are looking for the terms we have obtained. They would like a longer timespan for the availability of funds than was granted to them under the bilateral aid package.
Third, the general provision based on lending in a last resort situation will apply to this loan and to any future loan, should that arise for any other country. This is the first time a loan has been given in a last resort situation and the terms are based on the ECOFIN decision of last May. The rate has been calculated at a level to ensure it acts as an assistance to us but, given that the IMF is recognised as the cheapest international provider of credit, the European Financial Stability Mechanism, EFSM, money is at the same rate — 5.7% — as the IMF money.
[281]Deputy Eamon Gilmore: This is the first time the EFSM is being used, but it is not the first time money has been made available to members of the European Union through various EU mechanisms. The EFSM operates under Article 122 of the European Union treaties, which provides that the EU can assist a country “in a spirit of solidarity” where that country is facing exceptional financial difficulties. When money was loaned to other countries under that provision of the EU treaties — and I have referred to the situations in Latvia, Hungary and Romania — the additional margin was not applied. Those countries were not charged an additional 3% on the money lent. Ireland is the first country being charged a penalty rate of interest.
Why are we being charged this additional rate of interest? Yes, we are in a position of going to the lenders of last resort in order to get money to finance the State. We understand that. We also understand the context in which that deal was struck. There is not just an Irish problem. There is also a European and a euro problem. When the Government sat down to negotiate the deal with the European Union institutions, the arrangement it made was to provide financial assistance to Ireland, but it was also designed to support the euro and provide financial stability within the European system. Why did the Government agree to being charged a penalty rate of interest that will cost the Irish taxpayers almost €5,000 million over the period of repayment when such a penalty has never been applied to a European country borrowing through the mechanisms provided for by Article 122 of the EU treaties?
The Taoiseach: The simple reason is that this is the first time the mechanism has been used as a lender of last resort working with other international organisations that are providing the cheapest form of international credit available to the IMF. If Deputy Gilmore wants to equate humanitarian or other aid to Latvia and Hungary with the situation we are in today, he is not acknowledging the context in which the European Union — and ECOFIN in May — decided, in taking up this posture, to make available funds at a similar rate as is available from other international institutions that provide money for this purpose. Money is provided by the European Union for other purposes, for which a margin is not charged.
If the money were not available from the European Union and we did not take up the EFSM money we would, presumably, have to get it from the European Financial Stability Facility, EFSF, which would be at a slightly higher rate, or from the IMF, which is at the same rate as the money Deputy Gilmore is talking about. There is no alternative, bar the market, to the EU, the EFSF and the ESFM. That is the situation.
Deputy Eamon Gilmore: The Government has allowed the country to be ripped off.
The Taoiseach: That is not correct.
Deputy Eamon Gilmore: It is correct. No one else was charged the penal rate.
Deputy Brendan Howlin: The Government had more leverage.
Deputy Eamon Gilmore: The Government got a bad deal.
The Taoiseach: That is not correct. The Deputy is suggesting that the EU will make the money available at a lesser rate than the IMF, which itself is the cheapest international provider of credit. That is something ECOFIN is not prepared to do. ECOFIN was prepared to make sure it would provide additional credit to this country at rates similar to what was available from the IMF, which is the established international organisation to provide international credit to sovereign countries for this purpose. That is the situation.
[282]If we were to go to the international market for that money we would be paying a far higher rate than is available from the EFSM and the IMF. Those are the facts. Deputy Gilmore’s suggestion that a lower rate was available, despite the fact that ECOFIN made this decision, is not only unrealistic but also unachievable.
Deputy Michael D. Higgins: It is a strange version of solidarity.
Deputy Brendan Howlin: The legal basis for the money is clear.
Deputy Caoimhghín Ó Caoláin: Today is the day when the Taoiseach and the Government want the Dáil to vote approval of a deal that will sell the Irish people into economic bondage. The vote that will take place later today would never have taken place but for the fact that Sinn Féin threatened legal action if the Government failed to act in the spirit of Article 29 of the Constitution. The Taoiseach would have bulldozed on regardless.
We have now learned that the EU Commission, with the approval of the eurozone Finance Ministers, has insisted on placing a further 3% profit margin on top of the interest applied to an element of the loan provided via the EFSM.
Deputy Arthur Morgan: It is punitive.
Deputy Caoimhghín Ó Caoláin: This is an outrageous situation. Over the term of the loan, and if it is drawn down in full, a further burden of €5 billion will be placed on the Irish people. This money will go directly back to the EU member states, principally Germany and France.
We are told this additional 3% has the approval of the eurozone Finance Ministers. When did such a meeting take place? Was the Minister for Finance in attendance? Did he accede to this further 3% penalty being applied to the overall loan from that particular mechanism within the deal? What steps were taken to oppose this, if any?
This mark up is unique to Ireland. The Taoiseach cannot get away from the fact that none of this applied to EU supports for other countries, such as Latvia, Romania and Hungary. He says it will apply in every other case from here on. What has he done to resist it applying in Ireland’s case? We are not a unique or special case. The difficulties presented here are particular to us, but difficulties have presented in other economies too. We want to know why the Taoiseach has signed off on such a damn bad deal for the Irish people.
If the Dáil approves this deal, the Irish people will be burdened with a massive debt to bail out banks and bond holders.
An Ceann Comhairle: The Deputy should conclude.
Deputy Caoimhghín Ó Caoláin: I will conclude on this point.
An Ceann Comhairle: The Deputy should please do so.
Deputy Caoimhghín Ó Caoláin: It is suggested that the average interest rate applying will be something of the order of 5.8%. Make no mistake, however, there are clear indications that the estimated real interest rate will be closer to 7% across the board. The Government has already admitted this in a number of statements it issued.
An Ceann Comhairle: The Deputy should allow the Taoiseach to deal with the questions he has posed.
[283]Deputy Caoimhghín Ó Caoláin: What is the real rate that will apply? Will the Taoiseach reveal to the Irish people the full facts and the real truth regarding this very sullied deal the Government is proposing to impose following today’s forced vote in the Chamber? If the Taoiseach has confidence in the deal to which I refer, he should ensure there is a free vote on it for all Members.
The Taoiseach: On the issue I raised with Deputy Gilmore regarding the question of a general provision based on lending in a situation of last resort, the European financial stabilisation mechanism, EFSM, will have a margin and the decision in that regard was made by ECOFIN in May. This is an ECOFIN-based source of funding from the 27 member states. As the Deputy is aware, there is also another facility which is specific to the eurozone. The decision on the margin was made in May and the specific terms and conditions were signed off when the Minister for Finance, Deputy Brian Lenihan — with a mandate from the Government — attended meetings of both eurozone and ECOFIN Ministers.
The basic point is that this is the first occasion on which the money or mechanism in question has been used for the purpose to which we are referring, namely, to provide funding for the State in the absence of the sovereign debt that is available on the markets at a far higher rate of interest.
Deputy Joe Costello: All the more reason to obtain a good deal.
Deputy Emmet Stagg: A precedent has been set.
The Taoiseach: The rate that is being provided compares favourably to the cheapest international credit available, namely, that on offer from the IMF, for this purpose. Ireland is the first country to use the mechanism to which I refer for this purpose. Countries that avail of it in the future will be obliged to deal with similar situations. In the context of humanitarian or other aid offered to countries that were in difficulties, it was not the case, as is the position with regard to Ireland, that a lender-of-last-resort scenario obtained.
The legal basis for the application of a margin was laid down by ECOFIN in May. The specific terms and conditions were signed off by ECOFIN in recent weeks following the completion of the negotiations which took place here. The rate that is applicable in respect of the mechanism is the same as that which applies in the case of funding from the IMF, which — as already stated — is the cheapest source of international credit. It is a facility from which the Government can draw down funding during the next three years at the rates to which I refer over an average period of seven and a half years. It is a matter for the Government to decide what to draw down and when to draw it down. If money becomes available on the markets at a cheaper rate in the intervening period, it will be open to the Government to seek to access such money. The reality is that we either seek these funds at the rate on offer or that we return to the secondary markets, where the cost of borrowing is more than 8%, in search of money to fund the State beyond July next. We already have in place pre-funding arrangements to that date.
An Ceann Comhairle: I will take a brief final supplementary from Deputy Ó Caoláin.
Deputy Caoimhghín Ó Caoláin: From what the Taoiseach said, there is no sense of the so-called spirit of solidarity cited in Article 122 of the Lisbon treaty. There is no spirit of solidarity when the European Union and those involved in the eurozone grouping decide that they can make profit on the backs of Irish people, who are facing hardship. How will the Taoiseach explain what is happening, in the context of a spirit of solidarity, to those who are on social welfare payments or low or middle incomes and who are being obliged to shoulder the burden [284]of the repayments to be made? The suffering and hardship that are affecting our society and that will continue to hold sway in the coming years have come about as a result of the decision to bail out banks and bondholders.
An Ceann Comhairle: Will the Deputy please conclude by asking a question?
Deputy Caoimhghín Ó Caoláin: Those bondholders are primarily based in the very countries — France, Germany and Britain — that will benefit from the 3% profit margin that will apply over and above the interest that must be repaid. There is no acceptance of this whatsoever.
Before the Ceann Comhairle rings his bell, I wish to avail of a final opportunity to make an appeal to the Taoiseach to withdraw and pull back from the brink. If he has confidence in his position and in the deal that has been negotiated — it is shameful that the Minister for Finance signed off on the latter — then the matter should be put before the people in a general election.
An Ceann Comhairle: Deputy Ó Caoláin is going beyond the bounds.
Deputy Caoimhghín Ó Caoláin: Will the Taoiseach call a general election?
The Taoiseach: It is ironic for the Deputy to refer to treaties of the European Union and the spirit of solidarity when he never voted in favour of one such treaty in his life.
Deputy Caoimhghín Ó Caoláin: However, the Taoiseach has done so. On two occasions Governments of which he was a member held second referenda in respect of treaties that were rejected by the people in the first instance.
An Ceann Comhairle: The Taoiseach, without interruption.
The Taoiseach: The Deputy used the minute available to him and more in order to make his points. He should allow me to reply.
I wish to make a serious point. It is unrealistic to suggest that the European Union has not shown a preparedness to assist Ireland in this situation. Two thirds of the facility available to us will come from European Union sources and the remaining third will be provided by the IMF. It is also unrealistic to suggest that there are rates of credit available within the European mechanism which would be cheaper than those relating to the IMF mechanism. As already stated, we are discussing lender-of-last-resort status. In that context, we must ensure we can return to the markets when conditions normalise. Prior to the serious turbulence which arose on markets during the year, Ireland was obtaining money at average rates of 4.5% to 5%.
Making a return to funding our operations through the international bond markets, in more normal conditions and as quickly as possible, is the reason we have been provided with a facility from which we can drawn down moneys as required. It is hoped that while we pursue the programme of adjustment in which we are already engaged, the bond markets should normalise and we will then be able to return to them and obtain money at rates which would be lower than those which apply in respect of the funding we are obtaining from the sources to which I refer. That is the purpose of what is being done.
The facility is for three years and it seeks to ensure we can return to the bond markets on the basis of the adjustments we will make in the interim. As already stated, it is a misnomer to continually refer to a penalty when what is on offer is comparable to what is available from the cheapest source of international credit, namely, the IMF. It is important to recognise that [285]the lender-of-last-resort facility is available to Ireland for the first time since the mechanism was established. The mechanism in question was set up by the ECOFIN Council, which involves all 27 member states, and is distinct from the stabilisation facility which was established by the eurozone countries. It is vital to point out that the financial assistance to which I refer is on offer at a far lower cost than the only alternative available, namely, funding from the secondary markets where rates of well over 8% currently apply.
An Ceann Comhairle: That concludes Leaders’ Questions.
1. Deputy Eamon Gilmore asked the Taoiseach if he will make a statement on the recent work of the working groups chaired by his Department. [45951/10]
Deputy Brian Cowen: In answering this question, I am interpreting the term “working groups” as groups which are working towards completion of particular projects or tasks rather than those which meet on a continual or ongoing basis to provide strategic direction. This is the same interpretation I took when I answered an identical question tabled by the Deputy on 31 March 2010. Using this interpretation, there are no working groups chaired by my Department. However, my Department does, of course, chair, and is represented on, a wide variety of other types of groups, including those that support the work of Cabinet committees and the implementation of the programme for Government or other Government policy initiatives.
Deputy Eamon Gilmore: Will the Taoiseach indicate if the working group chaired by his Department has issued a report and, if so, will he indicate the findings of that report?
The Taoiseach: I made the point that no working groups chaired by my Department are looking after particular tasks or projects. If there is a specific area about which the Deputy wishes to inquire on a policy front, there may be some supplementary information available to hand. This is the manner in which I dealt with it last March when we had some discussion on a specific matter.
Deputy Eamon Gilmore: I understood that what the Taoiseach told me in March was that there was a working group that was developing proposals for reducing barriers to information sharing between different parts of the public service. Moreover, I understood that proposals that were being developed by this group would be submitted for consideration by a Cabinet sub-committee on transforming public services. Did this group ever conclude its work or what can the Taoiseach tell Members about it?
The Taoiseach: I apologise to the Deputy. I understand from memory that work has been done in that area, which is due to be finalised by the senior officials group and which will come before the Cabinet shortly but I will get the detail.
Deputy Eamon Gilmore: That is fine.
2. Deputy Eamon Gilmore asked the Taoiseach when he next plans to meet the social partners; and if he will make a statement on the matter. [45953/10]
[286]3. Deputy Eamon Gilmore asked the Taoiseach when the last formal annual meeting of the parties to the Towards 2016 agreement was held; when the next meeting is due; and if he will make a statement on the matter. [45955/10]
4. Deputy Caoimhghín Ó Caoláin asked the Taoiseach his role regarding the implementation of the Croke Park agreement; and if he will make a statement on the matter. [46964/10]
5. Deputy Caoimhghín Ó Caoláin asked the Taoiseach if he will report on his most recent discussions with trade unions and employers; and if he will make a statement on the matter. [46965/10]
The Taoiseach: I propose to take Questions Nos. 2 to 5, inclusive, together.
There have been three formal plenary meetings of the parties to the Towards 2016 agreement since its publication in June 2006. The last meeting of that nature was held on 15 February 2008 and no further meeting has been scheduled. There have been a significant number of bilateral meetings with each of the social partnership pillars since then, both directly with myself and my Department and with relevant line Ministers and Departments, including most recently in the context of their budgetary submissions.
There have been initial discussions with each of the social partnership pillars regarding the Europe 2020 process, which involves consultation with national stakeholders in the development of each member state’s national reform programme. I envisage further consultations before the final national reform programme is submitted to the Commission next April. Social partner representatives also continue to participate in a variety of Governmental consultative fora and bodies.
Additional information not provided on the floor of the House.
The public service agreement agreed at Croke Park earlier this year and ratified during the summer provides the industrial relations environment for the successful implementation of the Government’s public service transformation programme. My Department worked closely with the Department of Finance and senior management from all the main sectors in the negotiations which led to the agreement.
The agreement provides a means by which the Government can radically transform the public service, especially through greater flexibility, redeployment, changed work practices and overall reductions in numbers. The management-union implementation body, independently chaired by Mr. P.J. Fitzpatrick, has been given an important role in driving forward the process of change and ensuring that any difficulties which may be encountered are resolved in a fair and speedy manner. A senior official from my Department is a member of the public service management side of the implementation body, alongside senior officials from the Department of Finance.
I welcome the valuable work which has already been done by the implementation body since it was established. The Government has instructed senior management across the entire public service to accord the highest possible priority to implementing the agenda for change set out in the agreement and to working with the implementation body. The Government has always stated that it seeks full implementation of the agreement as soon as possible and the national recovery plan was prepared on the basis that the agreement will make possible the delivery of tangible savings. The national recovery plan also makes it clear that the commitments entered into by the Government under the Croke Park agreement are dependent on savings being delivered through its comprehensive implementation. Finally on the issue of the Croke Park agreement, I wish to state once again that the Government considers that any party that [287]chooses to remain outside the provisions of the agreement cannot expect to benefit from the commitments it gave as part of the agreement. That is its clear position.
The area of public service transformation is, by definition, a very broad one, covering a wide range of issues and sectors such as health, education, local government, justice, etc. The Cabinet committee on transforming public services, which I chair, is overseeing the implementation of the transformation programme as a whole. However, responsibility rests with the relevant Ministers in respect of each branch of the public service. Implementation of these transformation programmes will be facilitated by the terms of the Croke Park agreement. A steering group of Secretaries General, under the chairmanship of the Secretary General of my Department, supports the Cabinet committee and meets on a very regular basis.
In addition to providing the secretariat to the Cabinet committee and the steering group, the transforming public services programme office in my Department, working closely with the Department of Finance, is supporting organisations across the public service in their transformation efforts and is supporting the Government in driving, co-ordinating and monitoring progress in implementation of the overall transformation programme. The programme office, in conjunction with the Department of Finance, also provides the necessary assistance to the Minister of State, Deputy Calleary, with regard to his public service transformation brief.
Deputy Eamon Gilmore: In the original Towards 2016 agreement, there were to have been quarterly meetings to review, monitor and report on progress, as well as an annual formal meeting of all the parties to the framework agreement. Do I understand from the Taoiseach correctly that the last quarterly meeting of the full social partnership body took place almost three years ago in February 2008? If that is the case, is it not then the case that the social partnership arrangements have in effect come to an end? Specifically, what is the Government’s policy at present in respect of social partnership? In his recent interview on “Morning Ireland”, the Minister for Finance suggested that a report that was being drawn up in his Department on the financial crisis would find that social partnership did enormous damage to the financial system. I find this to be difficult to understand and invite the Taoiseach to state whether he agrees with this assessment by the Minister for Finance. If he does agree with it, can he explain to the House what it means?
The Taoiseach: As I stated, there have been a number of bilateral meetings both this year and in previous years. However, there has not been a plenary meeting because, as the Deputy is aware, the Government has been dealing with this crisis. In addition, we also have had the Croke Park agreement and there has been a huge amount of consultation and work that has provided the background to dealing with a lot of problems that were arising in the labour market and industrial relations areas. This work has been highly substantive and specific. Moreover, it is clear that in the new economic, financial and fiscal position in which we find ourselves, all these agreements, whether they be social partnership agreements or any other, are based on maintaining financial and fiscal stability and on putting in context that all our commitments in such areas are subject to that overriding imperative because, otherwise, the process of implementation, whether phased or complete, is put at risk. Consequently, I do not accept that these do not continue to inform our basic approach. In all its efforts, the Government has sought to make adjustments that are progressive whereby people at the highest end of the spectrum in terms of income and resources pay the greatest proportion of the adjustment. This has been the case and economic data are available in the budgetary papers to confirm this and subsequent analysis of the budget and the cumulative impact of the budgets the Government has been obliged to apply since 2008 confirms this progressivity.
As for the issue about which the Deputy asked regarding a recent interview, I understand the Minister was referring to social partnership as an influence on public spending increases. [288] He also spoke about the commitments as reflected in successive programmes for Government in that respect. As for the wider public spending influence of social partnership, all agreements are negotiated against a background of the programmes that are in place and of the overriding requirement for fiscal and financial stability. Commitments expressed as being dependent upon available resources and against a backdrop of the overriding concern to secure economic and fiscal stability form part of those programmes or of any other commitments people made responsibly at the time. It is important to consider the impact on public expenditure through increased public service salary levels and increases then associated with the wider policy objectives as set down in partnership agreements. The process of building peace and stability in the labour market and underpinning the process of economic change has yielded two of the benefits that social partnership provides for us all. There is no doubt but that in the circumstances in which we now find ourselves, social partnership must evolve to meet our current circumstances. However, as a matter of information sharing, opinion sharing and getting the views of people and stakeholders in our society, it remains an important point of contact for all social partners with the Government.
Deputy Eamon Gilmore: On the interview by the Minister for Finance, the Taoiseach has stated that the Minister was referring to those increases in public expenditure that arose from social partnership agreements. Will the Taoiseach confirm that any such increases in public expenditure were agreed by the Government and, therefore, the reference by the Minister for Finance to the effect that social partnership did enormous damage to the financial system is simply another way found by that Minister to find another whipping boy to blame for the Government’s policy failures? Did the last meeting of the entire partnership framework take place on 15 February 2008? Are there plans for further meetings of it? The Taoiseach referred to the Croke Park agreement and the implementation thereof. How often has the implementation body for the Croke Park agreement met? Is it the case that the Government or various Departments of the Government have now submitted their implementation plans for reforms in the public service to the implementation body? Has the implementation body yet heard the full extent of what the Government and its various Departments plan with regard to reforms in the public service?
The Taoiseach: I do not have all the detailed up-to-date positions in respect of the Croke Park agreement implementation body. It has met seven times to date, meets regularly and I understand its next meeting is due on 23 December. That body is available to deal with issues referred up to it, rather than with all the issues. The body exists to ensure that the existing sectors resolve problems consistent with the agreement in a timely and appropriate way. It has met key bodies such as the managements of Departments and general secretaries of public service unions, as well as a wide range of people in different sectors on a bilateral basis. It also has met key bodies in this area, including the Labour Relations Commission and the Labour Court. Chairs have been appointed to the sectoral bodies from the implementation body, including Mr. Pat Harvey in health and Mr. Dan Murphy in local government.
The bodies have met a number of times. The Civil Service body met recently and a chairperson has been appointed for the other sectors. Mr. David O’Callaghan represents education, Mr. John White represents State agencies and Mr. Michael McCloone represents prisons. The sectoral action plans for effecting the change set out in the relevant sectoral agendas contained in the agreement are being reviewed by the implementation body. That is the most up-to-date information they have on that.
On the previous part of the Deputy’s question on social partnership——
[289]Deputy Eamon Gilmore: Are there any plans for another meeting?
The Taoiseach: No plans are currently scheduled for another plenary meeting but it is important to point out that meetings are taking place on a bilateral basis with employers, unions and voluntary pillar on various issues, and that will continue.
Deputy Caoimhghín Ó Caoláin: I heard the interview with the Minister for Finance yesterday morning on “Morning Ireland”. There was no question but that he was extremely critical of the Croke Park agreement and previous social partnership agreements. The Taoiseach’s speaking note aside, has he heard the interview or read a transcript of what the Minister said? Would he agree with the very strong criticisms the Minister aired on the national airwaves yesterday morning?
Whatever the views of the Minister or the Taoiseach — I am anxious to hear what he has to say — would he not accept that, to all intents and purposes, he has torn up the Croke Park agreement by the passage last week of facilitating legislation to reduce the minimum wage from a date in the new year? That is a critical element.
Would the Taoiseach also accept that he has flittered up the Croke Park agreement by the measures he introduced in the budget last week? They will have devastating consequences for people on low and middle incomes and those dependent on social welfare. What prospects does social partnership have into the future against the backdrop of an agreement and then the total unravelling of all the essential elements and understandings——
An Ceann Comhairle: Does the Deputy have a question?
Deputy Caoimhghín Ó Caoláin: I have several of them. I hope the Taoiseach has heard them if the Ceann Comhairle has missed them.
The reduction in the minimum wage does not kick in immediately. I refer to the exposure on “Prime Time Investigates” on Monday of a number of people working as home carers who are not only on the minimum wage but also earning below it. There is very bad behaviour on the part of unscrupulous employers who are exploiting people on the lowest incomes possible.
Would the Taoiseach revisit the decision, allow the minimum wage to stand and take whatever appropriate measures are needed to weed out unscrupulous employers who will continue to profit at the expense of low paid workers——
An Ceann Comhairle: Could we have a final question?
Deputy Caoimhghín Ó Caoláin: ——even in the event of a reduction in the minimum wage by €1 per hour?
The Taoiseach: I do not agree with the Deputy. The public service pay agreement, which comprises the Croke Park agreement, has been maintained by the Government. It is sometimes forgotten that the agreement was negotiated against a background of escalating industrial action and put an end to that. In accepting the Croke Park agreement public servants have accepted the imposition of a pension levy and pay cuts, resulting in an average combined reduction of 14% in pay.
There has also been a reduction of about 12,000 in public service numbers since the end of 2008. In line with the national recovery plan, there will be an overall reduction of almost 25,000 by the end of 2014, from an end of 2008 base reference period. In contrast with the experience of other countries where less severe reform measures have been pursued, we have been able [290]to maintain service continuity, which is particularly important for the most vulnerable in our society.
The reduction in numbers means that there has been increased productivity across the public service, as well as a reduction in the public service pay bill. We are getting more work and output for less money. The process will have to continue, in terms of maintaining stability in the public finances and getting to the point where we can bring balance back into our public finances.
I do not accept the contention of the Deputy that there has been a breach of the Croke Park agreement. It is a public service pay agreement with transformation commitments made therein, on the basis that we want a sustainable public service for the future which is well-resourced, affordable in the context of the circumstances in which we find ourselves, which will be reformed and will enable people to contribute on the basis of a sustainable financial position. It is in everyone’s interests for that to happen. To do otherwise would be to put at risk job security for those in the public service and the avoidance of compulsory redundancies.
Any sectors in the public service which do not undertake the commitments of the deal cannot expect the benefits which arise from it. We are seeing commitment and leadership across a cohort of people numbering some 300,000. Leadership at all levels will be required to bring about the changes which are necessary and that are agreed need to be implemented, albeit in difficult circumstances. It needs to be done and we are working in line with the agreement to achieve that.
A redeployment mechanism and changes in practices are necessary. All the measures are fundamental. Despite economic constraints, the Government has abided by the agreement on pay, compulsory redundancies and pension terms. Public servants, their unions and managers all have to abide by the commitments which have been entered into to pursue flexibilities and reforms in every part of the public service. We have made commitments to the continued reduction in the cost of the public service. If the Government is to be held to its side of the agreement these reductions must be delivered. That is the situation and it is important that we all work with that in mind.
A report on the future organisation of the Department, conducted by a number of external people, is due to be finalised and published. It will examine the past ten or more years. The review of the performance of the Department is being conducted by an independent review panel and will be forthcoming in due course. Of necessity, any review of fiscal policy and public spending over the past ten years will include the influences referred to, such as social partnership, Government programmes and commitments.
What were spoken of as policy failures by Deputy Gilmore in an earlier question must be considered against the context of the failures identified at the time by the Labour Party. These included inadequate social provision and spend which were not sufficient to meet the needs of the day. There is now the prospect that we will hear about failures because we spent too much. It will be interesting to see that analysis.
During those years, probably without exception, every policy initiative which was brought forward was welcomed, in some cases because they were consistent with the social partnership or other commitments which involved the expansion of social policy goals, increasing objectives and improving the position of people, which one would expect at a time of economic growth and financial surplus. The critique always was that more should be done.
Deputy Eamon Gilmore: It should be done better.
[291]The Taoiseach: More should be done and more resources should be applied. It is on the record of the House. None of us can revise all of this. We all have read what was said at the time. That was the case.
Deputy Eamon Gilmore: The Taoiseach should tell us what he said himself.
The Taoiseach: Exactly. That was the case.
Deputy Eamon Gilmore: He should tell us what he said about the bank guarantee.
The Taoiseach: Despite the economic constraints that mean certain policies have to be pursued now as a matter of national necessity, a great proportion of the social gains that have been made can be retained. The recent improvements in economic competitiveness that have derived from our capital gains, which are now visible for many people in view of those investments, can also be retained. They can and will be built upon. The areas of social gain on which we are having to some extent to pull back can be re-examined in different times. We need to recognise that many of them can be retained, despite the depth and scope of this crisis, if we pursue difficult policy options and objectives. That has to be done if we are to forge ahead again.
Deputy Caoimhghín Ó Caoláin: I reiterate my appeal to the Taoiseach and the Government not to proceed with the proposed reduction in the minimum wage, for all the reasons I have recorded here many times previously. My final question on this group of questions relates to the Taoiseach’s discussions with the trade unions and the employers. Subcontractors throughout the country are going through very difficult times as a result of disputes with main public works contractors. I am aware of a number of instances of such disputes in my constituency. I remind the House that workers on the M7 motorway scheme between Castletown and Nenagh have gone on strike because of difficulties with moneys.
An Ceann Comhairle: Taoiseach’s Question Time has fallen into the trap of being a catch-all for all types of questions.
Deputy Caoimhghín Ó Caoláin: I am asking if this has been——
An Ceann Comhairle: Many of the questions that are being posed should be addressed to the line Minister——
Deputy Caoimhghín Ó Caoláin: I am very aware of that.
An Ceann Comhairle: ——and not to the Taoiseach.
Deputy Caoimhghín Ó Caoláin: This question, which I have posed validly on today’s clár, relates to talks with the trade unions and the employers. I am asking the Taoiseach about the general principle, although I instanced a specific case. The Taoiseach will be familiar with the case I have exemplified as it directly affects Laois County Council, which covers part of his constituency, and the National Roads Authority.
An Ceann Comhairle: If the Deputy does not ask a question, I will move on.
Deputy Caoimhghín Ó Caoláin: The principal contractors are failing to meet their commitments to make monetary payments to locally recruited subcontractors, thereby placing Irish companies at serious risk. Many jobs have been lost. Is the Taoiseach cognisant of this issue? Is he taking any steps to address it? Has he addressed it in the context of his engagement with [292]employers? Would he consider introducing standards to ensure those who get publicly funded major contracts fully honour their commitments to the subcontractors engaged in such works?
The Taoiseach: All of these issues, including the specific issues being encountered by subcontractors, are dealt with by the Ministers concerned in the Departments concerned on an ongoing basis. The question of legislative change is being pursued. The Deputy is aware that the Government agreed to consider a proposal that was made by Senator Quinn, who is an Independent. It has been advanced considerably on foot of close and constructive work between the Departments of Finance and Enterprise, Trade and Innovation to prepare amendments to the relevant legislation. I hope the Bill will be enacted. It will not have retrospective effect, unfortunately, because the legislation cannot have such an effect. It is being prepared as part of an effort to address situations that have arisen, of which we are all aware.
I refer to subcontractors that have been left in difficult situations because of the financial problems of main contractors. We are all cognisant of that. Many people have been affected. The Government is working in co-operation with the sponsoring Senator to make this legislative change, which is an indication of the seriousness of our intent and purpose in this area.
6. Deputy Enda Kenny asked the Taoiseach if the agenda for the December meeting of the European Council has been finalised; and if he will make a statement on the matter. [46013/10]
7. Deputy Enda Kenny asked the Taoiseach the bilateral meetings he plans holding on the margins of the December meeting of the European Council; and if he will make a statement on the matter. [46014/10]
8. Deputy Enda Kenny asked the Taoiseach if the arrangements for his planned visit to China have been finalised; and if he will make a statement on the matter. [46015/10]
The Taoiseach: I propose to take Questions Nos. 6 to 8, inclusive, together.
While I do not yet have any formal plans for meetings on the margins of this week’s Council meeting, I expect to have informal discussions with my European Council colleagues while I am in Brussels. Prior to the Council meeting, I will attend a meeting of the European Liberal Democrat Party at which a number of my European Council colleagues will be in attendance. This week’s meeting of the Council will focus on economic policy matters and external relations. We will reach agreement on limited treaty change to provide for a new permanent crisis mechanism. We will receive a report from President Van Rompuy on his consultations with member states in this regard.
The European Council will be informed of ongoing work on the evaluation of the European Union’s relations with its strategic partners, including the United States, Russia and China. Ireland has been making major trade visits to China for over 12 years. Bilateral trade has increased substantially as a result. We enjoy excellent relations with China, not least in the cultural sphere. Two years ago, I led a wide-ranging trade mission to China. In the course of discussions in recent months, the Chinese Premier and a senior Chinese official indicated they would welcome a further visit in 2011. Our embassy has been following that up with the Chinese authorities but no firm arrangements have been finalised.
Deputy Enda Kenny: Will there be a discussion at the European Council meeting on the banking crisis that confronts Europe? Is it the Taoiseach’s view that the possibility of a major [293]restructuring of the situation at European level, as distinct from the application of pressure on individual countries like Ireland and Portugal, will be discussed?
The Taoiseach: The Union’s finances and the banking system generally provide a context for the discussions on the permanent crisis mechanism. Along with our colleagues at Council level, we will work through the issues that are up for discussion. I refer specifically to the permanent crisis mechanism. It is important to note that much of the speculation, including people’s projections about what they think might represent a solution to the problem, can create its own problems in terms of market reaction, as we have seen. We have to discuss these issues with our colleagues this week.
Deputy Enda Kenny: Have there been any advance comments or indications with regard to the discussions that might take place about debt restructuring? Is it possible that the debt of senior bold holders that is not guaranteed might be subject to discussion and renegotiation? There is evidence that the State has given guarantees in respect of debts that have already been sold on. Is it likely that an internal discussion on the possibility of a major restructuring of debt at European level will take place at the heads of Government meeting?
The Taoiseach: It is important to point out that the agenda regarding the permanent crisis mechanism is the specific context for the discussion on that. As Deputy Kenny is aware, there are ongoing discussions at ECOFIN and other levels regarding wider financial stability issues. I am sure the rate of progress that is being made on issues like the change in economic governance will be adverted to at the European Council meeting. Various issues are being pursued at ECOFIN level specifically.
Deputy Enda Kenny: The Taoiseach mentioned that no firm arrangements for a trade mission to China have been made to date. Is there a fix on that? Is it likely to take place before the middle of the year, or at the back end of the year? It takes a great deal of time to organise the logistics of these things and to receive confirmation from both sides that they can make arrangements to meet. What sort of emphasis is surrounding this trade mission? Will there be an emphasis on technology, food or other areas where we have an interest with China?
The Taoiseach: No firm arrangements have been finalised, as the official reply indicates, adverting to the fact that China is becoming an increasingly important trading partner for Ireland, as well as for other countries. We are promoting our interests there but there are no final arrangements regarding impending visits.
Deputy Enda Kenny: In that context, might I suggest to the Taoiseach that he follows through on the proposals put forward by our party and others in respect of international education? There is serious potential in terms of English teaching and education here in Ireland. There have been difficulties in the past regarding visas and a system that might work effectively. However, China is one country where there is enormous potential if it is followed through.
In the context of a trade mission to China, this is something we would support very strongly, and it should be followed through.
The Taoiseach: Obviously international education has been on the agenda for previous trips during the ongoing engagement we have been having in bilateral talks in terms of both trips to China and visits from Chinese delegations to Ireland. There have been significant improvements in terms of the availability of visas for those purposes, and indeed for tourism purposes, for Chinese people coming to Ireland.
[294]As the Deputy knows, an international educational initiative was announced by the Government some months ago. It now forms a more co-ordinated and joined up framework between the Department of Justice and Law Reform, the Department of Education and Skills, the Department of Enterprise, Trade and Innovation and others, which is reflected in the improved arrangements now available.
Deputy Caoimhghín Ó Caoláin: Earlier the Taoiseach mentioned last May in the context of the sign-off by the eurozone Ministers for Finance of the deal he is asking the House to approve later today. In May of this year, German Chancellor Angela Merkel stated that the economic crisis in Europe was an opportunity to "make up for failures that were not remedied in the Lisbon treaty". She went on to say that beyond the economic crisis, “after the shared currency we will, perhaps, dare to take further steps, for example, towards a European army". Those were her words and she is not a small player in the EU context. What are the Taoiseach’s views on the German Chancellor’s comments?
What is the situation in relation to proposed changes to the Lisbon treaty, in the so-called simplified revision procedure, to provide for a permanent bailout fund? Has the Attorney General been consulted about any alteration to the treaty as to whether it might require a referendum or are there concerns from his office to the effect that such would be the import of any change under this procedure that it might compel citizens to seek recourse to the courts?
The Taoiseach: Regarding what Chancellor Merkel had to say, obviously there are issues in relation to matters that have been well articulated and amplified in the intervening period.
The whole question as to how we might proceed by way of a very limited amendment has become clear from President Van Rompuy’s consultations. These indicate widespread support for a very limited amendment that should be given effect through the simplified revision procedure, which in turn implies no change of competence. Based on the form of wording currently being considered, I am hopeful that no referendum will be necessary, but, of course, we cannot be definitive in that regard until there is a final wording.
Deputy Caoimhghín Ó Caoláin: The Taoiseach is hopeful that it will not be necessary. From my viewpoint, I hope the Irish people will have their say so we immediately disagree. When does the Taoiseach expect that the deliberations on any considered change will conclude and will the current Government be making such a determination? Will the Taoiseach be making an announcement in the House before the Dáil collapses on what is intended? Can he give us a timeframe in that regard and to what level has the Attorney General been consulted in all of this? We are mindful of what the Minister of State, Deputy Dick Roche, has been saying in recent days, and he is also hopeful, as is the Taoiseach, that there will be no need for a referendum. Some of us however hope that he does not get his wishes this Christmas, so what can you tell us today?
The Taoiseach: I want to wish the Deputy a happy Christmas as well.
Deputy Caoimhghín Ó Caoláin: Nollaig shona.
The Taoiseach: The Attorney General is, of course, involved in all these matters. I am simply respecting the situation where the Government will make its final decision when it has the final wording. However, based on what we have seen thus far, we believe the limited procedure that is being used for this purpose implies no change in competence. We will finalise our formal decisions and report to the Dáil in the normal way on the outcome of the European Council when we return and we are able to confirm the situation.
[295]Deputy Bernard J. Durkan: In the context of EU trade with China, will the Taoiseach say what emphasis is being placed on the need for the European manufacturing and service sectors to be competitive, having regard to the fairly considerable relocation of many multinational corporations to China and south-east Asia generally?
The Taoiseach: We have been observing the rise of China as a world economic power over the past 20 years at least and it continues to forge ahead. From an Irish viewpoint, we have been indicating in our industrial strategy the need for Ireland to promote science and investment in research, development and innovation and we are seeing continuing significant investment in Ireland as a result. There are aspects of economic activity and indeed parts of manufacturing at the lower end of the scale perhaps where Ireland is no longer competitive, given the wage rates that our people are entitled to expect.
However, we still have a manufacturing base in Ireland and the competitiveness of Irish industry has improved significantly in the past couple of years as a result of the difficult but necessary steps we have been taking. That is reflected both in terms of the stabilisation of the economy, given the contraction that has taken place, and in the fact that our exports are increasing. Indeed, we have exceeded the targets set in our Asian strategy for exports to China over the past decade and we are now seeking to build on a far more substantive activity base to that which was in place ten years ago.
Deputy Eamon Gilmore: I was interested to hear the Taoiseach say that the wording of the proposed amendment has not yet been finalised. A draft wording has been reported in the newspapers. Is that not to be the wording that is to be presented to the European Council meeting? In the event, when does the Taoiseach expect the wording to be finalised and publicly available?
The Taoiseach: The President of the Council will formally put forward a wording and the reply I have given is based on the drafts we have seen thus far. However, when the final wording is presented — I cannot anticipate whether any amendments will be tabled or agreed at the meeting — I am simply observing the necessary protocols in saying that we will evaluate the final wording when it is agreed politically. The wording that President Van Rompuy has been addressing would indicate a limited procedure to us that will not involve a change of competence. On that basis alone, subject to detailed examination, we are very hopeful that a referendum will not be necessary.
9. Deputy Enda Kenny asked the Taoiseach the cost accrued to his Department during November in respect of the Moriarty tribunal; and if he will make a statement on the matter. [46016/10]
The Taoiseach: The cost accrued to my Department during November 2010 was €390,427.
Deputy Enda Kenny: In respect of the Moriarty tribunal, is there any update on when the Taoiseach expects the report to be issued and does he have an estimated figure of the final cost overall?
The Taoiseach: I recently gave the updated cost as of end October, which when added to the figure provided today indicates the full cost thus far. On the completion of its work, the Deputy will be aware that the tribunal recently spent two weeks hearing evidence, subsequent to which Mr. Justice Moriarty indicated to the Department that while it is clear that the tribunal is in [296]the final phase of its work, he must consider Mr. Andersen’s evidence and a number of other matters before mapping out the final stages of that work.
The tribunal was set up by resolution of both Houses of the Oireachtas and is independent in the performance of its functions.
Deputy Enda Kenny: I realise that. I am sure all Members of the House would be anxious that the Moriarty tribunal complete its work as soon as possible. While I realise we cannot give a direction to the judge to do so, it is hoped that the outstanding matters will be dealt with by Mr. Justice Moriarty and the tribunal as quickly as possible. I assume that if and when Mr. Justice Moriarty publishes the tribunal’s findings they will come before this House for discussion.
Deputy Eamon Gilmore: Has clarification been sought from the tribunal on whether public hearings have concluded? We understood that following evidence from the last witness who appeared before the tribunal public hearings would conclude. Has it been confirmed that public hearings are concluded and that it is now only a matter of the tribunal considering the evidence and preparing and bringing forth its report to the House?
The Taoiseach: As I said, the Chairman is independent in his functions. My assumption is that public hearings have concluded. However, Mr. Justice Moriarty must consider that evidence. Whether witnesses will have to be recalled arising out of that evidence I cannot confirm or deny.
Deputy Bernard J. Durkan: Perhaps the Taoiseach will indicate if the total cost of all the tribunals held during the past number of years is known and, if not, when the final bill of cost will be known.
The Taoiseach: We are all agreed that tribunals are an expensive way of carrying out investigations. It is not possible, however, to quantify the overall cost of this particular tribunal until it has concluded its work and third party costs are known. The tribunal has always insisted in response to any queries from the Department that any attempt to quantify third party costs at this point could lead to conjecture and inferences being drawn, which could affect the rights of persons affected by the tribunal’s inquiries. Unfortunately, until matters are completed, the report made and third party costs adjudicated upon, I cannot give that figure.
An Ceann Comhairle: Before coming to the Order of Business I propose to deal with a number of notices under Standing Order 32. I will call on Deputies in the order in which they submitted their notices to my office. I call Deputy Ferris.
Deputy Martin Ferris: I seek the adjournment of the Dáil under Standing Order 32 to discuss the following matter, namely, that workers on the N7 motorway in County Offaly have been forced to take industrial action because they have not been paid since 1 November owing to their immediate employer not having been paid by a major contractor and the need for intervention to ensure that the moneys concerned are paid down to enable those workers receive what they are owed.
Deputy Frank Feighan: I seek the adjournment of the Dáil under Standing Order 32 to discuss a matter of national importance, namely, the continued administration of the Quinn [297]Group and the huge financial costs incurred thereon owing to administration fees and penalties, the viable plan to recover the company from administration and to facilitate full repayment of €2.8 billion to Anglo Irish Bank, which effectively is the Irish taxpayer, the need to secure the future of 6,000 jobs in the Quinn Group and the need for the Minister for Finance to state his views on this issue of national importance and, more important, to state what he intends to do about it.
Deputy Denis Naughten: I seek the adjournment of the Dáil under Standing Order 32 to discuss a matter of urgent national importance, namely, in light of the threat of the imminent closure of the acute psychiatric unit at Roscommon County Hospital, the high dependency unit in Castlerea and-or the mental health day care centres throughout County Roscommon as a result of front line staff shortages, which will have a dramatic impact on the provision of health services throughout County Roscommon and the immediate need for the Government and Minister for Health and Children to lift the blanket ban on recruitment of nursing and front line support staff in order to maintain day-to-day operation of vital health services throughout this country.
Deputy Michael D. Higgins: I seek the adjournment of the Dáil under Standing Order 32 to discuss a matter of national importance, namely, the need for the Minister for Foreign Affairs to respond to the urgent need to provide consular assistance to an Irish citizen and her family. Having been struck down with a severe illness while in Vietnam, she and her family face enormous daily medical costs, including the cost of transfer home by air ambulance, which costs are beyond her and her family. Given our bilateral aid relationship with Vietnam it is essential that the consular services address this urgent situation as an emergency and seek in this regard the assistance of the Vietnamese Government in resolving this matter and also make contact with the Vietnamese ambassador in London.
An Ceann Comhairle: Having consider the matters raised, they are not in order under Standing Order 32.
The Taoiseach: It is proposed to take No. 9c, motion re proposed approval by Dáil Éireann of the EU-IMF Programme of Financial Support to Ireland; No. a5, Credit Institutions (Stabilisation) Bill 2010 — Order for Second Stage and Second and Subsequent Stages; and No. 40, Multi-Unit Developments Bill 2009 [Seanad] — Order for Report, Report and Final Stages.
It is proposed, notwithstanding anything in Standing Orders, that the Dáil shall sit later than 8.30 p.m. tonight and that business shall be interrupted not later than 11 p.m., the proceedings on No. 9c shall, if not previously concluded, be brought to a conclusion after two hours in respect of which the following arrangements shall apply — the speech of a Minister or Minister of State and of the main spokespersons for Fine Gael, the Labour Party and Technical Group, who shall be called upon in that order, shall not exceed ten minutes in each case, the speech of each other Member shall not exceed ten minutes in each case, Members may share time, and the Minister or Minister of State shall be called upon to make a speech in reply, which shall not exceed ten minutes; the suspension of sitting under Standing Order 23(1) shall take place at 1.30 p.m. or on the conclusion of No. 9c, whichever is the later, until 2.30 p.m; Question Time today shall be taken on the conclusion of No. 9c or at 2.30 p.m., whichever is the later and shall be brought to a conclusion after 75 minutes; the Second and Subsequent Stages of No. a5 shall be taken today and the following arrangements shall apply — the proceedings on Second Stage shall, if not previously concluded, be brought to a conclusion at 6 p.m., the opening speech of a Minister or Minister of State and of the main spokespersons for Fine Gael, [298]the Labour Party and the Technical Group, who shall be called upon in that order, shall not exceed 20 minutes in each case, the speech of each other Member 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 speech in reply which shall not exceed five minutes; the proceedings of Committee and Remaining Stages shall, if not previously concluded, be brought to a conclusion at 10 p.m. by one question which shall be put from the Chair and which shall, in relation to amendments, include only those set down or accepted by the Minister for Finance; in the event a division is in progress at the time fixed for the taking of Private Members’ business, which shall be No. 104, motion re proposal to reduce national minimum wage (resumed), Standing Order 117(3) shall not apply and Private Members’ business shall, if not previously concluded, be brought to a conclusion after 90 minutes; and Report and Final Stages of No. 40 shall be taken tonight and the proceedings thereon shall, if not previously concluded, be brought to a conclusion at 11 p.m. by one question, which shall be from the Chair and which shall, in relation to amendments, include only those set down or accepted by the Minister for Justice and Law Reform.
An Ceann Comhairle: There are six proposals to put to the House. Is the proposal that the Dáil shall sit later than 8.30 p.m. agreed? Agreed. Is the proposal for dealing with No. 9c, motion re proposed approval by Dáil Éireann of the EU-IMF Programme of Financial Support to Ireland agreed?
Deputy Caoimhghín Ó Caoláin: It is not agreed.
Deputy Eamon Gilmore: The Labour Party does not agree to the arrangements proposed by Government for dealing with this important matter. This is a motion from the Government asking the Dáil to approve the terms of the EU-IMF deal and all of the contents of the programme documents, which were circulated after the deal was negotiated and concluded.
There are a number of reasons we are opposing this arrangement. First, the motion the House will debate was only circulated at 11.40 last night. It is probably the most important economic motion to be put before the House and it was circulated only late last night, even though it had been talked about in the media and Government spokespersons had been saying since last week that there would be a vote on this today. Second, only two hours are being provided for the debate and the vote on what is the most serious measure brought before the Dáil in a long time and we are required to address the contents of the documents, the restrictions which are being applied, the various conditions for the moneys which are available and the political issue, which is that this is a bad deal negotiated by a Government in its last days that seeks to tie the hands of the succeeding Government for the next three to four years.
Deputy Caoimhghín Ó Caoláin: The time being provided to address this proposition is wholly inadequate. This is an issue of such enormity that I cannot for the life of me understand why such little time is being provided. After one takes into account the contributions by the main spokespersons, the reply by the Minister for Finance, the fact there are three empty seats in the House and the Ceann Comhairle who does not contribute to debate, that leaves 158 Members to share 70 minutes. If they all wished to participate, that would mean 35 seconds each. I do not know how many will want to participate but I have no doubt that it will be much greater than the time provision allows for something of such gravity in terms of its impact on the lives of ordinary Irish citizens now and into the future. This is totally inadequate time provision.
I never wanted to see this proposition but I believed that once the Government was proceeding with it, it had to be brought before the elected Members of this Chamber. I agree that is required but the Taoiseach is not providing adequate time for Members and I cannot agree [299]to the ordering, given the enormity of what is involved and the fact that it will burden our citizens generationally.
Deputy Enda Kenny: I agree with some of the sentiments expressed. Why is the motion on the Order Paper today? Is this because the Government has taken a decision that this should be so? We made a request that this matter would be debated and voted on in the House three weeks ago but it was turned down by the Government. Why are we having a two-hour debate on it today?
The Taoiseach: There has been a detailed debate on this matter. Over two days, we had a debate and statements from parties which set out their positions on it. I made it clear then that it was the Government’s intention to proceed to a budget. The advice is there is no legal obligation here but I believe there is a political imperative, given the attempt to create uncertainty about this matter by suggestions that people would, over the coming months, question the validity of the agreement or whatever that was set down by people engaging in an exercise elsewhere.
The passing of the budget was the first instalment in that matter and the passing of the motion will further reinforce the agreement, if further reinforcement is necessary, but I am determined to send a certain and clear message that this agreement has the support of the House and on the budget, on which the availability of funding under the programme is required, which has been passed by the House through the financial resolutions passed on budget night. It is, therefore, for that purpose I wanted to deal with it in that way to avoid further uncertainty being created by others.
Deputy Caoimhghín Ó Caoláin: The time issue?
Deputy Enda Kenny: I would like——
An Ceann Comhairle: The Deputy is looking for a second bite of the cherry.
The Taoiseach: We have had over two days of discussion on this already. The motion simply sets out the fact that we are acknowledging the terms and conditions upon which the programme is available to us. Parties have set out their positions very clearly in the statements process.
Deputy Caoimhghín Ó Caoláin: That is not acceptable.
Deputy Eamon Gilmore: We did not get the programme documents until the end of that debate.
Deputy Billy Kelleher: The Deputy said he would tear it up.
Deputy Enda Kenny: I am glad the Taoiseach referred to sending out a clear signal, which is important. A few weeks ago we requested that this matter would be debated and voted on in the Dáil and that was turned down. Now it appears on the Order Paper today. However, at the Fianna Fáil parliamentary party meeting on 9 December——
An Ceann Comhairle: The Deputy will have an opportunity when the debate starts to make these points.
Deputy Enda Kenny: This is important. I want to get clarity and I will prove my point.
An Ceann Comhairle: We are turning the Order of Business into——
[300]Deputy Enda Kenny: We are not. This is important and I want to tell the Ceann Comhairle why. The following motion was passed unanimously at the Fianna Fáil meeting: “To add political legitimacy to the agreement and to force the Opposition to take a definitive position on the matter, that the Memorandum of Understanding between the Irish Government and the EU-IMF be put to Dáil Éireann for approval.” That was unanimously endorsed by the Fianna Fáil Party, which is its right. However, according to the Fianna Fáil statement, “Supporting the motion, An Taoiseach and Uachtaráin Fianna Fáil said, ‘The Memorandum of Understanding has been put in place legally, legitimately and in the national interests of this country’——
An Ceann Comhairle: The Deputy is holding up the commencement of the debate.
Deputy Enda Kenny: I will prove my point. The statement continued, “However, Fine Gael, the Labour Party and Sinn Féin continue to try to make the public believe that there is an easy way out of the country’s funding crisis. Given the seriousness of the situation——
An Ceann Comhairle: The Deputy is quoting from a document, which is inappropriate on the Order of Business.
Deputy Enda Kenny: I want to make a point to the Ceann Comhairle. Will he give me two minutes?
An Ceann Comhairle: I have allowed the Deputy in briefly
Deputy Enda Kenny: The Ceann Comhairle has not.
An Ceann Comhairle: I should not have done so. However, out of courtesy, I allowed him in.
Deputy James Reilly: Let the Deputy finish.
Deputy Enda Kenny: I want to make my point. I will sit down when I make my point.
An Ceann Comhairle: I have to put the question and we must decide the Order of Business.
Deputy Enda Kenny: Yes, and I will not cause any more obstruction. I want to make this point.
An Ceann Comhairle: We have to decide the Order of Business and the points the Deputy is making now can be adequately made when the debate commences.
Deputy Enda Kenny: I only have ten minutes.
An Ceann Comhairle: I will give the Deputy 20 seconds to conclude.
Deputy Enda Kenny: The Taoiseach said that he challenged the other parties to come clean and outline their alternative. He stated, “Given the seriousness of the situation, I do not believe this myth can be allowed to continue unchallenged. I was delighted to support this motion and look forward to the debate in Dáil Éireann next Wednesday”. Last Thursday when I returned from Shannon, when I made the point to the Minister for Finance, who was sitting in the Taoiseach’s seat, that the IMF had suspended judgment on this deal because of the motion tabled by the Fianna Fáil parliamentary party, he said, “There is no decision of the Fianna Fáil parliamentary party. The Government has decided to submit the general arrangements to political approval next week”.
An Ceann Comhairle: We have to move on.
[301]Deputy James Reilly: This is about honesty and integrity.
Deputy Enda Kenny: Hold on. The Minister, who is determined to be the worst Minister for Finance in the EU two years running, told the House there was no decision of the Fianna Fáil parliamentary party and the reason we are having the debate is the Government wanted to have it, even though it was refused three weeks ago.
Deputy Frank Feighan: What about the national interest?
Question put: “That the proposal for dealing with No. 9c be agreed to”.
The Dáil divided: Tá, 81; Níl, 72.
| Tá | |
| Ahern, Bertie. | Ahern, Dermot. |
| Ahern, Michael. | Ahern, Noel. |
| Andrews, Barry. | Andrews, Chris. |
| Ardagh, Seán. | Aylward, Bobby. |
| Behan, Joe. | Blaney, Niall. |
| Brady, Áine. | Brady, Cyprian. |
| Brady, Johnny. | Browne, John. |
| Byrne, Thomas. | Calleary, Dara. |
| Carey, Pat. | Collins, Niall. |
| Conlon, Margaret. | Coughlan, Mary. |
| Cowen, Brian. | Cregan, John. |
| Cuffe, Ciarán. | Curran, John. |
| Dempsey, Noel. | Devins, Jimmy. |
| Dooley, Timmy. | Fahey, Frank. |
| Finneran, Michael. | Fitzpatrick, Michael. |
| Fleming, Seán. | Flynn, Beverley. |
| Gogarty, Paul. | Gormley, John. |
| Hanafin, Mary. | Harney, Mary. |
| Haughey, Seán. | Healy-Rae, Jackie. |
| Hoctor, Máire. | Kelleher, Billy. |
| Kelly, Peter. | Kenneally, Brendan. |
| Kennedy, Michael. | Killeen, Tony. |
| Kitt, Michael P. | Kitt, Tom. |
| Lenihan, Brian. | Lenihan, Conor. |
| Lowry, Michael. | McEllistrim, Thomas. |
| McGrath, Mattie. | McGrath, Michael. |
| McGuinness, John. | Mansergh, Martin. |
| Martin, Micheál. | Moloney, John. |
| Moynihan, Michael. | Mulcahy, Michael. |
| Nolan, M.J. | Ó Fearghaíl, Seán. |
| O’Brien, Darragh. | O’Connor, Charlie. |
| O’Dea, Willie. | O’Donoghue, John. |
| O’Flynn, Noel. | O’Hanlon, Rory. |
| O’Keeffe, Batt. | O’Keeffe, Edward. |
| O’Rourke, Mary. | O’Sullivan, Christy. |
| Power, Peter. | Power, Seán. |
| Roche, Dick. | Ryan, Eamon. |
| Sargent, Trevor. | Scanlon, Eamon. |
| Smith, Brendan. | Treacy, Noel. |
| Wallace, Mary. | White, Mary Alexandra. |
| Woods, Michael. | |
| Níl | |
| Allen, Bernard. | Bannon, James. |
| Barrett, Seán. | Breen, Pat. |
| Broughan, Thomas P. | Bruton, Richard. |
| Burke, Ulick. | Burton, Joan. |
| Byrne, Catherine. | Carey, Joe. |
| Clune, Deirdre. | Connaughton, Paul. |
| Coonan, Noel J. | Costello, Joe. |
| Coveney, Simon. | Crawford, Seymour. |
| Creed, Michael. | Creighton, Lucinda. |
| Deasy, John. | Deenihan, Jimmy. |
| Doherty, Pearse. | Doyle, Andrew. |
| Durkan, Bernard J. | English, Damien. |
| Feighan, Frank. | Ferris, Martin. |
| Flanagan, Charles. | Flanagan, Terence. |
| Gilmore, Eamon. | Hayes, Brian. |
| Hayes, Tom. | Higgins, Michael D. |
| Hogan, Phil. | Howlin, Brendan. |
| Kehoe, Paul. | Kenny, Enda. |
| Lynch, Ciarán. | Lynch, Kathleen. |
| McCormack, Pádraic. | McEntee, Shane. |
| McGrath, Finian. | Mitchell, Olivia. |
| Morgan, Arthur. | Naughten, Denis. |
| Neville, Dan. | Noonan, Michael. |
| Ó Caoláin, Caoimhghín. | Ó Snodaigh, Aengus. |
| O’Donnell, Kieran. | O’Dowd, Fergus. |
| O’Keeffe, Jim. | O’Mahony, John. |
| O’Shea, Brian. | O’Sullivan, Jan. |
| O’Sullivan, Maureen. | Penrose, Willie. |
| Perry, John. | Quinn, Ruairí. |
| Rabbitte, Pat. | Reilly, James. |
| Ring, Michael. | Sheahan, Tom. |
| Sheehan, P.J. | Sherlock, Seán. |
| Shortall, Róisín. | Stagg, Emmet. |
| Stanton, David. | Timmins, Billy. |
| Tuffy, Joanna. | Upton, Mary. |
| Varadkar, Leo. | Wall, Jack. |
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Emmet Stagg and Paul Kehoe.
An Ceann Comhairle: Is the proposal for the suspension of the sitting under Standing Order 23(1) agreed to? Agreed. Is the proposal for dealing with No. a5 agreed to?
Deputy Enda Kenny: It is not agreed. I find it absolutely extraordinary that the Government would actually have the audacity to come in here and expect that the Credit Institutions (Stabilisation) Bill 2010, containing 77 sections, would go through by 10 p.m. tonight. This Bill will allocate to the Minister for Finance the most powerful positions in finance ever given to any Minister in any government in the history of the State.
Deputy Finian McGrath: Che Guevara.
Deputy Enda Kenny: All he has to do is to consult with the Governor of the Central Bank.
Deputy Billy Kelleher: Hugo Chavez.
Deputy Enda Kenny: If Deputy Ó Caoláin had his way, he would be talking about Mr. Adams being in the Department of Finance. This is quite extraordinary.
Deputy Shane McEntee: Fianna Fáil will need him for the technical group.
[303]Deputy Enda Kenny: This allocates extraordinary powers to the Minister for Finance. It is not possible from any common sense perspective to deal with a Bill of this complexity on this day. It is just not possible to do it. We have had examples before of rushed legislation not standing up. We have had a situation where the Government did not fully provide the facts in respect of the bank guarantee. It was very reluctant to talk about the progress being made by the IMF as it approached Ireland. We now have this Bill giving extraordinary powers to the Minister for Finance.
I know that next week is Christmas week, but we should meet here next Tuesday and deal with this Bill. It is not right to expect——
An Ceann Comhairle: Deputy, you have made your point.
Deputy Enda Kenny: ——that a Bill of this complexity and this range could be dealt with adequately by this Parliament, when our people are expected to fork out over €10 billion in interest every year, due to the carry on and the reckless lending practices of some bankers and some institutions. It is not possible to do it today.
I suggest that we come back here next Tuesday and let us deal with this Bill under some sense of normality and common sense. It will not change the impact of the Bill, but it will at least give the Parliament an opportunity to have a rational debate about something that is very complex, but very serious.
Deputy Joan Burton: The Labour Party objects to this Bill being taken today. This Bill could probably teach the North Koreans a lesson in ministerial powers, because——
Deputy Conor Lenihan: The Deputy would know all about that.
An Ceann Comhairle: Deputies, please. Could we have some silence for the Deputy in possession please?
Deputy Conor Lenihan: That was an own goal.
Deputy Billy Kelleher: A Joan goal.
Deputy Joan Burton: Outside of totalitarian regimes, I do not believe there has been a proposal to give powers like this to a Minister for Finance. We have received legal advice from a number of sources which agree that section 53 is more than likely unconstitutional, because it seeks to replace the law-making powers of the Oireachtas within the Constitution and transfer them to the Minister for Finance.
An Ceann Comhairle: All these points can be made during the discussion.
Deputy Joan Burton: The later Schedules to this Bill provide for the disemboweling of the National Pensions Reserve Fund in two parts; one for the banks and one for spending——
An Ceann Comhairle: We cannot have a debate on this matter on the Order of Business. Standing Order 26 provides for a brief statement on the matter, which I am allowing you, but you are branching into a discussion on the matter.
[304]Deputy Joan Burton: You are interrupting me when I am speaking. The second power in respect of the National Pensions Reserve Fund is a power to the Minister for Finance to devote what he can of that fund to capital expenditure. It is a Fianna Fáil election slush fund.
Deputy Joan Burton: It is proposed to turn——
An Ceann Comhairle: The Chair is on its feet. You will resume your seat. I will suspend the House if you do not resume your seat.
An Ceann Comhairle: You are out of order. Permission is granted on the Order of Business to issue a brief statement on matters such as this, but not a Second Stage speech. The debate on the issue will begin later in the day and you will have ample opportunity then. I have allowed you make your point and I have done the best I can to protect your position.
Deputy Conor Lenihan: With respect, they think they are in North Korea.
Deputy Eamon Gilmore: On a point of order, Deputy Burton was repeatedly interrupted during her contribution.
Deputy Bobby Aylward: She does it here every day.
Deputy Eamon Gilmore: Not once——
An Ceann Comhairle: Deputies, please.
Deputy Eamon Gilmore: Not once, a Cheann Comhairle, did you call order to allow Deputy Burton to make her point.
An Ceann Comhairle: That is not true.
Deputy Eamon Gilmore: It is true.
An Ceann Comhairle: It is not true.
Deputy Eamon Gilmore: It is true. Check the record.
An Ceann Comhairle: Deputy, please resume your seat and allow business to proceed.
Deputy Eamon Gilmore: I am making a point of order.
An Ceann Comhairle: Yes, you have made it. Resume your seat and we will get on with the business of the House.
Deputy Eamon Gilmore: I am making a point of order. You are right in saying, a Cheann Comhairle, that when people make points on the Order of Business, they are required to be brief.
Deputy Eamon Gilmore: Deputy Burton would have been brief if she had been allowed to make her comment, but you did not——
[305]An Ceann Comhairle: That is not true.
Deputy Eamon Gilmore: With respect, a Cheann Comhairle, you did not provide her with the protection from the Chair to which she was entitled.
Deputy Damien English: He is right, a Cheann Comhairle.
An Ceann Comhairle: Deputy, that is an outrageous slur on the Chair.
Deputy Lucinda Creighton: You are there to protect Fianna Fáil.
Deputy Damien English: It is not, a Cheann Comhairle. It is true.
Deputy Joan Burton: May I finish speaking?
An Ceann Comhairle: Yes, very briefly.
Deputy Joan Burton: I made two points about this Bill. Section 53 is clearly unconstitutional because it provides most extraordinary powers to the Minister for Finance.
An Ceann Comhairle: Deputy, you are branching into a discussion on the Bill at this point, which is out of order.
Deputy Joan Burton: The section on the National Pensions Reserve Fund equates to the creation of a slush fund for Fianna Fáil to put into capital projects.
Deputy Joan Burton: It is a slush fund for the Minister’s party.
An Ceann Comhairle: Deputy Burton, will you resume your seat, please? Will you co-operate with the Chair for once?
Deputy Joan Burton: I will finish on this. The provision of these extraordinary powers after a debate of less than four hours on 77 sections and 66 pages is a travesty of democracy. People talk about political reform.
An Ceann Comhairle: Deputy, please. I have advised the Deputy she is out of order.
Deputy Joan Burton: The job of Parliament is to examine legislation.
An Ceann Comhairle: The Deputy is out of order.
Deputy Joan Burton: You are aiding and abetting that.
An Ceann Comhairle: Deputy, you are out of order.
Deputy Joan Burton: Four hours is not enough for this.
Deputy Willie Penrose: Hear, hear.
An Ceann Comhairle: You will withdraw that remark or leave the House.
Deputy Joan Burton: What remark?
An Ceann Comhairle: I am not aiding and abetting.
[306]Deputy Joan Burton: Sorry — are you now going to keep control?
An Ceann Comhairle: You will withdraw the remark.
Deputies: Withdraw the remark.
An Ceann Comhairle: Deputy, resume your seat.
Deputy Kathleen Lynch: On a point of order, a Cheann Comhairle. With the greatest of respect——
Deputy Billy Kelleher: Or the respect of the greatest.
Deputy Kathleen Lynch: ——to allow that type of rabble to continue like that when someone——
Deputy Kathleen Lynch: A Cheann Comhairle, do you hear it?
An Ceann Comhairle: That is not a point of order. Deputy Lynch, resume your seat or we will have to suspend the House for ten minutes.
Deputy Michael D. Higgins: You should suspend it.
Deputy Kathleen Lynch: Do you hear it, a Cheann Comhairle?
An Ceann Comhairle: Yes, I do. I hear the whole House.
Deputy Kathleen Lynch: Then you should stop it.
An Ceann Comhairle: I hear it continuously. I am doing the best I can, and if I had some co-operation we would be more successful.
A Deputy: She did not withdraw the remark, a Cheann Comhairle.
An Ceann Comhairle: An Teachta Ó Caoláin.
Deputy Billy Kelleher: Now we will have brevity.
An Ceann Comhairle: Please, could we have some silence and respect for the Deputy in possession?
A Deputy: It is a slur on the Chair.
Deputy Caoimhghín Ó Caoláin: The Sinn Féin Deputies oppose proposal No. 4 on the so-called Credit Institutions (Stabilisation) Bill 2010. We do so because it underpins the Government’s failed banking strategy and because, despite what the Taoiseach claimed in his responses earlier to Deputies Burton and Gilmore, there is not adequate time to address the reasons this Bill should not be supported. This Bill is being guillotined at all Stages of its scheduling. That is why——
[307]An Ceann Comhairle: The rule about comments on the Order of Business being brief applies to Deputy Ó Caoláin just as it applies to every other Deputy, so I ask him to respect that.
Deputy Caoimhghín Ó Caoláin: Dear God. How many seconds do you think I am on my feet, a Cheann Comhairle?
An Ceann Comhairle: Yes, but let us speak to the issue.
Deputy Caoimhghín Ó Caoláin: It might be too many for some over there, but I can assure them they will be sitting somewhere else after the next general election, and it will not be in here.
Deputy Caoimhghín Ó Caoláin: We will not accept this Order of Business. That Bill is out, and they are out with it.
Question put: “That the proposal for dealing with No. a5 be agreed to.”
The Dáil divided: Tá, 81; Níl, 71.
| Tá | |
| Ahern, Bertie. | Ahern, Dermot. |
| Ahern, Michael. | Ahern, Noel. |
| Andrews, Barry. | Andrews, Chris. |
| Ardagh, Seán. | Aylward, Bobby. |
| Behan, Joe. | Blaney, Niall. |
| Brady, Áine. | Brady, Cyprian. |
| Brady, Johnny. | Browne, John. |
| Byrne, Thomas. | Calleary, Dara. |
| Carey, Pat. | Collins, Niall. |
| Conlon, Margaret. | Coughlan, Mary. |
| Cowen, Brian. | Cregan, John. |
| Cuffe, Ciarán. | Curran, John. |
| Dempsey, Noel. | Devins, Jimmy. |
| Dooley, Timmy. | Fahey, Frank. |
| Finneran, Michael. | Fitzpatrick, Michael. |
| Fleming, Seán. | Flynn, Beverley. |
| Gogarty, Paul. | Gormley, John. |
| Hanafin, Mary. | Harney, Mary. |
| Haughey, Seán. | Healy-Rae, Jackie. |
| Hoctor, Máire. | Kelleher, Billy. |
| Kelly, Peter. | Kenneally, Brendan. |
| Kennedy, Michael. | Killeen, Tony. |
| Kitt, Michael P. | Kitt, Tom. |
| Lenihan, Brian. | Lenihan, Conor. |
| Lowry, Michael. | McEllistrim, Thomas. |
| McGrath, Mattie. | McGrath, Michael. |
| McGuinness, John. | Mansergh, Martin. |
| Martin, Micheál. | Moloney, John. |
| Moynihan, Michael. | Mulcahy, Michael. |
| Nolan, M.J. | Ó Fearghaíl, Seán. |
| O’Brien, Darragh. | O’Connor, Charlie. |
| O’Dea, Willie. | O’Donoghue, John. |
| O’Flynn, Noel. | O’Hanlon, Rory. |
| O’Keeffe, Batt. | O’Keeffe, Edward. |
| O’Rourke, Mary. | O’Sullivan, Christy. |
| Power, Peter. | Power, Seán. |
| Roche, Dick. | Ryan, Eamon. |
| Sargent, Trevor. | Scanlon, Eamon. |
| Smith, Brendan. | Treacy, Noel. |
| Wallace, Mary. | White, Mary Alexandra. |
| Woods, Michael. | |
| Níl | |
| Allen, Bernard. | Bannon, James. |
| Barrett, Seán. | Breen, Pat. |
| Broughan, Thomas P. | Bruton, Richard. |
| Burke, Ulick. | Burton, Joan. |
| Byrne, Catherine. | Carey, Joe. |
| Clune, Deirdre. | Connaughton, Paul. |
| Coonan, Noel J. | Costello, Joe. |
| Coveney, Simon. | Crawford, Seymour. |
| Creed, Michael. | Creighton, Lucinda. |
| Deasy, John. | Deenihan, Jimmy. |
| Doherty, Pearse. | Doyle, Andrew. |
| Durkan, Bernard J. | English, Damien. |
| Feighan, Frank. | Flanagan, Charles. |
| Flanagan, Terence. | Gilmore, Eamon. |
| Hayes, Brian. | Hayes, Tom. |
| Higgins, Michael D. | Hogan, Phil. |
| Howlin, Brendan. | Kehoe, Paul. |
| Kenny, Enda. | Lynch, Ciarán. |
| Lynch, Kathleen. | McCormack, Pádraic. |
| McEntee, Shane. | McGrath, Finian. |
| Mitchell, Olivia. | Morgan, Arthur. |
| Naughten, Denis. | Neville, Dan. |
| Noonan, Michael. | Ó Caoláin, Caoimhghín. |
| Ó Snodaigh, Aengus. | O’Donnell, Kieran. |
| O’Dowd, Fergus. | O’Keeffe, Jim. |
| O’Mahony, John. | O’Shea, Brian. |
| O’Sullivan, Jan. | O’Sullivan, Maureen. |
| Penrose, Willie. | Perry, John. |
| Quinn, Ruairí. | Rabbitte, Pat. |
| Reilly, James. | Ring, Michael. |
| Sheahan, Tom. | Sheehan, P.J. |
| Sherlock, Seán. | Shortall, Róisín. |
| Stagg, Emmet. | Stanton, David. |
| Timmins, Billy. | Tuffy, Joanna. |
| Upton, Mary. | Varadkar, Leo. |
| Wall, Jack. | |
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Emmet Stagg and Paul Kehoe.
An Ceann Comhairle: Is the proposal for dealing with Private Members’ business agreed? Agreed. Is the proposal for dealing with No. 40 agreed? Agreed. I call Deputy James Reilly on the Order of Business.
Deputy James Reilly: At the Joint Committee on Health and Children yesterday I alluded to the practice in the past where hospital pharmacists could do deals with certain drug companies and get branded products cheaply which they would then prescribe within the hospital. Those prescriptions would then go out to general practitioners and patients would remain on those branded more expensive products while cheaper generics were available. I understood this was an issue in the past but I received a phone call from a colleague this morning suggesting it is believed this is ongoing. Will the Taoiseach cover off this issue when the Government introduces the drugs reference pricing Bill? The problem is that patients are being left on expensive medication on which the hospital makes a small saving but on which the State loses heavily because the patient is left on that medication for years.
An Ceann Comhairle: We will inquire about the legislation.
[309]Deputy James Reilly: The Taoiseach informed me at the beginning of this year that this legislation would be delivered on the same finger as the prescription charges Bill, which has come in and which hurts those who are chronically ill.
Deputy Bernard Allen: On the long finger.
Deputy James Reilly: There is no sign of the drugs reference pricing Bill. Will the Taoiseach tell the House if it will come in during the lifetime of this Government?
An Ceann Comhairle: Is there promised legislation in this area?
The Taoiseach: I understand that will be next year.
Deputy Pat Rabbitte: I wish to ask the Taoiseach about two tranches of legislation. When will the Bill to regulate the casino sector be published?
Deputy Michael Noonan: It is for Two-Mile Borris.
Deputy Pat Rabbitte: Has the Bill to ban corporate donations been signed off by the Cabinet? When is it likely to be published?
The Taoiseach: No Government decision has been made in respect of the first matter raised by the Deputy. As the Deputy is aware, a report has been prepared in the Department of Justice and Law Reform on these matters to get a more modern framework for the Gaming and Lotteries Act 1956. There is a question as to whether resort tourism should be catered for in that context as well and that is an issue for a report from the Department.
Deputy Pat Rabbitte: Is the Taoiseach suggesting a Bill is not necessary?
The Taoiseach: No, I have not said a Bill is not necessary. I am simply saying a decision must be made by Government for legislation to be brought forward with regard to these matters. What has been looked at, as the Deputy is aware, is the need to review the whole legislative framework currently governed by 1956 legislation which, I presume, does not take account of the many technological and other advances made in betting. For example, one issue that arose which will require legislation in the new year is to give legislative effect to a budgetary decision to try to capture funds for the Exchequer in respect of Internet betting and betting outside normal bookmakers’ offices or turf accountant arrangements where there are on-course and off-course bookmaking arrangements at the moment.
The matter of political donations is at an advanced stage of preparation and I expect it to be brought for final approval and publication shortly.
Deputy Charles Flanagan: I refer to the Child Care (Amendment) Bill with particular reference to the short period between now and the dissolution of the Dáil. Will the Taoiseach ensure, through his Whip, that this matter will be taken in its entirety? The Bill is on Report Stage at present. The main Opposition party will co-operate and see Report Stage through in a couple of hours if it could be prioritised for the New year.
I have realised there is no other mechanism for me to raise this matter. There is a difficulty with the Department of Transport and the National Roads Authority with reference to the completion of the M7 motorway and payments to workers before Christmas. The Taoiseach is aware of it. Will the Taoiseach discuss this with the Minister for Transport and propose that the Minister act as a facilitator to ensure these workers, of whom there are 70 unpaid since 1 [310]November, might receive their due wages before Christmas? This is an important issue and I call on the Taoiseach to give it his attention.
The Taoiseach: I understand we could complete the Child Care (Amendment) Bill without much difficulty based on the co-operative support of the Deputy and other Deputies. The other issue was raised earlier this morning in the context of changes to sub-contracting legislation. This is being dealt with in the Seanad at the moment and will come here. Unfortunately, it does not have retrospective effect as the Deputy is aware. The ongoing difficulties that arise specifically with regard to this matter and others throughout the country are matters about which we must continue to try to establish what can be done. There is a difficult legal situation in this case, as the Deputy is aware.
Deputy Kathleen Lynch: I support the comments of the previous speaker with regard to the Child Care (Amendment) Bill. It is crucial legislation and we are keen to see it completed as quickly as possible given the “Prime Time” reports on the elderly. The list of published legislation which I received this morning included the Dublin Mayor Bill and the Biological Weapons Bill both of which, I am sure, are crucial tranches of legislation. However, when will we see the mental capacity Bill? It is a good deal more important than those two tranches of legislation.
The Taoiseach: I stated earlier or yesterday that we hoped to have it this session as well, before the beginning of the next session.
Deputy Bernard J. Durkan: I concur with the previous speakers with regard to the payment of sub-contractors. Incidentally, I raised this matter with the Minister some two and a half years ago. It took a great deal of time for the legislation to come before the House and there should be no need to deal with this now.
There are approximately 40 Bills on the published list before the House, some of which have been on the list for three years. The list indicates that, “publication is expected”, “it is not possible to indicate at this stage” or “publication is expected in 2011”. Either 2011 will be an extra long year or there will be little else done except what is contained in this legislative programme. Will the Taoiseach indicate if it will be possible in future to bring forward legislation which is deemed to be urgently required at a given time? Examples include the bail amendment Bill, a matter I and others have raised previously, and the legal costs Bill, which has been also raised previously. Such legislation could have an impact on dealing with crime, in particular organised crime, and the costs accruing to the State arising from tribunals.
The Taoiseach: There is no date for the bail amendment Bill. I expect the legal costs Bill to be published next year.
Deputy Bernard J. Durkan: Another one for next year.
Deputy Joe Costello: On Monday, the Taoiseach met the British Deputy Prime Minister, Nick Clegg, at the British-Irish Council meeting. The bilateral funding arrangement for €7 billion was part of these discussions. What interest rate will be applied by the British to this tranche of funding? What interest rate is likely to be applied to the Swedish and Danish contributions?
An Ceann Comhairle: That may be more appropriate to a parliamentary question.
The Taoiseach: These matters will be debated in a couple of moments.
[311]An Ceann Comhairle: We will move on then.
Deputy Joe Costello: A Cheann Comhairle, I will not get the opportunity to participate in the debate on the forthcoming EU-IMF debate. I do not see why the Taoiseach cannot answer my questions.
An Ceann Comhairle: There is no provision for questions on the Order of Business.
Deputy Joe Costello: My question relates to a meeting that took place between the Taoiseach and the British Deputy Prime Minister at the British-Irish Council on Monday.
An Ceann Comhairle: The Deputy could submit a parliamentary question on the matter.
Deputy Joe Costello: It is quite proper to ask about the outcome of this meeting on the Order of Business.
An Ceann Comhairle: No, it is not quite proper as no legislation is involved. We will move on.
Deputy Joe Costello: It is not just questions about legislation that can be raised on the Order of Business. It can include questions on European Council meetings——
An Ceann Comhairle: If I were to allow questions on the Order of Business about every meeting held, we would be here all day.
Deputy Joe Costello: It is a simple question. I am only looking for a simple answer.
An Ceann Comhairle: Will the Deputy please put down a parliamentary question?
Deputy Joe Costello: That is very unfair.
Minister for Finance (Deputy Brian Lenihan): I move:
This is a difficult time in our country’s history, but we must not give in to the sense of hopelessness that pervades much public comment. Across the country, citizens are getting on with their lives, their jobs and their businesses. Those of us in leadership positions have a duty in these difficult times to engender hope and confidence and to point out our problems are resolvable. The national recovery plan and the fiscal and banking measures we are taking have established the essential framework for this country’s path back to recovery. We now have the means at our disposal to rectify our economic position and lay the necessary groundwork for sustainable growth. Fundamental to this endeavour is the programme of financial assistance we have agreed with the European Union and the International Monetary Fund, IMF.
This motion proposes Dáil Éireann approves the terms of the agreements which comprise the EU-IMF programme of financial assistance and, in particular, the memorandum of economic and financial policies and the memorandum of understanding agreed by the Government. These set out the standards in respect of which a positive evaluation will lead to the disbursement of financial assistance from the EU and the IMF.
The Government agreed to a total package of €85 billion of financial support to Ireland from EU member states through the European Financial Stability Facility, EFSF, and the European Financial Stabilisation Mechanism, EFSM, the IMF’s extended fund facility, EFF, and the bilateral loans from the UK, Sweden and Denmark on the basis of specified conditions.
The EU-IMF programme will include up to €50 billion to cover the day-to-day running costs of the State. Up to €35 billion will support the banking system of which €10 billion will be for immediate recapitalisation and the remaining €25 billion provided on a contingency basis. This €25 billion is being provided to address any potential downside risks that may arise through the course of the programme in our banking system.
The State’s contribution to the €85 billion facility will be €17.5 billion, which will come from the National Pensions Reserve Fund, NPRF, and other domestic cash resources. This means the extent of the external assistance will be reduced to €67.5 billion. As set out on numerous occasions, if drawn down in total today, the combined annual average interest rate would be 5.8% per annum. The rate will vary according to the timing of the drawdown and market conditions. The National Treasury Management Agency has issued a technical note on the borrowing costs of the programme.
The purpose of the external financial support is to return our economy to sustainable growth and to ensure we have a properly functioning banking system. The assistance of our EU partners and the IMF is necessary because of the current high yields on Irish bonds, which have curtailed the State’s ability to borrow. Without this external support, the State would not be able to raise the funds required to pay for key public services for our citizens and to provide a functioning banking system to support economic activity. This support is also needed to safeguard financial stability in the eurozone and the EU as a whole.
The programme for support was agreed with the European Commission and the IMF, in liaison with the European Central Bank, ECB. The programme builds on the bank-rescue policies that have been implemented by the Government over the past two and a half years and on the national recovery plan announced in November. It lays out a detailed timetable for the implementation of the measures contained in the national recovery plan. In other words, [313]the national recovery plan is effectively embedded in the programme. This is a key point that needs to be emphasised, as some have suggested that control has been taken out of the Government’s hands. This is not the case.
The details of the programme are set out in the documents listed in the motion. The key documents that set out the conditionality and the level of monitoring that will be required are the memorandum of understanding on specific economic policy conditionality and the memorandum of economic and financial policies. The proposed support will be provided in quarterly tranches on the achievement of agreed quarterly targets.
The programme has two parts — the first deals with bank restructuring, the second, with fiscal policy and structural reform. The requirement for quarterly progress reports covers both parts of the programme. We have already made good progress on the second part concerning fiscal policy with the implementation of the budget. By the end of the week, we will have made a major step forward with bank restructuring with the enactment of the credit institutions legislation.
The programme for the recovery of the banking system will be an intensification of the measures already adopted by the Government. The programme provides for a fundamental downsizing and re-organisation of the banking sector so that it is proportionate to the size of the economy. It will be capitalised to the highest international standards, and in a position to return to normal market sources of funding. The strong focus in the programme on de-leveraging and downsizing of the banks provides a roadmap for achieving the long-term sustainability and viability of the banking system by aligning the size of bank assets with their capacity to fund on a stable basis.
The next step in this process was taken yesterday with the publication of the Credit Institutions (Stabilisation) Bill 2010 which will be debated later. I propose to have it enacted as a matter of urgency by the Oireachtas by the end of this week. It provides the legislative basis for the reorganisation and restructuring of the banking system as agreed in the joint EU-IMF programme.
The programme endorses the Government’s budgetary adjustment plan of €15 billion over the next four years and the substantial €6 billion front-loading of this plan in 2011. The overall adjustment set out by the Government is made up of €10 billion in expenditure savings and €5 billion in taxes. Our plan, based on the latest macroeconomic forecasts of the Department of Finance, envisages the target of having a deficit of under 3% of gross domestic product will be achieved in 2014. However, ECOFIN has acknowledged the EU Commission’s analysis that a further year may be required to achieve the 3% deficit target. This analysis is based on a more cautious growth outlook in 2011 and 2012 and the need to service the cost of additional bank recapitalisation envisaged under the programme. The Council has extended the timeframe by one year to 2015 and, while it is not now envisaged as being necessary, it is a welcome measure if growth does not materialise as planned.
The programme endorses the structural reforms contained in the national recovery plan which will underpin a return to sustainable economic growth over the coming years. We welcome the support thrown to Ireland by our EU partners and, in particular, by the United Kingdom, Sweden and Denmark which expressed their willingness to offer bilateral assistance. The Government also welcomes the assistance of the IMF.
Since this crisis began, the objective of the Government’s actions has been to return to sustainable economic growth and to protect and create jobs. The programme provides the necessary financial assistance to get us through the difficulties we face. We will emerge from our current difficulties a stronger and fitter economy. Many of our strengths as an economy still remain. We have a well-educated and young workforce, high-quality physical infrastructure, [314]favourable demographics, a pro-enterprise environment and a strong high-technology exporting base. Data available to date point to strong exports growth this year; the Department of Finance forecasts export growth of 5% in 2011. Up to 1.9 million persons are in employment, a fact that is overlooked in the doom-laden public debate. We owe it to the others who are seeking employment and cannot find it to put the necessary conditions in place to return this economy to growth. This is what the Government has been doing.
Ireland is still an attractive place to do business. Eight of the top ten global medical technology companies have a manufacturing base in Ireland. Employment in the sector on a per capita basis is the highest in Europe. Eight of the top ten pharmaceutical companies have operations in Ireland. Throughout the past decade, we invested substantially in infrastructure and achieved major improvements, particularly in the quality of road, rail, air and sea transportation. We have also invested in sport and cultural facilities, as well as the educational sector.
These are all factors that add to our competitiveness. Over the past two years we have regained our competitive edge and our healthy exports are proof of that. The national recovery plan identifies the areas of economic activity which will provide growth and employment, and commits to the retention of our 12.5% corporation tax rate. We have every reason to be confident about the future of this economy. This programme provides the funding and support for the necessary reforms we need to take to ensure our future economic recovery.
It mystifies me that any party in this House could oppose this programme. The suggestion that the Opposition could negotiate a better interest rate from the IMF is laughable. The rate of interest charged by the IMF is calculated using the standard formula which it applies to all countries. This is a standard calculation and it is completely misleading to suggest that it could be renegotiated. Greece sought to have the terms of its loan adjusted in line with our terms. Perhaps the Opposition parties need to have a discussion about this with their opposite numbers in Greece. The truth is that the only renegotiation possible is on the conditionality of the programme, not the interest rates. On the conditionality of the programme, the crucial figures of the €15 billion adjustment are not open to renegotiation. There may be scope for compositional discussion but any compositional variations in the four year plan would required it to be credible. To suggest, as some parties have, that half of the programme or more could be raised by taxation is frankly incredible because of the devastating impact it would have on employment in this economy.
This year alone we have to borrow €19 billion to fund the State’s expenditure. Any party opposing this motion has a duty to set out its alternative to the programme, without which Ireland would have an immediate €19 billion adjustment this year. I commend this motion to the House as the only realistic basis for our path to recovery.
Deputy Enda Kenny: I move amendment No. 1:
Fine Gael recognises the need to sort out the deficit in the public finances created by this Government. We also recognise that the Government’s botched response to the crisis means that external credit lines from the EU and the IMF will be needed until the next Government delivers the policies needed to restore confidence in the Irish public finances and in our financial system.
However, the Government’s so-called recovery plan, which underpins the current EU-IMF rescue package, shows that it has learnt nothing from the crisis of the past two years. We will not restore confidence to our economy unless we credibly cap the taxpayers’ exposure to the banking system, while pursuing new policies to support growth and jobs in parallel to the fiscal adjustments.
The Government’s commitment to continue, and to intensify its failed policies is why the plan in its current form is not workable. In addition, it is why the plan has been greeted with deep scepticism by the financial markets. That is why we cannot support the current agreement. That is also why we welcome the commitment of the EU-IMF to renegotiate, with an incoming Government, aspects of the specific economic policies within the context of our overall support for the deficit reduction targets set out in the agreement.
At the core of the massive loss of confidence in our economy and public finances has been the Government’s commitment of €100 billion to reckless banks: €60 billion in recapitalisation and at least €40 billion from NAMA. The Minister, Deputy Brian Lenihan’s, mantra — that bailing out these reckless banks and their investors was necessary to protect Ireland’s credit rating — proved to be a catastrophic misjudgement. This policy of writing blank cheques for banks has destroyed our country’s credit worthiness.
If it were not for the historical and potential future losses for Irish taxpayers from the bank bail-outs, Ireland’s public finance problems would be judged by the financial markets as being difficult but manageable. The plan asks Ireland to use €10 billion of our National Pensions Reserve Fund, and then potentially to borrow up to an additional €25 billion from the EU and IMF at an interest rate of 5.8% to bail out bank investors and creditors, including those in Anglo Irish Bank.
Between Bank of Ireland, AIB and Anglo Irish Bank alone, there is €25 billion in unguaranteed, unsecured junior debts of €10 billion and senior debts of €15 billion. These debts are not Ireland’s debts. Most of these were temporarily guaranteed by the Oireachtas to provide a period of stability to restructure the banks and to restore confidence, but this guarantee expired last September. Continuing to making the State responsible for the banks’ debts potentially puts an unsupportable burden on taxpayers.
These debts were issued by the banks under private ownership to private investors, including other European banks. A large share of the unsecured senior and junior bonds have now been sold on by the original investors to hedge funds and other risk investors at a fraction of their original value. They are gambling that a weak Irish Government can be strong-armed into paying these bank debts in full. We support a more aggressive bail-in strategy for the banks that forces owners of these debts to participate in the recapitalisation of selected financial institutions.
[316]The Bill published by the Government today — to give the Minister for Finance the powers to write down some of these junior debts in the banks — does not go far enough. There is also a need to negotiate with the senior bond holders to cap further losses for the taxpayer. This can be done while fully protecting the depositors and the functioning of Ireland’s banking system.
This would make the adjustment for the public finances more credible, as well as facilitating a speedier re-entry by Ireland into international capital markets and re-establishing our economic independence, which has been cast away by the current Government.
The Government defends its failure to secure such a deal on the grounds that other European countries and institutions objected to burden sharing by senior bondholders in Irish banks, and fears they had about the impact of such a measure on other banking systems. If such concerns were expressed and are valid, which is arguable, then these countries and institutions should have provided Ireland with the financial incentives and means to pursue further bail-outs.
Offering Ireland nine-year loans at an interest rate of 5.8% to pay off the debts of the banks, many of which are now owned by speculators, is not a fair or credible policy. For example, Iceland has just negotiated a 15-year loan with the UK and the Netherlands, at 3.2%, to pay off some of its own banks’ debts to UK and Dutch depositors. If other countries want Ireland to support the pan-European banking system, then a better deal is necessary.
The Government’s so-called recovery plan, on which the EU-IMF agreement is based, does not offer any credible plan to protect jobs and growth from the effects of fiscal austerity. Our support for a €6 billion adjustment in 2011 was always conditional on the introduction of a parallel plan to stimulate the economy. The recent decision by the European Commission, after being consulted on the Government’s draft plan, to revise down its growth projection for Ireland in 2011 to 0.9% confirms its own lack of confidence in the Government’s growth policies.
Deputy Brian Lenihan: That is a complete misrepresentation.
Deputy Enda Kenny: We have had further down-rating by Fitch and an increase of spread in the bond yields, even though we are not in the markets.
There is nothing in this agreement of the scale or ambition of Fine Gael’s commercially financed new economic recovery authority investment stimulus in water, broadband and energy. There are no cuts in VAT on job-intensive services, no cut in the jobs tax for small businesses and no new measures to get credit flowing for business. Neither does the cut in the minimum wage make economic or social sense. Families must be better off in work than on welfare. Fine Gael proposes, instead, to cut employment costs for business by abolishing the jobs tax of 8.5% on employer’s PRSI on employees with weekly earnings up to €356.
That is why we welcome the commitment of the EU and the IMF to strengthen the agreement in the area of jobs, growth and economic reform. The IMF has confirmed that, as a matter of principle, it is open to our NewERA proposals to finance an investment stimulus in energy, water and broadband through the sale of State assets that are no longer strategic to economic development. When the Fine Gael economic team and I met officials of the IMF and the EU, they made it perfectly plain that, in accepting the overall targets — as we do — of 3%, €15 billion and €6 billion in 2011, they are quite open to discussing again and renegotiating elements of the plan for growth, job investment and a more effective public sector to deliver more effective services. They were very open and asked me to confirm that in writing to IMF headquarters in Washington, which I did. For that reason, we cannot support this plan as currently [317]laid out. We accept the overall targets and I recognise the difficulty of attempting to renegotiate interest rates.
In due course, we will seek a mandate from the people for our strategy and we will be in a position to renegotiate elements of that plan, as the IMF confirmed to us face to face, while recognising that, for the foreseeable future, it will be necessary to avail of some of the money on offer under this agreement. If that responsibility is given to Fine Gael, it is my intention to be able to return to the international bond markets as soon as possible and acquire money at a lower rate.
Deputy Noonan will spell out some ideas on bank restructuring. There is a better and alternative way of doing this.
Deputy Eamon Gilmore: Earlier today, the Taoiseach said this motion is on the agenda today because of a political imperative. It is political. It is a cynical exercise in Fianna Fáil tribalism. In two hours, and with less than 24 hours notice of the wording, the Dáil is expected to debate and vote on the EU/IMF deal. We are doing so, not because the Government has suddenly woken up to the requirements of democracy or the Constitution. This is a purely political exercise for the Fianna Fáil party. This debate, we are told, is about putting it up to the Opposition and making them say how they will run the country without the IMF deal. It is another foretaste of the political posturing we can expect from Fianna Fáil during the election campaign. Fianna Fáil, the Republican Party, is reduced to trying to make political capital out of the fact that it has bankrupted the country, has been forced to seek outside assistance and has been reduced to going cap in hand to the lenders of last resort.
Let us be clear. Such is the mess that Fianna Fáil made of the country that we need outside help. The question is what form of external assistance is agreed and on what terms. Labour’s view is clear. This is a bad deal for Ireland. Because it is a bad deal for Ireland, we will vote against it here and, in the forthcoming election, we will seek a mandate to renegotiate it.
The Labour Party supports the programme’s objectives of achieving fiscal and financial sector stability. We have consistently argued over several years that Ireland faces a three-legged crisis — a banking crisis, a fiscal crisis, and a jobs crisis. We have supported the target of reducing the deficit in line with our obligations as members of the eurozone. We have pointed repeatedly to the need to restore credit in the economy and to fix the banks at minimum cost to the taxpayer. We have said, again and again, that the fiscal crisis and the banking crisis are linked to the jobs crisis and that growth is a vital ingredient in the solution to both.
Our concerns about the deal are not with the objectives or the four key elements of the programme. Our concerns are about the overall structure of the deal, the assumptions that underlie it and whether it will work, as well as with individual components within it.
The test of this deal, therefore, is whether, over the period of the programme, it will result in a return of investor confidence to the point where money will be lent to Ireland at reasonable rates of interest and the banking system will be able to fund itself. In the words of the memorandum, Ireland requires a programme that will “restore domestic and external confidence and thus snap the pernicious feedback loops between the growth, fiscal and financial crises”. That is the stated objective of the programme, but there are strong grounds for doubting that it can achieve that goal.
The programme was constructed in a short period, and in the face of pressure from the financial markets. While Ireland was out of the bond market, the yield on bonds in other eurozone economies increased, such that there was pressure to get the deal done quickly. Because time was short, what we have before us is at best partial and at worst unworkable. This is reflected in market comment, which has questioned the interest rate being applied to [318]the loan, the protection of senior bank debt, the amount, timing and front-loading of the fiscal austerity and the bank-restructuring plan, which lacks clarity in respect of what Irish banking will look like at the end of it.
What is being questioned are the two key assumptions on which the programme is built. The first is that Ireland’s present inability to access the sovereign debt markets is for reasons that can be resolved over a three year period with fiscal consolidation and bank restructuring, making it possible for Ireland to return to the market by 2014, if not sooner. The second is that a recapitalisation of the banking system will automatically lead to the banking system being able to access funding within a short space of time without State or EU/ECB support and that the banks will therefore regain the trust of the markets, function normally and provide adequate access to credit to businesses and households.
If Ireland is to return to the market, then the market must be convinced that the Irish economy can manage its debts. This, in turn, depends on the stock of debt that has been built up, the rate of interest being paid on that debt, and the level of growth being achieved. Growth, in turn, depends on the amount of money being taken out of the economy through fiscal austerity and the extent to which the banking system has been re-organised and can deliver credit to the economy, as well as growth in the world economy and the development of a coherent model for post-crisis growth in Ireland.
While many comments are made about Ireland’s flexibility and historic track record of successful fiscal consolidation, it has to be noted that on this occasion we do not have the capacity to devalue our currency. Moreover, we will export to markets experiencing slower growth and we will come out of a recession induced by a bank crisis. These tend to have a greater long-term impact on trend rates of growth than other types of recession.
Growth is critical to the success of this plan or any viable plan. That is why Labour has highlighted the need for adequate investment in the economy through a strategic investment bank. We have argued that resources must be available for a jobs strategy and against the excessive front-loading of austerity in a €6 billion budget, while accepting that the deficit must be brought under control.
So weak was the Irish negotiating position, and so much ground did Government yield on each issue, that, in the end, we are left with a deal that provides the least possible amount of money, at a high interest rate, with little clarity on how the banking system will lend to the real economy, no bail-in for senior bonds, and an extremely demanding austerity programme drawn up by people who know they will not implement it, and which is 40% front-loaded. In fact, it has been reported in the international media that the IMF itself has doubts about elements of the plan, including the fact that groups of bank creditors are not sharing the burden. It has been suggested that the IMF managed to negotiate with the Commission on the target date for achieving the 3% deficit, achieving an extension of one more year.
This is primarily an Irish problem, and it must be fixed in Ireland. It is also a European problem in which the European Union and the ECB have responsibilities. How was it that European banks were allowed to lend into the Irish property bubble, without intervention from the ECB? Why are European banks being protected from losses in respect of senior bonds while the Irish taxpayer is carrying the can? Europe made its contribution to the problem and must also make a contribution to the solution. It must do so because until there is a solution to the Irish crisis, there will be no overall solution to the euro crisis. That is the reality of inter-dependence. However, some are justifying the deal on the grounds that it will make a profit in light of the high rates of interest that are being charged.
[319]The fact that an IMF bailout comes with conditionality is well known. It is necessary that, for the next three years, the Irish Government will be obliged to work with its lenders on economic and financial policy. The IMF has made clear, however, that this does not remove the element of democratic choice regarding how the core objectives of policy can be achieved. What is also clear is that the next Government will be involved in a process of continual negotiation on the detail of the programme. That will not be easy but it is a task that Labour is ready to take on.
My party will seek a mandate from the people for our vision of what Ireland’s future can be and we will engage with the lenders on the basis of our view of how Ireland can have a prosperous and sustainable economy and a fairer society. We do not subscribe to the view that fairness must always be sacrificed for economic progress. We do not agree that cutting the national minimum wage is the answer to the problems in the labour market. We accept that the public finances must be brought under control but this must be achieved in a manner which is consistent with the broader goal of the programme, namely, that there be room for economic growth.
Fianna Fáil has brought us to the lender of last resort and Ireland has been obliged to apply for a loan. However, the terms and conditions of that loan must be workable. The deal must hang together, with jobs and growth a central part of it. Labour is opposing the motion because what is on offer is a bad deal for Ireland. In the coming election we will seek a mandate to renegotiate the programme.
Acting Chairman (Deputy Charlie O’Connor): The next ten-minute slot will be shared by Deputies Doherty, Maureen O’Sullivan and Finian McGrath.
Deputy Pearse Doherty: Cuirim fáilte roimh an deis labhairt ar an cheist seo inniu. I welcome the fact that this motion has been tabled but I wish to indicate that Sinn Féin will be rejecting it when the vote is called. Deputy Ó Caoláin made repeated requests for a debate on this matter and he was continually informed that there was no need for either a debate or a vote in respect of it. Again, it was a threat by Sinn Féin to bring the Government to the High Court in order to prove that it would be unconstitutional to push through the EU-IMF programme without a vote which caused action to be taken. Letters that were sent by Deputy Ó Caoláin on Tuesday of last week eventually had the desired effect and resulted in the motion before the House being tabled.
Perhaps the Minister might provide me with some assistance as I appear to be missing the final page of his speech. I refer to page 5, which, I presume, refers to this being the cheapest bailout in the world and on which it is stated that the worst is over and that we have turned a corner. It may be the case, however, that all of these slogans have been forgotten and that those on the benches opposite are repenting for making such misleading statements in the past.
The Minister stated that we have every reason to be confident about the future of the economy. I fundamentally disagree with him in this regard. I would love to be in a position to support his assertion but the reality is that we cannot be confident about the future of the economy. The motion before the House and the Credit Institutions (Stabilisation) Bill 2010, with which we will deal later, are both designed to underpin failed strategies on the part of the Government in respect of the banks and the structural deficit. The strategies to which I refer have resulted in the country falling ever deeper into a black hole.
Unless the Government really turns the corner and takes us off the one-way street on which we have been moving for the past two years, we can have no confidence in it. Exaggerated claims have been made in respect of what has been done during the past two years. Essentially, what the Government wants to do is transform the banking debt into sovereign debt. It wants [320]to ask the people who took the hit in last week’s budget — namely, the unemployed and those on the minimum wage or low incomes — to bail out the bondholders in our banks. Those bondholders are gamblers who invested their money in the banks. Had their investments been successful, they would have received nice returns. However, the latter did not prove to be the case and now the Government is asking taxpayers to take the hit. It is for this reason that we cannot have confidence in the current Administration.
Let us consider the trajectory on which the Government has placed the country and on what outside forces are saying. Ireland’s debt has been downgraded by the international ratings agencies. It was downgraded immediately after the budget in light of the austerity measures announced in the latter, and to which Fine Gael and Labour have signed up, and the contents of the national recovery plan. The national recovery plan has been discredited because the European Commission has already extended the timeframe relating to it to five years instead of four. The austerity measures to which I refer are strangling the economy. Our exposure to the debts of the banks means that those in the international bond markets have no confidence that Ireland will be in a position to return to those markets or that they will be able to lend to us. This is because they are unsure as to whether we will be able to repay our debts.
A number of actions must be taken. In the first instance, the banking debt must be separated from the structural deficit. The Minister tried to present the bailout in such a way as to make the IMF and the EU appear like knights in shining armour, riding to our rescue on their white horses and providing assistance to Irish citizens. Nothing could be further from the truth. Let us consider a couple of points. Some €35 billion of the money from the bailout will be ploughed directly into the banks. The yearly interest repayments relating to this amount will be in excess of €2 billion and they will have to be met by Irish taxpayers. By the end of the four year plan, the people will be paying €10 billion per year in interest. That is unsustainable. We cannot make such repayments into the foreseeable future.
We have two options. The first of these involves beginning to default in respect of private investments. Such investments are not State bonds and they should never be considered as sovereign debt. We either default on these private investments, which were made by the bondholders in Anglo Irish Bank, or we continue down the one-way street on which we are travelling and at the end of which is a cul-de-sac. If the latter course is taken, then at some point in the future Ireland will be obliged to default on sovereign bonds. None of us wants this to happen. However, we must make the distinction between private investment and investment in the State.
Earlier today, the Taoiseach indicated that the rate which will apply in respect of the bailout from the European financial stabilisation mechanism, EFSM, will be the standard rate. That is not true. The 3% additional interest that we will be obliged to pay is punitive. Under what is proposed, our partners in Europe will profit from the misery of the Irish people. In July, Commissioner Olli Rehn announced a €200 million additional investment in Latvia. The money in question was paid out in September and the lower interest rate applied in respect of it. The Minister for Finance, who represents Ireland at meetings of the ECOFIN Council, has sold the people out. A banner which read “We serve neither King nor Kaiser but Ireland” was once hung outside Liberty Hall. We did not serve them then and we will not serve them now. People throughout the country are demanding that the IMF be sent home.
Deputy Maureen O’Sullivan: I completely accept that we need money because the consequences of not having the resources necessary to pay bills, wages and the money due to social welfare recipients are just too horrific to imagine. However, there are too many harsh conditions attached to the bailout. I refer, in particular, to the interest rate which will place enor[321]mous pressure on the country in the context of meeting repayments. Between one quarter and one third of the entire tax take will be required in order to service the interest payments on the loan we have been given.
I am of the view that Ireland is being used as a test case in the context of future potential disasters within the eurozone. We are being obliged, unjustly and unfairly, to pay for the mistakes made by the banking sectors here and in Europe in respect of reckless lending. We are the puppets dangling at the end of a string and are under the control of elite groups of bankers who are solely motivated by their own interests and preserving their profit margins. I do not believe that the terms “banking” and “altruism” can be used in the same sentence.
How does taking on further debt assist us in repaying our existing debts? Global justice organisations have long been monitoring the impact of IMF policies, particularly in countries such as Mali, Zambia, Honduras and Guatemala where they have had disastrous consequences. The role of the IMF has been to oversee the transfer of wealth from ordinary people to corporate interests. The agreement into which we are entering will lock Ireland into a specific economic model, dominated by policies which impose suffering on the less well off in society. It also will diminish Irish democracy as it will remove aspects of economic decision-making. Why have the issues of leaving the eurozone and default been dismissed so readily? Why do we not ensure that Ireland has a proper stake in the Corrib gas field and other natural resources estimated to be worth in excess of €400 billion? Will this mean selling off profitable and successful assets such as the ESB and Coillte? It is interesting that a former Taoiseach is chairperson of the International Forestry Fund, which is likely to make a bid for Ireland’s forests. Last year, Members were told that we had turned the corner but it looks as though it was into a cul-de-sac. Ireland will recover but it will be in spite of this measure and not because of it.
Deputy Finian McGrath: I thank the Acting Chairman for the opportunity to speak on this hugely important debate on the European Union-IMF financial support package. It is a sad day for Ireland to find ourselves in this position. I have major concerns about this deal, as have many of my constituents in Dublin North-Central. This bailout deal is punitive, cruel and ultimately not viable. The debt servicing alone will cripple the economy for generations to come. It is abundantly clear that our so-called European partners have taken the opportunity to force this bailout on our country with exorbitant interest rates and ultimately will use of the bailout as a stick with which to enforce Ireland’s economic policy and reduce its sovereignty. Our country needs leaders to stand up and renegotiate a fair deal for the Irish nation. For example, Iceland has renegotiated a new deal which improves on the one rejected by 91% of Icelandic citizens. It has secured a reduction in interest rates from 5.55% to 3.2% on average. The agreement reached also maintains a ceiling on repayments to a share of its economic output.
As a small peripheral economy, Ireland is being squeezed. While we must take responsibility for a failed regulatory system, a failed financial system and for a Government that allowed the banks to be run as casinos, we are not obliged to take full responsibility for reckless and greedy investors in Irish financial institutions or for gamblers who operated the system in the knowledge that all their bets were guaranteed regardless of the odds. Finally, as a sovereign people, we can say “No” to a debt that cripples us. According to the figures of the Bank for International Settlements, the banks of the periphery owe the banks of France and Germany more than €973 billion. This bailout is not for Ireland but is for the banks of France and Germany and the Irish cannot pay this bill.
Minister of State at the Department of Foreign Affairs (Deputy Dick Roche): I am unsure whether that was Deputy Doherty’s maiden speech. It was a fine speech. Unfortunately he rather destroyed it in the last few seconds. However, it was a fine speech nonetheless.
[322]Deputy Pearse Doherty: Is the Minister of State projecting——
Acting Chairman (Deputy Charlie O’Connor): The Minister of State, without interruption.
Deputy Dick Roche: I wish to focus on two issues.
Deputy Aengus Ó Snodaigh: The Minister of State is encouraging interruptions.
Deputy Dick Roche: My remark was not patronising but was a genuine comment. The Deputy should take a compliment when it is offered to him in this Chamber as they are rare enough.
Deputy Finian McGrath: It was an excellent speech. The Minister of State should leave it at that.
Deputy Dick Roche: I wish to take up and deal with two points. The first has been the response, led oddly enough by the main Opposition party, to the EU-IMF facility. Second, I wish to comment on the very loose talk in Ireland for the best part of two years on the rather emotive topic of burning bondholders. The approach adopted by Fine Gael over the weekend on the EU-IMF bailout programme and its attempt to justify its position strike me as bordering on the bizarre.
Deputy Michael Noonan: The Minister of State is out of touch.
Acting Chairman (Deputy Charlie O’Connor): The Deputy will have his chance later.
Deputy Dick Roche: A series of Fine Gael spokespersons basically have argued that they could renegotiate a better deal with the EU and the IMF on the basis that Deputy Kenny has some sort of friendship or relationship with the German Chancellor. I note that Deputy Kenny rather retrieved his position of last week in his earlier contribution when he spoke of how difficult it would be to vary interest rates. The leader of Fine Gael entered Dáil Éireann 35 years ago and became a Member of the House only a short time after Ireland became a member of the European Union. One could reasonably have assumed that Fine Gael, which regularly boasts of being the most European of parties, would have gained some knowledge as to how the European Union works in the meantime.
A central feature of the European institutional arrangements is the independence of the European Commission. Once it takes office, the Commission operates on Europe’s behalf and not at the behest of individual member states, individual political leaders or individual political families. The independence of the Commission as an institution is rightly perceived to be one of the protections of the European framework but in particular on of the protections for small and medium countries. Nevertheless, the central point that has been put forward by Fine Gael over the past five or six days is that its members intend to vote against the EU-IMF facility on the basis that if they are in power next year, they will be in a better position to cut a deal for Ireland. The basis for this particular argument is the proposition that Fine Gael is a member of the EPP and Mrs. Merkel’s party also is a member of the EPP. Consequently, the feeling appears to be that Fine Gael can make a telephone call to Mrs. Merkel and that she will put in the fix on behalf of that party with the Commission. I am disappointed by this line of argument, which has been made repeatedly on the other side of the House. The suggestion gives pot-hole politics an entirely new dimension.
The first point that must be made is that the Commission would resist any attempt from any political leader to push it in a particular direction on purely partisan grounds, regardless of whether it was the Chancellor of Germany or the leader of the Fine Gael Party. The second [323]point is that given the recent focus of the German Chancellor’s comments, anyone who thinks that the German political leadership would willingly load any additional burden on German taxpayers to assist an individual member state is living in cloud cuckoo land. The third point which can be made is that not all members of the European Commission are from the same European party or family as are Mrs. Merkel and Deputy Kenny. One is living in a vain world if one believes that an EPP background alone will persuade Commissioners to do one’s bidding. Most importantly, the suggestion that Fine Gael can put in a fix with the Commission is an attack both on the integrity of the Commissioners themselves and, I suggest, on the integrity of the German Chancellor.
Over the last two days, I attended three different Council meetings in Brussels and the commentary which went around about this particular line of argument——
Deputy Brian Hayes: No doubt the Minister of State was swanning it again.
Deputy Michael Noonan: He was boasting about how wealthy we were as a country.
Acting Chairman (Deputy Charlie O’Connor): The Deputy will get his chance.
Deputy Dick Roche: ——was extraordinary. It was interesting to listen to the amusement and derision generated by the Fine Gael line.
Deputy Michael Noonan: They speak of nothing else but Fine Gael in Brussels.
Deputy Dick Roche: Talk of burning the bondholders is good for cheap headlines but bad for Ireland. As Members are aware, in Irish law, senior bond debt obligations of financial institutions rank equal to deposits and other creditors. The danger of unqualified speculation about burning bondholders was well illustrated following Chancellor Merkel’s comments, when bond yields increased dramatically. Fine Gael became so concerned at that time that Deputy Noonan, who I accept has taken a more nuanced line in this regard than some of his colleagues, including the gentleman sitting to his right, urged the Government to use whatever diplomatic levers were available to get a statement on the matter from the Council of Ministers and we succeeded in so doing. Dr. Garret FitzGerald described the German position, which of course is the same position as the unqualified position of Fine Gael, as being completely destabilising.
Dr. FitzGerald has been to the fore in warning about loose talk on burning bondholders. In August 2009, Dr. FitzGerald commented that the 46 economists who had written to The Irish Times had failed to distinguish between subordinated and senior debt. He made the common sense comment in that particular article that “an attempt to resile from our commitment in respect of [senior debt] could prejudice our capacity to continue to borrow from international markets”. The idea that Ireland could unilaterally resile in any degree from this is ludicrous. This is the point to which Dr. FitzGerald has returned more than once. He went on to ask the common sense question as to who would wish to lend any more to us were we to repudiate our senior bonds. Another former Fine Gael leader and Taoiseach, Mr. John Bruton, issued a warning in more unilateral terms recently when speaking about unilateral default. While backing the line taken by the Minister for Finance, he made the point that “if this generation fails to repay its debts, it would be [the worst] betrayal in the history of the country since the Act of Union in 1801”.
However, people in Fine Gael were not listening to senior counsels who were involved in that party and who have a good track record in this area. When speaking on “Morning Ireland”, Deputy Bruton as late as 29 November was critical of the Government and stated “it is displaying very narrow thinking in shielding bondholders from exposure to [debts]”. Later on the same day on “The Frontline”, Deputy Brian Hayes was asked by Pat Kenny about the IMF-[324]EU negotiations and the question of burning bondholders. Deputy Brian Hayes made it clear where he stood by advocating without equivocation that they all should be burned. He went further, because Pat Kenny asked him specifically——
Deputy Brian Hayes: The Minister of State is watching a lot of television.
Acting Chairman (Deputy Charlie O’Connor): Deputy, please.
Deputy Dick Roche: Mr. Kenny suggested correctly that the EU-IMF team had set their faces against burning the bondholders and that this was a parameter.
Deputy Michael Noonan: He knows more about Fine Gael than most of the lads in the party.
Deputy Dick Roche: However, Deputy Brian Hayes disputed this.
Deputy Michael Noonan: Send in an application form.
Deputy Dick Roche: He suggested that if this was an exclusive deal with the IMF, that would not be the position but unfortunately the EU sold out on the issue. His view, not for the first time, was entirely misrepresenting the position taken by an international body.
I suggest that Deputy Hayes, in the time between now and Christmas, might pick up a document, “Default in Today’s Advanced Economies: Unnecessary, Undesirable and Unlikely”, which is an IMF publication. The head of the ECB also agrees very firmly with the assessment of Deputy Hayes. In the European Parliament recently Mr. Trichet said finance Ministers were sticking closely to the precedents set by the IMF in dealing with possible sovereign defaults. He told the Parliament Europe’s policies would be fully consistent with IMF policy and practices.
To be fair, the leader of the Labour Party has been one of the first people seeing the difference, unlike Deputy Hayes. When Deputy Joan Burton said she was in favour of burning the bondholders, it was clear that Deputy Richard Bruton was not in favour. Speaking on “Morning Ireland”, he said we cannot and should not default and he made the same point today. The reality is that the grinning Member opposite is very good at getting a high profile and making commentary which he knows makes absolutely no sense.
The idea that Mrs. Merkel has or would ever pick up the telephone and have a quiet chat with a member of the Commission and put in a fix is gombeen politics of a high order. Chancellor Merkel and Finance Minister Schaeuble have made a politically populist point that taxpayers cannot be called on to shoulder burdens and made the same point again yesterday that they would not tolerate——
Deputy Michael Creed: The Minister of State is asking the taxpayer to shoulder the whole burden.
Deputy Dick Roche: I know that the truth hurts but a tiny bit of forbearance is needed. The European Central Bank, the IMF and various senior spokespersons from across the Union have made the point that the populist and uncomplicated line which has been taken by Fine Gael, namely, that everybody should be burned, is a nonsense policy.
I will return to the first point I made. The idea that European policy will be established within the EPP family is a facile approach to a debate of this importance in this country. It is ludicrous in the extreme to suggest the European Commission will be bid to do the wants of any individual party on this issue. It is undermining a position which Fine Gael has taken over [325]all the years of our membership about protecting the independence of the Commission. To suggest that, somehow, the Commission can be undermined for political reasons is a policy, attitude and boast that will come back to haunt it.
Acting Chairman: Deputy Noonan is sharing time with Deputy Hayes and will have my full protection.
Deputy Michael Noonan: The Minister of State, Deputy Dick Roche, has made the same mistake as all former bureaucrats. He confuses the bureaucracy with the Council of Ministers. The decisions on the bailout were made by ECOFIN. When the Minister, Deputy Brian Lenihan, had to have a conference call on the Sunday night with ECOFIN, it made the decisions and then, on the following Sunday, when he had to fly to Brussels to a special meeting, it was to a meeting of ECOFIN. It makes the decisions. The Commission makes proposals and carries out the decisions of the Council of Ministers. The Minister of State’s great defence of the bureaucracy which might enhance him in Brussels sounded more like a job application for the Commission rather than having any relevance to this debate.
Deputy Dick Roche: The only one is the one mentioned by the Deputy.
Deputy Michael Noonan: This deal is a very bad deal and in one respect it is a downright obscenity. Ireland’s sovereign debt was manageable, but once the banking liabilities incurred by the Government were added to the sovereign debt the situation could no longer be sustained. That is why Ireland could no longer borrow in the markets and why the IMF and the EU are bailing us out. The direct cause of the banking crisis and the bailout is the Government’s banking policy which has led directly to the IMF and EU bailout which we are now discussing.
It is worth recalling the liabilities of the Irish banks which the Government decided to cover since September 2008. They comprise €440 billion of eligible institutions guaranteed under the CIF and ELG schemes; €80 billion of property and associated impaired loans from the banks to be purchased by NAMA in exchange for Government guaranteed bonds; and €31 billion upfront capital support in the form of promissory notes and ISS which has brought the general Government deficit to 32% of GDP, against a 2010 forecast of 11.9%.
The bailout plan has increased the debt burden for the Government and has led to sovereign downgrades. The terms of the bailout insist that a further €17 billion of loans be transferred to NAMA by the end of the year. It has signalled that there will be additional discounts on this tranche of loans, so a considerable additional cost to the Irish treasury will be added to the €33 billion.
There are increased market tensions arising from the bailout, which may add further to Ireland’s debt burden, with increasing concerns that the position will become unsustainable. Despite all this, the Government failed to negotiate a burden sharing arrangement for non-guaranteed bank debt as part of the bailout arrangement. Ireland’s commitments on sovereign debt and debt under guarantee must be honoured in full. What legal or moral compulsion is on Ireland, however, to honour in full debt incurred by Irish banks when there was no State involvement in the arrangements? These loans were entered into freely by willing lenders and borrowers with absolutely no State participation. The interest rate charged represented the risk at the time and there never was a State liability. It is obscene that liability for these loans is now being transferred to the Irish taxpayer, in many respects to the poorest of the Irish taxpayers.
There is €10 billion of subordinated debt in Irish banks and €15 billion of non-guaranteed senior debt. The Irish Government and the taxpayer has no liability whatsoever for these debts, but the bailout deal is now forcing them to accept liability because it puts this imposition on them. In the budget the Minister for Finance reduced social welfare payments, punished the [326]blind, disabled, widows, carers and the unemployed and he taxed the poorest at work, and for what? It was so that the taxpayer can take on liability for debts the country never incurred and arose from private arrangements between private institutions. What a disaster and an obscenity. How can the Government stand over it? How can our European colleagues stand over it? When the deal was agreed, there was an attempt to justify it because any re-negotiation of bank debt in Ireland could have a major adverse effect on banks in Germany, France and the UK that lent to Irish banks. This consideration may have been valid some time ago but it is no longer valid.
The latest available bank data shows that Irish guaranteed bank debt has been sold on at a discount to hedge funds in the USA, the UK and Luxembourg, as well as to smaller speculative investors. If the Minister of State is interested in the data, he will find it through Clearstream and Euroclear. He can track the sale of bonds at discounts. They are no longer being held by European banks that lent the money in the first instance. Rather, they are now in the possession of hedge funds and the Minister of State can find their names on the two websites to which I referred.
Deputy Pat Rabbitte: They will make a killing on it.
Deputy Michael Noonan: If, for example, a hedge fund buys Irish unguaranteed bank debt at 80 cent in the euro, it stands to make 25% on its investment if Ireland continues to guarantee to redeem the debt at par. The position has now become indefensible that the Irish taxpayer, even the poorest taxpayers, should be required to underpin the speculation of hedge fund investors.
There must be transparent, open, negotiated burden sharing of bank debt. It must deal with both subordinate debt and non-guaranteed senior debt. If one wants to find the origin of the phrase “burden sharing”, it was Mr. John-Claude Trichet who first used it as chairman of the Paris Club, which was the first international institution involved in the discounting of debt.
If the EU finds this approach unacceptable for fear of a knock-on effect in Europe and if the Irish taxpayer is expected to underpin the banking system in other member states, then where is the quid pro quo? Where was it in the negotiations? The Icelandic Government has negotiated 15 year money at 3.2% from the UK and Dutch Governments for its bank bailout. Ireland is being charged 5.8% and at least one tranche of EU funding has a built-in profit margin of 2.9%.
This is not solidarity or in accordance with the spirit of Article 122 of the treaty. The Government’s negotiations have led to a very bad result and deal. The deal needs to be re-negotiated and Fine Gael, in the election, will look for a mandate to do so.
Deputy Brian Hayes: Since September 2008, every statement by the Minister on the banking situation has proved to be incorrect. Every estimate of the final cost has had to be revised upwards. It has now reached such staggering levels that the solvency of the State itself has been called into question. As Professor Kelly said recently when writing about this crisis, we are now depending “on the kindness of strangers”. The Government’s response to the emerging crisis in the State’s finances this autumn has exactly mirrored its response to the banking crisis. It continued to deny there was a problem, even though nobody was prepared to lend money to it other than at high rates. In recent weeks, the Taoiseach and the Minister for Finance deceived their own Cabinet colleagues and treated the Irish people as fools. Every citizen of this Republic has a right to be angry with this Government’s handling of events surrounding the EU-IMF bailout deal. We are a proud people and we do not like to be made fools of. We [327]do not like our Government to be made eejits of on the international stage, personified most by the Minister of State with responsibility for Europe.
Deputy Dick Roche: When one descends to personal insults, one detracts from one’s argument, even if it is a fatuous one.
Deputy Brian Hayes: Reckless lending——
Acting Chairman (Deputy Charlie O’Connor): Deputy Hayes, without interruption.
Deputy Dick Roche: No, he made a personal comment.
Deputy Brian Hayes: The gross incompetence of the Financial Regulator and the Central Bank and the catastrophic failures of the Government have trashed our economy and brought the country to the edge of bankruptcy. The Government has fractured the basic trust that should exist between citizens and those who govern them. People neither believe this Government nor trust the banks, and with good reason. Far from stabilising the banking system, the Government’s banking policy has fatally undermined confidence in our banks at home and abroad. The President of the European Central Bank, Mr. Trichet, expressed this succinctly in recent times when he said credibility is what matters. Credibility has drained away from the Government and rightly so. Any Government that tries to spin a bailout as a positive development is bereft of credibility and of shame.
The Minister, Deputy Batt O’Keeffe, recently spoke about playing high-stakes poker. I suggest it was more a case of strip poker. The only card the Government had to hold to cover its nakedness was the joker. Having crashed the economy into a brick wall, the Government wants us to forget the crash and talk instead about how the ambulance will help us. No one should be under any illusion about the medicine being dished out in this deal. We should not forget that the Minister for Finance, Deputy Brian Lenihan, wrote and signed the letter of surrender. Our new masters will be checking our wallets every week to see how much cash they can take on foot of the ridiculous deal that has been negotiated by the Government. The Government has been well and truly exposed. The emperor has no clothes. The Government’s banking policy is worth no more than a beaten docket on the floor of the Fianna Fáil tent at the Galway Races. The Government is like our banks — broken and bust. It is time for it to go.
Deputy Dick Roche: The Deputy’s speech contained an impossible cliché.
Deputy Thomas Byrne: I would like to share time with Deputy Michael McGrath.
Acting Chairman (Deputy Charlie O’Connor): Is that agreed? Agreed.
Deputy Thomas Byrne: The vote that will follow this afternoon’s debate will certainly be one of the most important votes since I was elected to the House. I think it will be one of the most important in the history of the Dáil. I am glad the Fianna Fáil Parliamentary Party, and subsequently the Government, agreed to the request made by Deputy Michael McGrath and me that this matter should be brought before the Dáil. It should be noted, for the purposes of the record, that we sent a letter to the Taoiseach saying we intended to pursue this important matter six days before the Sinn Féin solicitor’s letter was sent.
It is noteworthy that since the IMF deal was announced, the Opposition has not used its own time to discuss it. The Government has not done everything right throughout the economic crisis, but it did the right thing in this instance only for the Opposition to say a debate and a vote would be a waste of time. The public, including my constituents, were right to be enraged by the way the Government handled this issue in the middle of November. I hope this debate [328]provides some catharsis at the end of that episode. The manner in which these things were communicated to the public was totally unacceptable. The Government was doing the right thing by the country. It is not always possible for one to play one’s hand in public during a process of negotiation. The public definitely felt aggrieved. I hope this debate and the vote that will follow it will do something for the people.
Last Thursday, when the board of the IMF announced that it intended to postpone its decision as a means of showing respect for the decision of this House, Deputy Kenny came into the Dáil Chamber almost in a panic. He intervened when a division was being called to express his serious concerns about what would happen if the deal failed. The Deputy’s moment of panic shows how much real belief there is within the Opposition. Deputy Gilmore has accepted — for the first time, as far as I know — that a deal is needed but he does not think this deal is the right one. I would describe it as the politics of “yeah but no but yeah but no but yeah but no but”. It is the Vicky Pollard school of politics.
During this debate, not one of the shrill opponents of this deal has spoken about those who are unemployed, those who depend on social welfare, public sector workers or public services. We need to explore what they mean when they say we cannot afford it, starting by setting out what exactly this money will be spent on. Some €10 billion of it will go to the banks, unfortunately. It is possible that this figure will increase to €25 billion. Some €50 billion of it will be used to pay for public services, social welfare, hospitals, schools, gardaí and all the rest. That is a fact. If one says we cannot afford this deal, one is saying we cannot afford our public services. I am not prepared to countenance that.
My form of politics is based on defending the emblems or hallmarks of a cohesive and just society. The Members of this House aspire to defend them, but cannot always do so. That is what this deal is about, in my view. The State, through its public services, should look after the vulnerable. Those who oppose this deal should tell people on social welfare that they are going to take a chance. They should tell public sector workers that they are going to take a chance on their wages. The alternative to this deal is to borrow at 9%, which we cannot afford. If one decides to renegotiate the deal, one will take a chance on the public and on the country.
Rather than elaborating on the positive aspects of the agreement — for example, it mentions improving competitiveness, shrinking the banks at long last, getting lending out and protecting the poor and the vulnerable — I would like to mention an announcement that was made on RTE news this morning. The report in question, which suggested that the interest rate will be three percentage points above the 5.8% rate that has been agreed, was corrected after a time. It was utterly scandalous that an anonymously sourced and inaccurate piece of news which would enrage everybody was allowed to be broadcast. I was shocked by it.
Who is the anonymous source of the information that was given to RTE? Many of those who have placed on the record their opposition to this deal are players in the bond market. Did one of those in the markets who are trying to short the euro, and thereby make money from this crisis, give this inaccurate information to RTE? I understand RTE corrected its report following severe pressure from the Department of Finance. I was in telephone contact with the Department this morning on my way to the Newstalk radio station. This matter is so serious that it deserves to be the subject of a statement from RTE.
We would like a better interest rate. Even if we got €1,000 for everybody in the country, the Opposition would still have a complaint about it. Let us get on with this deal. Let us do it. Let us protect our public services.
Deputy Michael McGrath: I welcome the fact that we are having this debate. It is of fundamental importance to the operation of democracy in this country that the agreement between [329]the EU, the IMF and the Government should be put to a vote of Dáil Éireann. That is why Deputy Byrne and I tabled a motion at a meeting of the Fianna Fáil Parliamentary Party. I believe the Dáil should remain at the centre of Irish politics. It would be an insult to the House if an agreement of such national importance were not put before it for a meaningful debate and a decision. I welcome the fact that we will have a vote on it this afternoon. I thank the Taoiseach and the parliamentary party for accepting the motion in the spirit in which it was proposed and agreeing to this debate.
The agreement with the EU and the IMF gives us certainty about this country’s funding for the next three years. It comes at a price. It secures a funding stream. It gives us some space to work on reducing our budget deficit. We took a significant step in that regard last week when we passed the budget, which provides for savings of €6 billion in 2011.
I would like to pick up on a point that was made by Deputy Byrne. As one listens to the debate, one would think it was all about the banks. Of the €85 billion in question, some €67.5 billion will come from the fund that has been provided. Of that €67.5 billion, some €50 billion will be used for the running of the State. This mechanism will ensure that a replacement source of funding is available when the cash reserves built up by the NTMA expire in the middle of next year. It will enable us to continue to fund social welfare payments and pay public servants, gardaí, teachers, nurses and fire fighters. We owe them a duty to have a clear policy and strategy in place to ensure the State is funded on a stable basis for the next few years.
This plan gives us that opportunity.
There has been a good deal of debate about senior bondholders. The European Union, at present, will not countenance default on senior debt. When the German Chancellor made reference to a new mechanism that would be put in place, we saw how the markets reacted. Subsequently, clarification was given to the effect that any new regime involving burden sharing among senior bondholders would apply only post-2013. The fact is that at present the EU will not entertain a default of senior debt.
As Professor Patrick Honohan pointed out recently, about 5% of total bank debt is accounted for by non-guaranteed senior bonds. It would be wrong, therefore, to characterise the whole debate in terms of the issue of senior debt and defaulting on the senior debt being held by the banks. It appears there is a move within the European Union to put in place a permanent European stability mechanism. That may involve some element of burden sharing even with senior bondholders, but the fact is that such a mechanism is not in place at the moment, and the deal before the House today would not be on the table if the Government insisted on imposing burden sharing on senior bondholders at the present time. That is the reality.
On the issue of the interest rate, we would all like to see this as low as possible. The Spanish ten-year yields yesterday hit 5.54%, which is moving very close to the 5.8% figure contained in this deal. There is growing turbulence in the markets along with question marks about the stability, and the future, of the euro that will have to be dealt with. Countries such as Belgium, Italy, Portugal and Spain are all having to deal with growing concerns about their financial positions, and they are also seeing bond spread increases. The key issue, however, is the alternative to the deal on the table. It would be disingenuous of any politician to seek to misrepresent this deal and attempt to persuade the Irish people that in some way its fundamentals can be renegotiated, because they cannot. The interest rate is not negotiable, and neither is the overall fiscal consolidation of €15 billion nor the achievement of €6 billion in savings in 2011.
Within the parameters of the deal individual elements may be argued about, as well as the details and where the emphasis should lie in terms of taxation increases or expenditure cuts, [330]but the broad thrust of the deal will remain in place and have to be honoured. For any party or politician to make representations to the contrary would be to mislead the Irish people, because it is not possible to fundamentally renegotiate this deal. I have yet to hear a credible alternative being put forward that provides a secure source of funding for this country over the next three years.
In conclusion, we all want to ensure we get back to the markets as quickly as possible. As Professor John FitzGerald pointed out, in a very balanced article in the Sunday Business Post at the weekend, having this facility in place will enable the NTMA to secure short-term borrowing at relatively low interest rates for the country, to ensure we can continue to fund public services and pay social welfare.
Deputy Richard Bruton: The House needs to acknowledge that catastrophic policy mistakes have brought us to this sorry pass, not only the mistakes made by the Government in the lead-up to the crisis in 2008, but the catastrophic mistakes taken in respect of its banking strategy. With every day that passes, the more the public and objective commentators are made aware of that sad crisis that has come upon us.
The level of despondency is such that many breathed a sigh of relief when told the IMF was coming in, believing it would at last rescue them from a Government that was responding in an ad hoc manner, without any coherence as it went along. Others are beside themselves with anger because they see this as a denial of everything we fought to create in terms of the Republic that is ours. The truth is that being in the hands of one’s creditors is not a happy position to be in. The situation has been brought about through profound failure of the political culture that has been afoot in Ireland, particularly over the last decade. It has not served the interests of the general citizen but rather those of too small a group, devoid of a proper respect for citizens’ rights.
There are those who would look on this crisis as an opportunity to peddle failed philosophies. There are those who are advocating that we take a crude anti-European road, which would be a dreadful cul-de-sac for us in terms of recoiling back into an “ourselves alone” philosophy, that simply would fail in this country. Others see this as an opportunity to create deep division and pit the public sector against the private, the employer against the worker and create division within our communities. That again is a blind alley we must avoid.
The Government is right when it says its policies have led us to a point where no one will lend to us apart from the IMF. That is the sad truth, and in that it is right — this is the only option, and there is no other. Some of the conditions being imposed by the IMF and the EU are amply justified. They simply reflect inaction and an unwillingness to reform, over a long period. Let us be honest about this package and approach, however. In my view, it is founded on a narrow orthodoxy prevalent in Europe at the moment, that is underpinned by major weaknesses. It is based on a belief that rescue packages should contain a penal element within them, and bank resolution should not involve sharing the burden among those who invested in the banks. It is built on the belief that there should not be a growth strategy across Europe. Instead it should be all about export growth by the peripheral countries, so that they may work their way out of their problems, against a background of low inflation and a strong euro.
It is also based on a belief that the ECB must rapidly remove its concessionary liquidity at 1%, which in the Irish case is supporting €160 billion — every 1% increase in that would be the equivalent of €1.5 billion extra our community would have to pay for the lending that is outstanding. It is based also on a belief that countries trying to get back into the borrowing markets after 2013 should have a very strong health warning imposed upon their bond issues. We must question the thinking that underpins this strategy. Will it work, particularly when it [331]is being compounded here in Ireland by an Administration in its death throes, which has little ambition about the scope of reinventing Government or about a genuine jobs strategy that could transform the country? Its Members are marking time until they pass on to other work.
We need to create space to ensure this works. We are committed, as anyone entering Government should be, to honour the changes that need to be made to make our country succeed, but it must be on a much more ambitious basis than is being offered by this Government. That is what makes this agreement deeply flawed. It is not based on anything like sufficient ambition in relation to our problems.
There are those who would suggest we do not need to cut our deficit so severely, but I do not accept that. There are those who say we need to increase taxes more rapidly at this time, but all the evidence shows this does not help a country to recover from a deep crisis such as ours. I shall conclude by saying there will be a revisiting of this strategy over time. There has to be, because not only does Ireland have to honour its side of the deal, but there has to be a deal that works. It is in the interests of every European country that Ireland manages its affairs successfully under this agreement and that we are not imposed with a narrow orthodoxy which inhibits our chance to recover.
Deputy Shane McEntee: Just a week ago, my colleague, Deputy Thomas Byrne and I were discussing this on radio. Bringing this forward today, just two weeks after the incident is a Fianna Fáil tactic to enable its canvassers to look for extra votes on the doors when the general election is called, and to ask, in effect, “What would Fine Gael have done?”. I remind Mr. Byrne that in May 2005 the man to my left, Deputy Bruton, informed this House what was happening, and nobody listened to him. I still have the statement. That is the answer to that, and the tactic of trying to wheel us in to what is definitely one of the worst deals any country could ever make is not going to work with the public.
I was asked earlier, when speaking to 40 young students from Ashbourne who had been in the Visitors Gallery, how big a day today is for Ireland. It is a massive day, as their teachers know. It is the day we hand over that for which we fought. It is ironic that on the day Michael Collins came back from England with a deal in regard to our Independence and sovereignty the then leader of the now Fianna Fáil Party walked out and brought his men with him. Michael Collins did not go to England or anywhere else to collect money. It was from the Irish people he got money, for which he gave them all a receipt, be it for two, five or ten shillings. Today, members of the Fianna Fáil Party will walk up the steps and vote to bring English money into Ireland to keep it going. It is said that a week is a long time in politics. Ninety years is a long time politics. The Fianna Fáil Party claim to be Republicans. They are from one breed while I am from another. While it did not accept the deal obtained by Michael Collins, Fianna Fáil is now turning the wheel and is going to vote for it.
Fine Gael has a plan to create 100,000 jobs, which it will put to the people. We have a plan that will ensure the ECB and IMF are out of Ireland as quickly as possible. A child would do better, in terms of the deal done here some weeks ago. Let no Member of this House or business person tell me one cannot renegotiate a deal. The banks are doing it day-in and day-out in terms of writing down loans of €50 million to €20 million. When this day is over the ECB and IMF, who came here not alone to save Ireland but Europe, will have to write off €45 billion of this financial support.
Deputy Kieran O’Donnell: In the brief time available to me, I will address the negotiated interest rate of 5.8%, which not sustainable. It is prohibitive. The question that arises is what is required to secure a decrease in this rate. From my perspective, the key element here is the banking crisis. We must separate sovereign debt from State debt. We must choose between [332]solvency of the banks or solvency of the State. We must deal with the banks. What is required, in terms of going to Europe, is a Europe-wide resolution mechanism to deal with debt restructuring for insolvent banks and involving all bondholders. There is a mood of change within Europe which recognises that the rescue fund may not be large enough and that these issues need to be addressed.
We have €10 billion of subordinated debt and €15 billion of unguaranteed senior debt. Guaranteed senior debt will have to be honoured. If this situation were to arise, it would bring certainty to the banks and would draw a line under the cost to the Irish taxpayer and the Irish State. The bond markets would then take cognisance of this and our interest rates would come down. We could then go back to the EU and renegotiate for a shorter term. This would bring down interest rates and enable us to get back into the market. This is the type of thinking required. The rate being put forward is not sustainable for the taxpayer, the State or for Europe. Europe wants this money repaid.
This Government, which is in its last days of office, is weak and lacks credibility. We need a Europe-wide decision on the issue of restructuring insolvent banks in terms of debt for equity swaps and a range of other measures. We need it now. The incoming Government will have to find a mechanism to bring down interest rates. Fine Gael’s proposals will ensure certainty. We should deal first with the banking crisis, following which we can resolve the interest rate situation. Our economy is fundamentally sound but the banking crisis is dragging it down.
Deputy Michael Kennedy: I wish to share time with Deputy Michael Kitt.
Acting Chairman (Deputy Charlie O’Connor): Is that agreed? Agreed.
Deputy Michael Kennedy: I welcome the opportunity to contribute to this debate. It is important that our EU partners recognise that the Irish Parliament is endorsing the IMF deal signed by the Government on behalf of the Irish people and in the national interest.
I have listened to several contributions from the Opposition side. I deplore the attitude that there is a simple solution or different option open to us. It is ridiculous for any of the Opposition to suggest that they can come up with a simple solution. The reality is that we are spending €20 billion more than we take in tax. Sinn Féin has told us how it would solve the problem. Anyone with a grasp of simple mathematics knows that one cannot spend €50 billion if only taking in €30 billion. Perhaps Sinn Féin propose to rob the banks, as it did in the old days. Clearly robbing Irish banks is not currently a good proposition. Perhaps it proposes to tax people out of existence.
The Labour Party has provided us with a plan for only one year. It acknowledges the need to get to 3% of GDP by 2014 and has set out figures for 2011 only, ignoring the other three years. It has also set out proposals for savings of €4.5 billion, €2.25 billion of which will be raised by way of taxes. Perhaps the Labour Party can explain to the Irish people on whom they will impose this tax and where they propose to find the millionaires. While there were millionaires around in the Celtic tiger days there are not too many of them around now whom the Labour Party could tax significantly.
Perhaps Fine Gael will explain how it proposes to raise its €6 billion. It plans is to sell off State assets next year. In this regard, how could one achieve the best price in the short space of time about which we are speaking? Fine Gael has stated it proposes to bridge the gap on the €6 billion with savings on welfare fraud, which is fantasy economics. It is time the Irish people realised they are being conned by the Opposition.
[333]It has been suggested that this deal could be renegotiated. All informed economists and people involved in high finance, including Mr. Sutherland and previous Members of the Fine Gael Party such as Mr. Alan Dukes and Dr. Garret FitzGerald, have stated that renegotiation is not possible. It is downright insulting to the people for Fine Gael to suggest that if it is in office next year, it could ring up Angela Merkel and have the deal renegotiated. Fine Gael are living in fantasy land.
Any plc can negotiate an overdraft with its bank but to suggest the any new chief executive officer of that plc would get a better deal on the basis of the same balance sheet, assets and liability——
Deputy Ruairí Quinn: Different management.
Deputy Michael Kennedy: Anyone that has ever worked in business knows that is not possible. What galls me is that many Members of this House have never worked a day in their own business and have never written a PAYE or VAT cheque.
Deputy Kieran O’Donnell: Deputy Kennedy should check his sources. I have been self employed for the past 12 years.
Deputy Michael Kennedy: They come in here and lecture people.
Deputy Ruairí Quinn: The Deputy should speak for himself.
Deputy Michael Kennedy: What business experience does Deputy O’Donnell have? Has he ever written a PAYE cheque?
Deputy Kieran O’Donnell: Deputy Kennedy should check his facts.
Acting Chairman (Deputy Charlie O’Connor): Please allow Deputy Kennedy to continue without interruption.
Deputy Michael Kennedy: On Fine Gael’s suggestion that Anglo Irish Bank be closed immediately, who will pick up the €71 billion tab?
Deputy Kieran O’Donnell: Half of it is going in NAMA. The Deputy should check his facts.
Deputy Michael Kennedy: The Irish taxpayer will pick it up. Let us deal with reality.
On the Labour Party plan for the national recovery bank, which proposes to take €2 billion from the National Treasury Management Agency, from where would it get the liquid cash to lend to people? Anyone who knows anything about economics knows that one cannot lend one’s capital. They will have to rob the depositors from AIB and Bank of Ireland. We have learned in the past two months that €21 billion has disappeared from the deposit accounts of both banks. For the Labour Party to suggest that this magic national recovery bank will solve all of our problems is ridiculous and they know it. Let us tell the people the truth.
Deputy Kieran O’Donnell: Now that we have such a bad deal, the Deputy was obviously with the negotiating team.
Deputy Michael P. Kitt: I am grateful for the opportunity to contribute to the debate, which I welcome. I would also welcome the endorsement of the programme by the House, which is important. In my time in the House, I have heard strong criticism of the IMF and I have criticised the organisation, which has always been regarded as the bad wolf. I heard much of the criticism at the Oireachtas Joint Committee on Foreign Affairs, of which I was a member [334]for 20 years. I chaired a sub-committee on overseas development and I served as a Minister for State with responsibility for the Irish Aid programme. There were good reasons to criticise the conditions, for example, imposed on developing countries by the fund. However, the IMF has gone into other European countries, including the UK, our nearest neighbour, and it has been of assistance.
There was a great deal of praise for the organisation on “Morning Ireland” where it was not considered to be as bad as the ECB or the EU. It is interesting that there are various views on the IMF. It was always mentioned in the same breath as the World Bank and people often referred to the difficult conditions it imposed in economic partnership agreements. Some of them did not favour poorer countries as much as they should. However, an €85 billion fund will be provided. Ireland would have had to borrow €50 billion in any event to provide public services. Of the remaining €35 billion, we will provide half and the Minister for Finance stated clearly that €10 billion will be used to recapitalise the banks. That has also been subject to criticism but we have had serious problems in the domestic banking system, which, at its peak, was five times the size of the economy, and it is under severe pressure. It is important that we should address the banking issues as well as the broader economic issues.
The IMF-EU programme of financial support for Ireland is a good deal and it ensures that we have the necessary funds to maintain key public services overseen by the Departments of Social and Family Affairs, Health and Children and Education and Skills, which are big spenders. I refer to views expressed by Irish MEPs in the European Parliament when they discussed this issue. Mr. Gay Mitchell MEP welcomed the arrival of the EU and the IMF and said, “Up until now, credit rating agencies and markets have been deciding what happens to governments so I am glad to see these private sector agencies being replaced by public agencies like the ECB, EU and IMF”. Mr. Jim Higgins MEP claimed that if the IMF had come in two years ago, it would have saved a great deal of pain and repayments. The media is reporting important debates in the European Parliament and they have stated clearly what is happening.
This programme concludes that Ireland requires a strong performance to restore domestic and external confidence and it is important to reorganise the banking sector. The Minister stated that we need to fundamentally downsize this sector and there has to be a programme for growth and job creation. This package and the four-year national recovery plan will put our public finances on a sound footing and will promote job creation. Getting people back to work is the most pressing priority of the Government.
Deputy Michael D. Higgins: I wish to share time with Deputy Quinn.
It is important that we leave this debate with a semblance of hope for the many thousands of people who have been contacting Deputies on all sides, that we tell them there is a future for Ireland and a future for Europe beyond the incredible failure into which we have sunk. A real social Europe can be created. That social Europe is not a common market, but a European union where Article 122 will mean something, which is that countries that have signed the treaties “in a spirit of solidarity” will respond to each other. That is important.
Out of the chaos into which we have been plunged by a Government that was uncaring and incompetent, a real republic can be created. It is not a matter of us having lost something that has to be recovered now. Right through the history of this State we have dodged building a real republic. Such a republic would have, for example, a deliberative discourse where citizens and what they say would count. Put more simply, after this mess, will it be easier for people to feel that their concerns and worries and their aspirations and hopes for the future will be taken into account? That is part of the deliberative discourse of a republic.
[335]Equally, citizens will require that institutions come into existence that are genuinely transformative. It is the difference, for example, between the petty narrow nationalism in the early years of the State and those like Seán O’Casey, James Connolly and others who felt that a republic should be emancipatory and there should be a social floor below which people will not fall in health and housing. We are not hearing that now; we are hearing about a deal that was done rather badly.
If the Government believed in a real republic, it would go out with optimism and it would not operate with evasion. It would not say, “Politics in general has failed. What we need now is a set of celebrities”. It would not say in an insulting way that only young people can envisage where we might go to now. This involves people of all ages. I speak from a position of authority. The Government would not say, for example, that because we have a disgraceful absence of women in this Chamber, this is a matter for young women only. There are those of us who know and respect the older women who took on the burden of feminism here and fewer still, whom can I easily identify, who stood with them in making the case for feminism.
Deputy Ruairí Quinn: Hear, hear.
Deputy Michael D. Higgins: The response in the future involves us all. It also involves a cute evasion — those who say it is not a matter of left or right any more. This is a cop-out. This is to say, “You are afraid to say that a party of the left, the Labour Party, gave its vote in September 2008 against an indiscriminate guarantee, unbounded, from which flows most of these difficulties.” There is a strange hesitation in those would-be opportunists also of the left, who would like to say, “Maybe now in the anger that is there, we could defuse it somewhat; maybe what is required are celebrities, people untouched by the fact that they ever stood for election, people that we might recognise by some kind of competence and so forth”.
Deputy Ruairí Quinn: George Lee.
Deputy Michael D. Higgins: We need to demystify expertise and to hand back information and knowledge to citizens. What is interesting about this notion, and what they are saying is, now at this time when there is a prospect of real change, when the Labour Party, a party of the left offers not just a return to what was there before and what was falling apart, but something that can deliver a real republic as I have described it, the notion is that we all can go somewhere else for wider expression. If this was just some kind of innocence it would be all right. It is evasive philosophically and bad political science.
Those who regard it as political science to say that this Government is the most unpopular in recent history are also upset at the Opposition. So what? Let them do their political science and abandon their evasion and fear of being able to know the difference between right, left and centre. Let them look at the banks, who interests them and who seeks to influence legislation. Let them do a critical examination of the interest groups and, for example, of the group of people identified by TASC, the 50 people who are on each other’s remuneration committees. This is the stuff that is being avoided.
I have listened to various speakers, including from the Opposition, saying that this is a matter of a new political culture. It is far more a matter of moral courage and of people being free. Those who wish to squander this moment of real and effective change and who ask for the votes of the left to be scattered are delaying the moment when we will have a Labour Party-led Government making the changes that are necessary. That is important.
With regard to what was called by a Fianna Fáil backbencher “the package”— I love it — the ECB was not asked or forced to take its responsibility for the €130 billion that had to be dealt with. The negotiations were poor. The European architecture that will be required will [336]in itself require a renegotiated deal, not just for us but in the best interests of the future of Europe.
Deputy Ruairí Quinn: I am the last speaker on behalf of the Labour Party. I wish to put on the record the Labour Party’s full endorsement of the contribution made by its leader, Deputy Gilmore.
The Labour Party recognises reality; it recognised it in the past and over the last two and a half years. We called decisions as we saw them and, sadly, we were right and Fianna Fáil and the Green Party in Government were wrong. That series of errors has brought us to our current sorry state. We recognise the plight in which we now find ourselves. The disastrous policies of the Fianna Fáil Party over the last 13 years have betrayed the Republic, of which we are all so proud. The Fianna Fáil Party has come to an extraordinary point in history, in that its legacy for the future will haunt it for generations. It has betrayed the Republic.
The Labour Party will stand by the Republic and help to have it rebuilt in a difficult and hard time. We recognise the journey that must be travelled, the responsibilities we face and the macroeconomic context in which the economy finds itself. Deputy Gilmore has already said as much, not just in this debate but repeatedly. We dispute, and we did so at the time, the right of a failed Administration that is facing defeat in the ballot box to tie the hands of destiny for future generations beyond the next election. As the Fine Gael Party leader said, we met with the representatives of the IMF and the EU institutions and discussed with them our commitment to the restoration of sound finances in this country and our refusal to be tied in the future by the poor negotiations of an outgoing Administration that is morally and intellectually bankrupt.
I remind Members that it was the rainbow coalition Government in 1997 that left an unprecedented legacy of prosperity, competitiveness and growth that no previous incoming Administration ever had in the history of this State. It squandered it. Ours was the most competitive economy in Europe in 1997. We were earning our way in the world in a way of which Seán Lemass would have been proud. He once said this country is not owed a living by the rest of the world, but this Government has beggared the country to the extent that we are depending on this aid and assistance on difficult terms to rescue ourselves. We will do our duty in the future, as we have done in the past. I hope the Irish people, particularly this generation, will realise that the people on the other side of this House, who proclaim their virtue of republicanism, have destroyed the Republic that was proclaimed in 1916.
Deputy Paul Gogarty: I am sharing time with Deputy Seán Power.
An Leas-Cheann Comhairle: The Deputies have three minutes each.
Deputy Paul Gogarty: When the details of this bailout were leaked by the international press to the Irish media our Taoiseach had an opportunity to tell the country that our European colleagues are bullying and putting pressure on us to protect the eurozone and European stability, and that we would help them as a sovereign nation and member of the Union but we would do so on our terms. That was not done, and it is part of the reason the Green Party announced it is leaving the Government. We believe this Government has reached the end of its shelf life. Once we have done our duty for this country, we will go to the people.
However, in doing our duty we recognise that we must pass this deal. One can argue until the cows come home whether an interest rate of 6.7% from the European Union is unfair or whether the overall rate of 5.8% is a good deal. It was the best deal that could be done in the [337]circumstances. Any leverage we had of a political nature should have been announced beforehand. What is available is now before the people.
To argue that we can somehow partially default on what we owe in the open markets is absurd. We will either have to pay a 9% rate or default. If it is a full default, we will get no more loans and, overnight, the shops will close, the tills will stop ringing, the ATMs will not work and people’s wages will be cut by at least 50%. Do people want that? I do not believe so.
If we partially default, we will first have to extricate ourselves from the euro and float our own currency. That currency would devalue so even if we only owed half of what we had owed previously, it would still cost twice as much because our currency would only be worth half the value of the euro. It makes no sense.
It is fair enough if this country were, like Iceland, not a member of the eurozone and the European Union. Let us consider Argentina, a country with a level of debt similar to what confronts this country. In Argentina, the number of people below the poverty line increased from 30% to over 50% in the period from 2001 to 2004. The country went through a period of massive austerity. In our succession of unfair budgets, our standard of living is gradually being lowered to a realistic level. It is a soft landing. If we wish to play “Texas Hold’em” with our country, we will vote against this bailout. We will risk default and the country falling into a cataclysmic situation. We are guaranteed an income with a 5.8% interest rate over three years. There might yet be a sovereign default, but let it be a default in conjunction with our European Union partners. Otherwise, we will not survive as a nation. It is the patriotic duty of Members of the House not to play politics but to consider the reality of the situation that confronts us and support this deal.
Deputy Seán Power: Regardless of why or how we have come to be discussing this matter in the House today, it is the right option. Many people throughout the country have expressed their views on this motion and many of them have strong views on it. In yesterday’s newspapers I read that the main Opposition party will refuse to support the motion. It gave three reasons for that, one of which was that it had better contacts in Europe and would be in a better position to renegotiate. That is one of the most ridiculous comments I have encountered in recent times.
Last week the Government introduced the toughest budget this country has ever seen. It gave me no pleasure to take money away from thousands of social welfare recipients or to reduce the minimum wage. However, I supported the budget because I believe that such decisive and tough action is required if this country is to recover. While attempts were made in recent years to deal with our difficulties, they have often been too little, too late. The truth is that if we introduced last week’s budget two years ago, we would not be debating the arrival of the IMF. Money will have to be borrowed for the foreseeable future to pay for the running of this country. While we saw interest rates rise throughout the past 12 months and some people felt the markets were behaving irrationally, those markets were sending us a clear message. The message was that they did not believe we were capable of resolving our difficulties on our own. Many of the projections and forecasts that we gave to our European colleagues were changed shortly after they were given.
The arrival of the IMF was one of the blackest days this country has ever seen. We denied for a long time that outside assistance was required, or indeed being sought.
Deputy Ruairí Quinn: Who is the “we” here?
Deputy Seán Power: I am speaking as a member of the Fianna Fáil Party.
[338]Deputy Ruairí Quinn: Thank you. Let the record show that Fianna Fáil is not the nation, just a political party that failed.
Deputy Seán Power: When Patrick Honohan announced on the national airwaves that an offer would be made to the Government, it came as no surprise to the vast majority of our people. The decision of the Government to accept funding from the IMF and the EU was the first real admission that we were no longer able to deal with our own difficulties. It was an admission that past policies had not worked and that help from overseas was now needed.
I have no difficulty with the interest rate being charged by the IMF. We never saw it as being a charity, but we must look at what is being charged by the European Union. When we joined the EEC, the standard of living here was very poor. Schemes were put in place so that the standard of living and the infrastructure of this country could be improved, and we have all witnessed those improvements taking place. The same sort of understanding and support that was available when we joined seems to be sadly lacking now. I cannot understand how the money could not be provided at a more affordable rate than that being sought.
The package agreed with the IMF and the EU is not ideal, but it gives this country the opportunity to deal with its problems and if recovery occurs quickly, we will have the opportunity to re-engage with the markets.
Minister for Finance (Deputy Brian Lenihan): Not surprisingly, this has been a profoundly dreary and dispiriting debate. Deputies need to deal in reality. Our capacity to avoid the pressing and difficult issues is remarkable. Worse than that, the use of our difficult position to score cheap political points is frankly depressing. I heard Deputy Kenny opening his contribution today by announcing that Ireland was bankrupt. That is simply not in accordance with the facts. The State was and is well funded into next year, but the decision to enter the facility was a wise and precautionary decision which ensured that economic continuity is maintained in this country, so that we do not find ourselves in a position of wondering whether the Pass machines would produce or that the State pensions would be paid.
The Government acted prudently throughout these negotiations. The Government was not rushed into these negotiations, but carefully protected its position to ensure, for example, that the question of our corporation tax rate was not on the agenda. The insistence that this programme was necessary only because of the banks is risible. The fact is that €50 billion of the €67.5 billion we are getting from the IMF and the EU will go to the running costs of this State over the next three years. We all know that this problem has been with us since 2008. We all know in this House that there is a need for a budgetary correction, but time and again, reality has been denied by the Opposition parties on this issue. Time and again, a magic solution has been held out to the people which is an illusion. Time and again, every measure the Government brought in to restore the budgetary position has been opposed.
Deputy Arthur Morgan: That is because the Government held out the wrong solution.
Deputy Brian Lenihan: The Sinn Féin solution is to tax at 70% and destroy whatever jobs are left in the country.
Deputy Arthur Morgan: Only those who can afford it.
Deputy Brian Lenihan: We know where that policy of excessive taxation will lead. It is most unlikely that any lenders will lend us any money to fund the State with a policy like that. You know this and you keep misleading people with these foolish economic policies.
Deputy Arthur Morgan: You should not talk about misleading people.
[339]Deputy Brian Lenihan: Excuse me, Deputy.
An Leas-Cheann Comhairle: Please, allow the Minister to make a contribution.
Deputy Brian Lenihan: I am entitled to reply to points that are made in the debate.
An Leas-Cheann Comhairle: Only through the Chair.
Deputy Brian Lenihan: A Leas-Cheann Chomhairle, public expenditure in this country has reached an unsustainable level. That is a fact that any Government must face. If the measures that were taken in recent years had not been taken, our borrowing requirement would have been 20% of our GDP. That is the factual position since 2008. In my budget speech, I set out the analysis of our economic problems that has been accepted by the Government. We accept that public spending had increased on the back of taxes that were not sustainable.
The parties opposite never criticised increases in social welfare provision or spending on public services. Indeed, it was quite the opposite as they called for more. I recall the last election poster from Fine Gael: “More Nurses, More teachers, More Gardaí”.
Deputy Damien English: Based on reform.
Deputy Brian Lenihan: Now they have the audacity to suggest——
An Leas-Cheann Comhairle: Allow the Minister to make his brief contribution.
Deputy Brian Lenihan: ——that we are not reducing numbers enough in the public sector, having campaigned with these expensive posters about more nurses, teachers and gardaí.
Deputy Brian Hayes: These are front line staff.
Deputy Brian Lenihan: I recall the 2002 election when Deputy Noonan led a campaign for compensation of Eircom shareholders. That was utter madness. If the electorate had not scotched that particular promise, God knows where we might be today.
Deputy Brian Hayes: Why does the Minister not throw in 1977 as well?
Deputy Brian Lenihan: That would have been an interesting twist to our banking difficulties. Without the funds in the joint programme, the adjustment that Ireland would require would be much larger.
Deputy Brian Hayes: Decentralisation, e-voting, does the Minister want me to go on?
Deputy Brian Lenihan: The joint programme will supply the necessary funds to assist in the restructuring and recapitalisation of our banking system. It will facilitate the implementation of the necessary budgetary and reform strategies set out in the national recovery plan.
Deputy Damien English: What will NAMA cost us?
Deputy Brian Lenihan: The international team with whom we negotiated the joint programme agreed wholeheartedly with our national recovery plan, and the fiscal and banking measures that we have taken so far. The IMF described our measures as a clear and realistic package of policies to restore our banking system to health and put our public finances on a sound footing.
The interest rate being paid on the loans is 5.8%, on the basis of the market rates at the time of the agreement. This rate was set out on the day of the announcement of external [340]assistance and it remains the interest rate today. The rate of interest charged by the IMF is calculated using the standard formula which it applies to all countries. This is a standard calculation. Greece sought that the terms of its loan be adjusted in line with what Ireland is receiving. This shows the good deal Ireland has negotiated.
In May of this year, the ECOFIN agreed that the European Financial Stabilisation Mechanism would have a margin. This was a general provision based on lending in a last resort situation. It applies to the Irish loan and it will apply to any future loans as well. The interest rate has been calculated at a level to ensure that it does not act as an impediment to economic growth.
This financial assistance is provided at a far lower cost than we would be able to access in the financial markets. At the moment, the yield on Irish Government bonds is over 8% in the secondary markets——
Deputy Brian Lenihan: ——compared to the rate of 5.8% at which we will borrow under this facility.
The agreement provides the terms of a facility under which Ireland can choose to draw down moneys. A future Government is not obliged to avail of any drawdown. Therefore, future executive action of Government is not fettered nor is the legislative freedom of the Oireachtas. Furthermore, a future Government is free to seek moneys from a different source, including the market. My point is that any putative government opposing this joint programme has a duty to set out for the electorate its alternative source of funding for this country over the next few years.
Deputy Ruairí Quinn: And we will.
Deputy Brian Lenihan: There is an obligation on the parties opposite to lay before the people a plan as credible and realistic as the four year plan for recovery the Government has already submitted. The Government’s plan, which is extraordinarily detailed, has not been matched by any equivalent document from the Opposition parties. Instead, we hear vague talk from the Fine Gael Party about their extensive contacts in Europe. Fianna Fáil are members of the European liberal group and we have extensive contacts——
Deputy Brian Hayes: They laugh at you. You are being laughed at internationally.
Deputy Dick Roche: You are the laughing stock.
Deputy Brian Lenihan: You are associated——
An Leas-Cheann Comhairle: Through the Chair. The Deputies will not shout down the speaker.
Deputy Brian Hayes: He was provoking us.
An Leas-Cheann Comhairle: You will either leave the House or you will have some respect for the Chair.
[341]Deputy Brian Hayes: I am respecting the Chair, but he is provoking us and we will reply accordingly.
An Leas-Cheann Comhairle: No, you will not shout down Members.
Deputy Brian Hayes: But he will not——
An Leas-Cheann Comhairle: The Chair will have the argument on that.
Deputy Brian Hayes: You must protect both sides.
Deputy Kieran O’Donnell: A Leas Cheann Chomhairle, could we hear the Minister?
An Leas-Cheann Comhairle: I will insist on order in this House——
Deputy Brian Hayes: You will get it.
An Leas-Cheann Comhairle: ——and I will not be bullied into it.
Deputy Brian Hayes: Neither will I.
An Leas-Cheann Comhairle: Then you will leave the House.
Deputy Brian Hayes: I will not be bullied by anyone.
An Leas-Cheann Comhairle: If you disrespect the Chair, you will leave the House.
Deputy Brian Hayes: You are wasting time. Let him finish.
An Leas-Cheann Comhairle: The Deputy will not address the Chair in that fashion. You will have some respect for the Chair.
Deputy Brian Hayes: I have respect for the Chair. I ask the Chair not to point in my direction.
Deputy Paul Gogarty: A Leas-Cheann Comhairle, he is trying to avoid having to vote.
An Leas-Cheann Comhairle: The Chair will be respected.
Deputy Brian Hayes: The Chair is respected.
An Leas-Cheann Comhairle: Then please remain silent while the Minister concludes his contribution.
An Leas-Cheann Comhairle: I beg your pardon? The Chair will determine——
An Leas-Cheann Comhairle: The Chair will call the speaker, if the Deputy does not mind.
Deputy Brian Hayes: I appreciate that.
Deputy Dick Roche: He is a prat.
Deputy Thomas Byrne: That is unbelievable.
An Leas-Cheann Comhairle: The Minister without interruption.
[342]Deputy Brian Lenihan: Any putative Government opposing the joint programme has a duty to set out for the electorate its alternative source of funding for this country over the next few years. I have referred to various assertions about European contacts that the principal Opposition party has made in the course of this debate. I was about to make the point that the most influential and important contact of the Fine Gael Party is the German Christian Democratic Union and Chancellor Merkel, whose intervention played a large part in the escalation of our bond prices this autumn. I urge Fine Gael to use its influence in that regard.
Deputy Kieran O’Donnell: With due respect, it was because of Government policy on the banks, and the Minister knows it.
An Leas-Cheann Comhairle: Allow the Minister to conclude his contribution.
Deputy Brian Lenihan: I urge Fine Gael to use its influence in that regard.
There has been much commentary about the need for senior bondholders to accept a share of the burden of this crisis. When those who deplore the gradual erosion of the deposit base of the Irish banking system reflect on it, they will see the substantial contribution that was made to that process by the unhelpful level of domestic noise about this matter. Yet again, the principal Opposition party played a leading part in that — in contrast, I must say, to the relatively responsible attitude taken by the Labour Party.
Yesterday, I published the Credit Institutions (Stabilisation) Bill. The draft legislation provides broad powers to the Minister for Finance to act on financial stability grounds to effect swift restructuring actions and recapitalisation measures as envisaged in the programme. That Bill will be debated in the Dáil later today and I propose to answer questions raised on that Bill at that time.
Deputy Damien English: It will be shoved through.
Deputy Brian Lenihan: There is simply no way this country, whose banks are so dependent on international investors, can unilaterally renege on senior bondholders——
Deputy Paul Gogarty: Hear, hear.
Deputy Brian Lenihan: ——against the wishes of the European Central Bank. In any country in which such experiments have taken place, the central bank has stood behind the affected banks throughout the resolution of the resulting crisis. Those who think we could unilaterally renege on senior bondholders against the wishes of the ECB are living in fantasy land.
The idea that somehow there are no costs associated with default is entirely incorrect. This country is hugely dependent on foreign direct investment. These companies have large funds and investments in Ireland and, directly and indirectly, employ a quarter of a million people in this economy. Any default on senior debt and the uncertainty that would cause would undoubtedly have an impact on the future investment decisions of these companies. Subordinated debt bondholders are in a different position, and the legislation we will discuss later has a particular provision in this regard.
Of the €85 billion facility negotiated with the IMF and our European partners, €50 billion is to cover the financing of the State. The facility also includes up to €35 billion for support for the banking system —€10 billion for immediate recapitalisation, with the remaining €25 billion provided on a contingency basis. Deputy Noonan stated that the contingency amount was not sufficient. I must point out that the Central Bank’s statement of 30 September 2010 on the prudential capital assessment review requirements for Irish banks estimated their capital [343]requirements in view of all the elements of the banks’ loan books, including the mortgage loan book.
Question put: “That the words proposed to be deleted stand.”
The Dáil divided: Tá, 81; Níl, 75.
| Tá | |
| Ahern, Bertie. | Ahern, Dermot. |
| Ahern, Michael. | Ahern, Noel. |
| Andrews, Barry. | Andrews, Chris. |
| Ardagh, Seán. | Aylward, Bobby. |
| Behan, Joe. | Blaney, Niall. |
| Brady, Áine. | Brady, Cyprian. |
| Brady, Johnny. | Browne, John. |
| Byrne, Thomas. | Calleary, Dara. |
| Carey, Pat. | Collins, Niall. |
| Conlon, Margaret. | Connick, Seán. |
| Coughlan, Mary. | Cowen, Brian. |
| Cregan, John. | Cuffe, Ciarán. |
| Curran, John. | Dempsey, Noel. |
| Devins, Jimmy. | Dooley, Timmy. |
| Fahey, Frank. | Finneran, Michael. |
| Fitzpatrick, Michael. | Fleming, Seán. |
| Flynn, Beverley. | Gogarty, Paul. |
| Gormley, John. | Hanafin, Mary. |
| Harney, Mary. | Haughey, Seán. |
| Healy-Rae, Jackie. | Hoctor, Máire. |
| Kelleher, Billy. | Kelly, Peter. |
| Kenneally, Brendan. | Kennedy, Michael. |
| Killeen, Tony. | Kitt, Michael P. |
| Kitt, Tom. | Lenihan, Brian. |
| Lenihan, Conor. | Lowry, Michael. |
| McEllistrim, Thomas. | McGrath, Michael. |
| McGuinness, John. | Mansergh, Martin. |
| Martin, Micheál. | Moloney, John. |
| Moynihan, Michael. | Mulcahy, Michael. |
| Nolan, M.J. | Ó Cuív, Éamon. |
| Ó Fearghaíl, Seán. | O’Brien, Darragh. |
| O’Connor, Charlie. | O’Donoghue, John. |
| O’Flynn, Noel. | O’Hanlon, Rory. |
| O’Keeffe, Batt. | O’Keeffe, Edward. |
| O’Rourke, Mary. | O’Sullivan, Christy. |
| Power, Peter. | Power, Seán. |
| Roche, Dick. | Ryan, Eamon. |
| Sargent, Trevor. | Scanlon, Eamon. |
| Smith, Brendan. | Treacy, Noel. |
| Wallace, Mary. | White, Mary Alexandra. |
| Woods, Michael. | |
| Níl | |
| Allen, Bernard. | Bannon, James. |
| Barrett, Seán. | Breen, Pat. |
| Broughan, Thomas P. | Bruton, Richard. |
| Burke, Ulick. | Burton, Joan. |
| Byrne, Catherine. | Carey, Joe. |
| Clune, Deirdre. | Connaughton, Paul. |
| Coonan, Noel J. | Costello, Joe. |
| Coveney, Simon. | Crawford, Seymour. |
| Creed, Michael. | Creighton, Lucinda. |
| D’Arcy, Michael. | Deasy, John. |
| Deenihan, Jimmy. | Doherty, Pearse. |
| Doyle, Andrew. | Durkan, Bernard J. |
| English, Damien. | Feighan, Frank. |
| Ferris, Martin. | Flanagan, Charles. |
| Flanagan, Terence. | Gilmore, Eamon. |
| Hayes, Brian. | Hayes, Tom. |
| Higgins, Michael D. | Hogan, Phil. |
| Howlin, Brendan. | Kehoe, Paul. |
| Kenny, Enda. | Lynch, Ciarán. |
| Lynch, Kathleen. | McCormack, Pádraic. |
| McEntee, Shane. | McGrath, Finian. |
| McGrath, Mattie. | McHugh, Joe. |
| Mitchell, Olivia. | Morgan, Arthur. |
| Naughten, Denis. | Neville, Dan. |
| Noonan, Michael. | Ó Caoláin, Caoimhghín. |
| Ó Snodaigh, Aengus. | O’Donnell, Kieran. |
| O’Dowd, Fergus. | O’Keeffe, Jim. |
| O’Mahony, John. | O’Shea, Brian. |
| O’Sullivan, Jan. | O’Sullivan, Maureen. |
| Penrose, Willie. | Perry, John. |
| Quinn, Ruairí. | Rabbitte, Pat. |
| Reilly, James. | Ring, Michael. |
| Sheahan, Tom. | Sheehan, P.J. |
| Sherlock, Seán. | Shortall, Róisín. |
| Stagg, Emmet. | Stanton, David. |
| Timmins, Billy. | Tuffy, Joanna. |
| Upton, Mary. | Varadkar, Leo. |
| Wall, Jack. | |
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Emmet Stagg and Paul Kehoe.
Question put: “That the motion be agreed to.”
The Dáil divided: Tá, 81; Níl, 75.
| Tá | |
| Ahern, Bertie. | Ahern, Dermot. |
| Ahern, Michael. | Ahern, Noel. |
| Andrews, Barry. | Andrews, Chris. |
| Ardagh, Seán. | Aylward, Bobby. |
| Behan, Joe. | Blaney, Niall. |
| Brady, Áine. | Brady, Cyprian. |
| Brady, Johnny. | Browne, John. |
| Byrne, Thomas. | Calleary, Dara. |
| Carey, Pat. | Collins, Niall. |
| Conlon, Margaret. | Connick, Seán. |
| Coughlan, Mary. | Cowen, Brian. |
| Cregan, John. | Cuffe, Ciarán. |
| Curran, John. | Dempsey, Noel. |
| Devins, Jimmy. | Dooley, Timmy. |
| Fahey, Frank. | Finneran, Michael. |
| Fitzpatrick, Michael. | Fleming, Seán. |
| Flynn, Beverley. | Gogarty, Paul. |
| Gormley, John. | Hanafin, Mary. |
| Harney, Mary. | Haughey, Seán. |
| Healy-Rae, Jackie. | Hoctor, Máire. |
| Kelleher, Billy. | Kelly, Peter. |
| Kenneally, Brendan. | Kennedy, Michael. |
| Killeen, Tony. | Kitt, Michael P. |
| Kitt, Tom. | Lenihan, Brian. |
| Lenihan, Conor. | Lowry, Michael. |
| McEllistrim, Thomas. | McGrath, Michael. |
| McGuinness, John. | Mansergh, Martin. |
| Martin, Micheál. | Moloney, John. |
| Moynihan, Michael. | Mulcahy, Michael. |
| Nolan, M.J. | Ó Cuív, Éamon. |
| Ó Fearghaíl, Seán. | O’Brien, Darragh. |
| O’Connor, Charlie. | O’Donoghue, John. |
| O’Flynn, Noel. | O’Hanlon, Rory. |
| O’Keeffe, Batt. | O’Keeffe, Edward. |
| O’Rourke, Mary. | O’Sullivan, Christy. |
| Power, Peter. | Power, Seán. |
| Roche, Dick. | Ryan, Eamon. |
| Sargent, Trevor. | Scanlon, Eamon. |
| Smith, Brendan. | Treacy, Noel. |
| Wallace, Mary. | White, Mary Alexandra. |
| Woods, Michael. | |
| Níl | |
| Allen, Bernard. | Bannon, James. |
| Barrett, Seán. | Breen, Pat. |
| Broughan, Thomas P. | Bruton, Richard. |
| Burke, Ulick. | Burton, Joan. |
| Byrne, Catherine. | Carey, Joe. |
| Clune, Deirdre. | Connaughton, Paul. |
| Coonan, Noel J. | Costello, Joe. |
| Coveney, Simon. | Crawford, Seymour. |
| Creed, Michael. | Creighton, Lucinda. |
| D’Arcy, Michael. | Deasy, John. |
| Deenihan, Jimmy. | Doherty, Pearse. |
| Doyle, Andrew. | Durkan, Bernard J. |
| English, Damien. | Feighan, Frank. |
| Ferris, Martin. | Flanagan, Charles. |
| Flanagan, Terence. | Gilmore, Eamon. |
| Hayes, Brian. | Hayes, Tom. |
| Higgins, Michael D. | Hogan, Phil. |
| Howlin, Brendan. | Kehoe, Paul. |
| Kenny, Enda. | Lynch, Ciarán. |
| Lynch, Kathleen. | McCormack, Pádraic. |
| McEntee, Shane. | McGrath, Finian. |
| McGrath, Mattie. | McHugh, Joe. |
| Mitchell, Olivia. | Morgan, Arthur. |
| Naughten, Denis. | Neville, Dan. |
| Noonan, Michael. | Ó Caoláin, Caoimhghín. |
| Ó Snodaigh, Aengus. | O’Donnell, Kieran. |
| O’Dowd, Fergus. | O’Keeffe, Jim. |
| O’Mahony, John. | O’Shea, Brian. |
| O’Sullivan, Jan. | O’Sullivan, Maureen. |
| Penrose, Willie. | Perry, John. |
| Quinn, Ruairí. | Rabbitte, Pat. |
| Reilly, James. | Ring, Michael. |
| Sheahan, Tom. | Sheehan, P.J. |
| Sherlock, Seán. | Shortall, Róisín. |
| Stagg, Emmet. | Stanton, David. |
| Timmins, Billy. | Tuffy, Joanna. |
| Upton, Mary. | Varadkar, Leo. |
| Wall, Jack. | |
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Emmet Stagg and Paul Kehoe.
19. Deputy David Stanton asked the Minister for Defence the progress that has been made in reforming the Irish Red Cross; the contact he continues to have with the IRC officials in relation to governance changes; and if he will make a statement on the matter. [47413/10]
22. Deputy Brian O’Shea asked the Minister for Defence when he expects to present the new finalised governance proposals for the Irish Red Cross to Government; and if he will make a statement on the matter. [47411/10]
Minister for Defence (Deputy Tony Killeen): I propose to take Questions Nos. 19 and 22 together.
Proposals for reform of the governance of the Irish Red Cross Society arise from a resolution passed in November 2007 by the council of delegates of the International Federation of Red Cross and Red Crescent Societies, IFRC, which urged all national societies to examine and update their statutes and related legal texts by 2010.
A working group to propose changes in governance, including those recommended by the international federation, was established by the Irish Red Cross Society in 2008. To implement the recommendations made in the working group’s report, significant amendments to the society’s existing legislation, including the Irish Red Cross Society Order 1939, will be required. Representatives of the society and officials from the Department of Defence have had several meetings this year to discuss the specific changes required. A draft amendment order, which would substantially amend the 1939 order, has been drawn up and was recently referred to the Office of the Attorney General.
The proposed changes address issues relating to higher level areas of corporate governance such as organisational structures, electoral arrangements and membership. I outlined the main areas for consideration to the House during an Adjournment debate on 24 November 2010. As recently as last week, further proposals were received by the Department of Defence from the Irish Red Cross Society. These further proposals are being examined. Further discussions with the society and the Office of the Attorney General on the draft amendment order will take place shortly.
When the consultative process has been concluded, I propose to present the amendments to the Joint Committee on Justice, Defence and Women’s Rights for its consideration prior to seeking the Government’s approval to change the legislation.
Apart from the legislative changes that are being progressed, a new chairman, Mr. David J. O’Callaghan, was recently appointed by the President. Mr. O’Callaghan is a former Secretary General of the Department of Defence and has vast experience of public administration at senior management level. Since his appointment in September 2010, he has put improved governance of the society’s affairs at the top of his agenda. The society has already implemented procedures to avoid a recurrence of the events that led to the recently completed investigation into the delay by the Tipperary branch of the society in forwarding funds raised during the Asian tsunami appeal from its branch account to headquarters. The society is well advanced in introducing strengthened new financial procedures. The recommendations made in the report of the investigation into the Tipperary bank account will also be implemented as [347]a matter of urgency. I am confident the new Chairman will expedite the reform process in the society which also involves the drafting of a new constitution.
As part of the ongoing process of change that is being advanced in the Irish Red Cross, the new chairman and the acting secretary general met with senior officials of the international federation in Geneva last week to apprise them of the proposed legislative changes. The international federation has indicated it would welcome an opportunity to contribute to the final stages of the proposed legislative changes and I am happy to facilitate it in this regard.
Deputy David Stanton: The Minister referred to the internal report he commissioned on the Irish Red Cross. Will he agree this controversy arose because of the issue of unreported bank accounts? What are the Minister’s views on the change from an external independent investigation to an internal one? Why were the former chairman, Mr. David Andrews, the former secretary general, Ms Carmel Dunne, and the whistleblower, Mr. Noel Wardick, not interviewed as part of this investigation? Has the Minister proposals to bring to the Joint Committee on Justice, Defence and Women’s Rights regarding changes to the society’s governance? Will he be in a position to bring these proposals to the committee in the near future, so that they can be discussed?
Deputy Tony Killeen: As regards whether an internal or external review might have been better, the judgment was made by the new chairman that an internal report would be quicker and cheaper. I have seen the report and I do not believe anybody could argue with its findings. It seems to be comprehensive from my point of view and proposes some changes. When I bring the draft governance issue to the committee, Opposition Members and others may well have views to bring forward at that stage concerning additional governance issues that may not have been addressed in the 2009 report, which I mentioned in the initial answer. I have no idea why some people were interviewed and others were not. Having seen the comprehensive nature of the report, I do not know whether additional people would have had something to add.
My intention was to bring the proposed changes to the committee around this time, but the two matters I mentioned in my initial response have delayed that. The international committee has indicated that it has some input and only last week we received some additional proposals from the Irish Red Cross. I would like to do a comprehensive job taking account of all the views. I would like to have all that information when I next come before the committee, which I would like to do in January.
Deputy Brian O’Shea: On the face of it, it seems that progress has been made since the last occasion we had oral Defence questions. Are the further proposals that have come in from the Irish Red Cross substantial? For instance, do they deal with the issue of the length of time during which somebody can operate as a member of the executive board? Why does the international organisation wish to have an input into the final proposals? This did not seem to be the position over the last few months, as they had approved the proposals that were sent last year. There have been changes in that respect but what is the nature of the changes proposed by the Irish Red Cross? Why does the international committee want to have a hand in what happens at this stage?
Deputy Tony Killeen: I understand that the most recent proposals arise, to some extent at least, from the findings of the internal report, which was referred to by Deputy Stanton.
Deputy Brian O’Shea: To which internal report is the Minister referring?
[348]Deputy Tony Killeen: The most recent one.
Deputy Brian O’Shea: On the accounts?
Deputy Tony Killeen: Yes, the most recent one on the accounts, which found many more accounts than the Tipperary bank account, as it transpired. It also has something to say about systems. My recollection is that the initial review, which was conducted by the Red Cross under Professor Roger Downer, recommended a limit on the number of terms — I think it might be two — somebody could serve on the executive committee. I will have to check that for the Deputy but I am pretty sure it is the case. The International Committee of the Red Cross has been asked for recommendations and has indicated that it will be sending in some. I do not know the nature of the recommendations at this point but I understand that the general thrust will be along the lines we have previously discussed, of extending the independence of the Red Cross Society from Government.
Deputy David Stanton: I wish to revert to the interview process and those who were not interviewed. Is it not strange that the secretary-general of the Red Cross up to mid-2007 was not interviewed, and neither was the chairman at the time, nor the whistle-blower? This was all about the internal review into the accounts, which the Minister mentioned. Can the Minister find out why they were not interviewed? It seems inexplicable that they were not. Has the Minister a sense of urgency with regard to the required changes? This is the third time we have asked questions about this matter, yet we have seen no proposals from the Minister and no reports to the committee. When will we see some action on this? The report said the matter was urgent and had to be addressed soon. It also said the practices and procedures were unacceptable. Surely the Minister has some plan or timescale to take action.
Deputy Tony Killeen: The Deputy has raised three separate points. The internal review has been published and is publicly available for anybody with an interest in the issue. People may well have views on it. I have access to it because it has been published and was made available to the Department and everyone else. It has come up with some important findings and there are two levels at which action can be taken. The first level is internal and I understand that a number of measures have been put in place by the chairman. Those can be done internally without any changes to the statute or regulation. It seems inevitable to me that, arising from the findings of that report, some changes will have to be considered and will probably have to be implemented when the legislative review is under way. This may well result in the entire legislation being revisited, rather than secondary legislation. Both may be considered but that is not yet clear.
The Deputy will appreciate that there is no requirement for any Minister to bring an issue of this nature to the committee. I am doing so as a courtesy to the House and because I believe that secondary legislation in many instances has an importance that, at a minimum, should see it being placed before a committee. That is the reason I am doing it, although of course I am not required to do so. I hope people will have an input at that stage, however.
With regard to the timescale, I have said previously that this is an opportunity to get this right, particularly if it is the case that primary legislation will have to be revisited. A few extra weeks will be important in order to assimilate the views of all the related stages.
Deputy Brian O’Shea: During a recent Adjournment Debate, the Minister indicated that he had sought clarification from the Attorney General’s office as to what exactly his powers are vis-à-vis the Red Cross. Has the Minister received that clarification and, if so, does it in any [349]way enhance his powers to investigate aspects of the internal workings of the Irish Red Cross? Heretofore, the Minister has taken the position that he cannot become involved in the day-to-day management of the society.
With regard to the issue of independence, does the Minister intend to cast free the Irish Red Cross in the context of the present relationship it has with the Government? He has indicated some favour in that direction previously, which is a good idea.
I do not wish to open the issue of a member of staff who was dismissed and whose case has been the subject of an appeal hearing. Is there any indication, however, when the internal process in the Irish Red Cross will be concluded in regard to that case?
Deputy Tony Killeen: The interaction with the Attorney General’s office continues and has been helpful. Naturally, when new issues have arisen from the views of the International Red Cross and also from this internal report, the interaction with the Attorney General must continue and be revisited. Having considered all that, perhaps the most important question will be whether primary legislation is required in this instance. Even if it is, I would choose to go to the committee with secondary legislation as early as possible. I hope to do so in January.
The likely outcome is that the independence of the Red Cross will be established beyond any question. I understand that the emphasis from the international body will be in that direction.
As regards the staff member mentioned, that matter is still under appeal so I do not think it would be helpful for the House to intervene during that process.
20. Deputy Brian O’Shea asked the Minister for Defence the impact the reduction in provision for allowances for overseas deployment, as outlined in Budget 2011, will have on the capacity of the Defence Forces to serve overseas; and if he will make a statement on the matter. [47410/10]
Deputy Tony Killeen: In common with all areas of the public service, the Department of Defence and the Defence Forces will operate with reduced funding for 2011. The gross allocation for Defence and Army Pensions combined in 2011 is €933 million, an overall reduction of 4% on the 2010 allocation. Defence spending at €725 million, including capital spending, will be down by €30 million or 4% on the 2010 Estimate. The provision for Army pensions, Vote 37, for 2011 is €208 million. The cost of overseas allowances in a given year is principally a factor of the number of personnel serving overseas and the time spent overseas. While there has been a significant reduction in participation in overseas peace-keeping in 2010, and thus in the expenditure on overseas allowances, this was driven mainly by the unexpected withdrawal from Chad. Since then, civil and military management have been reviewing all available options to identify a suitable overseas mission for the Defence Forces.
Despite the reduced budgetary resources available to the Department generally, Ireland remains open to participation in peace-keeping operations. In that regard, I am glad to be able to advise the House that the Government yesterday approved the deployment of a contingent of the Defence Forces, as part of a joint Finnish/Irish battalion to UNIFIL. Up to 440 personnel could be deployed in the second quarter of next year to this mission. Discussions will now commence with the UN and with Finland on finalising the composition of the contingent and the deployment schedule. Thereafter, I will proceed in the new year to seek Dáil approval for the mission. This will complete the triple lock mechanism of UN, Government and Dáil approval before deploying members of the Defence Forces overseas.
[350]Ireland is currently contributing 137 Defence Forces personnel to 12 different missions throughout the world. The main overseas mission in which Defence Forces personnel are currently deployed is the EU-led operation ALTHEA in Bosnia and Herzegovina, with 43 personnel. Ireland’s contribution to this mission will be drawn down in April next as the mission continues to transition to a training and support mission. Once we deploy to UNIFIL it is expected that our total overseas deployment at that stage will amount to just over 500. This is a very significant contribution in the context of the reduced resources available and reflects the Government’s continued commitment to international peace-keeping and to the ongoing development of the Defence Forces.
Deputy Brian O’Shea: That 440 members of the Defence Forces will go on a UNIFIL mission to Lebanon is welcome, and I compliment the Minister on that. However, the thrust of my question concerned the provision for allowances for overseas deployment. The overall reduction for the Defence Forces in the budget was 20%, or €10.7 million. How will this affect the allowances of those members of the Defence Forces who serve in Lebanon? Will they receive a smaller allowance than those serving in Chad? What exactly will the position be regarding the remuneration of Irish serving members?
Deputy Tony Killeen: As the Deputy and the House will be aware from my answer, there is sufficient provision to meet the cost of the proposed deployment to UNIFIL in 2011. This arises, mainly, because of the reduction in other missions. We made a substantial contribution to KFOR. The Chad mission, because of the nature of the terrain, inaccessibility and the huge cost of transporting equipment, tended to be very expensive. Set-up costs will arise in 2011 with regard to setting up in Lebanon. However, because of the nature of the UN operation there and the fact that it has been there for so long, the set-up costs will be considerably less than they might be in other instances. That will cut into the budget in the way it might in other instances. I strongly believe that we have sufficient to deal with all contingencies that might arise in relation to our commitment to overseas service.
Deputy Brian O’Shea: Can I take it that there will be no reduction in overseas allowances for serving members, in spite of the reduction in allowances made in the budget?
Deputy Tony Killeen: We need to draw a distinction between the provision in the budgetary process for the overall allocation to the Defence Forces and how that will play out with individual members serving, wherever they might be. One representative association in the Defence Forces has signed up to the Croke Park agreement and the other has not. A complicated process is under way and it would be inappropriate to discuss that or to undermine it. I had a very positive meeting yesterday with RACO and PDFORRA and discussed all the matters of concern to them. In that regard, there are two messages. First, there is a welcome for the fact that a UN deployment is under way for 2011. Second, other issues that arise will be discussed within the processes. One group is within the process and the other currently remains outside.
21. Deputy David Stanton asked the Minister for Defence the progress made by him and the military authorities in relation to the necessary structural and rank changes to the Permanent Defence Forces to meet operational requirements under the Employment Control Framework; if he has received proposals in relation to same; and if he will make a statement on the matter. [47414/10]
[351]Deputy Tony Killeen: Within the context of consolidating the public finances, the Government is focused firmly on maintaining the operational efficiency of the Permanent Defence Force. Government approval was secured in the context of budget 2010 for a level of 10,000 all ranks. This reflects the reductions in personnel recommended in the report of the special group on public service numbers and expenditure programmes. In 2011, the Permanent Defence Force, like all areas of the public service, will operate on a reduced budget. I am advised by the military authorities that the strength of the Permanent Defence Force as of 30 November 2010 was 9,502, comprising 7,704 Army, 769 Air Corps and 1,029 Naval Service personnel.
The official confirmation and details were received on 18 October 2010 from the Department of Finance on the employment control framework (ECF) for the Defence Forces. The ECF is based on a figure of 10,000 all ranks Permanent Defence Force personnel, appropriately configured across the Army, Naval Service and Air Corps to enable them meet the roles assigned by Government.
Officials from the Department together with the military authorities are in the process of reviewing the structures and posts required to meet the operational requirements of the Permanent Defence Force in accordance with the upper limits in ranks provided for in the ECF. Thereafter a detailed proposal will be submitted to me.
Detailed proposals on foot of the review of the structures and posts required to meet the operational requirements of the Permanent Defence Force, within the reduced numbers and reduced resources, will include a phased plan for promotions. This will seek to address the priority posts to be filled in relation to the re-organisation of the Permanent Defence Forces.
The official confirmation of numbers, provided by the ECF and the criteria of the National Recovery Plan 2011-2014 are now being considered by the military authorities and officials of the Department, for the purpose of outlining a structure capable of meeting the roles assigned by Government to the Defence Forces.
Overall numbers in the Permanent Defence Force, including numbers serving at various ranks will be subject to ongoing control and monitoring by the Department of Finance on a monthly basis. This is to ensure compliance within the overall parameters and controls set by Government for each sector. The ECF also sets out that it will be necessary to underpin the re-organisation with the required amendments to regulations and administrative instructions.
While these are challenging times, my priority is to ensure that the Defence Forces are organised, equipped and staffed in a manner which will ensure that they can continue to deliver the services required of them by Government.
I am advised that at this time the Defence Forces retain the capacity to undertake the tasks laid down by Government at home and overseas.
Deputy David Stanton: According to the Minister’s reply, the Permanent Defence Forces appears to be 500 under strength. Is the Minister allowed to bring the Defence Forces to a strength of 10,000, all ranks? Does this mean he has a flexibility to increase the numbers by approximately 500? Has he plans to do that in the immediate future?
Does the Minister know when the review will be completed? Has he asked the military authorities and his officials when the review might be completed and when it might be presented to him?
[352]Deputy Tony Killeen: With regard to Deputy Stanton’s first question, Deputies will be aware that a recruitment process is under way currently. Those who have been recruited in that process are not included in the numbers given in my reply. In the initial phase, approximately 40 personnel will be assigned to each of the divisions. I have organised the recruitment process in such a way that it is open to being worked on as the opportunity presents itself. That must be done within the financial constraints. It is important that the ECF and the allocation of posts be based of the 10,000 figure. That is how we will move forward.
The difficulty anticipated by Deputy Stanton would only arise at the end of the current phase of recruitment when a new phase begins. That will be this time next year or a little later. For the moment, the recruitment process is under way and there is considerable flexibility there.
Deputy David Stanton: The Minister did not answer my second question. When does he expect to get the review into his hands and take action on the ECF?
The Minister also spoke about phased promotions. Can he indicate when these might begin? Is the ECF not a crucial element in them? Will he let us know if there are surplus posts in the organisational structure that may need to be taken out as part of the employment control framework? Is that part of the reason he is not making decisions on this?
Deputy Tony Killeen: The implementation of the ECF has been the subject of discussions between the representative groups and Department officials, and considerable progress has been made. We went over this ground at yesterday’s meeting with the representative associations. Difficulties that had been encountered up to that point were advanced somewhat.
There is an implementation body that deals with issues arising from the Croke Park agreement. It will meet next week, perhaps on 20 December. Organisations that are parties to the agreement have the right to attend the meeting in question, at which some of the issues to which the Deputy referred will be dealt with. I understand that promotional posts will begin to be filled in the early part of the new year. The process of filling these posts will continue throughout 2011.
The Deputy also referred to surplus posts. I understand that at present quite a number of people are acting up in various capacities. On the previous occasion on which I answered parliamentary questions in the House, I stated that this figure was more than 100. Even though I offered that number from memory, it turned out to be correct. Most of the posts in question will be replaced by the permanent posts on offer under the ECF. I am not sure whether there are surplus posts and I would be surprised if such posts existed.
23. Deputy David Stanton asked the Minister for Defence the current strength of the Reserve Defence Forces; the numbers recruited to the RDF since January 2009; and if he will make a statement on the matter. [47415/10]
Minister for Defence (Deputy Tony Killeen): I am advised by the military authorities that the strength of the Army Reserve and Naval Service Reserve was 6,103 on 31 October 2010, the most recent date for which figures are available. This comprises 5,832 Army Reserve and 271 Naval Reserve. The number recruited to the Reserve Defence Force, RDF, from 1 January 2009 to 1 November 2010, the most recent date for which figures are available, was 900. In March 2009 all recruitment to the RDF was temporarily suspended in the context of the Government decision on the implementation of savings measures relating to public service numbers and the reduced budgetary provision available for 2009. Following a subsequent [353]review and examination of RDF personnel numbers and budgets for 2009, limited recruitment resumed. This recruitment was to fill vacancies arising as a result of existing RDF members resigning or being discharged in the normal manner.
This limited recruitment was subject to the overall strength level that existed at 1 January 2009 — 7,671 — not being exceeded. It also included a proviso that recruitment would be monitored and kept under review in the light of the uptake of paid training within the RDF and the future budgetary provision. In 2009, the budget available for the reserve provided for 60,000 paid training man days. In 2010, further budgetary reductions reduced the provision to 31,000 paid training man days. The man-day allocation provides for annual paid training for existing members of the reserve and also provides for targeted developmental training such as career courses and skills courses. The training of new recruits inducted into the reserve must also be met from within the man-day allocation. The level of recruitment must be carefully balanced to ensure appropriate training and development opportunities for all members of the reserve.
The Department, in consultation with the military authorities, is currently considering the level of recruitment to the reserve that can be supported in 2011 and beyond, having regard to maintaining the existing capabilities of the reserve to the greatest extent possible. This must factor in the resources available for 2011 and the further budgetary reductions required under the Government’s national recovery plan.
Deputy David Stanton: How many personnel were recruited to the RDF in 2010? Has an instruction been issued in respect of suspending recruitment to the RDF for the foreseeable future? What are the Minister’s plans with regard to the future of the RDF? If the current rate of reduction continues, the number of personnel within the RDF will drop to as low as 2,000 in a couple of years. Is the Minister in a position to provide projections in this regard?
Deputy Tony Killeen: I do not have a breakdown regarding the 900 personnel recruited in 2009 and 2010. However, I will obtain it for the Deputy. Quite a number of those who have been recruited are at the stage between approval and admission to the reserve. These individuals are obliged to undergo various security checks, and so on. There appear to have been some delays in this regard. I have not issued any instruction to the effect that recruitment to the reserve should be discontinued and I am not aware of such an instruction being issued by anyone else.
Deputy David Stanton: To be clear, neither the Minister nor anyone else has issued an instruction.
Deputy Tony Killeen: I am not aware of any such instruction.
Deputy David Stanton: That is not the same as an instruction not being issued. Will the Minister check whether such an instruction has been issued by either the military authorities or his Department and then inform us of the position? I have been informed that an instruction such as that to which I refer may have been issued and I am seeking confirmation with regard to whether that is the case. Will the Minister indicate the number of training days allocated for 2010? Will he further indicate the number of these that have been used to date?
Deputy Tony Killeen: In my initial reply I stated that there were 60,000 training days in 2009 and 31,000 in 2010. When I last checked the position at the end of the summer, a substantial [354]proportion of the days allocated for this year had not yet been taken up. However, I will obtain the precise figure and forward it to the Deputy.
24. Deputy Eamon Gilmore asked the Minister for Defence the outcome of the investigation being carried out by the Defence Forces into allegations that members may have been working for private security firms in the Seychelles and possibly involved in the purchase of arms; if any new changes in regulations have been introduced as a result of the report; and if he will make a statement on the matter. [47257/10]
61. Deputy Emmet Stagg asked the Minister for Defence if he will describe the updating of the Defence Forces policy on off duty employment for certain Permanent Defence Forces personnel recently announced by the Chief of Staff; and if he will make a statement on the matter. [47277/10]
Deputy Tony Killeen: I propose to take Questions Nos. 24 and 61 together.
The military authorities have completed an investigation into allegations that Defence Forces personnel were involved in the use of Irish Defence Forces’ equipment in the Seychelles and that Defence Forces regulations were breached. The Chief of Staff has recently reported to me in this regard. The Chief of Staff has confirmed that of the five personnel against whom allegations were made, two are currently serving members of the Permanent Defence Force, PDF, and three are former members. I am advised that the investigation found no evidence to support the suggestion that Defence Forces equipment was utilised in any of the alleged activities, nor was there any evidence found of any illegal arms purchases or sales. In addition, the investigation undertaken by the military authorities indicates that Defence Forces regulations were not breached.
During the course of the investigation, I received a letter from the Seychelles’ Minister for Foreign Affairs and the Chief of Staff received a letter from that country’s Chief of Defence. Both letters indicated that any arms purchased for their state forces were fully legitimate and are in service by authorised Seychelles Government security personnel. In addition, the letters confirmed that Irish Defence Forces personnel only provided and facilitated lawful services for the Government of the Seychelles and in doing so made a significant contribution to the welfare and safety of the country. The letters also indicated that the character of Irish personnel who assisted in training their State police force were of the highest order.
While the investigation found that Defence Force regulations had not been breached, having considered the report, the Chief of Staff concluded that because of the nature of the specialist training required for certain military employment, it is not compatible with service in the PDF for such training and skills to be employed outside of the PDF. In this context he has updated the Defence Forces policy on off-duty employment to provide, inter alia, that PDF personnel cannot undertake off duty employment that utilises the specific military training they acquire as part of their service in the PDF.
Deputy Brian O’Shea: I wish to sound a note of relief that the members and former members of the Defence Forces were found to be not guilty of any wrongdoing in respect of this matter. [355] As a result of this investigation, the reputation of the Defence Forces stands intact. The Minister indicated that the policy relating to the activities in which members of the Defence Forces can become involved in the context of off-duty employment has been revised. Will he expand on the position in this regard?
Deputy Tony Killeen: Deputies will be aware that members of the Defence Forces and the Garda Síochána are frequently involved in capacity-building exercises in support of Governments in several countries. Heretofore, their work in this regard has been done with the approval of the military authorities. With regard to exercises involving more than 12 personnel, the approval of the United Nations and Dáil Éireann is required. The activities carried out in support of the training of personnel on behalf of the Government of the Seychelles did not come under the ambit of the system to which I refer. I understand the military authorities formed the view that, in this instance, the activities to which I refer appear to have been entirely positive in nature. All available evidence certainly points to this being the case. Nevertheless, it was decided that the regulations should be amended to ensure that regardless of how positive in nature they might be, activities of the kind which occurred in this instance would not be undertaken by serving members of the PDF who would be obliged to use the skills they acquired during their training as military personnel.
Deputy Brian O’Shea: Does this mean that if prior approval is sought and obtained, members can be given permission to take part in the type of activity in question?
Deputy Tony Killeen: In a sense, there is a distinction. In the instance in question, the regulations were not breached. However, it was felt that these regulations needed to be stronger. The part of the regulations to which I refer relates to individual members of the Defence Forces rather than to the organised overseas deployment of personnel which have occurred on many occasions. As I understand it, the amendment of the regulations relates to the obligations placed on individual members and does not provide for the wider context to which Deputy O’Shea refers.
Deputy David Stanton: Is the Minister aware of any other instance where activity of this kind is either taking place now or has occurred in the recent past?
Deputy Tony Killeen: I am not so aware. However, I inquired with regard to when the regulations were last amended. I understand that members of the Defence Forces had been involved in various private enterprise operations — including in the vicinity of nightclubs — and that some issues arose as a result. On foot of this, the relevant regulations were amended several years ago. I am not aware of any current instances involving the type of activity under discussion.
25. Deputy Liz McManus asked the Minister for Defence the number of suicides there have been in the Defence Forces since Lariam was first used; and if he will make a statement on the matter. [47270/10]
57. Deputy Jan O’Sullivan asked the Minister for Defence the number of members of the Defence Forces who have committed suicide and had taken Lariam that have been reported to the Irish Medicines Board; and if he will make a statement on the matter. [47272/10]
[356]66. Deputy Jan O’Sullivan asked the Minister for Defence the number of persons who have committed suicide in the Defence Forces since Lariam was first used that were either taking Lariam or had taken Lariam in the past and if in the past, the date on which they had their last Lariam dose; and if he will make a statement on the matter. [47271/10]
Deputy Tony Killeen: I propose to take Questions Nos. 25, 57 and 66 together.
I am advised by the military authorities that the Defence Forces personnel management system does not capture data on the number of suicides in the Defence Forces during a specific period. In this context, the information requested regarding the number of suicide victims who were either taking Lariam or who had taken Lariam prior to committing suicide is not available.
Lariam is authorised for use by the Irish Medicines Board, which is the statutory regulatory body charged with regulating the use of medicines to ensure the quality, safety and efficacy of medicines available in Ireland. Lariam was first authorised for use by the Irish Medicines Board in 1989. The authorised product information provides details to ensure the safe and effective use of this medicinal product. While certain risks associated with the use of the drug were highlighted in drug safety newsletters in 1996 and 2003, the Irish Medicines Board remained of the view that the benefit-risk profile for the product remained acceptable. The Irish Medicines Board continues to review the safety of this and all medicines on an ongoing basis and updates the product information as appropriate.
In accordance with best practice in prescribing this medication and taking account of the contraindications, warnings and side effects highlighted by the Irish Medicines Board, the Defence Forces screen all personnel for medical suitability. The screening system automatically rules out personnel from overseas service with certain conditions such as depression, anxiety, neurodegenerative disorders and so on which, as has been indicated by the Irish Medicines Board, are more likely to precipitate serious adverse reactions to Lariam. Pregnant personnel also are excluded.
In the case of overseas missions to malarious areas, the medical screening involves an assessment of the individual’s suitability to be prescribed the selected anti-malarial agent in line with current Irish Medicines Board guidelines. This typically involves review of the individual’s previous experience, if any, with the medication. The individual’s medical history is also screened for those conditions which have been identified as precipitating serious side effects in association with the medication. In addition, blood tests are carried out to ensure that the liver is healthy, as liver disease is an accepted contraindication to the use of Lariam.
It is the policy of the Defence Forces Medical Corps that personnel who are found suitable for Lariam should commence their medication three to four weeks in advance of their travel. The purpose of this precaution is twofold. While it allows a slow build-up of the medication in the bloodstream, it also permits assessment by the person of his or her individual reaction to the medication while still in Ireland. During this probationary period, the individual can consult a medical officer on any adverse reaction, minor or major. Some minor reactions may be transient but if persistent or troublesome, the individual will be deemed to have sensitivity to the medication and will be found not medically suitable for the mission.
The Defence Forces take all necessary precautions in assessing the suitability of personnel before prescribing Lariam in accordance with the prescribing instructions and information provided by the Irish Medicines Board. Personnel are screened both before and after deployments and all necessary actions are taken to ensure that those with contraindications to Lariam use are deemed unsuitable for overseas service and are not prescribed the medication.
[357]Deputy Brian O’Shea: To revert to the original question regarding suicides, may I take it there is no record of the number of serving or former members of the Defence Forces who have committed suicide? If such information is not available, it is difficult to assess what role or part Lariam could have played in this regard. What exactly is the position with regard to the deaths of serving members? Is it a military function to establish the cause of death or that of a civilian coroner? How do the Defence Forces deal with deaths within the service?
Deputy Tony Killeen: The Defence Forces personnel management system does not have a means to capture the data in this regard. My understanding is that the coroner decides what is the cause of death and obviously suicide sometimes is found to be the cause. However, all kinds of other outcomes are possible and frequently it is not entirely clear what was the cause. Moreover, it is a matter of enormous sensitivity to survivors and family members and is a very difficult issue with which to deal but my understanding is that it is a civil matter to be dealt with by the coroner and that the Defence Forces personnel management system does not have the capacity to accommodate the information.
Deputy Brian O’Shea: While I take it that this is the position, some Members have been receiving representations on concerns regarding Lariam toxicity pertaining to ongoing illness and suicide. Does the Minister not agree that, in respect of the personnel and families affected, an effort should be made to put together the necessary information in order that the entire subject of the use of Lariam in this regard can be more fully assessed?
Deputy Tony Killeen: I agree with the Deputy that it would be helpful to have the maximum level of information available and it is important to bear in mind that, in the first instance, responsibility rests with the Irish Medicines Board in respect of any medicines that are approved for use. The Deputy is correct in that the Defence Forces have particular reason to use this medication and have a large cohort of people who need to use it. A reasonable person would state that the precautions taken by administering three or four weeks beforehand, as well as ongoing assessment before travel and during the overseas trip, are very important. Moreover, one should bear in mind that the Defence Forces Medical Corps is available to personnel both in Ireland and to those who are deployed on overseas service. I have no reason to believe that members of the Defence Forces are reluctant to access the services available from the Medical Corps.
Deputy David Stanton: I have three brief questions. First, have there been any reported adverse effects as a result of the use of Lariam? Second, can the Minister provide Members with figures regarding the number of suicides or attempted suicides in the Defence Forces in the recent past? Third, the Minister should comment on mental health issues in the Defence Forces.
Deputy Tony Killeen: As for adverse effects, my understanding is that the Medical Corps would notify the Irish Medicines Board of any effects and that an internal medical communications channel exists. In respect of figures for attempted suicide or suicides, this certainly is not captured by the personnel management system in any event. Moreover, I am not aware whether it is being captured in respect of any other group for that matter. What was the third question?
Deputy David Stanton: It pertained to mental health issues. On the subject of adverse effects, is the Minister aware of any incidents in which a report was given by the Medical Corps to the Irish Medicines Board as he has indicated? Has any such report been given?
[358]Deputy Tony Killeen: While I am not aware of any particular report, I understand that the Irish Medicines Board depends on two sources. In the first instance, it depends on international medical sources. In addition, I understand that access is available for sources in all the medical services within the country at every level to make information available. As far as I am aware, there is an obligation on people to make such information available and I understand it is made available. However, I am not aware of any particular cohort of people being subject to particular tests or of some kind of peer review being carried out. I am not aware whether this is the case within the Defence Forces and I certainly do not have such information to hand.
Deputy Aengus Ó Snodaigh: In a previous answer to me in respect of similar questions, the Minister stated that “three members of the Defence Forces had been treated for serious symptoms which may have been caused or contributed to by Lariam”. He also noted there was a further cohort of seven personnel with less dramatic symptoms. The questions being debated pertain to suicide and there has been an obligation since 2003 on the Defence Forces to refer any adverse reaction to the Irish Medicines Board. In particular, the fact that suicide and suicide ideation was added to the safety literature in respect of Lariam in 2003 means the Defence Forces should be on high alert for any suicide. The mere fact that the victim was either taking or had taken Lariam in the past should have resulted in a suspected adverse drug reaction report to the Irish Medicines Board. My question is whether all such cases have been referred to the Irish Medicines Board. Moreover, if the Defence Forces have not compiled and are not compiling data on suicide, can the Minister instruct them to so do and to ensure that, in particular, cases in which Lariam had been taken are flagged to the Irish Medicines Board?
Is the Minister aware of the report of the Permanent Defence Force on suicide and turning the tide of suicide? Between 2001-06 there were 15 suicides of serving members. There is a question regarding whether Lariam has an effect among those who have left the Defence Forces.
Would the Minister agree to meet former members — I know there is a problem with meeting current serving members — of the Defence Forces who have highlighted issues regarding Lariam to see whether their concerns are based on fact? It would be helpful to the group that has now formed which is examining these issues. The US military and other militaries have stopped using Lariam specifically because there are concerns about suicide and other adverse effects.
Deputy Tony Killeen: The Deputy referred to ten cases, which he has previously referred to in parliamentary questions and which I have discussed with him, Deputies O’Shea and Stanton and others outside the House. In the case of the three people with serious symptomatology, it may have been caused or contributed to by Lariam. I am informed that there is nothing conclusive in this regard, which is not surprising. On the further cohort of seven, they have less dramatic symptoms and remain under review. Again, there is no conclusive evidence that the use of Lariam was a factor in any of the cases.
I am quite confident that the obligations to consult and provide information to the Irish Medicines Board are being complied with; I will check that. It is very difficult to access the figures on suicide. Whatever the local view may be at the time of a person’s death, ultimately the matter is decided in a coroner’s court and the information becomes available at some point in time. It is not always clear what the exact cause of death is in some instances. It is something which might make it very difficult for military authorities to gather the information.
[359]I am prepared to examine this matter. The three Deputies and the group which was mentioned are obviously concerned about it. In so far as is possible, I will report to the Deputies on what seems to be practically possible.
In regard to a meeting, I tend to take the view that it is preferable to meet the representative associations of current serving members. I have also met the representative associations of retired people. It is a matter I will take up with the Deputy privately when I have considered it.
26. Deputy Enda Kenny asked the Minister for Defence if the decentralisation of all military directorates due to move to Newbridge has now been completed; and if he will make a statement on the matter. [46277/10]
38. Deputy Phil Hogan asked the Minister for Defence if the decentralisation of all civil branches of his Department to Newbridge has now been completed; and if he will make a statement on the matter. [46273/10]
Deputy Tony Killeen: I propose to take Questions Nos. 26 and 38 together.
The relocation to Newbridge under the decentralisation programme was successfully completed on 5 November 2010. The move to Newbridge now sees all civil branches of the Department located either in Newbridge or in Renmore, Galway. The chief of staff, deputy chiefs of staff, director of strategic planning and other relevant military staff have also relocated as planned. The remaining military directorates are located at their current locations in Parkgate Street, St. Bricin’s Hospital, Coláiste Caoimhín, Park House and McKee Barracks, all in Dublin and also Kickham Barracks in Clonmel, County Tipperary.
The original decision on decentralisation provided for two buildings, one in the Curragh and one in Newbridge. The civil and military elements of the Department were to be accommodated between the two buildings. In light of budgetary constraints, the Government decided to defer proceeding with the new building in Defence Forces headquarters at the Curragh. This location, along with a number of other deferred locations, will be considered as part of the overall review of the programme in 2011.
It is clearly preferable to have all of the key managers, both civil and military, working in close proximity. The Department is actively pursuing options to address this situation, in advance of the review in 2011. The use of existing departmental property in the Curragh is being considered as an alternative to a new building. I will be engaged with the OPW, Department and Defence Forces to ensure that the organisations can carry out their business efficiently and effectively in the short and long term.
Deputy David Stanton: Could the Minister tell us the cost of decentralisation in his Department for the current year? What are the plans for the current military headquarters? Does he know how much it would cost to move the communications centre from there? Figures were given which were not disputed. Is the cost of moving it €1 million, €2 million or more? Does he have any plans to move it from its current location?
Deputy Tony Killeen: As the Deputy will be aware, the Office of Public Works is responsible for the provision of the buildings in Newbridge and so forth. I understand the overall cost will be in the region of €34 million. The Department of Defence will have spent approximately €430,000 on the decentralisation project, mainly on ICT and some adjustments which were required.
[360]On the communications centre, my preference would be to have it moved to a permanent rather than an interim location, which was what was being considered the last time we discussed these matters. The cost of moving it permanently, depending on where it was moved, is variable and very variable if an interim arrangement is required. If an interim arrangement would be required the cost would be likely to be well in excess of €1 million.
If it was possible, which I mentioned in my initial answer, to transfer all the remaining staff to the Curragh, including the communications centre, and refurbish an existing building, a possibility which is currently being examined, the cost of the communications centre would obviously be part of the entire process. The original cost set out for it was in excess of €30 million for the entire operation. The building was deferred.
It is possible that the 2011 review will give it the go-ahead, in which case it will be done in that way. If that is not possible it can be considered in the context of making some alterations to existing buildings. It is premature to discuss that now since the review of part 2 of decentralisation is now under way.
Deputy David Stanton: Has the Minister given any consideration to using Parkgate House, the location of the current headquarters, staying there, saving €30 million and moving the other directorates from Coláiste Caoimhín and others into that building, given its historic importance and significance? Pearse signed the surrender there, for instance, and it has been the military headquarters since 1923. Does the Minister have any feeling for the historic importance of the building and location? Has he given any consideration to maintaining it? Where is the current office of the Minister?
Deputy Tony Killeen: The Minister’s office is in the new building in Newbridge. The possibility of remaining in Parkgate House would be open for consideration by the Defence Forces if the Department or Defence Forces owned the property, but it is an OPW property and I understand it has plans for the entire area surrounding the new courts buildings and other legal aspects to be accommodated on the greater campus, therefore that option is not available to us.
In any event, there is considerable merit in going with the original proposal, which was to have two locations, the Curragh mainly for military personnel and Newbridge close by for the Department of Defence. The proximity would address all of the issues which are currently very difficult because of the number of locations I mentioned.
Deputy David Stanton: Would the Minister agree that spending €30 million at this time is daft? Could he not use his influence in Cabinet to hold what he has and save the money for a better use, rather than trying to spend it just to relocate? Have there been any additional costs as a result of the decentralisation to Newbridge, such as the relocation of staff and ongoing transport costs for people who have to come to Dublin? Is there an onus on personnel to travel to Dublin from Newbridge to hold meetings? What time cost is involved?
Deputy Tony Killeen: The Deputy will be aware that the decision to move from Parkgate House was made a number of years ago and was long under way before my appointment to the office. It is not a matter which is decided at Cabinet. Quite clearly, the OPW has a considerable portfolio of buildings and has decided to centralise the Courts Service and all the ancillary services in that area. I understand the plan is to create a campus and there is some logic to support that view.
There is also logic to support the view that personnel in Newbridge ought to be in close proximity to military personnel in the Curragh. My strong view is that the cost of the building, if it is proceeded with in 2011, will be considerably less than the €30 million that was estimated [361]in 2006 or 2007, when this entire project commenced. That will be examined when a decision is being made on whether to pursue a new-build in the Curragh, which was the original plan. My personal leaning is to proceed with the refurbishment of the historic existing suite of buildings, which are considerably under-utilised. That might be an attractive option for the communication centre and the decentralisation of the remainder of the staff.
27. Deputy Jimmy Deenihan asked the Minister for Defence his responsibility regarding the Civil Defence; and if he will make a statement on the matter. [46256/10]
39. Deputy John Deasy asked the Minister for Defence the strength and budget for the Civil Defence; and if he will make a statement on the matter. [46253/10]
Deputy Tony Killeen: I propose to take Questions Nos. 27 and 39 together.
The Civil Defence Board was established pursuant to the Civil Defence Act 2002 to co-ordinate the operation and future development of the Civil Defence at national level. While the board gives advice on policy issues, responsibility for policy and political accountability to the Oireachtas for the discharge of the board’s functions remain with the Minister for Defence. In accordance with the Act, the board must submit to the Minister a three-year strategic plan setting out its key objectives and strategies. In June of this year, I launched the third strategic plan of the Civil Defence Board, which covers the period from 2010 to 2013. The strategies identified by the board place a high priority on the organisation’s involvement in developing training and recruitment programmes and in the framework for major emergency management, which identifies a wider role for the Civil Defence in emergency response.
In 2010, the Civil Defence Board received a grant of €6.061 million, almost €1 million of which was allocated for the purchase of equipment. This has enabled the board to equip volunteers to a high standard. The board has re-equipped all of its casualty trained volunteers with up-to-date training manuals, DVDs and instructional material, thereby bringing the organisation into line with the statutory requirements laid down by the Pre-Hospital Emergency Care Council. The Civil Defence College is a recognised certifying body for the preparation and delivery of courses approved by statutory and other national bodies such as the Further Education and Training Awards Council and the Irish Heart Foundation. This accreditation, combined with the diverse range of training available to volunteers, is of great assistance to those who wish to develop career opportunities outside the Civil Defence.
The board’s strategic plan identifies the marketing of the capabilities of the Civil Defence as an important strategy. While the recruitment of Civil Defence members is a local authority function, the Civil Defence Board encourages and supports local authorities to undertake recruitment campaigns. The board supports such recruitment initiatives through the provision of additional publicity material and media training for Civil Defence officers and other supports that help to enhance the image of the Civil Defence. Targeted recruitment programmes also take place in the form of public awareness campaigns and new training classes at various locations around the country. Earlier this year, the board compiled a volunteer database to give an accurate reflection of the numbers in the organisation and enable the board and local authorities to target recruitment campaigns as required. Development work on the database has been completed. The population of the database is under way at local authority level. The national membership strength, as obtained from local authorities earlier this year, is approximately 4,750. Significant numbers of Civil Defence officers on the ground are reporting an increase in membership. This is a very positive development for the future of the Civil Defence.
[362]Deputy David Stanton: I thank the Minister for his response. Has he received any advice on policy issues relating to Civil Defence matters, or any proposals in that regard, from the board in recent years?
Deputy Tony Killeen: I had a number of meetings with Civil Defence personnel when I visited various places around the country. I had a long interaction with members of the Civil Defence Board, including its chairman, when I went to Roscrea for the launch of the three-year plan. Considerable thought has been given to how the Civil Defence might be developed. In the past, there were concerns because the Civil Defence reports to the Department of Defence at one level, but at another level is part of the local authority system through Civil Defence officers. Some of the advantages of that structure came to light when the deployment of Civil Defence personnel was a huge advantage to local authorities during the adverse weather conditions of recent weeks and of earlier this year. Some Civil Defence vehicles are suitable for all-terrain work and for use as ambulances. The trained personnel who use such vehicles, particularly when dealing with difficult weather events, make a significant and positive contribution to the work of local authorities.
Deputy David Stanton: One of the functions of the Civil Defence Board is to advise the Minister for Defence on policy issues. Has the Minister received any such advice in the last year or two? Has the board proposed any initiatives during that time? Has he received any proposals from the board regarding initiatives or policy matters? The making of such proposals is one of the functions of the board.
Deputy Tony Killeen: The board has been very proactive in interacting with departmental officials on the issues that arise. The importance of the volunteer programme initiative, which is close to completion, has been demonstrated. The initiative, which is particularly vibrant, has been successful in drawing the attention of the public to the existence of the Civil Defence and the advantages to volunteers of membership of the Civil Defence. It is fair to say that recruitment drives in some local authority areas have enjoyed considerable success. The efforts in other areas have been less successful. Concerns have been expressed about the availability and quality of training. Very good facilities are available at the headquarters in Roscrea. The Civil Defence also retains a training facility in the Phoenix Park. Its close association with the Irish Heart Foundation has been a positive development. Many of its courses are now accredited by the Further Education and Training Awards Council. I understand this initiative came from the board itself. It is important that independently verified and accredited qualifications are available. Other issues relating to insurance, etc., have also been successfully addressed.
Deputy Brian O’Shea: It strikes me that vehicles are available at local level to many organisations, including the Civil Defence, the Irish Red Cross, the Order of Malta and the St. John Ambulance Brigade of Ireland. In light of the current Exchequer position, there is a major case for making every effort to co-ordinate the activities of the organisations I mentioned with those of the Reserve Defence Force, which we discussed earlier. If we are to encourage people to get involved in the Civil Defence, it must be made more attractive. It needs to get involved in other activities that are attractive to young people. We seem to be making contributions to statutory and voluntary bodies, such as the Civil Defence, that are doing the same work, such as providing assistance at local level during bad weather. If a programme of co-operation and co-ordination were established and maintained in an ongoing way, the whole operation would be more attractive for those involved and the public at large would get a much more streamlined and co-ordinated service in vital areas.
[363]Deputy Tony Killeen: The Deputy has made a fair point about the particular challenge we face in this regard. The organisations he mentioned, each of which has a huge voluntary element, have successfully maintained relatively high membership levels. Some of them have found the challenge more difficult than others. The need for co-ordination arises most dramatically in circumstances like those of the last two weeks, which were also experienced in November 2009 and January 2010. The additional opportunities to deploy personnel in these circumstances, during real and contrived exercises, led to clear improvements during the most recent spell of bad weather, by comparison with the previous spells. Each of the organisations mentioned by the Deputy — the Reserve Defence Force, the Civil Defence, the Irish Red Cross and the Order of Malta, etc. — has its own role to play. It is interesting that some of these organisations have strong bases in certain geographical areas. The Reserve Defence Force, which we discussed earlier, has some enormously strong pockets of involvement, membership and recruitment. This success story is not always replicated elsewhere. Some of the other organisations are particularly strong in certain areas. That can be attributed in part to the personnel in those areas being in a position to drive the organisations in question. It is also a function of the attractiveness to young people of the particular organisation. We are speaking specifically about Civil Defence. One of the great attractions for young people is the fact that FETAC-approved courses are available which might be of assistance in terms of their employment prospects, quite apart from personal development. That is something we try to highlight to the greatest extent possible, but there is an enormous challenge in attracting people into such organisations, to keep them viable at local level.
Deputy David Stanton: Will the Minister say what the age limits are for Civil Defence, both lower and upper, and what involvement there is between Civil Defence and the schools?
Deputy Tony Killeen: I do not have the information on age limits off the top of my head, and I shall have to come back to the Deputy on that. In some areas there is considerable interaction with schools. While travelling around the country I have asked Civil Defence officers and others I have met about something which was very common in my youth, namely, the provision of first aid classes to a very high standard in relatively small rural communities. That had an enormous level of availability in my area, mainly through Civil Defence, while in other areas it was provided by the Red Cross and others. It seems to me to be an enormous advantage to civil society to have that type of skill available.
A number of things have happened. Standards have risen, of course, and regulation as regards the provision of training is at a very high level. The cost of the provision of some of these courses is very high, perhaps prohibitive in some instances, but it is something that could be usefully looked at, nonetheless.
That is not quite the point Deputy Stanton is referring to in terms of direct interaction with schools, I appreciate, which is very positive in some areas. The argument has been made to me that organisations such as Civil Defence and a number of others could be proactively involved in providing, for example, first aid courses in schools in transition year or whatever. This is something that has not really been scoped, and in an ideal world it should be available universally. That seems to me to be a considerable challenge, although at a considerable cost.
28. Deputy Thomas P. Broughan asked the Minister for Defence the way it is intended to achieve the administrative efficiencies of €21 million in full as contained in the budget 2011 proposals; and if he will make a statement on the matter. [47261/10]
[364]69. Deputy Jim O’Keeffe asked the Minister for Defence the basis on which he proposes to have administrative efficiencies in his Department leading to savings of €3 million in 2011 and €21 million in a full year; and if he will make a statement on the matter. [47360/10]
71. Deputy Eamon Gilmore asked the Minister for Defence if he will make a statement on his Department’s estimate for 2011. [47258/10]
Deputy Tony Killeen: I propose to take Questions Nos. 28, 69 and 71 together.
In common with all areas of the public service, the Department of Defence and the Defence Forces will operate with reduced funding for 2011. The gross Estimate for Department of Defence and Army pensions combined in 2011 is €933 million, an overall reduction of 4% on the 2010 Estimate. Defence spending at €725 million, including capital, will be reduced by €30 million or 4% on the 2010 Estimate. The provision for Army pensions for 2011 is €208 million, which is, of course, non-discretionary expenditure.
It should be noted that a very significant proportion of defence spending is accounted for by pay and allowances. The bulk of the non-pay element is spent on items such as fuel and utility costs and the maintenance and replacement of essential stores and equipment.
The expenditure reductions in 2011 will be achieved mainly through the reduction in the cost of participation in overseas missions, in addition to savings delivered through the postponement of expenditure on equipment and capital works across the Defence Forces. The 2011 capital Estimate of €12 million reflects a 25% reduction on the 2010 provision. Capital spending will focus on building works to improve the accommodation and facilities of the Defence Forces.
While there have been reductions in the overall defence budget, steady investment since 2000 means that the Defence Forces are well placed to address the challenges for 2011.
The administrative efficiencies of €3 million in 2011 will be achieved chiefly through reduced employee numbers and related costs. The full year yield of €21 million on administrative efficiencies referred to in budget 2011 relates primarily to payroll savings across the Vote that will accumulate by 2014.
Expenditure in every area of Defence Forces activity is being critically appraised. The priority now and into the future is to maintain the capability of the Defence Forces to deliver effective services across all the roles assigned by Government.
Deputy Brian O’Shea: The four year plan states that the defence area will contribute savings of €106 million by 2014. One of the issues mentioned is a reduction in the number of civilian employees attached to military installations. What exactly does that mean and what type of numbers may be involved? It obviously indicates that the duties carried out by civilians previously will now be carried out by military personnel, against the backdrop of a decrease in the number of officers and enlisted personnel in the Defence Forces. Are we in danger of reaching a level where the Defence Forces would no longer be a credible organisation fit for purpose?
Deputy Tony Killeen: As to the latter concern, I have no worries in that regard. I am absolutely certain that the Defence Forces will be fit for purpose, and that has been proven. Of all Departments, the Department of Defence and the Defence Forces have most successfully addressed downsizing, while improving quality of service simultaneously, to an extraordinary extent. This is testimony to the professionalism and commitment of all those in the Defence Forces, their representative associations and the Department of Defence.
I am absolutely confident that the challenges in the period 2011-14 can be addressed successfully. The framework to address them will need to be sketched during 2011, in my view. For 2011 everything has been sorted out as regards the matters we discussed earlier, overseas [365]service and so forth, and we are fortunate to have very good equipment, to the highest standard, and most of it very new. Therefore there are no requirements in that regard either this year or next, and indeed very limited ones for 2013-14 in that regard, too. Fortunately, the stores are full to an extent which means there is no challenge in that regard in the short to medium term. It is as well to bear in mind that the Defence Forces and indeed, the Department, are very well positioned.
On the specific question about civilian personnel, that is something which will have to be considered in the context of the framework of options. There will not be compulsory redundancy and in the event that vacancies arise specific decisions will have to be made to ensure that whatever challenges they may pose are addressed.
Deputy David Stanton: The Minister said the full-year yield of €21 million on administrative efficiencies relates to payroll savings, and that will accumulate by 2014. Does that mean it will be €21 million in the full year, 2014, or will it accumulate between now and 2014? Could the Minister say what this actually means per annum between now and 2014?
Also, he talks about reduced personnel numbers. Is that primarily civilian personnel or does it refer to further reductions in military personnel?
Deputy Tony Killeen: It is mainly on the civilian employee side. I understand there are considerable opportunities available in that area, but the framework will have to be discussed with the stakeholders. It would be very unwise and unhelpful for a Minister or anybody else to lay out a narrow construct as regards what should be achieved over the period. Yesterday, I engaged with the two representative organisations and there are a whole lot of other players in this area that have an input to all of this. I do not believe any Department has achieved as much as the Department of Defence and the Defence Forces over recent years. They are very well placed to deal with these challenges and very well equipped, which can be an enormous cost.
There is an ongoing cost, for example the purchase of the two ships, that is factored into the accounts and safely dealt with. There is a White Paper process and in the context of that some work has to be done on the four year element. To embark on the ten year White Paper process without taking account of the parameters of the 2011-14 element would seem to me to be ill-advised. That may delay the White Paper process somewhat, although my hope is that it can be accommodated within it. The ultimate point lies in deciding what is required of the Defence Forces by the Government and the State. That will be set out to a considerable extent in a White Paper. It is a very big and important job that is gradually coming to be better understood, and this, in a sense, has to be the defining centre of how one operates all that flows from that.
Deputy David Stanton: The Minister is very clever in that he has avoided my question. Is the €21 million in respect of 2014 or is to be accumulated between now and 2014? Perhaps the Minister will also provide a breakdown of the overall figure for each year between now and 2014.
Deputy Tony Killeen: It is stated in the reply that administrative efficiencies of €3 million in 2011 will be achieved through reduced employee numbers. The four year yield of €21 million on administrative efficiencies relates primarily to payroll savings across the Vote. They are accumulated and not defined and would be likely to arise more or less in proportion across the four year period. The figure will be €3 million in 2011 and so on and so forth, accumulating to €21 million.
Written Answers follow Adjournment Debate.
An Ceann 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 Noel J. Coonan — the need for Templemore Garda College to provide more practical training; (2) Deputy Deirdre Clune — the need for the Government to demonstrate its support for the Cork docklands project; (3) Deputy James Bannon — the need for the Minister to recognise the valuable work of Longford-Westmeath family resource centres through essential funding for 2011; (4) Deputy Seán Sherlock — the decision to impose pay cuts on up to 17,000 low paid staff from 1 January 2011; the workers affected include school secretaries employed by individual schools and VECs, many of whom barely earn above the minimum wage; they are not on the Department’s payroll but are indirectly funded through grants from the Department which are to be cut by 5%; (5) Deputy John O’Mahony — the urgent need for the Minister to address the low stocks of salt for gritting roads; (6) Deputy Dan Neville — the need for an extension to Nicker national school, County Limerick; (7) Deputy Phil Hogan — the need for the Minister for the Environment, Heritage and Local Government to review the savage expenditure cuts in the budget of the National Heritage Council for 2011; and (8) Deputy Tom Hayes — the issue of raw sewage flowing into the River Suir, County Tipperary.
The matters raised by Deputies Dan Neville, Noel J. Coonan and Tom Hayes have been selected for discussion.
Minister for Finance (Deputy Brian Lenihan): I move: “That Second Stage be taken now.”
Minister for Finance (Deputy Brian Lenihan): I move: “That the Bill be now read a Second Time.”
The Joint EU-IMF programme commits the Government to a comprehensive restructuring of our banking sector. The Credit Institutions (Stabilisation) Bill 2010 gives the Minister for Finance the necessary powers to effect that restructuring as quickly as possible. The fundamental rationale for this legislation is well expressed by the detailed set of recitals contained in the Bill before the House. In essence, these highlight the persisting adverse impact of the banking crisis on our economy and the need in the public interest for strong measures to resolve the continued serious threat to the stability of the financial system generally.
The Preamble to the Bill stresses the necessity for the functions and powers provided under the Bill to reorganise the guaranteed domestic credit institutions in the context of the National Recovery Plan 2011-2014 and the European Union-International Monetary Fund programme of financial support for Ireland, consistent with EU state aid requirements. The Preamble also [367]reiterates the basic justification for the very substantial financial support that has been provided by the State to the banking system, namely, to make certain that these institutions continue to meet their financial and regulatory obligations to maintain public confidence in our banking system and, in particular, in the security of deposits. Extraordinary and exceptional challenges still face our banking system and the economy and there is a strong public interest in the introduction of the extensive ministerial powers included in this Bill, the details of which I will outline to the House shortly.
This Bill represents an intensification of the measures already adopted by the Government such as NAMA and bank recapitalisation to ensure that there is a viable and long-term banking system in the State to meet the needs of the real economy and underpin our economic recovery. The purpose of the bank restructuring measures set out in the joint programme is to ensure that the sector is proportionate to the size and credit needs of the economy. The objective is to capitalise the banks to the highest international standards, thereby rebuilding investor confidence in the Irish banking system in due course and restoring their access to normal market funding. This will, over time, facilitate a very significant reduction in the domestic Irish banking system’s reliance on funding from the euro system and the Central Bank of Ireland and put the Irish banking system on a more sustainable funding platform.
Has my speech been circulated?
Deputy David Stanton: Yes. We have heard it all a couple of times during the past number of years.
Deputy Brian Lenihan: We will not go there now as we will have plenty of time later to do so.
As the House will be aware, the primary elements of the programme include a substantial and immediate recapitalisation of the banks, further recapitalisations, as necessary, based on the outcome of stringent stress testing and rigorous validation of asset valuations and a substantial downsizing of the banking system through the identification of non-core bank assets and their run down or disposal over time. This reshaping of the banking system will be carefully guided by the determination of sustainable long-term funding metrics for the banks which can be met through stable funding sources including deposits and long-term debt. The size of the balance sheets of banks can be reduced to make the institutions more sustainable by asset securitisation or portfolio or division sales, with scope for credit enhancement provided by the State if necessary.
The powers provided in the Bill allow the Minister to implement key aspects of the agreed support programme for bank restructuring as follows: direction orders may be issued to relevant institutions to take or refrain from taking any action in support of the Government’s banking strategy; transfer orders may be issued relating to relevant institutions’ assets and liabilities to facilitate the restructuring of the banking sector; and consistent with the terms of the support programme, the making of subordinated liabilities orders under particular conditions to achieve appropriate burden sharing by subordinated creditors in relevant institutions which have received State support.
It is clear that the powers being provided under the Bill to the Minister for Finance are extensive and interventionist. They are, however, targeted and proportionate to the scale of the challenge we face. Importantly, they are subject to consultation with the Governor of the Central Bank and within a clear framework for appropriate judicial oversight. I should advise the House that a particular policy priority under the Bill is to ensure that the reorganisation and restructuring measures are recognised in other EU member states through the mechanisms available in the European Communities (Reorganisation and Winding-up of Credit Institutions) Regulations 2004, which implement the relevant directive in Ireland. This is partic[368]ularly important given that many agreements entered into by Irish credit institutions are governed by the laws of other EU member states. I should also make clear that all the powers provided under the Bill must be executed in a manner fully consistent with EU state aid requirements.
I will now address the key provisions of the Bill. Section 2 sets out the definition of a number of terms used in the Bill. A key definition in this section is that of a relevant institution. Section 3 provides the Minister with the power to prescribe any body corporate with a registered office in the State as a “relevant institution” for the purposes of the Bill. Section 4 sets out the purposes of the Bill, which I have already outlined for the House. Section 5 safeguards the independence of the Governor and the Central Bank and section 6 provides the Minister with the discretion to agree a relationship framework to govern his or her relationship with the Governor in relation to the exercise of powers.
Part 2 of the Bill addresses the making of direction orders under the Bill. While important powers of direction are available to the Minister under the ELG scheme, it is considered important to strengthen under this Bill the legal basis for that power of direction. Section 7 sets out the circumstances under which the Minister can make a proposed direction order. Sections 8 to 11 set out the procedures for the court to make a direction order on the terms of any proposed order, provided that the Minister can apply to the court to vary the direction order and that a relevant institution or its members can apply to the High Court to have such an order set aside. Section 11, in particular, provides that the High Court may set aside, amend or vary the order if it thinks it appropriate. A similar process is provided for the making of special management orders in Part 3, subordinated liabilities orders in Part 4 and transfer orders in Part 5 of the Bill.
Part 3 is an important part of the Bill as it gives the Minister for Finance the power to appoint a special manager with knowledge, expertise and experience of the financial sector to take over the management of a relevant institution where this is necessary for the preservation or restoration of the financial position of that institution. The provision of the power is an important legal innovation as it provides a mechanism that can be used as an alternative to nationalisation. Moreover, in the context of this Bill, the special manager is required to operate the institution in a manner consistent with the objectives of the Bill, helping to ensure that the public interest in the maintenance of financial stability strongly underpins the conduct of the special management.
Section 20 specifies the functions and certain powers of special managers. The special manager will take over the management of the business of the relevant institution and carry on that business as a going concern with a view to preserving and restoring the financial position of the relevant institution. Section 22 is a significant power providing that while a relevant institution is under special management, the Minister’s prior consent is required for a number of resolution and restructuring actions concerning the institution, which ensures that no precipitous action can be taken while the special manager is in place which could jeopardise financial stability. Furthermore, once a special manager is appointed, the functions of the directors and, with the Minister’s consent, the powers of the relevant institution exercisable by general meeting may only be exercisable by the special manager. Sections 23 and 24 provide that the special manager may, with the consent of the Minister, remove directors, officers or employees from their position and that the special manager will determine the role and remuneration of directors during the special management.
Part 4 gives the Minister for Finance powers to take certain actions in respect of the subordinated liabilities of relevant institutions to which he or she has provided or intends to provide financial support under the Credit Institutions (Financial Support) Act 2008. The purpose of [369]this Part of the Bill is to achieve appropriate burden sharing with holders of subordinated debt in the relevant institutions under the particular circumstances set out in the Bill.
Part 5 confers the power to make a proposed transfer order, which would transfer all or any of the assets and liabilities of a relevant institution where I believe it is necessary for achieving the purposes of the Bill and for the preservation or restoration of the financial position of the relevant institution. Any transfers would, of course, take place in accordance with EU state aid rules following the completion of a market process.
Section 38 provides for the provision by the Minister for Finance of financial incentives to a transferee. However, the Bill is clear that any such financial assistance provided is a debt due and owing to the State by the transferor. Section 41 makes specific provision for the transfer of foreign assets under a transfer order.
Part 6 addresses potential existing administrative and legal requirements whose effect might otherwise impact adversely on the achievement of the aims of the Bill. I especially draw the House’s attention to a key section — section 48 — which provides that the overriding duty of directors of relevant institutions will now be to me, as Minister for Finance, on behalf of the State, to have regard to certain purposes of the Bill. Prior to the enactment of the Bill, the primary duty of directors has been to the company.
Part 7 contains a number of miscellaneous provisions necessary to ensure that the powers provided under the legislation are effective. Section 51 provides that nothing in any enactment or rule of law can prevent me from imposing any terms and conditions relating to the provision of financial support which the Minister considers desirable in the public interest. As a result, I can impose terms and conditions that relate to the non-payment of bonuses and the institution concerned must comply with this. The powers set out in this legislation refer to any financial institution which receives State support. Where the taxpayer is providing extensive support for an institution, there would be grounds for the Minister for Finance to impose conditions on that support in regard to bonuses.
Section 52 is an important section the purpose of which is to ensure that orders made under this Bill are consistent with the EU credit institutions winding up directive, as I have previously outlined. Sections 55 and 56 empower the Minister to exclude a particular institution as a relevant institution under some or all of the provisions of the Bill for a specified period or to declare that I will not exercise all or any of the powers conferred under the Bill in respect of a specified institution for a specified period. This could arise where it is believed that this is necessary to facilitate the availability of private investment in the institution that would reduce the amount of public financial support that would otherwise be required.
Section 59 provides that the fact that I have made or propose to make a proposed order under this Bill must be kept confidential. Sections 63 and 64 provide for the limitation of judicial review and of certain rights of appeal to the Supreme Court. Section 67 is required in order to comply with the loan agreements with both the European Financial Stabilisation Mechanism, EFSM, and the European Financial Stability Facility, EFSF, under the EU-IMF support programme. Section 69 provides that the provisions of the Bill, with the exception of sections 67 and 51, cease to have effect from 31 December 2012 or later, if decided by a resolution of both Houses.
The Bill also provides for the amendment of a number of other enactments. The purpose of the amendments to the Building Societies Act 1989 under section 71 is to facilitate the conversion of building societies into private limited companies.
Section 72 amends the Central Bank Act 1942 to ensure the Central Bank is legally able to share confidential information to facilitate the Central Bank, the Minister, the Governor, the [370]head of financial regulation or a special manager appointed under the Bill in the performance of their functions under the Bill.
The amendment of the Central Bank Act 1971 under section 73 is proposed to facilitate a more expeditious transfer of a banking licence holder’s business including assets and liabilities not directly associated with its banking business. The purpose of the changes to the Credit Institutions (Financial Support) Act 2008 under section 74 are to ensure I can provide financial support other than by means of direct guarantees and assistance and, in particular, can provide financial support through the normal capital markets structures.
The purpose of the amendments to the National Asset Management Agency Act of 2009 under section 75 is to limit the right of appeal to the points which the High Court certifies for appeal to the Supreme Court. The provision also requires that any appeal be determined by the Supreme Court acting as expeditiously as possible, consistent with the administration of justice.
Section 76 provides for a number of amendments to the National Pensions Reserve Fund Act 2000 to allow the Minister for Finance to suspend or reduce the annual contribution to the fund for the duration of the EU-IMF programme; to direct the NPRF to invest in Government bonds; and to direct the NPRF to make payments to the Exchequer for capital expenditure purposes for the duration of the programme. The purpose of these amendments is to facilitate the State’s own contribution to the programme over the next three years.
The pace at which this legislation has been prepared and the urgency with which it must be enacted by the Oireachtas reflect three separate but related objectives. The first is the real and tangible value of demonstrating to the external parties to the programme, the wider international community and the international markets the strength of the Irish authorities’ commitment to the delivery of key elements of the agreement consistent with the ambitious timeframe for implementation. The second is the clear benefit of having the necessary powers available to the Minister for Finance at the earliest possible stage for initiating the profound restructuring of the banking system envisaged under the programme. The reputation of our domestic banking system and its ability to meet its funding needs from market sources will be only be rebuilt by undertaking the concrete measures to bring about a substantial reconfiguration of our banking system. The third is the imperative of empowering the Minister for Finance with the statutory authority to ensure all our institutions are in conformity with regulatory capital requirements set by the Central Bank of Ireland at the end of this year. It is also essential that the Minister is in a position to progress the joint restructuring of Anglo Irish Bank and Irish Nationwide Building Society is progressed expeditiously, while safeguarding the Exchequer.
No Deputy should doubt the importance of ensuring that the Minister for Finance is appropriately equipped with the range of legal powers necessary to continue to maintain financial stability in the State. That is the sole purpose of the legislation before us. I commend the Bill to the House.
Deputy Michael Noonan: I wish to share time with Deputies Mitchell, Perry and Varadkar.
The legislation is a long time in gestation if we understand the Minister correctly. Fine Gael has been calling for resolution legislation for a long time and, eventually, it has arrived. It is not appropriately named, as it is not the kind of resolution Bill I was expecting. This Bill empowers the Minister to do whatever he likes with the banking sector and I do not see many resolution measures in it.
It is a pity that he did not organise business in order that we could have debated it properly. There are 76 sections and every Member knows we cannot deal with this appropriately between now and 10 p.m. with a break of an hour and a half for Private Members’ business. It is a [371]ridiculous position to put us in and, despite putting several hours into them last night, I am not sure what all the sections mean yet. I would like to question the Minister and to tease the legislation out with proper Committee Stage and Report Stage debates. I renew the offer made by Deputy Kenny on the Order of Business. We are prepared to come back to the House next Tuesday if the Minister defers Committee and Report Stages to next week and we will go through the Bill and, at least, give it some justification.
There is nothing more serious in the eyes of the public at the minute than how we will deal with the banks and the banking crisis. The electorate is intelligent and when people see us ramming through stuff here that nobody fully understands, they wonder what we are at in this House. It is unnecessary. I acknowledge it is always difficult to draft complex legislation and have it out on time and I also acknowledge the Minister experienced a further delay when he had to stitch on provisions relating to bank bonuses to a section of the Bill. I presume that held him up for 48 hours but we should give the Bill a proper debate.
The explanatory memorandum is helpful in understanding the legislation. It is cast as emergency legislation and almost everything the Minister has introduced recently has been cast as an emergency measure. If there were not such recitals of public interest, much of what he has brought before the House would not pass constitutional muster and even though he did not recite public interest considerations in this regard, similar language is used. The Minister said this is an emergency, it is necessary in the current circumstances and it has to be done. There is a salute to the Constitution on the way through.
The section relating to the purposes of the Bill contains a number of interesting measures. One is very curious and the Minister might comment on it. One of the purposes is “to continue the process of reorganisation, preservation and restoration of Anglo Irish Bank”. I thought one of the purposes of this legislation was to get rid of it but the idea that the purpose is “the preservation and restoration of Anglo Irish Bank” is a new one on me. The Minister might explain that concept. Is he trying to sneak up on them? Is he using the Tonto approach whereby he wants to lull them into a false sense of security before he buries them?
Deputy Brian Lenihan: It is to ensure consistency with EU legislation. It does produce certain ironic consequences.
Deputy Michael Noonan: Like the Taoiseach, the EU must be speaking in riddles as well.
Another purpose is to facilitate the availability of credit in the State. That is a worthy purpose because there is a serious lack of credit at present, and I wish the Minister would do something to provide it. However, I searched the Bill and could not find any measure to put this objective into effect. There is no credit flow. As some classical scholar said in an analysis piece, of which I reminded the Minister previously, currency derives from the word currere, to flow. It means the flow of funds through the system, without which the economy dies. There is no flow of funds through the system at present. While the objective is worthy, it is not put into practice under the provisions of the Bill.
Deputy Damien English: The Minister said the same about the National Asset Management Agency.
Deputy Michael Noonan: I am concerned about the role of the Governor of the Central Bank under this legislation. I would have expected resolution legislation to have conferred the special powers on the Governor of the Central Bank, rather than on the Minister. In this Bill the special powers are conferred on the Minister on all occasions. There is a section which states that the independence of the Governor of the Central Bank is not affected, but the [372]powers taken by the Minister and the lack of additional powers being given to the Governor of the Central Bank are quite noticeable.
There is a curious section which provides that the relationship between the Governor of the Central Bank and the Minister will be specified in writing. I understood that under the Central Bank acts the Governor of the Central Bank was independent in the exercise of his functions. How can that be squared with the provision in this Bill which states that the relationship in respect of the provisions of the Bill will be specified in writing by the Minister? It appears to suggest that the Minister will, from time to time, give written instructions to the Governor of the Central Bank and he will have no recourse but to obey them. That is a peculiar restatement of the relationship with the Governor of the Central Bank, given that one of the pillars of our fiscal and monetary system was the independence of the Central Bank.
There is a provision under which direction orders may be issued by the Minister from time to time. However, the Minister appears to be doubtful about the legality of what he is doing because in all the instances where he is taking powers, he is providing for recourse to the High Court to underpin his actions under the legislation. The High Court has little power to overturn what the Minister is doing but it is as if the Minister is nervous on constitutional grounds and each time he provides for a power which will be exercised at his discretion, there is a parallel provision providing for the Minister to go to the High Court to get it authorised. It appears to be an attempt to put the Minister’s actions beyond constitutional challenge and I am not sure that is an appropriate way to legislate in this case.
The Minister is careful to pitch everything so it is in accordance with EU Directive 2001/24 of the European Parliament and Council of April 2001, the credit institutions winding up directive, CIWUD. I understand why he does that and it is appropriate to do so. Obviously, his actions must have the force of law across the Union and must be consistent with this directive. However, is it also in accordance with the law in the United States and the United Kingdom, in particular, and in other jurisdictions? There is a provision dealing with subordinated debt. In circumstances where part of the assets of Irish credit institutions are subject to US and UK law, Chapter 15 provisions should apply in the United States and the provisions in English law similar to examinership would apply in the UK. There is a possibility that the Minister will take power to move against the providers of subordinated debt and find that they will move against assets of the banks in the UK or the US unless the Minister has proofed it sufficiently that his actions are recognised under the provisions of Chapter 15 and UK law. However, the Minister has hitched his wagon to the CIWUD directive, which probably has the force of law in the UK but not in the United States of America.
There are various other provisions which my colleagues will discuss. In section 51, the Minister makes an attempt to protect in law the actions he is taking against those employees of the banks, especially AIB, who have received bonuses. On first reading, the provision appears to be cosmetic rather than having any effect. Deputy Burton already pointed out on the Order of Business that it appears to be doubtful from a constitutional point of view. I have a slightly different view. The Minister’s legal empowerment arises from the letter he sent to the board of directors of AIB and he is relying on force majeure concepts to carry it through. This is a cosmetic provision in the legislation to give respectability to that letter, which was relying on far older and more forceful concepts.
Deputy Olivia Mitchell: The Minister must be aware that this is possibly the most far-reaching and significant financial legislation to come before the House. It is potentially so far-reaching and draconian that it contains a sunset clause. He must also be aware that a Bill of this intricacy and complexity requires far more time for discussion than has been allocated. In fact, we only [373]received a copy of the Bill at lunchtime yesterday so it is impossible to get a full idea of the intent of the legislation, much less give it the type of scrutiny it requires.
It is ironic that this legislation is being brought forward in such a rushed format when at least two of its main provisions provide for policies that were totally rejected by the Government when they were recommended by this side of the House over the last two years. We were assured that Anglo Irish Bank was of systemic importance, could not be wound down and had to be maintained. Billions of euro of taxpayers’ money were pumped into it to ensure it could continue as a going concern. Two and a half years and billions of euro later, we are confronted with legislation to provide for what the Minister originally rejected. It is a pity he did not listen to the dissenting voices two and a half years ago. We could have saved all those jobs and all that money and, possibly, prevented many of the forced emigrations as well.
We were also told there could not be burden sharing. There was no question that we had to cover all of the recklessly acquired liabilities of Anglo Irish Bank and the other banks. Now we have legislation before us that will not only encourage and permit deeply discounted liquidity management exercises but which goes much further to permit a coercive approach. In short, the Government that would not consider burden sharing is now introducing legislation which goes far beyond what was being proposed by the Opposition. Again, it is a complete turn in Government policy and, again, it is a pity that the Government did not accept the inevitability of burden sharing before it paid off, at face value, all the billions of euro of subordinated debt over the past two and a half years.
Hardly a week passed without the Government telling us what a good job it was doing and how the rest of the world saw Ireland as a headline for how to manage the financial crisis. It is strange that the countries which we were told thought we were so wonderful are now forcing us to do the opposite and precisely what the Opposition recommended at the time. It is too little, too late. Again, I wish to point out the folly of not even providing in legislation for burden sharing with senior debt-holders. This insistence on wrapping senior debt-holders in cotton wool and protecting them from the consequences of their reckless investments is wrong, and will continue to be wrong. I wonder if those in the EU who enforced this position on us, if it is the truth that they did enforce it, recognise that they are ultimately imperilling the repayment of senior debt and, indeed, the loans they are providing to us under the bailout.
My fundamental opposition to the Bill is based on the way it is being rushed and the lack of adequate scrutiny.
There is no indication of the Government’s intention in respect of disposing of the banks. There is no opportunity to debate the which, the how and the when. I presume the idea of this Bill is that whatever is ultimately left of the zombie banks will be for sale to foreign banks.
The primary reason for opposing this Bill is the draconian powers it gives to the Minister of the day. We have absolutely no confidence in the current Minister for Finance or his predecessor, so how can we have confidence in passing these powers to one man without even the opportunity to scrutinise the details of what is being proposed?
Deputy John Perry: From listening to Deputy Noonan’s comprehensive review of this Bill, his points were quite apparent when we look at the deficit. The Minister for Finance has repeatedly said that the Government has taken a stake in Allied Irish Banks and Bank of Ireland in the hope that the banks clean their risky property loans, and will be able to raise equity from their own shareholders and from new private investment. We now know that this hope was misplaced in the case of Allied Irish Banks and that the Bank of Ireland is still hoping to avoid a majority stake in shareholding. The two major banks in this State are fully dependent [374]on State funding to maintain their operations. These banks may yet reveal additional losses from loans to businesses and householders.
When we look at the massive shortfall in funding to businesses at the moment, there is no confidence and no credit in the economy. The €12 billion that has been promised by Bank of Ireland and Allied Irish Banks is not available to companies. Viable companies are closing as we speak due to the lack of support, regardless of the Credit Review Office headed by Mr. John Trethowan. His powers are very limited. In the world of real banking, of lodgments, withdrawals, payments and cheque clearances, the banks are struggling to survive. In the casino and gambling part of banking, such as trading activities, the bankers seem to believe that nothing has changed. From the behaviour of bank trading staff in the last few weeks, it is clear that a substantial bonus culture, based on short-term bookkeeping profits, is still the expectation. The people working in banks seem to think it is okay to pay themselves bonuses from taxpayer provided cash. How far out of touch with the reality of everyday in the country are these people? Do they really think they can continue to pick the pocket of the taxpayer while an indifferent Government stands idly by?
Until recently, people in the financial world believed in their own superiority and took salaries and bonuses that were orders of magnitude of ordinary wages. They were getting golden handshakes, bonuses and cheques for leaving that were worth millions. There is no great body of evidence showing that a big bonus culture improved long-term shareholder value in financial services companies. The decent people of Ireland were told to invest their money in these banks, and many of them have lost their life savings. It is unforgivable. People trusted the credibility and the corporate governance of banks and they put their life savings in them, and now they have nothing. All evidence points to the reverse of this theory. There is much commentary about the design of the bonus scheme, where short-term results are valued ahead of solid, long-term improvement. There is no bonus roll back system for situations where risk was misunderstood and serious losses were incurred. That is outrageous.
In the past few years, these delusional masters of finance have been exposed as idiots, and yet our Government has been very slow to learn that lesson. Slapping down the bonus culture in Government controlled banks is a short-term measure that will appeal to the hard-pressed taxpayer. Having the Government involved in micro-managing the individual pay decisions will not work. The evidence from the out-of-control pay and conditions of top semi-State managers clearly demonstrates that the Government does not and cannot micro-manage the pay and bonuses of the financial services sector.
I have stated my case. Enough is enough. What we want is credit for small companies, which are the backbone of this economy.
Deputy Leo Varadkar: This is one of the most important Bills before the House, certainly in my time here. It is very interesting that more than two years after the bank guarantee was introduced, it is only now that we have bank resolution legislation. The guarantee really was only an exercise in buying time. That time could have been used to restructure the debts of the banks, bring them to resolution, close down Anglo Irish Bank and organise a debt for equity swap in AIB and Bank of Ireland. That did not happen. As a result of that, there is two years worth of water under the bridge as well as billions and billions of euro of taxpayers’ money.
It is good that we have bank resolution legislation at long last. Unfortunately, it does not go far enough. In particular, it does not contain any provision for the restructuring of the debts of senior bondholders, particularly those who are not under the guarantee. There is perhaps up to €16 billion of taxpayers’ money that could be saved by imposing losses and haircuts on [375]those bondholders. That is the key change of policy that needs to happen when we have a change of government in this country because the people are not responsible for the debts of those banks and should not be held liable for them. That is the big lacuna in this Bill. It is not the appalling disaster that people make it out to be. For example, Washington Mutual in the US restructured its debt by imposing losses on senior bondholders and by organising debt for equity swaps. I do not see any reason that cannot be the case in this country. In fact, I think the markets expect us to do it. One of the reasons we have not had an improvement in our sovereign bond yield numbers is because the bond markets and the rest of the world are waiting for a new government in Ireland to do what everyone expects us to do at this stage. That is the major gap in this Bill.
Deputy Joan Burton: Today’s stopgap Bill is too little, too late. It is too late because the horse has bolted since the expiry of the original bank guarantee, and too little because it does nothing to address the treatment of liabilities other than subordinated bondholders. It fails to address the issue of senior bondholders now out of the guarantee, the debts for whom amount up to €20 billion. Had a resolution regime been in place when the crisis struck in 2008, much of the cost of the banking crisis that is now being borne by taxpayers could have been avoided. Indeed, I have called for the introduction of a special resolution regime for our banks on a number of occasions since the bank guarantee was first introduced.
In the US, which has a long-standing bank resolution framework, it is not uncommon for officials from the Federal Reserve or the Department of the Treasury to go into a failing bank over a weekend, close it down, clean it up and sell it on. Depositors are protected. Losses are apportioned on the basis of creditors’ seniority. Business continues as normal when the bank reopens on the Monday morning, often under new owners. There is only recourse to taxpayers’ funds in the event that the excess of liabilities over assets cannot be made good. The wind up of Washington Mutual, where even senior bondholders were made to share some of the burden, is a case in point.
It is now 113 weeks since the night of the bank guarantee, and nearly two years since the UK introduced its own special resolution regime for banks in February 2009. If a limited bank guarantee had been introduced in September 2008, covering all depositors, interbank loans and new debt issues, time could have been bought for the introduction of a resolution regime for the banking sector. Arguably, a general framework for bank resolutions should always have been in place. At the latest, this should have happened back in late 2008 and early 2009. Instead, two years on, the Government is trying to lock the stable door after the horse has bolted and many of the bondholders have already been repaid.
When any private company goes bust because of reckless trading, its private investors are supposed to lose out if they made a bad bet. If the shortfall between assets and liabilities is greater than shareholders’ capital, not only do shareholders lose their shirts, but losses are passed up the line to other creditors depending on their seniority — first to subordinated bondholders and then to other unsecured creditors, including senior bondholders. These are the fundamental rules of a functioning market economy. Using State funds to bail out private investors would be a cynical example of socialism for capitalists.
Banks are not like all other private companies. They play a crucial role in the wider economy, facilitating payments, transactions, savings and investments. Thus, the disorderly collapse of a bank could have severe ramifications, potentially setting off a chain of events and a run on the banking sector as a whole. Banks are also unique in that they hold the savings of almost the entire population. Irrespective of any regime to wind up or restructure credit institutions, this important economic and social role must be recognised with the protection of depositors from financial loss. The people in the Department of Finance and various institutions seem to have no idea of the transition that has taken place between managerial capitalism and the new [376]financial capitalism. They seem to be at sea about this and about the globalisation of markets. Even though banks are different from other private companies, the principle still holds that private and professional investors in banks should lose out in any restructuring arrangement before any taxpayers’ funds are put on the table. It is for this reason that we need our own special resolution regime for our banks.
Deputies will remember the rising sense of anxiety around the country in the period to the end of September 2008. People were worried about their savings, and there was evidence that people were taking cash out of the banks. An Post experienced a surge in new savings. This all happened again recently, as the Minister knows. Older people in particular were contacting my office to ask if their savings were safe or to tell me that their savings were now under the proverbial bed. What started as a trickle threatened to become a flood. In mid-September 2008, before things got out of control, I proposed in a letter to the Minister and in public statements an enhanced guarantee of at least €75,000 for depositors. Far from the Fianna Fáil rhetoric that the Labour Party would not countenance any form of bank guarantee and was willing to put depositors at risk, we were in fact the first to propose a strengthened guarantee specifically for depositors. What we could not accept was a bailout of professional investors, a free lunch for bondholders and a blank cheque for Fianna Fáil.
Professor Patrick Honohan, Governor of the Central Bank, in his seminal report on the banking crisis published last summer, made this very point. He is on the record as saying, before his time as Governor of the Central Bank but after the introduction of the bank guarantee: “Mature reflection by the financial markets would recognise that a country honouring its debts and guarantees to the letter — and not beyond — was more creditworthy than one which handed over money lightly to unguaranteed risk investors.” This is a core problem for the Government. It lacks fundamental credibility in terms of the soundness of its approach to banking, hence the continued destruction of our reputation here, in Europe and around the world.
Bondholders in Ireland had nowhere to run. Even if the Government of the day was convinced that the banks were facing merely a liquidity crisis, which was suggested, it has never explained why it saw fit to guarantee locked-in investors. This would do nothing to affect liquidity in the short term but, as Professor Honohan pointed out in his report, the decision narrowed the Government’s margin for manoeuvre in resolving the banking crisis while protecting the interests of taxpayers. As a result, Anglo Irish Bank alone is likely to cost Irish taxpayers upwards of €30 billion when all the dust has settled.
All of the details have not yet been filled in on the bank guarantee blank cheque, but from what we have seen so far, it could reach half of our diminishing national income or more. Writing in The Irish Times on 3 April this year, Professor John McHale of NUI Galway mapped out how a special resolution regime could be introduced in Ireland before the expiry of the guarantee on 29 September as an alternative to the Government’s gratuitous no-bondholder-left-behind policy. He wrote:
Had the Minister heeded Professor McHale’s warning, Irish taxpayers might not be in such a deep hole. Instead, he prevaricated and let the guarantee expire.
The Minister has insisted for months that this legislation was in the pipeline, but we only saw it for the first time yesterday. The Minister is addicted to playing political games. For a Bill of this importance and complexity, this is not the right way to treat the Dáil. This Bill deserves careful consideration and scrutiny. Instead, it is being railroaded through the Dáil in less than five hours. We are told to expect a full and permanent special resolution regime early in 2011, and under the terms and conditions of the EU-IMF programme of financial support, the Government has committed to introducing legislation for such a regime by the end of March 2011. I suggest that a slimmed-down Bill be introduced, covering the bare essentials for the immediate restructuring of the banking sector, but that any of the more substantive measures should be held back for the permanent regime due early next year. To be honest, it is hard to believe that this is anything other than window dressing, with an election coming down the tracks.
In introducing any special resolution regime for the banking sector, three concerns must be paramount: providing stability to the banking sector, providing certainty to depositors and protecting the interests of taxpayers. We already have an extensive guarantee to protect depositors. This Bill seeks to bring stability to the banking sector but it brings little in the way of protection for taxpayers. The Bill contains draconian measures to transfer powers to the Minister for Finance without countervailing measures to allow for Oireachtas oversight. As I mentioned this morning, perhaps the worst example of this transfer of powers is contained in section 53, which may well be contested on constitutional grounds.
Section 53 contains two provisions. First, it provides that this Bill will override the provisions of any earlier Act, which is standard and uncontroversial. However, section 53 then goes further. It purports to empower the Minister for Finance, by order and without reference to the Oireachtas, to override Acts of the Oireachtas and to legislate contrary to their terms.
The section makes the Minister a one-man legislature, with power by order to amend or repeal the law of the land. The section is an attempt to equip the Minister with power to make orders that will have effect and the force of law, notwithstanding any Act of the Oireachtas. If we, as Members, approve such a section we might as well pack our bags early for Christmas and not come back at all in the new year. Instead, the country will be governed by ministerial diktat in a way similar to that of totalitarian regimes. Such regimes would willingly send someone here to study the powers Deputy Brian Lenihan has taken. There is nothing in the recitals of the Bill to justify the Government’s attempt to seize the power of making law from the Oireachtas in this way and to seek instead to vest it in the Minister for Finance.
The Bill draws a veil of secrecy over the exercise of these extensive executive powers with a series of confidentiality clauses. There is a mania in all the emergency banking legislation that has come before the House in the crises of the past two and a half years and a need for the Department and the Minister for Finance to have secrecy and more secrecy. To close the stable door after the horse has bolted, it is now proposed to transfer a vast swathe of new powers to the Minister for Finance. That such drastic action is now needed to right our banking sector is beyond doubt. However, the need for drastic action has come about now because of monumental policy failure on the part of Government and the regulatory system, compounded by the lies, incompetence, fraud, stupidity and wishful thinking on the part of our delinquent bankers [378]and the foolishness and folly of those in political and public administration who were supposed to have oversight and governance of them.
As a consequence of the Government’s failed banking policy, its pension policy is now in tatters. The National Pensions Reserve Fund is being plundered time and again to plug holes in the banking sector. A total of €7 billion has already been pumped from the pension fund into AIB and Bank of Ireland. Under the EU-IMF bailout, a further €10 billion or more will be pledged to the banks from this source. What was to be a strategic reserve set aside for the payment of state and public sector pensions from 2025 as our population would begin to age, will soon be a crutch holding up not some elderly old age pensioner or public service pensioner but our elderly, infirm and beyond-rescue banking system.
Perhaps sensibly, section 76(c)(ii) allows for the suspension of payments into the pensions fund in 2012 or 2013. Although transfers do not impact on the general Government balance, they impact on the Exchequer borrowing requirement and it does not makes sense even if it were possible — which it is not, now that we are out of the bond markets — to borrow at 6% or more to put money into the pensions fund at a lower average annual return. Section 76(g) goes on to make provision for transfers in the other direction, back to the Exchequer’s Central Fund. The Minister has indicated that these funds taken from the National Pensions Reserve Fund back to the Exchequer could be used to fund capital investment projects.
The cynic in me wonders if the Minister’s Damascene conversion has anything to do with the clock ticking down to the general election early next year. It is entirely inappropriate for a Government on the way out of office to squander the last remnants of our strategic reserve through a pre-election slush-fund for pet projects to save the skins of failing Fianna Fáil candidates. The use of the pensions fund to finance capital investment has much merit but it must be done on a structured, commercial basis. This is something the Labour Party proposed years ago to howls of derision from Government benches. In changed economic circumstances and with capital investment necessarily curtailed in the years to come, the Labour Party has proposed a strategic investment involving a modest €2 billion from the pensions fund. Setting up an investment fund takes time and must be done in an orderly way to ensure successful investment that could finance important infrastructure projects and innovative start-up and scale-up businesses. With Ireland now out of the bond market for the foreseeable future, one could have been forgiven for wondering what was to become of all the highly-paid NTMA staff who had previously fulfilled that function. Section 76 provides the answer. It further expands that nature of the pension fund’s “investments” to include non-listed credit institutions, namely, the building societies. It also proposes to allow the pension fund to become a bizarre support scheme for Irish sovereign debt. It seems the NTMA is to be kept busy with one department selling sovereign bonds to another.
An Ceann Comhairle: The Deputy has 20 seconds remaining.
Deputy Joan Burton: The Bill also covers the credit unions. Given the importance of the credit unions in the fabric of Irish community, social, family and business life I am disappointed that the Minister has not explained the implications for the credit union movement of its inclusion in the Bill. I made recommendations to the Minister in a previous debate, which he promised to consider, regarding proper consultation with the credit union movement but the movement has been simply thrown in again.
I read with interest the cables released on Wikileaks yesterday. It is fascinating to read the conversations set down between the United States Embassy and various officials with staff in the Department of Finance, the Central Bank and the Financial Regulator at the time of the guarantee. They guessed impaired assets to be between 0.5% and 0.8%. They had favourable impressions to the effect that the banks were not in much difficulty at all.
[379]An Ceann Comhairle: You are eroding the next group’s time.
Deputy Joan Burton: I am pleased someone from the United States Embassy committed this in cables from the ambassador because the tone of the cables represents exactly the type of advice and brush-off that the Department of Finance gave to people such as myself when we questioned the notion that nothing was wrong other than a little liquidity problem in the Irish banks that would right itself by the subsequent weekend.
An Ceann Comhairle: We move on to the Technical Group. The group has 20 minutes in total but I am unsure about the sharing arrangements.
Deputy Pearse Doherty: Ba mhaith liom mo chuid ama a roinnt leis an Teachta Arthur Morgan agus an Teachta Finian McGrath. Let us be clear, this legislation underpins the bankrupt banking strategy of the Government. It represents the official seal of approval of the bailout plan and it ratifies it in Irish law. I examined section 67, to which the Minister referred earlier and I wondered what the Minister, Deputy John Gormley, would make of it. He has referred to his desire and vision to grow and empower local authorities. This section stipulates that any local authority that wishes to mortgage one of its premises must seek the approval of the IMF before so doing. The depths to which this bailout or sell-out is reaching with regard to the constraints on local government is appalling.
Ní le muintir na hÉireann fiacha na mbanc, sin an phríomhphointe atá agam. Simply put, bank debt cannot be public debt. We must find a way to separate the national debt from financial debt. We must ask ourselves how the reputation of a financial area can be made more solid by rewarding banking failure rather than success. The EU-IMF bailout is not a bailout for the people. It will not secure social welfare, nurses’ wages or the provision of education. It will not help those on low income who are struggling. However, it will provide money to the Government to pursue its current banking policy. Such is the essence of this legislation. Parts of this legislation are welcome. We referred to them in our briefing with the Minister for Finance. In general, however, the Bill is too little, too late. The decision to make Ireland’s citizens pay for the recklessness of the State’s bankers is entirely a political one. There is no economic imperative that says the bondholders cannot be burned and taxpayers must carry the burden. This is a political decision being imposed by the ECB and the IMF. Lenders should face fully the consequences that bad investments are meant to face in a capitalist, free market economy. They are not shy about taking the rewards in the good times, so they should not be shy about taking the knocks in the hard times. This means burning the bank bondholders as an alternative to several generations of Irish people struggling to repay billions of euro.
The Government refers to burden sharing, but there was no profit sharing when things were good. My party and I have tabled more than 40 amendments, which make a clear distinction on burden sharing to ensure senior bondholders are included. We have not heard this distinction being made by any other Opposition party because the corrupt, bankrupt policies of the Government will be followed by Fine Gael and Labour. The idea of investing taxpayers’ money to bail out the gamblers in Anglo Irish Bank, whether they are subordinated or senior bondholders, is morally wrong.
Deputy Thomas P. Broughan: On a point of order, I wish to inform my Sinn Féin colleague that his party voted——
Deputy Pearse Doherty: That is not a point of order.
Deputy Thomas P. Broughan: ——for the guarantee. Sinn Féin got us into this——
Deputy Pearse Doherty: His party voted to bail out and invest——
[380]Deputy Thomas P. Broughan: Sinn Féin, Fianna Fáil, Fine Gael and the Green Party got us into this boat.
An Ceann Comhairle: This is not a point of order. Deputy Doherty should continue.
Deputy Pearse Doherty: The Deputy knows well, although he may not agree with his party’s leader or spokesperson on finance when they say they will use taxpayers’ money to bail out the gamblers in Anglo Irish Bank.
Deputy Pearse Doherty: It is appalling that a party claiming to follow the legacy of Connolly will take from the most impoverished and give it to the gamblers, the bondholders, the international multibillionaires.
Deputy Finian McGrath: Hear, hear.
Deputy Pearse Doherty: I touched a nerve with Deputy Broughan.
There is no incentive for banks and pension funds to lend sensibly to borrowers if there is an implicit guarantee that they will always be bailed out by the taxpayer, even at the expense of impoverishing a nation. The €85 billion deal with the IMF and the EU explicitly bans the State from defaulting on guarantees given to the overseas finance institutions that loaned €15 billion in senior bonds to Anglo Irish Bank. This is what we are giving effect to in this legislation. Do Fine Gael and Labour believe that protecting these bondholders is right? Instead of writing down or renegotiating with bondholders, we should burn them completely. The European institutions that lent recklessly to our banks did not bother to consider the risk because they assumed there was no risk to them. There is a phrase about what happens when one assumes something, but I will not repeat it in the Chamber. Government debt must be restructured. Bank debts need to be converted into equity and, where banks are insolvent, debts should be written off. Measures to boost growth in the economy will be an obvious requirement to meet the significant debt repayments on this bailout, but the terms of the €85 billion loan limit our options by sacrificing most of the pension reserve fund. The Bill amends the existing provision to allow the Minister to direct the National Pensions Reserve Fund, NPRF, to invest in credit institutions so as to ensure that the fund will continue to be available to support banks. The pension fund will not go into critical infrastructure projects, take hundreds of thousands of school children out of cold prefabs or be invested in job creation projects. It will go to the black hole of banks. It will give an injection of fresh equity capital into the banks. Unlike the Labour Party, we would support the idea of changing the Bill’s provisions to allow the pension fund to be invested in capital projects. It would be used to build schools, hospitals and child care facilities.
Acting Chairman (Deputy Michael Kennedy): Did Deputy Morgan indicate that he will cede time to his colleague? Deputy Doherty’s time is up.
Deputy Pearse Doherty: Perhaps I understand where the Labour Party is coming from, given that its pre-budget submission called for a reduction of €1.2 billion in capital spending.
Christmas has come early for the bondholders. We are repeatedly told that the banks need a fresh injection of capital. There have been so many injections that it has been more like a transfusion, that is, a transfusion of public wealth to bankrupt entities. The lifeblood of the economy has been drained to avoid defaulting on the holders of private debt. The Bill should rename the NPRF the “National Bank Transfusion Fund”.
[381]Acting Chairman (Deputy Michael Kennedy): I understand Deputy Morgan will share time with Deputy Finian McGrath.
Acting Chairman (Deputy Michael Kennedy): The Deputies have six and seven minutes, respectively.
Deputy Arthur Morgan: The Acting Chairman might tell me when I have a minute or so remaining. I thank him for allowing Deputy Doherty to continue. Well done to my colleague. He was on a flow.
Here we go again in the wrong direction. The Bill is supposed to restructure the banks. Sinn Féin would support that 100%, but the Bill is only partly about restructuring the banks, in that it has more to do with underwriting the lousy deal between the IMF, the EU institutions and the Government. It is a political and financial mugging of the people by those institutions. Instead of the Government standing up to defend the taxpayer, the economy and the future of both, it is choking them to facilitate the IMF’s rip-off. The Bill is nothing more or less.
The banks have already paid bondholders some €60 billion. In most cases, they are zombie banks. It is what Anglo Irish Bank has been for a long time. We know about Allied Irish Bank and Bank of Ireland is only a short step behind it. The economy cannot support such a level of bailouts for banks that are insolvent. They are hanging on by dint of money invested in them by the ECB, although not through the ECB’s generosity. The ECB is investing that money because the Irish taxpayer and the Government are underwriting the banks. No one else would stand over this situation. It is crazy and it should not occur. Sinn Féin has outlined a progressive and sensible path forward to deal with this situation. We would not waste money earned through the sweat and effort of the economy’s taxpayers on zombie banks, yet that is what is being done.
A sensible approach would be to adopt Iceland’s solution. By and large, Iceland told bondholders to take a walk. The past quarter has already seen it at 1.2% economic growth. Where are we? In a good scenario, we will be flat-lining or dipping for the next two years. Compare those two examples. The agenda of the ECB and the Commission was to protect the euro. They had no interest in the Irish people or the problems the two bodies would create in the economy for several generations. They could not care less. While we might expect such from the IMF, perhaps even from the ECB and the Commission, our so-called partners in Europe, surely the Government should have stood up in the negotiations and told the ECB and the Commission that Ireland would have nothing to do with the IMF. In terms of the money the ECB shovelled into our zombie banks, the Government should have pointed out that the former was the central bank over the euro area. The ECB could have made the call. It should have known better. The bottom line is that the ECB has a significant responsibility. It is at least as culpable as anyone else involved in the case. Did the Government point out this? What it did instead was to sign up to its deal with the IMF.
Deputy Doherty outlined how the Bill’s provisions tie the hands of local authorities. A typical example is that local authorities in County Louth are imposing a 25% cut on staff wages. The cut will not be applied surgically. One can be sure it will be applied with an axe. That will happen in local authorities across the country with a consequential drop in public services. We are aware from what the Minister for Health and Children has said about the significant burden that will affect the Health Service Executive. Therefore, health services will take a substantial hit as well. Meanwhile, back at the ranch there is also talk of selling off the ESB, Coillte and Bord Gáis — all providers of critical essential services. One would think the Government would have learned something from its predecessor selling off Eircom. Where is the common sense in that approach?
[382]I would have expected an initiative to try to grow the economy. There is no hint of the need to create jobs and provide a stimulus package. From the record of the IMF internationally it is clear that it could not care less about growth. All it wants is its pound of flesh.
The issue of rip-off charges in terms of the interest rate of the ECB and the institutions was raised this morning on Leaders’ Questions. That is scandalous and unacceptable.
I hope the Bill will be rejected. It is regrettable that we do not have more time to deal with the legislation comprehensively, given that we will only reach one or two of the amendments.
Deputy Finian McGrath: I thank the Acting Chairman for the opportunity to speak on the Bill.
Deputy Edward O’Keeffe: When is it my turn to speak?
Acting Chairman (Deputy Michael Kennedy): Deputy O’Keeffe will have his turn after Deputy McGrath.
Deputy Edward O’Keeffe: Do not forget.
Acting Chairman (Deputy Michael Kennedy): I will not.
Deputy Finian McGrath: Deputy O’Keeffe should not worry. We could not forget him.
When I first heard about the legislation and read about it in the newspapers I thought I was hearing things. The Minister for Finance, Deputy Brian Lenihan, was portrayed Fidel Castro-style riding in and sorting out the banks. All of a sudden I thought the Government had turned to the left. One big difference, however, is that the Cubans nationalised the banks when there was money in them but we take major shareholdings when the banks are broke. The latest developments in Cuba would be of interest to the Minister for Finance and the Government. I read in a newspaper today that the draft guidelines for economic and social policy state that as it updates its economic model, planning will be paramount, not the market. Perhaps there is a lesson for the Government and the Minister for Finance to learn from our comrades in Cuba.
The details of the legislation refer to the transfer of loans and deposits from lenders in a bid to reduce the size of the banking system. Special managers will have the power to sack directors and overrule shareholders. The Bill will also allow the Government to pump further cash into AIB which has a capital hole of €9.8 billion. In addition, it will enable the Government to wind down Anglo Irish Bank and the Irish Nationwide Building Society. The Bill changes the investment rules for the €25 billion National Pensions Reserve Fund. The Bill will also allow the Government to acquire 100% of AIB.
My colleague, Deputy Morgan, referred to the example of Iceland. It negotiated a new deal which is an improvement on the one rejected by 91% of Icelandic citizens. Iceland has secured a reduction in the rate of interest to be paid, from 5.5% to 3.2% on average. That is a sensible way to deal with the issue. Who shoulders the losses of the banks is a political choice. That is why I raise the issue. Iceland said “No” and got a better deal. We said “Yes, yes, yes” and we got saddled with an interest rate of 5.7%.
Levels of growth in the four year plan are grossly overestimated. It is important to admit that and to have an honest debate on the matter. We cannot make progress without growth. Our small open economy will be driven into the ground. No country in history has successfully accomplished what Ireland is being asked to do. At the very least other countries could devalue. That is extremely painful but it helped their economy with their neighbours. We cannot do that. If we succeed, the economics textbooks will have to be rewritten. We are being asked to [383]do the impossible. It has never been done before. This small peripheral economy is being squeezed. The politics of the Government and some of the other conservative parties is helping the squeeze. What has happened in our country is totally unacceptable.
I referred previously to the greed of some bankers and others working in the industry and how the debt is about to cripple this country. The reality is that we live in two Irelands. We live in an Ireland of the rich and an Ireland of the poor. Let us consider Mr. Eugene Sheehy, who is retired on a pension of €529,000 from AIB. He will gain almost €16,000 per year from the budget. Mr. Seánie FitzPatrick has retired from Anglo Irish Bank on a pension of €4 million. He will gain many multiples of the Sheehy gains — in excess of €64,000 — from the budget. That is a disgrace and a grave injustice.
Attention has already been drawn to the fact that super-high earners are gaining from the budget while low and middle income recipients are being hit. “Hit” is a polite way to put it: they are being hammered. There is greater inequity in pension income. As pensioners, rightly, do not pay PRSI, they are not affected by the abolition of the ceiling. A pensioner gains approximately €16,000 per year whereas an employer on the same income gains approximately €12,000. On the other hand, a person with a private sector pension of €15,000, which is less than the minimum wage, loses €400 while a public sector pensioner on €15,000 loses €580 per year. The injustice springs from two sources. The pensions of public servants on low incomes are being directly cut while high-income private pensioners such as the former bank chief executives are not. That is a grave injustice. The application of the universal social charge results in a €404 disadvantage to all those on low incomes. It is a disgrace that we find ourselves in this situation.
There are sensible aspects to the Bill but the Government’s overall handling of the banking crisis has been a disaster. Most independent observers would agree with that. I urge caution and sensible debate. Rushing through legislation is not good for the country, the economy and, more importantly, it is not good for the people of this country.
Deputy Edward O’Keeffe: I am pleased to have an opportunity to speak on the Bill. What I have to say will not be favourable to my side of the House.
Deputy Finian McGrath: Get ready.
Deputy Edward O’Keeffe: This is the most draconian legislation ever introduced by an Irish Government, especially a Fianna Fáil Government. My colleague, Deputy McGrath, referred to Cuba, but it is even worse than Cuba, it is like something one would hear about in North Korea. The Bill is taking from the rights of the people and putting legislation in place to that effect. We have seen a lot of that in recent times. That is why Fianna Fáil has lost support and is down to 17% or 18% in the polls. We have a Minister for Finance who is not identifying with the issues that concern the public. I say that publicly. I gave him a warning some weeks ago. I have no say in this House. I am a backbench Deputy. We are where we are because of our financial policy. Since 2008 we have gone down the wrong road with bank guarantees to Anglo Irish Bank.
I wish to refer to one issue which has not been referred to by any speaker today, namely, credit unions. They are at risk from the Financial Regulator. He is going to use a scalpel to destroy our credit unions that are based in towns and villages across the country. Approximately 2 million people are members of credit unions. They must be protected. It is a hidden issue in the Bill. I give a warning to that effect. I do not want that to happen. I defended the credit unions as spokesperson on enterprise and employment in 1997 with Deputy Mary O’Rourke, who was a good friend of mine at that time.
Credit unions need protection. Mr. Elderfield could become the new Cromwell of the Irish Republic. He cannot be allowed to take a hatchet to them, as he has been doing and will [384]continue to do. The threat is hanging over credit unions and people are frightened. They are contacting me about the issue. Credit unions in villages and towns across the island must be protected.
Deputy Arthur Morgan: Deputy O’Keeffe is right.
Deputy Edward O’Keeffe: I thank Deputy Morgan. It was not the Bank of Ireland and AIB that caused the problem. An individual came here from the United Kingdom, Mr. Mark Duffy. He brought the Bank of Scotland into the Irish market. He gave 100% mortgages to the Irish people. He could not give out enough money. No one has said anything about him. We have heard all sorts of things from the Labour Party and from Fine Gael but no one has mentioned him in this House at all at all since 2008. He was the man who destroyed the banking system in this country. He came into the finance committee and told us what we should and should not do. Bank of Scotland is gone with a trail of financial destruction left behind and Mark Duffy has gone and he has not been arrested.
We are talking about other Irish people who did nothing wrong being forced into competition. Competition destroyed our banking system and foreign banks in our land. We have foreign people telling us what to do. We have a regulator who was Garret FitzGerald’s financial adviser in 1984-87 and what did he do? He doubled the national debt. He talks the talk, he goes to dinners and tells us what to do but he is a professor, he never bought a pig’s head in his life; if he had, he would know what life is about.
We have only two banks on this island and we have no banking system and no country can afford not to have a banking system. Every country in the European Community will have a bank in its own nationality. New Zealand went down the road many years ago of deregulation and still to this day does not have a banking system and it regrets that every day. I meant to go to New Zealand this year but because of restrictions on this House and economics and cutbacks and publicity I did not.
If I was in charge of the banking system as Minister for Finance, I would have put a business banking task force in place of people like O’Brien of O2 and Alan Dukes, who is not a bad guy, and I would have Denis O’Brien and the stockbroker of NCB, Dermot Desmond, along with Pat Farrell of the Irish Banking Federation. I would have put five practical, common sense people on a bank task force. Then we would have business and we would not be running around with bank guarantees and bad banks and good banks. We do not know where we are going and the people of Ireland are fed up with us because banking has destroyed this Government and this Minister for Finance has let it rip, rip, rip. I have told him so and I commented publicly in 2008 when he got the job. If I had gotten that job in 2008, my first task in my first month would have been to make a plan. No plan was put in place, nothing was done and the economy was on the down. It was done by McCreevy and other Ministers and now we are depending on foreign banks to rescue us. Corrective action should have been taken.
This legislation must go before the Supreme Court before it can be enacted. It is the most serious and draconian legislation that has ever come in here, even the Special Powers Act was not as dominant and dangerous to the Irish people as this legislation. Tomorrow morning our two banks can be sold off at the stroke of a pen. We are being told they must be sold. What are we going to do? I say that we cannot manage without an Irish bank and I am looking at the Minister of State, who is a good friend of mine and I ask if we are going to depend on the HSBCs, the Barclays, the Standard Chartereds, the Credit Suisses? They just laugh at us.
Side by side with that, we can look at what has happened with Lehmans in New York, and Bear Stearns, and what happened in other countries, where they put their houses in order. American banking is not as bad as it was. There are two banks in Britain, Royal Bank of [385]Scotland and Lloyds and they have no problems. We do not have any leadership in banking. That is the problem.
The sooner we put our House in order and put our structure right, then we will be in business, but it has not happened and no one has a formula. I mentioned credit unions and I mentioned selling off the banks. We will rue the day we sold the banks. In Irish history, we will never forget it and I say that as a genuine Irishman. We have more foreigners running our banks now that we will get so bad we will be looking for Brian Boru to drive them out again.
Minister of State at the Department of Finance (Deputy Martin Mansergh): I thank Deputies for their contributions on Second Stage of this important legislation.
The comprehensive restructuring of the business system is a key pillar of the financial support programme with the IMF and EU, approval of which was passed earlier this morning. It is the first important step in putting in place an extensive special resolution regime that will provide for a comprehensive framework to facilitate the orderly management and resolution of distressed credit institutions. In that context the Bill includes the powers to appoint a special manager to a relevant institution, which would only arise in limited and exceptional circumstances, to achieve the objectives of the legislation.
Under the EU-IMF programme, there is a commitment providing for a comprehensive special resolution regime to be published by the end of February 2011 which would include the full suite of SRR powers based on international best practice and the evolving EU framework. Once this Bill is enacted, the powers available to the Minister would enable the substantial and significant restructuring actions envisaged in the support programme to be progressed and the provisions will facilitate the disposal of non-core assets to support the achievement of funding targets set by the Central Bank of Ireland, while allowing the Minister to provide credit enhancement that could help to support progressive reduction in the balance sheets of the domestic credit institutions through, for example, the securitisation of bank assets.
The restructuring of Anglo Irish Bank and Irish Nationwide Building Society is set out in the programme agreement and is consistent with EU state aid requirements, providing scope for appropriate burden sharing for subordinated debt and providing the Minister with the power, if necessary, to effect a recapitalisation of AIB prior to the end of the year to meet regulatory capital requirements set by the Central Bank of Ireland.
As the Minister outlined in his speech, it is imperative that he has the necessary powers to undertake these actions as soon as possible. There was much comment in the debate about the need for senior bond holders to accept their share of the burden of this crisis. When those who deplore the gradual erosion of the deposit base of the Irish banking system come to reflect on it, they will see the substantial contribution made to that process by the unhelpful level of domestic noise about this matter. The Minister dealt with this issue earlier in the debate on the IMF-EU support programme. There is simply no way this country, where the banks are so dependent on international investors, can unilaterally renege on senior bondholders against the wishes of the European Central Bank. People talk about burning the bond holders but they will burn the people of this country, those on social welfare, public servants and anyone dependent on the public purse. It is grossly irresponsible to suggest that can be done unilaterally. In any country where such experiments have taken place, the central banks stood behind the affected banks throughout the resolution of the resulting crisis. Those who think we could unilaterally renege on senior bondholders against the wishes of the ECB are not living in the real world.
Deputies are aware that discussions are ongoing at EU and international level on the mechanisms that may be available in future to share the fiscal costs of bank resolution with senior creditors of banks other than depositors. This work, however, remains preliminary and many important legal, financial and commercial hurdles must be cleared before there is any prospect [386]of it becoming accepted market practice. It is important to draw attention to that because this debate in Ireland is not taking place in isolation from developments with our EU partners. For all these reasons, and those discussed at length in this House and elsewhere, the scope for burden sharing going beyond subordinated debt is a matter not currently available to us. When the new Government is formed, the parties in that Government will rapidly find out those realities, if they do not realise them already.
It is not the case that SRRs are widespread, it is only in recent weeks that countries such as Denmark and Germany have brought such legislation before their parliaments. The legislation before the House now is an important first step in the development of a comprehensive SRR and the Government is committed in the IMF-EU programme to having such an extensive regime by the end of February 2011. It is worth noting that at EU level, an EU directive on the issue is not due to be published until June 2011 by the Commissioner for Internal Market and Services.
The Dáil divided: Tá, 80; Níl, 72.
| Tá | |
| Ahern, Bertie. | Ahern, Dermot. |
| Ahern, Michael. | Ahern, Noel. |
| Andrews, Barry. | Andrews, Chris. |
| Ardagh, Seán. | Aylward, Bobby. |
| Behan, Joe. | Blaney, Niall. |
| Brady, Áine. | Brady, Cyprian. |
| Brady, Johnny. | Browne, John. |
| Byrne, Thomas. | Calleary, Dara. |
| Carey, Pat. | Collins, Niall. |
| Conlon, Margaret. | Coughlan, Mary. |
| Cregan, John. | Cuffe, Ciarán. |
| Curran, John. | Dempsey, Noel. |
| Devins, Jimmy. | Dooley, Timmy. |
| Fahey, Frank. | Finneran, Michael. |
| Fitzpatrick, Michael. | Fleming, Seán. |
| Flynn, Beverley. | Gogarty, Paul. |
| Gormley, John. | Hanafin, Mary. |
| Harney, Mary. | Haughey, Seán. |
| Healy-Rae, Jackie. | Hoctor, Máire. |
| Kelleher, Billy. | Kelly, Peter. |
| Kenneally, Brendan. | Kennedy, Michael. |
| Killeen, Tony. | Kitt, Michael P. |
| Kitt, Tom. | Lenihan, Brian. |
| Lenihan, Conor. | McEllistrim, Thomas. |
| McGrath, Mattie. | McGrath, Michael. |
| McGuinness, John. | Mansergh, Martin. |
| Martin, Micheál. | Moloney, John. |
| Moynihan, Michael. | Mulcahy, Michael. |
| Nolan, M.J. | Ó Cuív, Éamon. |
| Ó Fearghaíl, Seán. | O’Brien, Darragh. |
| O’Connor, Charlie. | O’Dea, Willie. |
| O’Donoghue, John. | O’Flynn, Noel. |
| O’Hanlon, Rory. | O’Keeffe, Batt. |
| O’Keeffe, Edward. | O’Rourke, Mary. |
| O’Sullivan, Christy. | Power, Peter. |
| Power, Seán. | Roche, Dick. |
| Ryan, Eamon. | Sargent, Trevor. |
| Scanlon, Eamon. | Smith, Brendan. |
| Treacy, Noel. | Wallace, Mary. |
| White, Mary Alexandra. | Woods, Michael. |
| [387]Níl | |
| Allen, Bernard. | Bannon, James. |
| Barrett, Seán. | Breen, Pat. |
| Broughan, Thomas P. | Bruton, Richard. |
| Burke, Ulick. | Burton, Joan. |
| Byrne, Catherine. | Carey, Joe. |
| Clune, Deirdre. | Connaughton, Paul. |
| Coonan, Noel J. | Costello, Joe. |
| Coveney, Simon. | Crawford, Seymour. |
| Creed, Michael. | Creighton, Lucinda. |
| D’Arcy, Michael. | Deasy, John. |
| Deenihan, Jimmy. | Doherty, Pearse. |
| Doyle, Andrew. | Durkan, Bernard J. |
| English, Damien. | Feighan, Frank. |
| Ferris, Martin. | Flanagan, Charles. |
| Flanagan, Terence. | Gilmore, Eamon. |
| Hayes, Brian. | Hayes, Tom. |
| Higgins, Michael D. | Hogan, Phil. |
| Howlin, Brendan. | Kehoe, Paul. |
| Lynch, Ciarán. | Lynch, Kathleen. |
| McCormack, Pádraic. | McEntee, Shane. |
| McGrath, Finian. | Mitchell, Olivia. |
| Morgan, Arthur. | Naughten, Denis. |
| Neville, Dan. | Noonan, Michael. |
| Ó Caoláin, Caoimhghín. | Ó Snodaigh, Aengus. |
| O’Donnell, Kieran. | O’Dowd, Fergus. |
| O’Keeffe, Jim. | O’Mahony, John. |
| O’Shea, Brian. | O’Sullivan, Jan. |
| O’Sullivan, Maureen. | Penrose, Willie. |
| Perry, John. | Quinn, Ruairí. |
| Rabbitte, Pat. | Reilly, James. |
| Ring, Michael. | Sheahan, Tom. |
| Sheehan, P.J. | Sherlock, Seán. |
| Shortall, Róisín. | Stagg, Emmet. |
| Stanton, David. | Timmins, Billy. |
| Tuffy, Joanna. | Upton, Mary. |
| Varadkar, Leo. | Wall, Jack. |
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Emmet Stagg and Paul Kehoe.
An Ceann Comhairle: The Select Committee on Foreign Affairs has completed its consideration of the Biological Weapons Bill 2010 and has made amendments thereto.
SECTION 2Deputy Joan Burton: I move amendment No. 1:
The purpose of this amendment is to address the issue of section 53 in which the Minister gives himself an astonishing range of powers seldom seen outside totalitarian regimes. I am sure it will be much copied if totalitarian-style regimes want to give a Minister for Finance an extraordinary range of powers.
Section 53 exemplifies what is problematical about this Bill. This amendment to subsection (1) states that “Nothing in section 53 shall be construed as enabling orders to be made under this Act which purport to have the effect of making or changing laws, within the meaning of subsection 2 of section 1 of Article 15 of the Constitution”.
Section 53 seeks to give extraordinary powers to the Minister for Finance. As I said at some length during my speech on Second Stage, the Labour Party has called for a clear commitment to a bank resolution regime. The Government agreed to such a regime in the memorandum of understanding between the IMF and the European Union institutions. In fact, according to the memorandum of understanding, a full banking resolution regime is to be in place early in the new year, presumably in the time of the next Government.
We received copies of this legislation yesterday at around 1 p.m. It is a complex Bill comprising 67 pages with 77 sections and two Schedules, one of which is in five parts. Each part sets out substantive amendments to other pieces of legislation, such as the National Pensions Reserve Fund Act and the NAMA Act. In addition, the Bill before us sets out changes to powers concerning the relationship between the Minister for Finance and the Governor of the Central Bank. We are supposed to deal with all this material by 10 o’clock tonight, out of which 90 minutes will be devoted to Private Members’ time.
In dealing with such a Bill, Second Stage is obviously more important than Committee Stage. However, Committee Stage will now be limited to the small amount of time we have been allocated, with almost no opportunity for interested parties, publicly-minded citizens, expert academics and lawyers to examine and consider the Bill with a view to how it might be improved or amended, or what might be deleted or altered in its provisions. The Bill is being railroaded through. It is hard to understand what is its purpose, except in the context of a general election happening early in the new year.
The Labour Party is not opposed to bank resolution regimes. We have called for one. However, this is not a bank resolution Bill. It is a temporary measure that will be in force for only two years. The Government is committed to introducing full special resolution regime legislation by the end of next February under the terms of the IMF-EU memorandum of understanding. The Bill is an interim stop-gap measure. It attempts to plug a gap in a way that will enable the Minister for Finance to dictate a targeted special resolution regime designed to facilitate specific restructuring and reorganisation measures that it is expected will be undertaken in the coming months.
However, the measures are not spelt out in the Bill. From media comment and from a brief discussion I had with the Minister and Department officials — I am sure the same is true of other Opposition parties — we know that the Minister’s intention is to address the issues in each of the guaranteed institutions over the next short period of time. We understand, for instance, that the issues in Allied Irish Bank are grave and that it is likely that the further recapitalisation of AIB by the Government will be attended to before the end of the year, and perhaps before Christmas. The Minister knows this but it is not specifically referred to in the Bill, other than that powers in the Bill address all the guaranteed institutions as well as others the Minister may feel require the effect of the legislation.
[389]Not even an optimist could consider that Anglo Irish Bank and the Irish Nationwide Building Society have a future. However, the legislation specifically refers to the Minister reorganising and recapitalising Anglo Irish Bank, as though the aim of the Bill was to save Anglo Irish Bank, when not only is it beyond salvation but it has, pretty much, taken the country down with it.
Acting Chairman (Deputy Michael Kennedy): Deputy Burton, please speak to the amendment.
Deputy Joan Burton: I am addressing what the Minister is proposing to do but what he has not actually addressed.
Acting Chairman: We are discussing amendment No. 1. Can you confine your remarks to the amendment to section 2.
Deputy Joan Burton: I will read the substance of the amendment again. It states:
It is the Labour Party’s view that the powers the Minister is seeking to confer on himself in section 53 are so wide as to be beyond the boundaries of the Constitution in any reasonable meaning.
In various sections of the Bill, the Minister has made orders, constructions and structures in regard to the different institutions. He covers himself, presumably after consultation and advice, by saying that having arranged that, he will be able to have the courts rubber-stamp what he has dictated. In that sense, he seeks to take unto himself the power to amend legislation.
Section 53 says the Bill will override the provisions of any earlier Act. Much legislation does this. However, section 53 goes further. It purports to empower the Minister for Finance to override Acts of the Oireachtas and to legislate contrary to their terms. The section seeks to make the Minister a one-man legislature, with power by order to amend or repeal the law of the land. The section attempts to equip the Minister with the power to make orders that will have the effect and force of law, notwithstanding any Act of the Oireachtas. If we approve of legislation such as this we may as well pack our bags, because the country will be ruled by the Minister and not, as the Constitution says, by the Oireachtas. There is nothing in the recitals to the Bill that would justify the Government attempting to seize the power of making law from the Oireachtas in this way and to seek to vest it in the Minister for Finance.
It has become a feature of the Minister’s legislation that there are recitals at the front of a Bill that seek to paint broad pictures and give extra powers. Much of the Minister’s emergency legislation contain these recitals, presumably on the basis that the general arguments in the recitals will impress judges and persuade them to give the Minister full power to override the Oireachtas and the Constitution.
The basic principles were set out by Chief Justice, the Honourable Mr. Justice John Murray, in his judgment in Mulcreevy v the Minister for the Environment, Heritage and Local Government and Dún Laoghaire-Rathdown County Council. The Chief Justice said:
What the Oireachtas is, therefore, faced with, in the words of former Chief Justice, the Honourable Mr. Justice T. F. O’Higgins and affirmed by former Chief Justice, the Honourable Mr. Justice Ronan Keane, is an attempt to seek a meaning for the words in section 53 of the Bill which absolve the national Parliament from any intention to delegate its exclusive power of making or changing the laws.
I cannot see how section 53 can be read in any other way. It specifically says that ministerial orders have effect, notwithstanding the terms of any Act of the Oireachtas or any pre-Independence statue. To the extent that it overrides existing statute law, any such order would have to be taken to implicitly either amend or repeal it. However, the power to amend or repeal statute law is, according to the Supreme Court, a power that the Houses of the Oireachtas cannot delegate to a Minister. The Dáil cannot delegate its exclusive power to make or change the laws. In view of this I propose this amendment. It is important because we have had so much emergency legislation.
The WikiLeaks reports that were reported yesterday in The Guardian and The Irish Times set out the mindset of Department officials at the fateful time of the bank guarantee. The material in question refers to a perfect storm, to impaired assets constituting 0.5% to 0.8% and to the fact that the media had exaggerated the difficulties in the bank. It states that the issue related to how to unwind the problem assets and that the auditors, PricewaterhouseCoopers, PwC, had a favourable impression of two of the institutions that were examined. It further states that there was a herd mentality that was based on rumour and innuendo. The herd mentality to which it refers revolved around the fact that our reputation had been shredded in the UK, in particular, and in the United States as a result of the actions of two rogue institutions, namely, Anglo Irish Bank and Irish Nationwide.
The US Government representatives indicated at the time that “it may be that government officials are being a bit optimistic in their assessment of the level of impaired assets”. The term “optimistic” refers to the belief among officials in this country that the level of impairment, at less than 1%, was negligible. That kind of thinking, which was prevalent when the bank guarantee was introduced, has carried through into the legislation before the House. Those who delivered that guarantee now want us to grant the Minister extraordinary powers and to basically abdicate our constitutional role as a Legislature. The Labour Party will not do that because it is of the view that the Minister is wrong.
According to the memorandum of understanding, the legislation before the House will be replaced, by the end of February, with the type of proper bank resolution legislation required by the IMF and the EU. Why is the Minister seeking to grant himself such extraordinary powers and why does he feel no obligation in respect of this matter? The Bill contains vast secrecy provisions and when it is enacted, we will not be able to discover why the Minister [391]took certain actions in respect of the various institutions. However, we are aware, from media reports and from the Minister’s general comments, that the taxpayer will own 90% of AIB. It is proposed in the relevant section of the Bill that Anglo Irish Bank be reorganised and recapitalised. The Minister should read that section into the record in order that people might know what is to occur. Amendment No. 1 seeks to reasonably restrain the Minister from doing something which he is not entitled to do.
Deputy Pat Rabbitte: I support the amendment. As Deputy Burton stated, the Labour Party is in favour of the introduction of bank resolution legislation. Such legislation was not in place in 2008. Not many Members knew much about bank resolution regimes at that time. However, we have all learned a little about them since. Having waited for a bank resolution Bill since 2008, we have suddenly been presented with one on the day before the House is due to adjourn for the Christmas recess. There is no rebutting the argument advanced by Deputy Burton that this is no way to make law. We have been presented with a complex item of legislation which runs to some 76 sections and we are expected to respond to it on the hoof.
I do not believe the Bill before the House constitutes bank resolution legislation. It certainly does not reflect the bank resolution legislation that has been put in place in other jurisdictions. Rather, it is a temporary measure which is designed to empower the Minister to do certain things, some of which may be in urgent need of being done. For example, it is obvious that AIB plc would be in danger of losing its banking licence after 31 December next if the Minister is not empowered to come to its rescue. A press release from AIB appeared on the Reuters website last night and in it reference is made to the Minister publishing the Bill. The press release in question states “the Minister has indicated the legislation, if passed, will be available to effect, in part, an injection of capital into AIB prior to year end”. In other words, what is being stated is that AIB would not be in compliance with the new capital adequacy ratios established by the Financial Regulator by the end of the year. If the bank is to comply with the new capital requirements, the Minister must be in a position to do what he proposes to do.
Under normal circumstances, the provision of a bank resolution regime would be entrusted to the Financial Regulator or to the Central Bank. In the legislation before the House, the Minister proposes to take over that function. He is arrogating unto himself the prudential function relating to the special resolution scheme envisaged in the Bill. That is most unusual. Following the collapse of Northern Rock, the UK authorities introduced temporary legislation to cover a period of six or nine months in which they could get their act together and decide what would be required in respect of a special resolution regime. They then introduced what became the Banking Act 2009.
I would be interested in hearing the Minister’s views on why, in the period since 29 September 2008, he has not sought to establish a special resolution regime. At present, his actions appear to be driven by two factors. The first of these is the urgency with regard to the position of AIB and the second is the IMF-EU-ECB agreement, which places certain impositions on the Minister in the context of his ability to intervene, restructure and make changes within the banks, to reallocate sections of one bank to a safer home, etc.
Deputy Burton sought to make the point that the Labour Party is in favour of the introduction of bank resolution legislation. However, it is most unfair to place Members in a position where the legislation has been thrust upon them 24 hours before the House rises for the Christmas recess and then expect them to make a considered response in respect of it. I am not opposed to the Minister taking upon himself powers that are proportionate to the job that must be done. However, any reading of the Bill suggests that it will empower the Minister, without reference to the Houses, to make orders that are contrary to legislation enacted by the [392]Oireachtas and to the provisions of particular laws. This extraordinary power is contained in section 53.
It is important that the interpretation section of the Bill should seek to constrain, in the fashion envisaged in the amendment, the powers of the Minister. The Bill contains a sunset clause which appears to support the view the Labour Party is expressing, namely, that this is not bank resolution legislation. Rather, the Bill is a temporary measure to which certain limited, designated objectives attach. The Minister appeared to imply that, as a result of a requirement contained in the deal with the EU and the IMF, a more comprehensive item of bank resolution legislation will be forthcoming in the spring. Everyone would welcome the introduction of such legislation. In the meantime, however, we must respond to the interim measure before the House. I submit the amendment tabled by Deputy Burton is desirable and the Minister still would have powers that are proportionate to do the job he must do.
Deputy Michael D. Higgins: The issues that arise in this regard are quite serious. Obviously if Members can resolve this issue, which should be done either by clarification or by vote, one would be able to approach what the Minister seeks to achieve in other sections in a much clearer fashion. Certainly, the case for this amendment that has been made by my colleague, Deputy Burton, is very important. It is simply a fact that clarifications have been given by the highest court in the land on the use or departure from Article 15.2.1° of the Constitution. This is the reason it is appropriate to discuss Deputy Burton’s amendment under section 2, the interpretation section, as it goes right to the very beginning and seeks to clarify what precisely is the intent of the legislation, as will be proposed specifically with regard to section 53. In turn, Members should be well aware of section 53’s sweeping powers. The section proposes to give the Minister an extraordinary power to override any other instrument and I will outline the issue. It states:
However, as an ordinary legislator in this House, albeit one who has been here for a long time, may I set out the current position and where the difficulty arises? For example, Members need to discuss significant amendments to the basic consolidated companies legislation. I suggest that legislation in this regard is quite urgently needed. It would have been desirable, and this is a positive, rather than a partisan view, that after November 2008, Members had been provided with research papers and a good discussion on, for example, the role and responsibilities of non-executive directors. Moreover, as a long time has elapsed, I would like to return to the companies legislation pertaining to professional supports and requirements.
Some changes have been made in recent years with regard to the auditing function and so forth, in which a departure from traditional practices has created the capacity for the disaster in which we now find ourselves immersed. However, Members should imagine being engaged in such a review and that one then encounters as passed section 53 of this Bill. The question immediately would arise as to what precisely does the Minister seek to override. Is there a [393]boundary to it in legislative terms? Does it extend beyond the range of this particular Bill and everything that is mentioned in it? This would have been helpful but I make this point in an attempt to tease out the current position in respect of this provision. Unfortunately, section 53(a) provides a citation of other Acts such as the Companies Acts, the Building Societies Act and the Credit Union Act 1997. Consequently, the provision is going beyond the boundaries of what is sought with regard to this legislation.
The Title of the Bill, namely, the Credit Institutions (Stabilisation) Bill, may be enigmatic. Certainly anything that might happen may be more stable than anything of which Members have had recent experience, but the legislation does not resemble the comprehensive bank resolution legislation about which Professor McHale of NUIG wrote last spring. While I wish to be fair, this Bill pertains to the role, competence and entitlements of the Minister to deal with the particular mess as it arises in respect of particular financial institutions.
Another problem arises beyond the constitutional one posed by Article 15.2.1° and the possible compromising of legislation that is beyond the boundary of this particular proposed legislation, namely, the role of the Minister into the future. This is not a personal criticism of this Minister but is a criticism of any Minister of the day. The difficulty is that this legislation appears to deepen the connection between the Minister, as Minister for Finance nominated and agreed by the House as a member of the Government, and the banks. This is a difficult question because the Minister should be able to answer but, at the same time, the Minister to an extent will be almost constrained to defend what has happened. The Minister could reply to that point by stating he will have powers through this legislation to state, for example, that he sought A, B or C but it was not complied with. The legislation may be in existence but non-compliance or the absence of sanctions for such non-compliance will then immediately arise.
I must make a small admission which is that I have written previously about the role of the Department of Finance and Minister for Finance anyway and I wish to provide a tiny example in this regard. Off the top of my head, I refer to section 24(1)(1) of the Ministers and Secretaries Act 1924, which has been comprehensively abused. For example, as a former member of the Cabinet, I recall that one could go to Cabinet and could succeed in an argument with one’s Cabinet colleagues. One could reach consensus or, if consensus was not available, some kind of compromise agreement, only to find that this retained power under the aforementioned section would leave one withering on the vine in respect of the approval that was required with regard to, for example, the staffing of a meritorious institution, some of which were associated with my period in office. I remember getting approval for a particular activity and purchasing a premises in the west of Ireland, namely, Turlough House, only for it to be left closed to the public for 18 months because it was pointed out to me that one could not get permission for the approval of staff and so forth. This issue as to what should be the competence of a Minister and of a Department and so forth is a matter for another day. I make this point lest people state that I am always against the Department of Finance. I draw a distinction between the Department and the Minister of the day.
Incidentally, I suggest to the Minister that he needs a protective distance between himself and the functioning of the Department. Moreover, he needs a protective distance between himself and those to whom regulation functions have been delegated. However, his real difficulty lies in him stating that nothing anyone else may legislate, order or do in this area or even outside it will count. He also, in the long list of internal matters pertaining to ministerial orders as to function within a banking institution, leaves himself wide open to the suggestion that had the Minister wished it to be different, he should have specified it. He is moving too close to the institution in respect of performance whereas, under the Constitution, what he is being [394]asked to do is to provide accountability. They are different things and one could state, for example, that the Minister is not in the role of a defender of the faith with regard to what happens in financial decisions but he is in this Chamber to show how the public interest is facilitated. I suggest that while I strongly support the amendment to section 2 tabled by Deputy Burton, it would be very wrong to pass section 53 in its rather vague and widely defined way and Members should vote on that.
Acting Chairman (Deputy Michael Kennedy): Deputy Doherty, we are on section 2. Do you wish to make a contribution? You tabled amendment No. 1.
Deputy Arthur Morgan: I agree entirely with the sentiment of the amendment. I do not know how the Minister thinks the President can sign the Bill into law without referring it to the Supreme Court or at least consulting with the Council of State. There will be trouble for this Bill in its current state. I hope there is because I do not want to see legislation passed which incorporates the package from the IMF and the EU. It would do us all a favour if it was referred to the Supreme Court and it found it to be unconstitutional.
Deputy Brian Lenihan: On the narrow issue of the amendment, all legislation is subject to the Constitution. It is legislative surplusage to say that section 53 will be subject to the Constitution because it is subject to it. The primacy of the Constitution is fundamental in all the legislation we enact. I do not see the narrow text of the amendment advancing the argument in any way and I am not prepared to accept the amendment in its terms.
More general arguments were raised.
Deputy Michael D. Higgins: Then we would have to oppose section 53.
Deputy Brian Lenihan: I will deal with section 53 and try to persuade the Deputy why he should not oppose it by speaking to the general issues he raised. I have dealt with the narrow issue of the amendment but wider concerns were raised in the course of the debate. It is important to note that section 53 achieves two purposes rather than one, a point which was not noted in the discussion.
It has a double effect. Second, it provides that an order made under the Act shall have effect, notwithstanding relevant legislation. There are two distinct objectives in this section and it is important that they are distinguished for the purposes of this discussion.
First, the reason for the extensive recitals is that the Bill reflects a banking emergency and the legislation has limited operation until December 2012 under section 69. Second, the pro[395]visions of the Bill are so fundamental that there can be no question as to its primacy over other legislation. The Oireachtas is being invited to approve this qualification of other statutes, such as the Companies Acts, the Building Societies Act and the Credit Union Act 1997. There is an implied repeal of any possible inconsistent provisions in this Bill in order that it, from a legislative prospective, can have full force and effect.
In the course of the argument it was not suggested by any Deputy that the first element was improper or wrong. The discussion was focused on the second element, as I understand it, namely the issue relating to the orders that could be made under the Bill. I am distinguishing between the two aspects of the section and suggesting that no objection was made by any Deputy to the fact that the provisions of the Bill are so fundamental that there has to be an implied repeal of other legislation in the event that there is a possible inconsistency.
The second issue is the question of the orders under the Bill. Orders under the Bill are not binding until sanctioned by the High Court. They override other legislation only to the extent that is permitted under the Bill. Deputy Higgins put the point well in his argument when he invited me to indicate if the Minister can use the powers under this Bill to repeal other legislation. The Minister cannot do that. All a Minister can do under this Bill——-
Deputy Joan Burton: ——is override.
Deputy Brian Lenihan: ——is look for an order in accordance with the statutory scope of the powers for which the Minister can apply.
For example, the power to give a direction is the most topical because a direction order may be required in the case of AIB. Such an order would be applied for and confirmed by the High Court and would then take full force and effect, notwithstanding the provisions in the listed legislation, the rules of law or equity, the codes of practice, the listing rules, the memo and articles of association of the relevant institution and any agreement to which that institution is a party.
The purpose is not to empower the Minister to repeal legislation, rather, it is to protect orders made under valid legislation enacted or to be enacted by the Oireachtas and to enable the Minister to apply and make these orders, subject to High Court confirmation. Those particular orders cannot be challenged on the basis of some other enactment. The orders are made within the terms of this enactment and that is the second effect of the section. All of this, I have been advised by the Attorney General, is in accordance with the Constitution.
Some wider questions were asked which relate to what we are discussing. The first question was how this Bill relates to the bank resolution legislation which the programme requires us to have published by the end of February. I take issue with Deputy Rabbitte. This is bank resolution legislation in substance as well as form because the most fundamental power in bank resolution legislation is the power to move assets and liabilities and that power is clearly conferred in this Bill.
The power in regard to subordinated debt is a fundamental provision in resolution legislation and is also dealt with in this Bill.
Deputy Pat Rabbitte: The power is targeted.
Deputy Brian Lenihan: The powers regarding capital are also required in a resolution regime. The powers on the appointment of a special manager are frequently found in resolution statutes. The essentials of a resolution regime are contained in this Bill.
[396]Deputy Noonan made the point that these powers would normally be vested in the Governor of the Central Bank and it is intended that the permanent resolution legislation which will be published in February will confer those powers on the Governor. The lead role and responsibility assigned to the Minister under the Bill reflects the huge commitment of State resources to the banking system and the need to safeguard the State’s fiscal position in implementing the programme.
In the terms of the facility which has been provided, €50 billion is for drawdown for the purposes of funding the State, for paying our salaries in this House, paying pensioners and discharging current and capital expenditure requirements. Of the balance of €35 billion, we are drawing €17.5 billion from our own reserves in the National Pensions Reserve Fund which is a contingency fund that can be drawn down if required. It is very important that we draw down as little of the contingency fund as possible.
For that reason, the Minister must have a central role in safeguarding the fiscal position of the State which has to be fundamental in the implementation of the Bill. It is also essential that the Minister has wider discretion, drawing on the best expert advice regarding the necessary steps or courses of action that should be embarked upon in seeking to resolve the challenges facing our banking system. Our problems, as all Deputies have recognised in the debate, are sector wide. Therefore, a sector-wide resolution plan is needed urgently.
I and any Minister will work closely with the Governor of the Central Bank but it is imperative that the Minister takes responsibility for this Bill and that is why it is drafted in that way.
The following motion was moved by Deputy Willie Penrose on Tuesday, 14 December 2010:
Debate resumed on amendment No. 1:
Acting Chairman (Deputy Michael Kennedy): Deputy Paul Connaughton is the next speaker. I understand he is sharing time with Deputy Bruton. There are ten minutes in this slot.
Deputy Paul Connaughton: Deputy Bruton can go first if he so wishes.
Acting Chairman (Deputy Michael Kennedy): Will Deputy Bruton accept that generous offer?
Deputy Richard Bruton: I will. I thank the Labour Party for tabling this motion and facilitating this timely debate. If we are to have a proper perspective on the decision to cut the minimum wage, we need to reflect on the entire crisis this country is facing. I do not doubt that we have embarked on a hard road that will last many years, as we try to come to terms with the crisis that has been created by the catastrophic mistakes of policy makers. As people make sacrifices, it is important for them to see that the burden is being shared fairly. That is why the Government’s decision to cut the minimum wage, as its first act in trying to confront this country’s competitiveness problem, is such an affront. Not only is it cutting the minimum wage by €40 a week, but it is also bringing the minimum wage into the tax net. The new universal social insurance contribution will cost a person on the minimum wage €11.10. He or she will also have to pay income tax of €5.07. It is clear that the combined effect of these changes will lead to a devastating 14% reduction in the standard of living of such a person.
I am sure the Minister of State, Deputy Kelleher, will argue that we need to retain the incentive for people to go out to work. Is it not somewhat ironic that on the day the social welfare payment to someone who is unemployed was cut by €8 a week, the take-home pay of someone on the minimum wage was cut by €48 a week? The authors of the Government’s literature on this subject have argued that the replacement ratio — the ratio between social welfare payments and payments at work — is most important. In one stroke, the Government has increased that ratio by 10%. It is now 10% more attractive to stay at home, compared to going out to work on the minimum wage, than it was a couple of weeks ago. That makes no sense as an economic policy or as a social policy.
When one examines this country’s competitiveness problems, one should not focus on the least organised section of the workforce, which comprises approximately 3% of those at work. One should focus on the powerful interests that are sheltering huge areas of uncompetitiveness. However, one does not hear a word from the Government about what it intends to do about costs in areas like power generation, legal services or rents. It suggests such areas are out of reach while legislating to sting people on the minimum wage. A recent survey in The Irish Times compared pay levels in the major professions on either side of the Border. It found that there is a huge gulf between what is paid in the North and what is paid in the South. According to the newspaper’s figures, there is a difference of €100,000 in the earnings of consultants on either side of the Border. The differences in the earnings of workers in all professions - The [399]Irish Times surveyed nurses and doctors, etc. — were generally in the order of €10,000 or €20,000. The Government is not introducing a legal stroke to cut rates of pay in those instances, however, because the groups in question are powerful.
I would like to conclude by speaking about the continuing rip-offs in this country. People are being charged more here than in other countries for the same services. Many of the problems that are undermining this country’s competitiveness are managed by the Government. I refer to water and waste charges, for example. There is an issue about trying to create more work at low pay. Fine Gael has made two concrete proposals to that end. First, levels of employers’ PRSI should be cut by 8.5%, thereby making it cheaper to employ people. Second, VAT should be cut by 1.5% in labour-intensive activities. Those steps would open employment opportunities. People who are on social welfare would have the real alternative of going out to work at low pay. That is the way to deal with it. The introduction of legislation that targets the most vulnerable people in society serves to undermine the social support for the difficult adjustments we are having to undertake.
Deputy Paul Connaughton: I thank the Labour Party for bringing this motion to the floor of the House. I have been here for many budgets. Until a few years ago, one could always rely on Fianna Fáil to do the clever thing — it might not be the best thing, but it would be the clever thing — but it has now lost that ability. I will explain why what the Government has done to the minimum wage is neither right nor cute. I will not refer to the Government’s outrageous conduct with regard to the blind, the disabled and the carers, as tonight’s debate relates to the minimum wage.
Before these changes were made, if those on the minimum wage worked for 40 hours they would be paid €350 a week, give or take one or two euro. That is what they would get for their week’s work. When the Government took €1 per hour from them, it reduced their yearly income of €17,500 by €2,000, which is a huge chunk of a small wage. That is what actually happened. Given that the Taoiseach and the various Ministers lost just €10,000 or €11,000 from their salaries, which can rise as high as €250,000, it is clear that there is no fairness in the system. Regardless of how one examines such a concept, high up or low down, one will not see any fairness in it.
I would like to speak about another huge problem with the minimum wage. I agree with Deputy Bruton that we have to ensure we get the people of this country back to work. While I accept that concept, I do not understand the argument that the reduction in the minimum wage will cause more people to want to get out of the social welfare system and back into work. It must be borne in mind that one encounters many hidden costs when one is in work. As most jobs are not created in one’s back yard, one usually has to drive to work. Therefore, one has to pay one’s insurance and one’s tax. One has to pay for meals and all that kind of thing. I think the Government has forgotten all of that. Those who are earning just €350 a week have no room for manoeuvre.
It is against that background that the 3% of the working population who are on the minimum wage consider themselves to be terribly unfairly treated. Having gone out to work in the first place, as they should do, they cannot understand why the Government is coming along with its hatchet to take €2,000 of the €17,500 they earn each year. The Government should be good to this cohort of workers. If we are to overcome the poverty wedge we are always talking about, we need to ensure those who are on social welfare might take a job if they got an opportunity to better themselves. I suggest the Government is striking the wrong balance with this proposal.
I would like to refer to something else that is worth mentioning. Countless numbers of highly qualified graduates have been coming out of our colleges over the past year or two. Most of those who have jobs, as opposed to being on social welfare or having emigrated, are on the [400]minimum wage. People with such qualifications might find it all right to be on the minimum wage for a couple of months or a year, but they will get extremely sour at some stage. They will leave the country and we might never see them again. That brain drain will be exacerbated by what the Government is doing with the minimum wage.
I have always heard about how important it is to take a rounded view of all of these matters. It has been suggested that sum of the various parts makes for an overall policy that can stand up to scrutiny. That cannot be said of the recent budget on several fronts, which we do not have time to discuss. The reduction in the minimum wage is another aspect of the ongoing race to the bottom. I cannot see it doing any good for the people involved or the employers for that matter because, as Deputy Bruton said, there were 101 other ways to reduce costs that were within the remit of the Government. However, it hit the easiest target, which is what Fianna Fáil seems to want to do all the time.
Deputy Timmy Dooley: With the permission of the House, I wish to share time with a number of colleagues.
An Leas-Cheann Comhairle: They are Deputies Collins, Power, O’Brien and Blayney. Is that agreed? Agreed.
Deputy Timmy Dooley: I welcome the opportunity to discuss this important matter. We debate on a daily basis the economic crisis in which the country finds itself. This is very much to the fore in national issues and in the international circumstances that have brought about the economic crisis.
To an extent, during the various debates on individual topics, we can lose sight of the real issues. We focus a good deal on the banks, the bonds and the various bondholders and on whether there will be senior or subordinated debt, interest rates, coupon values, non-recourse loans etc., while losing sight of the impact the current crisis will have on the lives of individuals and families. Most Members of the House hold clinics on a weekly basis and meet the people on the street. The overriding aspect of all this for me, and I believe for most Members, is the level of unemployment and the scourge that is associated with being out of work.
People can countenance a reduction in pay. We have all had to do it, and rightly so. People can countenance trying to reorientate the architecture of their household budgets, difficult as that might be, but it is being done, in some cases more successfully than others. Some clearly are under considerable strains because of their stage in life relative to the living costs with which they have to deal. There is real pressure on people in that regard, but the overwhelming scourge I see concerns people who are used to a reasonable level of income, with the associated costs, and who now find themselves on the basic level of social welfare, just able to remain outside the poverty trap. At the same time they have the burden of the significant debts associated with house purchase, education, car loans and private indebtedness.
We talk on all sides of the House about job creation and stimulating the economy. Some have various plans, but I do not want to get into this tonight or to be political. However, some of the statements are incoherent and I do not believe anybody has a monopoly of wisdom in this regard. There is a view to the effect that it is not the role of the Government per se to create employment, but rather to have a framework and conditions within which employment is created. I believe the Government is trying to create the appropriate framework, as I am sure its successor will also try to do. Difficult political decisions have to be taken and I do not believe there is anybody on this side of the House who would want to reduce the minimum wage, unless it was being prescribed as an obvious way to deal with the crisis.
[401]I take on board what the previous speaker has said. Deputy Connaughton is a very shrewd politician and a man who has worked extremely well having been successfully elected on many occasions. He is a man I respect. He made a telling point in talking about Fianna Fáil’s cute approach and the way we did business in the past. The simple fact is, however, that it is neither politics as usual nor the politics of the past. We are faced with a crisis we never had before. Sadly, we have to countenance methodologies and solutions to problems we did not want, but they are being put forward as necessary for regaining our competitiveness and the creation of jobs in certain sectors. If sectors in the economy are saying a reduction in the minimum wage will allow them to create more employment, then I do not believe any of us has a choice other than to try it out.
Of course, there are issues regarding the so-called average family living on 40 hours a week on the minimum wage. Deputy Connaughton has outlined the impact this would have on such a family. It is worth noting, however, that the family income supplement scheme is in place to protect those poverty traps, and it is a very useful mechanism for addressing such issues. People on the minimum wage are in second jobs in some cases, some of them as casual labourers, others just entering the workforce for the first time. For that reason it may not have the same impact on the family structure. I would argue, however, that the costs associated with remaining outside the poverty trap are addressed through the provision of the family income supplement scheme, which exists to protect the vulnerable family unit.
The overriding concern, however, is to get our competitiveness right. It is not just a question of the minimum wage. There are other escalatory clauses in place through joint labour agreements, EROs, etc. that have to be addressed but nobody wants to do it. However, we have addressed this in terms of public sector pay which was clearly set out as being problematic. We now have the Croke Park agreement which offers some protection for a period of time and, hopefully, that can be maintained. It is a question of recalibrating the cost structures within the economy. I would like to believe this could be done through reducing the cost of electricity, fuel, etc., but labour is a very significant component, and regardless of the electoral consequences, if we are not prepared to do what is right, we are casting a shadow over the lives of the population for years to come.
Deputy Niall Collins: This has been a very interesting debate on the minimum wage. In a way it mirrors a debate we had as regards the €10 travel tax at airports. The reaction, too, is similar. We heard from Ryanair in relation to the airport travel tax that a reduction to €3 was not good enough and would not make any difference. When it was put up to it, it still was not happy, and the reaction to the dropping of €1 from the minimum wage is similar in terms of the reaction from the Opposition parties. I believe we need to see how it works out.
To draw another parallel, no member of the public has ever contacted me to say he or she was opposed to the €10 travel tax. My experience differs slightly as regards the minimum wage. I got one phone call, from a SIPTU official in Limerick. When I was asked to vote against the reduction in the minimum wage, I asked why. I was told, “All the unscrupulous employers in County Limerick will start abusing their employees with the drop in the minimum wage”. I replied that this was a serious charge and asked who all those alleged employers were as I would like to take it up with them. Needless to say, there was much huffing and puffing, but nobody was offered up as an example. I told the official I was supporting Government policy on this and that, in fact, I agreed with the reduction in the minimum wage.
As a public representative, however, I also stand for the protection of workers’ rights. It has to be put on the record again that over the years — many parties are responsible for this — successive legislation has been introduced to protect workers’ rights, for example, the Employment Equality Act, the Health and Safety Act, the organisation of working time legislation, [402]maternity protection and unfair dismissals legislation, protection of employment laws etc. I could list some 40 items of legislation in this regard and it is right that they are on the Statute Book. At the same time, however, we have had other debates in this House in relation to business, its over-regulation and the red tape that is placed in its way of survival on a day to day basis. The people who represent business have been telling us the minimum wage has been a barrier, and we have to strive to remove the barriers from businesses to allow them to remain competitive.
We have made serious strides in terms of improvements in energy and communication costs and infrastructure, and we now have to examine labour costs. I met earlier with a group from the Dell Redundant Workers Association. We discussed Dell in this House. Dell moved to Poland for many reasons, including our uncompetitiveness and labour costs. At the end of the day, if the cut in the minimum wage results in the creation of extra employment for people in the service industry and for students at weekends, it will be a good measure.
The point has rightly been made that a cut in the minimum wage does not mean that those currently in receipt of the old rate of €8.65 will have to take a €1 cut because they have been employed at a previously agreed rate. We must look at other issues that affect small businesses because it is they who are facing the biggest challenges and are paying the minimum wage and local authority charges. In this regard, there is a responsibility on the Fine Gael and Labour parties who control almost all of the local authorities. How many of the local authorities will, at a time when they are drawing up their annual budgets for next year, reduce their commercial rates and waste and water charges, which are hugely critical for business? We are not in charge of the local authorities but Fine Gael and the Labour Party are.
Deputy Jack Wall: We support small industry.
Deputy Niall Collins: We can continue this debate when the House resumes in January, at which time we can review how many of the rates have been significantly reduced. We have to take everything in context. The Government has introduced measures to reduce other barriers to competitiveness. We cannot do all of that and not address our labour costs. I would be happy to come back into this House in a year’s time and be proven wrong but I do not believe that will be the case. We had to take the tough decisions. The minimum wage rate issue is addressed in the four year plan.
We also had a debate in this House on zombie hotels. In this regard, I note what Mr. Paul Gallagher, president of the Irish Hotels Federation said, namely, that the proposal to reduce the minimum wage would be a major help in that sector. We cannot on the one hand be asking what will be done to help the tourism sector and on the other not listen to those involved in that sector when they say that the minimum wage is a barrier.
Deputy Seán Power: Deputy Collins said he would be happy to come in here in 12 months’ time to debate this issue again. Like many others, I would be delighted to be here in 12 months time——
Deputy Paul Connaughton: I am sure Deputy Power will be here.
Deputy Seán Power: ——to debate this or any other issue. I note Deputy Connaughton will bid us farewell in a few weeks time. I take this opportunity to acknowledge his contributions in the House over a long number of years, for which the Deputy has been rewarded by the people of Galway in successive elections. I wish him well.
Deputy Paul Connaughton: Thank you.
[403]Deputy Seán Power: We all accept that we are living in difficult times and that difficult decisions have and will continue to be made for the foreseeable future. The way we do our business here must reflect the change that is taking place outside. Opposition for the sake of it is no longer acceptable. We are discussing the reduction in the minimum wage, a matter in respect of which I have received correspondence, some of it from people who are upset about its introduction. I do not believe for one moment that all Members on the Government side are fully supportive of what has been introduced. Equally, I do not believe everyone on the Opposition side is totally opposed to a €1 reduction in the minimum wage. However, that is how the debate will go tonight, with everyone on this side of the House supporting it while those on the Opposition side who speak on it opposing it and setting out the reasons we should not introduce it. This decision was made by Government following much consultation. As I understand it, this was a big issue during the discussions on the EU-IMF deal a few weeks ago. There is no guarantee that the decision taken by Government will create extra jobs, although I strongly believe it will.
Fewer than 450,000 are currently unemployed. We must come up with imaginative ways of creating opportunities for employment for these people. A colleague told me that the day after this decision was announced he received a telephone call from a man who owns a restaurant telling him he would be a in position to create two new jobs as a result of the cut. I am sure this will be replicated throughout the country. There is no reason people who are currently in receipt of the minimum wage should be affected by this change. I believe this reduction will create opportunities for people. It will allow people to get their leg on the first rung of the ladder or to get their first job. While as I stated earlier, no guarantee comes with the decision, like Deputy Collins, I am confident that in 12 months people will look back on this and say that we made the right decision at the time.
Like many colleagues, as part of my constituency work I meet with people who find themselves on social welfare. In many cases, these are people who have worked all their lives and who have never dealt until recently with the social welfare system. These people tell me they would prefer to work for the same amount they are receiving on social welfare if they could only find employment. It is important that all able-bodied people are given the opportunity of employment. We are all familiar with the difficulties experienced by people who are unemployed, including from a health point of view. Long-term unemployment can eat into a person’s self esteem, with people feeling unwanted and like they do not make a meaningful contribution to society. Apart from the money it provides for people, employment gives confidence and a feeling of self worth. Rather than knock this decision for the sake of it, people should analyse it for what it is. The intention was not to victimise people who are unemployed but to create opportunities for employment, thus giving to many people the opportunities so many of us have.
The minimum wage rate of €8.65 was set three years ago. However, it cannot be ignored that the cost of living here has reduced significantly in recent years. This decision was made for the right reasons. This is not an attempt to victimise anyone, either those who are unemployed or those currently working for the minimum wage. I got involved a few years ago with a number of people in establishing an organisation for stable staff. This group of people make an important contribution to an industry which Deputy Wall and I appreciate is important to Kildare and the rest of the country. It was clear to me that what they do is not all about money and that there are many other aspects to their employment which show the contribution they are making.
I support the measure, which I believe was introduced for the right intention. It is hoped it will succeed in creating more opportunities for those people who are currently unemployed.
Deputy Darragh O’Brien: I welcome the opportunity to make a brief contribution to this debate. I firmly believe that during the past few days in particular there were a great many [404]untruths and misinformation in regard to this measure have been put into the public domain. As Deputy Power said, this is about trying to regain competitiveness in our country so as to bring about opportunities in employment. Some of the campaigns on this issue, in particular those run by SIPTU and the bearded ones run by ICTU, have sought to tell people currently in receipt of the minimum wage that their salaries will decrease, which is not true and everyone knows that. I heard many contributions in that regard last week. It behoves all of us in the House to be at the very least straight with people in regard to the situation.
When I left school in the early 1990s I was unemployed for a period. I know what it is like to be unemployed. Who knows what will happen after the next election. I know from talking to people in my constituency and beyond that what we must do is create opportunities for people to get back into the workforce. Opportunities have to be created for people to get back into the workforce. Thankfully, over the past three months, we have witnessed a significant drop in unemployment month on month. There are reasons for that, including emigration, unfortunately, but new jobs have been also created. In north Dublin, more than 3,500 new jobs were created this year. We have rightly had many debates on support for the indigenous SME sector, the cost of business, local authority rates and so on. Local authorities have an important role in this regard. Fingal County Council reduced the rate multiplier by 10% last year, yet this was opposed by Fine Gael. The reduction passed by only one vote, 12 to 11, at the time. Many of the Labour Party and Fianna Fáil councillors supported it and it has made a significant difference.
We have debated reducing the cost of energy but we have to get real and discuss the cost of employing people as well. Many forms of assistance are provided with more than 100,000 on the employment subsidy scheme, which involves the Government directly supporting jobs. The cost of living now is the same as in April 2007, according to the ESRI and independent observers, not the Government. The minimum wage is still the third highest in Europe and it has been increased by 55% since it was introduced, while inflation increased by 28% during the same period. These are cold hard facts, yet some Members say that people’s salaries will be cut and the reduction in the minimum wage will be a disincentive to work. The wage for a 40-hour week based on the new minimum wage rate will be €306 compared to a social welfare payment of €188 per week. We must be aware of the social welfare trap in this regard.
The measure will generate nothing for the Exchequer and it is not about the Government trying to make more money. We are trying to make sure we support the businesses employing people in every town and village. We had debates about the restaurant sector and the Sunday premium rates, which have to be changed. This provision is killing businesses, particularly in rural Ireland and rural parts of my constituency. We must address these realities. Regardless of the composition of the next Government, if my colleagues in the Labour Party are in government, they will not reverse the decision because it would be seen as anti-employment, which it would be because it would mean an increase in costs for employers.
The intention is to get people back to work and this measure has been portrayed negatively in the media and political circles. I received text messages from SIPTU, which ran a round robin campaign on this saying we were robbing from the working poor. This change does not affect existing contracts. If anyone in the public gallery wants to discuss this, he or she should put his or her name on the ballot paper and run for election and we can debate it in the Chamber. That is a fact, whether anyone likes it or not. Approximately 1.8 million people are at work. Too many people have lost their jobs in the past two and a half years. It behoves all of us and any future Government, whatever its composition, to provide opportunities to get people back to work. Whether we like it or not, one of the issues is wage costs.
Deputy Niall Blaney: I am delighted to have the opportunity to contribute to the debate on the reduction to the national minimum wage. The Government has received a great deal of [405]criticism for the difficult decisions it has taken in next year’s budget. The decision to cut the minimum wage was not easy nor was it simply about saving money for the State. The reduction is about job creation and, more important, job stability while ensuring we have a more competitive labour market. Let us not fool ourselves by playing politics in this Chamber.
I welcome the measures taken in the budget that work towards keeping people in employment and reducing unemployment, especially among young people. I am pleased we are tackling the jobs crisis and taking steps to ensure Ireland becomes more competitive. Deputy O’Brien referred to the fact that 1.8 million people are working. This measure affects only 3.2% of those in employment. SIPTU can forward all the e-mails it wants but it needs to get real and deal with the facts on the ground. We are asking everyone to play a part and I am fully confident we are taking necessary measures to ensure growth and stability in the labour market in the coming years.
Our policy to make the adjustment in the minimum wage is part of our plan to create more jobs. Ireland has been criticised over its high labour costs and we have priced ourselves out of the market. The cut to the minimum wage is not a popular action but it is necessary. The current rate is acting as a barrier to job creation in many sectors. We have witnessed reductions in wage rates across the board in the public and private sectors. Following the adjustment, the rate will remain in the top tier of EU minimum wage rates and it still will be considerably higher than in Great Britain and Northern Ireland. I know all too well about that, given I am a Border Deputy.
I am aware of the problems that people are facing in my own constituency, including unemployment among those under the age of 25, small businesses struggling to pay their workforce week in, week out while, at the same time, trying to remain competitive, loss of custom across the Border and decreasing tourism figures. These issues must be dealt with and, in doing so, we have to get real and do what we can to make the market more competitive. The adjustment to the minimum wage can offer hope to the 4,586 people in County Donegal aged under 25 who are currently on the live register. It can help lower the costs of those hundreds of small businesses operating across my constituency and the rest of this country and bring the economy closer in line with our competitors.
We have experienced massive job losses in the retail, tourism and hospitality sectors and I have been contacted by local businesses about their concerns for the future and their constant struggle to keep their heads above water in the current climate. Our research clearly shows that a reduction in the national minimum wage will reduce the cost of doing business and support an increase in employment in the medium term. The Government is working to support small businesses and those working in labour intensive industries.
I have spoken to many people in my own constituency who are very angry, concerned and worried about their futures and, in particular, the futures of their children. The vast numbers of those aged under 25 leaving Ireland to find work elsewhere is not seen by the Government as a solution to our economic and jobs crises. I strongly believe the decision to reduce the minimum wage, along with a solid plan comprising new initiatives to help those in receipt of unemployment benefits, is a credible solution. The Government is taking the correct measures to create jobs for the future and to protect sectors that are particularly vulnerable during these difficult times.
There is no doubt about the need to make our economy more competitive. Reducing the minimum wage by €1 will ensure we have a more competitive economy. With the labour market beginning to stabilise, this offers us a great opportunity to show we are open for business and that we continue to have a highly skilled, flexible labour force. This reduction will help us maintain our reputation as an excellent destination for businesses. The Opposition has heavily criticised the Government parties for its decisions. However, we are offering realistic solutions that are in the public’s interest. The debate on the minimum wage is not new with many groups [406]calling for a cut, including some Opposition parties. This measure has been widely welcomed by groups including the Restaurants Association of Ireland, the Irish Hotels Federation and Chambers Ireland. IBEC also agreed that cutting the minimum wage will help avoid further job losses and loss of competitiveness and the OECD referred to the minimum wage as a structural issue that needed to be addressed.
To conclude, we must get real about the issues involved. Are we serious about getting our economy back into a competitive position or will we just play the usual politics across the floor of this House? I support the Government’s amendment.
Deputy Jack Wall: I wish to share time with Deputies Upton, Ciarán Lynch and Jan O’Sullivan.
An Leas-Cheann Comhairle: Is that agreed? Agreed.
Deputy Jack Wall: I thank my colleague, Deputy Penrose, for putting down this motion on the minimum wage. As he stated in his well-researched contribution, the Labour Party in government will reverse section 13 of the Financial Emergency Measures in the Public Interest (No. 2) Bill if it is enacted. The Labour Party recognises the penal charge that this Fianna Fáil-Green Party Government has imposed on one of the most vulnerable groups in our society.
It is easy to say one wants to create employment. Nobody in this House or outside it wants to do otherwise. However, in this case the Government is using the most vulnerable and least well paid in our society to counteract the number of people who are unemployed, a total of 435,000. One has to wonder how that idea came to the Government. Today, we discovered another situation where the Minister for Finance, who has praised the work he has done to the world, has allowed bonuses to be paid to staff in his Department. In the last few days, he said the bonuses for the AIB workers could not be reversed, yet that was done. I can see where savings could be made that could be put into an impetus package to create jobs, rather than hitting people on the minimum wage.
Consider what has happened in the budget and the taxes that have been put in place by the Green Party in the context of energy services, school transport, fees and so forth. Everything is on an upward spiral. People on the minimum wage must budget their money but if there is a constant strain on them one can see why the moneylenders become involved and why there are so many claims on the Society of St. Vincent de Paul and other such organisations who are working at the coal face. People simply do not have the money to ensure their families survive.
It is easy for Fianna Fáil and Green Party Members to claim that we are anti-employment. That is not true. We want jobs, but we also see daily in our constituencies the hard cold fact that the poor are getting poorer and the rich are getting richer. This Government is doing nothing to counteract that. The people who come to us have problems with their mortgages and all other aspects of life, yet the Government is seeking to reduce their income by another €40. That sum means nothing to a rich man; he might throw it on the table in the church on a Sunday. However, €40 means a great deal to the people who are trying to balance their budgets at the end of the week and trying to ensure they give their children the best possible education and opportunities and that they have a standard of living to which we in the Labour Party believe they should be entitled.
However, the Government decided to hit them, and did so because it believes they will not fight back. They will fight back through the Labour Party. We will reverse that decision and ensure these people are given an equal opportunity to educate their children and ensure their families and communities survive. Together we can move forward in a positive manner rather than with the negative attitude displayed by the Government and some of its speakers this evening.
[407]Deputy Mary Upton: I welcome the opportunity to speak on this motion. The Government’s measure makes no social or economic sense. There is no social argument, based on fairness or anything else, that justifies cutting the incomes of the lowest earners in society. Instead, it has been framed as an argument about competitiveness that is influenced by a certain ideology, which believes that those on the lowest pay in our economy are making it uncompetitive.
This move will not create jobs or reduce our deficit or debt burden. It will increase inequality and trap more working people in poverty for the sake of an ideology. That ideology ignores the enormous social costs associated with poverty and inequality, which cannot be measured on a competitiveness index. The argument about competitiveness implies that we all benefited from the economic boom and consequently we must all share the pain. It also implies a belief that lowering the pay of the lowest earners in our society will remedy a decade of spiralling prices for everything from utilities to household essentials. It is noteworthy that competitiveness was not of much concern to the Government when it inflated a housing boom that drove up prices to such unsustainable levels.
Competitiveness has only recently become a concern for this Government but it has long been a concern for the minimum wage earner. The people on the lowest incomes understand competition better than anybody and they certainly know how uncompetitive our economy is. They know that the relative prices of essentials such as the contents of the weekly shopping, health care, transport, electricity and housing are all vastly more expensive here than in comparative countries. These people are also the most sensitive to price increases. When prices were rising faster than their wages, their living standards declined. Now their pay is to be cut ahead of the decline in prices, causing a similar decline in living standards.
They know how competitive the labour market is too, because if they have a job, they are told how lucky they are to have it. If they are unfortunate enough to lose their job, the social safety net of the dole is also being cut to “make work pay”. Where are all the jobs going to come from to make work pay for the hundreds of thousands on the dole? How will work pay when one’s basic wage is cut, yet the prices one pays in the shops stay the same or barely fall?
Consider something as fundamental as health care. Unlike Britain, with whose pay and welfare rates ours are commonly compared, we do not have a national health service. We have a two tier system, encouraged by this Government’s policies of tax breaks on facilities and free transfers of State land for building, that reinforces a system of haves and have nots. In Britain one is not required to pay between €40 and €70 for a general practitioner visit, fees for a repeat prescription or €100 accident and emergency fees. Without an acknowledgement of this context, it is simply disingenuous to suggest one is comparing like with like.
If the Government was serious about competitiveness, it would do something worthwhile about the real costs facing business. In the past ten years there have been runaway increases in electricity, gas and waste costs, yet nothing of substance was done to tackle them adequately. There is still nothing of substance being done. Instead of making the difficult decisions in these areas, pay cuts are being imposed from the bottom up.
This decision has been described as another hard decision that had to be taken in the national interest. This Government appears to revel in its self-imposed role of hard decision-maker. It seems to believe that if a decision is hard, it is fair. It speaks constantly about hard decisions in the national interest, as if cutting the wages of the lowest earners will help those same low earners. There is no social justification for this move and the economic argument is hollow. A race to the bottom on wages serves nobody. We cannot compete on cost in a range of globalised industries, and the Government knows this. Indeed, it has framed its economic policies around this fact. How many times have we heard the Government state that our economic future lies in the smart economy, where we will compete in the fields of innovation and ideas, rather than a race to the bottom that we cannot win?
[408]Finally, can a smart economy be based on inequality? Is reinforcing inequality smart? Is trapping the working poor in poverty smart? The answers are clearly “No”, yet the Government is determined to make another decision that makes no sense and cannot be justified.
Deputy Ciarán Lynch: I thank my colleague, Deputy Penrose, for bringing this important motion before the House. The decision by Fianna Fáil and the Green Party to reduce the pay packets of minimum wage workers in this country by 12% is ill conceived, is badly thought out, and is detrimental not just to the future of minimum wage workers, but of all workers in the country. It is saying something to say that this is one of the stingiest decisions ever made in this House, considering the decisions the Government has made in recent times.
Many Members have referred to the direct impact it will have on people who are currently earning the minimum wage. I would like to look at this from a different angle. The measure cannot be examined in isolation, when we look at some of the finer details included in the EU and IMF documentation. If we look at that document and at what is happening to the minimum wage, then we see the greater strategy falling into place. Among the structural reforms we have signed up to in the IMF document is the movement towards the elimination of a cap on the size of retail premises, “with a view to enhancing competition and lowering prices for consumers”, as the plan puts it. If we take these two measures together, namely, the reduction in the minimum wage and the change in the existing retail planning guidelines, we cannot avoid the conclusion that the Government is preparing the ground for international multiple chains like Walmart to come into Ireland, by slashing the prospective wage bills of these companies and easing the regulatory framework in which they will work. Of course, we should not ignore the fact that many of these companies will be acquiring lands that are in NAMA and will end up being a bailout to the type of friends that Fianna Fáil acquired over the last decade.
Not only is the reduction in the minimum wage a step too far, it is also a step in the wrong direction. It will have seriously negative ramifications for the existing retail sector, workers in the retail sector, and the broader community. A Goodbody study that was published in recent times shows that the economies of scale in food retailing are exhausted at 2,000 sq. ft. The research also shows that moving towards hypermarket formats inevitably lead to job losses. It is curious to see that the minimum wage provision included in the IMF deal was in there at all. It is unclear at whose behest it was included . The Minister for the Environment, Heritage and Local Government states that Ollie Rehn insisted upon it, the Taoiseach stated it was a Government decision, but the fact is that it is in there.
The Government’s amendment to the Labour Party proposal this evening refers to the minimum wage being good for the retail industry. However, workers did not want to see a reduction in the minimum wage and employers did not want to see a reduction in the minimum wage. In its own submissions to the Government, the retail industry stated that it did not want to see any change to the minimum wage, rather reform in the area of the JLCs. However, it has been put on the table by the current Government. The biggest issue facing the retail industry is the tyranny of upward-only rent reviews. That is what is causing jobs to be lost in this country. Thirty thousand jobs have been lost in the retail sector in the past two years because of the Government’s choice not to deal with the tyranny of upward-only rent reviews.
No doubt we will hear this evening that the slashing of the minimum wage will create more jobs, more competition and will lead to cheaper products, but at what price? Any proposed move to cheap labour and out-of-town retail hypermarkets will sound the death knell for small and medium shops in towns, villages and high streets across the country. How on earth will local companies be able to compete with cheap employment, cheap rents and unregulated planning guidelines that allow companies like Walmart to create a devouring mechanism within the retail sector? This will drive sustainable and good employers out of the industry, and create greater unemployment levels.
[409]The decision by the Fianna Fáil Party and the Green Party to reduce the minimum wage this evening is not just an attack upon existing jobs and working conditions in those jobs, but also an attack upon existing businesses that are struggling against the tide to stay afloat in these tough economic times. We are seeing a softening up of the existing workforce — not just those on the minimum wage — for lower wages in the future by the type of deregulation that has got this country into the mess it currently finds itself.
Deputy Jan O’Sullivan: I am sorry Deputy O’Brien and Deputy Blaney have left the Chamber. What Deputy O’Brien said is not true. Deputy Penrose and Deputy Wall have clearly stated tonight that the Labour Party will reverse this decision. The decision to reduce the minimum wage is a core issue for us. Our motion refers to the threshold of decency and that is what this is about. Deputy Lynch has spoken just now about the agenda that is really at work here, which is not just about the minimum wage. We do not subscribe to that agenda.
Deputy O’Brien spoke about the difference between the person who works for 40 hours per week and earns €306 and the person on welfare who gets €188. That is absolutely pathetic and is not where any of this should have started. This should have started at the top. This is about cutting people at the very bottom of the scale on welfare and on income, and it is not acceptable. Before I came into this Chamber, I had to leave a meeting with the Dell redundant workers group. I said to the people with me that I had to come in here to speak about the minimum wage. The man sitting beside me said: “They want me to work, but I will lose my mortgage interest relief and my medical card to work for €306 a week.” On top of that, these people will now be included in the universal charge as well.
This decision is coming from people who are not living in the real world any more. The real world is about people who are struggling to make ends meet. Last night, Deputy Penrose pointed out that electricity prices, bus fares, prices for bread, coal and milk, rent and so-called voluntary contributions for school have all gone up significantly since 2007. These are things on which people spend their money and they will now have to struggle on these lower levels of income.
The Minister for Enterprise, Trade and Innovation stated last night that “According to the latest figures from the CSO for the second quarter of this year, the minimum wage rate now applies to about 3.2% of the workforce and has a disproportionate effect on employers in the hospitality, retail, manufacturing and horticultural sectors.” What has so much more of an impact on those sectors, particularly the first two sectors, is the fact that people do not have money to spend. People on the minimum wage and welfare have to spend all their money in the local economy because they have to spend it, otherwise they will not survive. They are not putting money away to go on holidays. They are not the people we saw on “Reeling in the Years” from 2007 who were going off shopping in New York. Deputy Rabbitte made the point that the comparison made with 2007 was at the top of the boom. We are talking about people who are struggling to survive in our economy. Are we saying that the people who work in the backbreaking horticultural sector must do so for a wage of just over €300? As Deputy Shortall pointed out, the actual pay of those workers is less than €300. This is not acceptable in a civilised society.
We are really talking about a two tier society, where we are suggesting that the people in the lowest jobs — often the hardest jobs — are somehow different from hospital consultants and the people at the top of the Civil Service and the private sector, who somehow need all this extra money to survive. It seems we cannot go attacking them, so we have to start at the bottom with people on the minimum wage. We should not be starting at the bottom, but at the top. If the country is in the kind of trouble that it is, which was brought about by Fianna Fáil, then it is the people who can afford to pay who should be paying, and not the people at the [410]bottom of the ladder. The Labour Party emphatically states that we are totally against this measure and we will reverse it when we are in government.
Deputy Martin Ferris: I wish to share my time with Deputies Finian McGrath and Maureen O’Sullivan.
An Leas-Cheann Comhairle: Is that agreed? Agreed.
Deputy Martin Ferris: I welcome the proposal from the Labour Party. Sinn Féin Deputies will stand with anyone in this House who is prepared to defend the rights of the people most marginalised and discriminated against in our society — those on the minimum wage.
I would like to read a letter from IBEC to the retail grocery and allied trades joint labour committee.
Deputies can see that already some employers are circling with the intent of further exploiting workers in our communities.
It is difficult to stand here and hold one’s temper when one reads that an AIB executive received a bonus of €161,000. A person on the minimum wage who works 40 hours a week will earn around €16,000 per year, so that bonus is the equivalent of ten people’s yearly incomes on the minimum wage, plus €1,000. What I find hard to stomach is the support of the Green Party for the Government. Deputies Gormley and Sargent said that the cut in the minimum wage was forced on the Government as part of the IMF-EU bailout. This has been denied by others, but I will not get into the ins and outs of it. What is clear is that measures such as cutting the minimum wage, slashing social welfare, attacking the wages of other workers, decimating the public service and, probably, selling off State assets to its friends are all part of the deal made by the Government with the IMF.
This week a constituent of mine — a single parent on the minimum wage — came to my constituency office. During the worst of the weather over the past two weeks, she had no money to pay for heating oil for her home. She was so desperate that she had scrabbled together €5 or €6 to buy four gallons of heating oil. That is what is happening out there. I listened to Deputy Gormley saying last week that he totally opposed what the Government was doing, but then he voted for it. He voted in favour of cutting the minimum wage and driving people further and further into poverty and depression.
What we badly need is consensus — not a consensus for cuts, but a consensus to defend workers’ rights and the minimum wage, to stand against the cuts being proposed by the two parties of the Government, and to stand by the rights of the working poor. Let us take a leaf out of James Connolly’s book. I am looking at the Labour Party Members as I say this. Connolly said at one time in his life, “Organise, educate, agitate.” It is time we organised [411]against this Government and against the establishment that is part of the consensus for cuts. It is time we educated the people of this State about the wrongs of the system and what it is doing to the ordinary, decent people of this land. It is time we agitated by taking to the streets and defending the rights of the workers. I pledge on behalf of Sinn Féin tonight that this is what we will do. We will defend the workers and the minimum wage and we will defend the working poor. To hell with the €161,000 bonuses for AIB executives.
Deputy Arthur Morgan: Well done. Good stuff.
Deputy Maureen O’Sullivan: The Minister for Finance informed us a week ago that Irish banks had repaid €68.8 billion to senior bondholders and €1.4 billion to subordinated bondholders as their full debt fell due under the two-year blanket guarantee. Why? They gambled and took risks, knowing that loss was part of that. Yet we are cushioning that loss and, in the same breath, we are reducing the national minimum wage. Those on the minimum wage, the working poor, low-income families with children and people on social welfare are all being hit with tax increases and cuts in child benefit and rent supplement. They will be also affected disproportionately by other aspects of the four year plan, with reductions in funding for education, health care and the community and voluntary sector. Organisations that work with those people are expressing their concern. The Society of St. Vincent de Paul says there has been an increase in calls of up to 50% in certain regions. Figures from the Central Statistics Office for 2009 show that levels of consistent poverty rose in 2008, as did the number unable to afford basic requirements. That was before the impact of the 2010 budget, never mind this one.
While we are talking about cutting the minimum wage, we are also talking about bonuses. Which part of the words “recession”, “downturn” or “economic disaster” are not understood by those giving and receiving bonuses? The word “bonus” should not be in our vocabulary for the foreseeable future, and I call again for bonuses to be eliminated. We are told there was justification for a bonus for those whose salaries were cut by 17%, but where is the equivalent treatment for those taking cuts in the minimum wage and social welfare? We were told that those showing exceptional merit in the Department of Finance deserved an extra bonus, but real exceptional merit will be shown by those on low and middle incomes, on social welfare and on the minimum wage in coping with life.
High salaries, bonuses and expenses are alive and well because of the lack of a real social conscience in this House. Sacrifices are being asked of those on social welfare, those on the minimum wage and those on low and middle incomes, but they are not being asked of the corporate sector and the rich elite.
Deputy Finian McGrath: I thank the Leas-Cheann Comhairle for the opportunity to speak on this important motion on the minimum wage. It was a disgrace to cut the minimum wage by €1 and to take €8 from the blind and disabled in the budget. The cuts to social welfare were an attack on the weaker sections of society. This should never be part of any plan to sort out the public finances. The poor and the weak should never have to pay for the actions of the reckless, who have destroyed the economic heart of this country. That is why I am supporting the motion. Imagine the brass neck required to cut the income of someone who is on €18,000 per year. There are 116,000 such workers, and 6.6% of the workforce are living below the poverty line. A total of 4% of workers and 1.2% of industrial workers in the export sector are on the minimum wage with no major impact on competitiveness. It is time the Government came to live in the real world. It should lay off these people. Even setting aside the grave injustice of this cut, it makes no sense at all and will have no impact on the public debt or on our economic recovery. It is “Father Ted” economics, which will drive more people onto welfare. That is the scandal of this debate. These measures will have a profound impact on those [412]who are poorest, which is totally unacceptable. In a recession, or in any dogfight to save our country, the strongest should always pay. Hammering the low-paid should never be the easy option.
Tonight’s motion makes reference to core values and decency. It is not fair or decent to slash the minimum wage of low-paid workers, public or private, full stop. Let us not drive a wedge between private sector and public sector workers, as some politicians and media commentators are trying to do. We must all be aware of the new right-wing agendas that are surfacing in this crisis. Let us remind those involved that it was their extreme ideology that caused this economic mess in the first place.
I urge all Members of this House to support the motion and to stand up and be counted on behalf of the 4% of the workforce who are being hammered by the cut in the minimum wage. Enough is enough. Let us support this worthwhile motion.
Minister of State at the Department of the Taoiseach (Deputy Dara Calleary): I thank the Deputies for their contributions over the past two nights. I reiterate the Government’s intention to restore the national minimum wage to a rate more suited to our present economic circumstances and the specific needs of the labour market today. This shows we are determined to support job creation and restore competitiveness to our economy. Unless steps are taken to address labour market inflexibility now, it is likely to inhibit employment growth in Ireland and lead to a further loss of competitiveness in the coming years. We must move now to maintain existing jobs and actions taken by Government and business during the past two years have allowed us to regain much of the competitiveness we had lost. Such action will now provide an essential basis for future growth. The national recovery plan includes structural reforms to sustain this process.
We realise work is the best route out of poverty and that it prevents people from falling back into poverty in the future. Employment allows people to provide for themselves, their families and their future incomes. The fact is where a national minimum wage is imposed at an excessively high level relative to the specific circumstances of an economy, unemployment will tend to be higher than it should be. This is especially the case for younger people, who can be denied the opportunity to work by an excessive national minimum wage.
Our priority as a Government is to encourage job creation and labour costs must be a key consideration in this regard, especially in sectors with high labour intensity. Legislative changes will allow the Minister for Enterprise, Trade and Innovation to set a new national minimum wage and to give effect to the Government’s decision to reduce the minimum hourly rate where necessary to alleviate this situation.
Some Deputies have argued that the Government picked the wrong target in reducing the national minimum wage and that the range of sectoral minima determined by employment regulation orders and registered employment agreements should have been tackled instead. However, the national recovery plan includes provision for a formal review to be undertaken of our statutory wage setting mechanisms within a short timeframe to assess the effectiveness or otherwise of the current structures. The proposed review will take into account the views of the parties to registered employment agreements and employment regulation orders, as well as the variety of means through which these arrangements can evolve as a more streamlined, transparent and flexible means of wage-setting. The precise terms of reference for the review will be agreed shortly but it will involve an opportunity for all Oireachtas Members to input directly.
In arguing that the Government should have limited its focus to the wage fixing machinery that sits on top of the national minimum wage, people fail to take into account the analysis provided by Forfás which highlighted how the national minimum wage serves as a floor for [413]wage setting for a wider range of employment through the mechanisms of employment regulation orders, EROs, and that the ERO process delivers a premium of approximately 5% over and above the national minimum wage. This is simply one illustration of the way in which the national minimum wage interacts with other sectoral wage fixing mechanisms and with collective bargaining generally.
The OECD economic survey of last year recommended that action be taken on the national minimum wage to better reflect changing economic circumstances and reduced labour demand. The report stated:
The OECD also urged that such action be complemented by a review of the sectoral minima which I have just outlined.
During the debate in the House last Friday, I stated that a range of protections were in place for workers, among the highest in the European Union, including a range of legislation and the existence of the National Employment Rights Authority. All concerns expressed by Deputies with regard to this issue and the genuine concerns held by every Deputy about exploitation can be dealt with through these fora. The Labour Court will continue to play a central role in the governance of the national minimum wage. However, the measures supported in this House last week also contain a proposal and provision for the Minister for Enterprise, Trade and Innovation to make a direct call on the minimum wage and to do so in a quicker manner. I fully accept that this decision is difficult. However, we must respond to the changed circumstances in the Irish economy and ensure we take immediate steps to encourage the fostering of employment within the economy.
Deputy Seán Sherlock: I wish to share time with Deputy Michael D. Higgins. I propose to take approximately seven minutes. I refer in the first instance to the Minister’s speech on budget day. He stated: “In the measures I am presenting today those on the new reduced minimum wage will not be brought into the tax net”. If ever there were a case of misleading the House, that was it. Some four pages later, the Minister introduced the universal social charge, which was defined in the financial resolutions that came after the budget speech as a tax. It is a tax of 2% on income from zero to approximately €10,000, 4% on income between €10,000 and €16,000 and 7% on income from €16,000 upwards. Not only have those concerned suffered the reduction in the minimum wage rate of itself but they have been brought into the tax net and must suffer the double whammy of the universal social charge, a tax, on top of it.
To give an idea of the logic and an insight into the mind of the Minister, I refer the House to the debate on the Financial Emergency Measures in the Public Interest Bill of Thursday, 9 December in which the Minister stated:
Such is the logic that dictates how this Government works. It is the logic of a Government that has thrown out the window the idea of poverty proofing any taxation or budgetary measure. [414] It is high time it was booted out of office and that a Government comprising the Labour Party was brought in so that we can reverse these measures and restore some degree of equity. What the Government has done to people working on the minimum wage is grossly unfair; there is no other way of putting it. It is contrary to any canon of taxation and to any republican ideal that we may hold in terms of how one treats workers in an economy, especially those on the margins and the low paid. It is grossly unfair and it should be reversed.
When the Labour Party launched its budget proposals two weeks ago, reference was made to the impact of the national minimum wage and the Government strategy for job creation. According to the most recently available statistics, 41% of those on the live register have a manual, craft or industrial background. One third of those aged between 15 and 24 years who have remained in the labour force are unemployed. We are concerned that 116,000 workers, some 6.6% of the workforce, are living below the poverty line; that the working poor make up 24% of all those in poverty and 40% of all households in poverty; and that the minimum wage is especially relied upon for protection by women, migrants and other vulnerable workers.
A total of 68% of those earning the minimum wage work in the hotel, catering, retail and wholesale trades. Low or no employment growth is anticipated in these sectors in future because there will be a permanent contraction from boom-time employment levels. Consequently, a cut in the national minimum wage will not lead to any direct job creation. It is expected the primary areas in which jobs will be created in the coming year are financial services, insurance, business and communications services and health and ancillary care services, all of which are non-minimum wage sectors.
The Irish labour force has already proved itself adaptable and flexible. The decline in unit labour costs has exceeded the decrease in consumer prices, producer prices and GDP by 11.2% between 2008 and 2010. In manufacturing, the real effective exchange rate is expected to be down 20% between 2008 and 2011. Lower paid manual and craft jobs have been hardest hit by the reduction in gross earnings of -9.75% between the end of 2008 and the start of 2010.
The Government’s strategy is to use supply side solutions such as cutting social welfare benefits and the national minimum wage to address a demand-led problem in a slumping economy. This is an illogical, incompetent and bogus argument for those who rely on the minimum wage.
Deputy Michael D. Higgins: I am pleased to have the opportunity to conclude this debate on behalf of the Labour Party. As the party’s president, I am proud it put down this motion defending those on the minimum wage. The Labour Party has also made it clear that when it enters government, the order to reduce the minimum wage will be rescinded. I pay tribute to my colleague, Deputy Penrose, who prepared a researched alternative proposal to reducing the minimum wage. I thank Members of Fine Gael, Sinn Féin and the Technical Group for the support they have given to this Labour Party motion.
There have been some excellent speeches on this motion. I thank all my comrades in the Labour Party for the different views they have presented. No one disagrees the economy has been brought to a point of near destruction by a small group of unscrupulous people in the banking sector. The economy could actually be saved in a relatively short time, irrespective of the Government’s proposals, if it were just about deficit.
Since November 2008 and the banking guarantee, however, the consequences of the actions of a small group of bankers, fewer than 100, were joined to the problems of the economy. This is the small group of people who sat on each other’s remuneration committees, several of whom were members of five different boards. This group really brought this economy and society to its knees. Now, we see these very same people swanning around the Continent with relative impunity. May that impunity soon come to an end.
[415]The Government repeats a series of allegations and assertions about the minimum wage that are simply untrue. It claims Ireland has the highest minimum wage rate in Europe. It does not. In fact, it is between the sixth and ninth highest minimum wage in the EU. If child care and housing provision, for example, were factored into it, one would find the rate was further down the European ladder. Neither is there any connection between reducing the minimum wage and decreases in unemployment. Reducing the income of those on the minimum wage and taking €150 million out of the economy will actually have a deflationary effect which will, as a consequence, lead to further job losses.
Those on the minimum wage know where every cent goes and are forced to spend their income not on luxuries but to survive. On the other hand, those at the very top, on whom Fianna Fáil and the Greens refuse to put a higher separate tax rate, do not spend all their income to survive. They are the ones who enjoyed the €11 billion in tax escapes for the past several years. Why will the Government not start there?
I am most attracted to the concept of the social floor. We regularly insult language by saying we live in a Republic. We do not. If we had any version of citizenship, there would be a social floor for health and housing for example, a threshold below which no citizen would be allowed to fall. Amartya Sen, the Nobel laureate in economics, claims the test of one’s citizenship is one’s ability to participate in society without shame. The minimum wage is about the right of people to go about the ordinary things one should be able to do in a free and decent society, be it education, health or housing. Those who cut the income of those on the minimum wage are visiting poverty on those earners and their children. That is a disgrace. Words are like ashes in their mouths when they say “treat all the children of the nation equally”. How can a mother on the minimum wage treat her child the same as everyone else when she loses €40 a week out of her basic wage of just over €300.
Who are those on the minimum wage? Up to 60% are women working in the hospitality and retail sector. Many of them are migrants, the very people we have humiliated enough already. They are also caught in that grey and dark area of the home-care industry.
There is a myth that the minimum wage is stopping Ireland coming out of recovery. How dare the Government make such an assertion? As one who has dealt with social statistics all my life, I have seen not one jot of evidence to substantiate this claim. As our economy recovers, one test must be to examine how much more inclusion can be made possible. That is why we must transfer income through taxation. How much exclusion is a consequence of current taxation policy? Every euro taken from those on the minimum wage creates exclusion in spending that will have a knock-on employment effect and will drive them and their families further into poverty.
There is a cynicism in all of this debate. For those who earn over €200,000 a year, the new combined PRSI and health levy will save them money while everyone else pays more. This is cynically referred to as an anomaly. Is it not an anomaly that the Government has gone after the poorest in society?
What kind of a message does this send out? The minimum wage is used as a standard for other wages in other sectors of the economy. The reduction in the minimum wage can be used as a battering ram against all sectors. Once it goes down, everyone else’s wages along the scale will come down too. That is why those on middle incomes should stand with those dependent on the minimum wage. If the Government goes after those dependent on the minimum wage this week, next week it will certainly go after the middle-income earners.
The very last people the Government will ever go after, however, are the non-executive directors, the dining club members. These are the people who put the poison from their own little companies into the Financial Regulator’s office, the Central Bank and the Department of [416]Finance. They now sit around with their failed version of the economy for which generations will pay.
It is time for a debate on restoring the economy and, more important, putting ethics back into society. It is time we linked the economy to society to insist no child ever goes hungry, that no woman on the minimum wage must worry about how she will compensate for the school trip she promised her child but was forced to cancel because it was too dear. It must be a society in which a father is never forced to go home without anything to offer his children. Those are the conditions of the poor charted by Seán O’Casey. That was Seán O’Casey’s Ireland. He, of course, was unlike the Seanie who plays golf with other notables and who could get a public servant to say to him, “Right on Seanie. Fair play to you.”
To those who want a debate on reviving the economy, it must be a reasonable one about matters that are above the line of necessary citizenship. Let us agree that is what a real republic would be if we were making a beginning. Let us agree on the line below which no one will be allowed to fall. Let us agree it should be there to protect from birth to old age. Let us do it in the education sector by stating that every child shall be entitled to an education. Let us also do it concerning other things, such as public participation. When we begin to do that, democrats can debate the shape of the Republic. Until we do so, however, the Government will be making one shameful adjustment after another. What is the Government really saying? Those who vote to reduce the minimum wage are saying that the people who are dependent on it are of less importance than others in society. As a republican and as a socialist, I condemn that attitude. That is why I am proud to ask everybody in this House to support the Labour Party’s motion.
An Leas-Cheann Comhairle: I must now put the question.
Deputy Aengus Ó Snodaigh: Shame on them.
The Dáil divided: Tá, 80; Níl, 70.
| Tá | |
| Ahern, Bertie. | Ahern, Dermot. |
| Ahern, Michael. | Ahern, Noel. |
| Andrews, Barry. | Andrews, Chris. |
| Ardagh, Seán. | Aylward, Bobby. |
| Behan, Joe. | Blaney, Niall. |
| Brady, Áine. | Brady, Cyprian. |
| Brady, Johnny. | Browne, John. |
| Byrne, Thomas. | Calleary, Dara. |
| Carey, Pat. | Collins, Niall. |
| Conlon, Margaret. | Connick, Seán. |
| Coughlan, Mary. | Cregan, John. |
| Cuffe, Ciarán. | Curran, John. |
| Dempsey, Noel. | Devins, Jimmy. |
| Dooley, Timmy. | Fahey, Frank. |
| Finneran, Michael. | Fitzpatrick, Michael. |
| Fleming, Seán. | Gogarty, Paul. |
| Gormley, John. | Hanafin, Mary. |
| Harney, Mary. | Haughey, Seán. |
| Healy-Rae, Jackie. | Hoctor, Máire. |
| Kelleher, Billy. | Kelly, Peter. |
| Kenneally, Brendan. | Kennedy, Michael. |
| Killeen, Tony. | Kitt, Michael P. |
| Kitt, Tom. | Lenihan, Brian. |
| Lenihan, Conor. | Lowry, Michael. |
| McEllistrim, Thomas. | McGrath, Mattie. |
| McGrath, Michael. | McGuinness, John. |
| Moloney, John. | Moynihan, Michael. |
| Mulcahy, Michael. | Mansergh, Martin. |
| Martin, Micheál. | Nolan, M.J. |
| Ó Cuív, Éamon. | Ó Fearghaíl, Seán. |
| O’Brien, Darragh. | O’Connor, Charlie. |
| O’Dea, Willie. | O’Donoghue, John. |
| O’Flynn, Noel. | O’Keeffe, Batt. |
| O’Keeffe, Edward. | O’Rourke, Mary. |
| O’Sullivan, Christy. | Power, Peter. |
| Power, Seán. | Roche, Dick. |
| Ryan, Eamon. | Sargent, Trevor. |
| Scanlon, Eamon. | Smith, Brendan. |
| Treacy, Noel. | Wallace, Mary. |
| White, Mary Alexandra. | Woods, Michael. |
| Níl | |
| Bannon, James. | Barrett, Seán. |
| Breen, Pat. | Broughan, Thomas P. |
| Bruton, Richard. | Burke, Ulick. |
| Burton, Joan. | Byrne, Catherine. |
| Carey, Joe. | Clune, Deirdre. |
| Connaughton, Paul. | Coonan, Noel J. |
| Costello, Joe. | Creed, Michael. |
| Creighton, Lucinda. | D’Arcy, Michael. |
| Deasy, John. | Deenihan, Jimmy. |
| Doherty, Pearse. | Doyle, Andrew. |
| Durkan, Bernard J. | English, Damien. |
| Feighan, Frank. | Ferris, Martin. |
| Flanagan, Terence. | Gilmore, Eamon. |
| Hayes, Brian. | Hayes, Tom. |
| Higgins, Michael D. | Hogan, Phil. |
| Howlin, Brendan. | Kehoe, Paul. |
| Lynch, Ciarán. | Lynch, Kathleen. |
| McCormack, Pádraic. | McEntee, Shane. |
| McGinley, Dinny. | McGrath, Finian. |
| Mitchell, Olivia. | Morgan, Arthur. |
| Naughten, Denis. | Neville, Dan. |
| Noonan, Michael. | Ó Caoláin, Caoimhghín. |
| Ó Snodaigh, Aengus. | O’Donnell, Kieran. |
| O’Dowd, Fergus. | O’Keeffe, Jim. |
| O’Mahony, John. | O’Shea, Brian. |
| O’Sullivan, Jan. | O’Sullivan, Maureen. |
| Penrose, Willie. | Perry, John. |
| Quinn, Ruairí. | Rabbitte, Pat. |
| Reilly, James. | Ring, Michael. |
| Shatter, Alan. | Sheahan, Tom. |
| Sheehan, P.J. | Sherlock, Seán. |
| Shortall, Róisín. | Stagg, Emmet. |
| Stanton, David. | Timmins, Billy. |
| Tuffy, Joanna. | Upton, Mary. |
| Varadkar, Leo. | Wall, Jack. |
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Emmet Stagg and Paul Kehoe.
Question put: “That the motion, as amended, be agreed to.”
The Dáil divided by electronic means.
[418]Deputy Emmet Stagg: A Cheann Comhairle, as a teller and in accordance with the Standing Orders of the House, and in light of the savage and mean-spirited nature of the proposal to cut the minimum wage——
Deputy Paul Gogarty: What about the €2,500 the Deputy received from SIPTU?
Deputy Emmet Stagg: ——I wish to demand a vote by other than electronic means.
An Ceann Comhairle: As the Deputy who is demanding the division is a teller, the vote will proceed in accordance with Standing Order 69.
The Dáil divided: Tá, 78; Níl, 70.
| Tá | |
| Ahern, Bertie. | Ahern, Dermot. |
| Ahern, Michael. | Ahern, Noel. |
| Andrews, Barry. | Andrews, Chris. |
| Ardagh, Seán. | Aylward, Bobby. |
| Behan, Joe. | Blaney, Niall. |
| Brady, Áine. | Brady, Cyprian. |
| Brady, Johnny. | Browne, John. |
| Byrne, Thomas. | Calleary, Dara. |
| Carey, Pat. | Collins, Niall. |
| Conlon, Margaret. | Coughlan, Mary. |
| Cregan, John. | Cuffe, Ciarán. |
| Curran, John. | Dempsey, Noel. |
| Devins, Jimmy. | Dooley, Timmy. |
| Fahey, Frank. | Finneran, Michael. |
| Fitzpatrick, Michael. | Fleming, Seán. |
| Gogarty, Paul. | Gormley, John. |
| Hanafin, Mary. | Harney, Mary. |
| Haughey, Seán. | Hoctor, Máire. |
| Kelleher, Billy. | Kelly, Peter. |
| Kenneally, Brendan. | Kennedy, Michael. |
| Killeen, Tony. | Kitt, Michael P. |
| Kitt, Tom. | Lenihan, Brian. |
| Lenihan, Conor. | Lowry, Michael. |
| McEllistrim, Thomas. | McGrath, Mattie. |
| McGrath, Michael. | McGuinness, John. |
| Mansergh, Martin. | Martin, Micheál. |
| Moloney, John. | Moynihan, Michael. |
| Mulcahy, Michael. | Nolan, M. J. |
| Ó Cuív, Éamon. | Ó Fearghaíl, Seán. |
| O’Brien, Darragh. | O’Connor, Charlie. |
| O’Dea, Willie. | O’Donoghue, John. |
| O’Flynn, Noel. | O’Keeffe, Batt. |
| O’Keeffe, Edward. | O’Rourke, Mary. |
| O’Sullivan, Christy. | Power, Peter. |
| Power, Seán. | Roche, Dick. |
| Ryan, Eamon. | Sargent, Trevor. |
| Scanlon, Eamon. | Smith, Brendan. |
| Treacy, Noel. | Wallace, Mary. |
| White, Mary Alexandra. | Woods, Michael. |
| Níl | |
| Bannon, James. | Barrett, Seán. |
| Breen, Pat. | Broughan, Thomas P. |
| Bruton, Richard. | Burke, Ulick. |
| Burton, Joan. | Byrne, Catherine. |
| Carey, Joe. | Clune, Deirdre. |
| Connaughton, Paul. | Coonan, Noel J. |
| Costello, Joe. | Creed, Michael. |
| Creighton, Lucinda. | D’Arcy, Michael. |
| Deasy, John. | Deenihan, Jimmy. |
| Doherty, Pearse. | Doyle, Andrew. |
| Durkan, Bernard J. | English, Damien. |
| Feighan, Frank. | Ferris, Martin. |
| Flanagan, Terence. | Gilmore, Eamon. |
| Hayes, Brian. | Hayes, Tom. |
| Higgins, Michael D. | Hogan, Phil. |
| Howlin, Brendan. | Kehoe, Paul. |
| Lynch, Ciarán. | Lynch, Kathleen. |
| McCormack, Pádraic. | McEntee, Shane. |
| McGinley, Dinny. | McGrath, Finian. |
| Mitchell, Olivia. | Morgan, Arthur. |
| Naughten, Denis. | Neville, Dan. |
| Noonan, Michael. | Ó Caoláin, Caoimhghín. |
| Ó Snodaigh, Aengus. | O’Donnell, Kieran. |
| O’Dowd, Fergus. | O’Keeffe, Jim. |
| O’Mahony, John. | O’Shea, Brian. |
| O’Sullivan, Jan. | O’Sullivan, Maureen. |
| Penrose, Willie. | Perry, John. |
| Quinn, Ruairí. | Rabbitte, Pat. |
| Reilly, James. | Ring, Michael. |
| Shatter, Alan. | Sheahan, Tom. |
| Sheehan, P. J. | Sherlock, Seán. |
| Shortall, Róisín. | Stagg, Emmet. |
| Stanton, David. | Timmins, Billy. |
| Tuffy, Joanna. | Upton, Mary. |
| Varadkar, Leo. | Wall, Jack. |
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Paul Kehoe and Emmet Stagg.
SECTION 2Debate resumed on amendment No. 1:
Acting Chairman (Deputy Charlie O’Connor): I understand the Minister was in possession.
Minister for Finance (Deputy Brian Lenihan): I was in possession but had concluded.
Acting Chairman (Deputy Charlie O’Connor): I was merely protecting the Minister’s position.
[420]Deputy Brian Lenihan: I understand Members still are considering the amendment.
Deputy Joan Burton: I wish to ask the Minister some questions in respect of the Labour Party amendment No. 1. Although the Minister explained his thinking on section 53, I am not convinced that this section does not give the Minister extraordinary powers that are outside the scope of the Constitution and I refer specifically to Article 15 of the Constitution. When the Minister spoke before the adjournment of this debate at 7 p.m., he created what in some ways was a very elegant construction that he as Minister had certain powers of direction and so on that he exercised and that having done this with consultation and so on, he then could go to the High Court, which could make a judgment. However, it appeared as though his approach was to make a construct that suggested the courts would have the say in this matter when, in fact, the powers he is taking are extraordinary. It appears as though he had created something of a castle in the air to devise a structure that would maximise the power of the Minister vis-à-vis Article 15 of the Constitution.
As for section 53, he described and read out its two parts. I had read them out previously and the Labour Party has no difficulty with the first part, which provides a recognition that much legislation provides for the repeal or amendment of existing legislation. This often is a function of legislation. However, our concerns are with the second part, namely, the powers the Minister will acquire under section 53 are so sweeping and draconian that they are outside the ambit of the Constitution. As I said, our Constitution recognises the law-making function of the Houses of the Oireachtas and specifically the Dáil. If we are to resign that function and hand it over to the Minister it would be an enormous diminution of parliamentary power.
On the IMF and European Union deal, Commissioner Rehn, whom almost all Opposition parties met during his visit to Dublin, in addition to setting out his thoughts on the likely level of the deficit also talked about the reform programme under the Lisbon agenda. The reform programme requires the consultation of not just member Governments but the Parliament, Opposition, civil society and other interested parties.
The Minister has still not answered Deputy Rabbitte’s question. We have consistently called for bank resolution legislation since the time of the guarantee because it is a feature of American legislation, in particular. I and others gave the example of Washington Mutual. It was restructured and the bondholders took a part in the restructuring.
The Bill is very complex. I do not know whether the people in the Minister’s office have been working on it for the past two years, perhaps they have been working at it every night. Perhaps the Attorney General has been working on it every night for the past two years. On the second last day of the Dáil session before it goes into recess for Christmas and the new year the Minister has introduced a highly complex Bill comprising 66 pages, 77 sections and several Schedules.
The Minister wants the Opposition to have it passed in under 24 hours. What Commissioner Rehn said in Dublin envisaged a very strong debate on the need for reform which involves not simply the Government — with which as Commissioner he obviously has the primary connection — but also the Opposition and civil society.
No academic lawyer in any of our universities, as far as I am aware, has had an opportunity to even cast a reflective thought on the Bill. The Labour Party has had members and lawyers talking to us about how they understand various sections. Yet, the main object of the Bill is to provide €10 billion to AIB — the Minister did not demur when I suggested it and perhaps he could enlighten us — before the end of the year or Christmas. He is exercising extraordinary powers in doing this.
[421]People talk in Irish society and a lot of columnists write intensively on aspects of it. Fintan O’Toole recently wrote a book on reform. The fundamental reform required in terms of the Dáil is that its Members have an opportunity to scrutinise and examine legislation. People in civil society or those with specialised legal knowledge should be able to contribute.
With due respect, there was nothing in the Minister’s response to our concerns. He has made up his mind, he has been the judge and jury and in future he will have an extraordinary collection of powers. The banking crisis is crippling the country. As a country and citizens we are allied to the banks’ debt. Without a doubt, we have a difficulty with the gap between spending and taxation, in terms of the ordinary fiscal deficit. Were that this was the country’s only problem, with a couple of difficult enough years and agreements on wage freezes and so on, we could deal with it without any difficulty. What is crippling the country and its borrowing rate is the weight of the bank debt.
The section in the Bill which relates to Anglo Irish Bank is extraordinary. It refers to involving the bank in some kind of reorganisation, revival and recapitalisation. I understand it is section 12. It is extraordinary. Can the Minister explain to the ordinary people in Ireland why the Bill refers to the recovery, reorganisation and recapitalisation of Anglo Irish Bank?
Most of us here thought we had this debate. Is the Minister expecting, with his extraordinary powers, to arrange for the ghost of Hamlet’s father to appear in the Chamber to scare the living daylights out of every man, woman and child in the country? That seems to be what he has in mind. It is almost impossible in this context to read the section containing the description of the proposals in the Bill in respect of the reorganisation, recapitalisation and revival of Anglo Irish Bank.
The Minister is taking extraordinary powers. Is it to create a Lazarus out of Anglo Irish Bank in order that it lives to see another day? Is there a technical reason, in terms of the agreement with the IMF and the European Union, which requires the smelling salts for this bank for a period and which he has not shared with us? I invite the Minister to share a little information with the Deputies of this House about his exact intentions. Is €10 billion for AIB to be provided by 31 December? Will the ghost of Hamlet’s father appear on the battlements of Leinster House and walk again? Is this the future the Minister has in mind for Anglo Irish Bank?
I ask the Minister to spell out the situation because he has taken extraordinary powers. Deputy Rabbitte said earlier that, in a way, this is something to facilitate the Minister between now and the general election. The requirement in the IMF deal the Minister signed is to publish real bank restructuring and reform legislation by the end of February.
Can the Minister tell us exactly what he is doing and why he will not accept the Labour Party amendment? It proposes a reasonable restriction on the Minister’s powers in order that he exercises them as ordinary Ministers exercise them in the context of full respect for the Constitution? The Minister referred to getting the advice of the Attorney General who said the Bill was constitutional. However, as a Minister he is carrying a very heavy stick.
Even though only four hours of debate on this Bill are permitted, we deserve more explanation from the Minister on the concept of the Bill, what it is expected to do and what the description of what is to happen to Anglo Irish Bank is meant to mean. The Minister is providing for extraordinary powers in that regard. When the deal was reached with the IMF, we were told we had €10 billion with €25 billion in reserve. It now appears that €10 billion will go into Allied Irish Banks by the end of the year. Last Saturday, the chairman and public interest director of Anglo Irish Bank suggested in an interview, which was carried by the international media, that the reserves are likely to be used up by further requirements. Can the Minister tell [422]us where it is at the moment? Why should the Dáil vote to give him these extraordinary powers?
Deputy Michael Noonan: In the time available tonight, this extraordinary Bill will receive little scrutiny. The Minister is proposing to take to himself extraordinary and very strong powers. I mean no disrespect to the Minister and his Department when I say their banking policy has not inspired confidence up to now. The proposal to make the Minister the sole agent of the development of future banking policy, with little or no recourse to the Governor of the Central Bank, no recourse to this Parliament and no requirement to consult the Government, is absolutely extraordinary.
Deputy Burton, who has proposed this amendment, is correct in her fear that the Minister is taking to himself one of the roles of the Parliament. The power being taken is, in effect, tantamount to the power to develop new law, using some kind of order as a mechanism. That is a very dangerous precedent. If one examines the measures being proposed in the Bill, one will have serious constitutional doubts about the Minister’s approach. I cannot understand why the Minister does not amend the various sections of the Bill in which he takes powers onto his shoulders in a manner that seems quite arbitrary. I suggest that the term “the Minister may, on the instructions of the Government” should be included in such sections. It is extraordinarily peculiar that emergency legislation of this nature has such a long recital, which refers to “the public interest”, in order to ensure its constitutionality. It seems the Minister will be able to act as a sole agent without recourse to the Government. I would have thought that a Government decision, on which the Minister of the day would act, would be a prerequisite in anything like this. That is not how the legislation has been phrased, however.
The Minister is encroaching on the constitutional role of the Parliament. There are serious doubts about whether he is also encroaching on the separation of powers with the courts. Various sections of the Bill propose to limit access to the High Court, the scope for appeal to the Supreme Court and the power of judicial review. Another section proposes that a person who loses his or her job directly by order of the Minister of the day, or through a person appointed by him or her, cannot take a case under the Unfair Dismissals Act. I would have thought that one of the rights provided for under that Act is the right of a person to vindicate his or her constitutional rights. It is not just a right in statute law — it is founded on a constitutional right. The Minister is proposing to remove the right of such a person to access a decision on whether his or her dismissal is unfair.
The relationship the Minister will have with the Central Bank under this Bill is peculiar, to say the least. It is not in accordance with what I know of bank resolution legislation across the European Union. The Minister is ignoring the Governor of the Central Bank, in effect. Some of the Bill’s provisions will require the Minister to consult the Governor, but none of them will require the Minister to take the advice of the Governor at any point. The requirement is confined to consultation. Another peculiar provision will allow the Minister to issue a directive in writing, indicating what the role of the Governor of the Central Bank is, and what the role of the Minister is, in the exercise of these functions. It seems to me, from the manner in which the section is drafted, that the Minister will be able to send a letter to the Governor telling him it is not his business to interfere with what the Minister is doing under the provisions of this legislation. It is a very peculiar approach to law.
Not only is this Bill draconian in its intent, but it is unnecessarily draconian in the manner in which it empowers the Minister. I presume it has been signed off by the Office of the Attorney General in the normal way. The Government is relying heavily on the preamble to the Bill as a kind of force majeure clause. It seems to suggest the power to ride roughshod over [423]the Constitution is required by the Minister because things are so bad. I am not sure that, in practice, the courts will see eye-to-eye with the Minister if this legislation is challenged. I do not understand why the Governor of the Central Bank is not being given a greater role. The token provision that he be consulted is no more than a nod in his direction. Nowhere in the Bill is there an obligation to take the Governor’s advice.
One peculiar section of the Bill before the House gives the Minister the power to delineate in writing where the power of the Governor of the Central Bank stops and the power of the Minister begins. I would have thought the independence of the Central Bank in law was a fundamental aspect of the monetary policy of this country. I appreciate that the Central Bank and the Financial Regulator have been criticised in recent years, but that does not detract from the principle that the Central Bank should be independent. The role of the Governor of the Central Bank is enshrined in law. He is independent in the exercise of his functions. That is a very important cornerstone of our fiscal and monetary position. However, the Minister seems to be proposing to do violence to all of that.
I know the Minister will not read the advice of the Attorney General into the record, but perhaps he can justify the legal approach being pursued in this Bill. I refer especially to the proposal to cut people off from accessing the courts.
Deputy Brian Lenihan: To what section does the Deputy refer?
Deputy Michael Noonan: It is near the end of the Bill. We received the Bill at a late stage, as the Minister is aware.
Deputy Pat Rabbitte: It is section 53.
Deputy Michael Noonan: A series of sections, from section 53 onwards, limit the rights of people to proceed as I have suggested. I ask the Minister to give us more insight into the thinking behind those provisions. I am not sure where they have come from. I am not too sure where the Bill as a whole has come from. According to the explanatory memorandum, section 64 provides for the “limitation of certain rights of appeal to the Supreme Court”, section 63 provides for the “limitation of judicial review” and section 62 provides for the “limitation of operation of section 61”. I just do not get it, to use a colloquialism. I do not understand why the Minister feels it necessary to do this.
Quite frankly, I cannot see how these provisions are in accord with the Constitution. It seems that the Minister is relying on the preamble, which is an extraordinary piece of writing in its own right, to ensure their constitutionality. It refers to “a serious disturbance in the economy” and claims these “measures are necessary to address a unique and unprecedented economic crisis which has led to difficult economic circumstances”. It mentions a “serious threat to the stability of certain credit institutions”. Such a recital of how bad things are has been included to justify this emergency legislation. I do not think the preamble, extensive as it is, justifies this approach or protects the Minister from constitutional challenge to his efforts to limit the right of citizens to access the High Court or the Supreme Court on appeal. I cannot see how it does not infringe on the separation of powers. I would be glad if the Minister could give us some insight into it.
Deputy Pat Rabbitte: In his earlier reply, the Minister said that I said this is not bank resolution legislation. I did not say that — I said it is not like “the bank resolution legislation that has been put in place in other jurisdictions”. A number of aspects of that have been dealt with. One of them, of course, is the resort to the courts. That is not normally the provision in a bank resolution Act. Normally the role of the Central Bank is central. It is curious here, and the [424]Minister should explain why he has gone down this road rather than adopting the role of the provisional supervisor. One cannot ask a Fianna Fáil colleague in the House where the nearest ATM is, without him or her telling you, “Did you see that we appointed Dr. Patrick Honohan, and that was a stroke of genius by the Minister?”.
When the Bank of Ireland ran into problems here last week with its technical hitch, I asked a Fianna Fáil colleague what was happening in the bank and he said, “Wasn’t Lenihan a genius, appointing Dr. Patrick Honohan?” and we had another big discussion regarding how inspired the Minister’s appointment was. Now we have appointed him and for some reason the Minister decides to bypass him here.
Deputy Damien English: He was too good.
Deputy Michael Noonan: He is like our piano. It looks good in the corner but no one wants to play it.
Deputy Pat Rabbitte: He has a consultative role only.
Deputy Damien English: It is nice to have him on the team.
Deputy Pat Rabbitte: He certainly looks well decorating the notepaper in this Bill, but that is all, and I do not know why the Minister chose to do that.
Deputy Brian Lenihan: He is more than decorative, I can assure the Deputy.
Deputy Pat Rabbitte: The point has been well made by Deputies Burton and Noonan to the effect that the Minister is a one-man legislature. This Bill will be waved around classes in UCD, Trinity College and the education colleges for many years to come, whereby the Minister has taken unto himself powers that need neither the House or the Constitution. Again, he has not adequately explained why he needed to convert himself into a one-man legislature.
Deputy Noonan suggests that it is the preamble that gets the Minister off the hook. The preamble is fascinating because it is not a feature of Irish law making. We do not have this in Irish law making, generally speaking. As a result of it he would be free to make any type of law he likes for the plebs. I do not know why we have opted for this pattern that is more prevalent in the Mother of Parliaments than it is here.
The Minister must explain to us what this peculiar provision is in section 4 which provides that the purpose of the Act is “to continue the process of reorganisation...”. There is very little reorganisation continuing, since we are exactly where we were when we were discussing the NAMA Bill. A few of the lads have relocated themselves outside the jurisdiction, but the institutions are not reorganised.
One of the purposes of the Bill is “to continue the process of reorganisation, preservation and restoration of the financial position of Anglo Irish Bank Corporation Limited begun with the Anglo Irish Bank Corporation Act 2009”. This has been raised by a couple of colleagues and we still do not have an answer as regards what it means. All we know is that the chairman of the corporation told the New York Times that he thought the €35 billion provided would not be enough. The Minister told us that €10 billion of it would be needed, probably, and quickly, but that the other €25 billion would be in a contingency fund and the Lord help whoever might touch it, as it was unlikely to be drawn down. However, here we seem to be committed to a programme of restoration and preservation. Anglo Irish Bank is preserved in the minds of the Irish people forever.
[425]Deputy Pearse Doherty: The amendment touches on a very important point, namely, the powers to be conferred on the Minister for Finance, however long the present incumbent will last in that office. Given the difficulties my colleague, Deputy Arthur Morgan raised in regard to potential constitutional problems arising from this legislation overriding or supplanting laws already in existence, it is a minefield. I am curious to find out what type of legal opinion the Minister has received in that regard, knowing that the Government has received legal opinion in other cases, only to be defeated in the High Court and no doubt ultimately in the Supreme Court whenever the case will be heard in regard to the by-election.
If we look at the wider economy, while the Bill is important in terms of the powers to be transferred to the Minister for Finance to allow him or her to act unilaterally, the big problem arises from the powers that will not be transferred. That is where the gaping hole in the legislation lies, and none of the speakers from the other parties have raised this. One of the powers the Minister will have is to make a subordinate liability order, while he or she will not have the power to make a senior liability order.
The crux of the matter is that while burden sharing will be dealt with in regard to subordinate debt, no matter how toxic or insolvent the bank is without State support, senior debt will continue to be guaranteed. Unless that position changes we are headed into a very difficult position in the future. We have issues as regards expenditure and falling income receipts and these can all be dealt with, as the Minister has indicated in his four-year plan. I believe that this is not achievable, however, in terms of the desired outcomes because it will contract and strangle the economy. Sinn Féin has said it will take six years but not only is there a difference in timeframes, there is also disagreement in terms of how this is to brought about.
One way to proceed is through cuts in deflation, which is the Government’s approach, along with those who have signed up to the consensus for cuts. The second approach is through a growth stimulus package. However, if we continue to allow private bank debt to be tagged on to the sovereign debt we will not be able to grow the economy in the way that is needed. The Government is planning to rape the National Pensions Reserve Fund to prop up the banks and the bondholders. Not just our party but also the Labour Party was planning to utilise some of that funding in terms of job creation and stimulating the economy.
Perhaps I am naive, but many experts are telling us that senior debt cannot continue to be guaranteed by the Irish State. There is no reason for it, and it can be looked at in two ways. The first is to look at it from a fairness viewpoint. As legislators and politicians elected on behalf of the Irish people we have to act in their best interests. This phrase —“acting in the national interest”— is probably the most bandied about misused phrase that I have heard since entering the Dáil or before that because of the many interpretations one may apply to it. Is it fair that we continue to allow the Irish taxpayer to guarantee senior debt? In this Bill the powers conferred on the Minister for Finance will be to deal with subordinate debt. I have looked through the measures that confer these powers and one of these is the likely extent to which subordinate creditors will be repaid amounts owing to them in the event of the winding up of an institution in the absence of such financial support.
These subordinate bondholders are investors. They invested in a bank which would not be functioning unless there was State support. However, the senior bondholders did exactly the same thing, so why should they not be treated in the same manner as the subordinate bondholders? The Minister continually poses the question of what will happen if we burn the bondholders, which Sinn Féin argues we should do in respect of those banks that have no future. Let us deal with Anglo Irish Bank in isolation. The senior bondholders in that bank should not get one red cent from the Irish taxpayer. There are other measures that can be used to address [426]the situation in other banks, for example, debt for equity swaps, which is a measure with which the Minister is empowering himself in order to deal with subordinated bondholders.
The Minister has asked how we will get money from the market if we burn bondholders. The reality is that if we separate bank debt from sovereign debt our debt to GDP ratio falls to 75%. Mr. David McWilliams pointed out today how this compares with other European countries. Sinn Féin has been arguing for a long time for a separation of bank and sovereign debt. We cannot allow private debt to become sovereign debt. If we make that separation our debt to GDP ratio will be 75% compared with Greece which stands at 126%, Italy at 116%, Belgium at 96%, Portugal at 76% and France at 78%, with Germany — it is mostly German and French bondholders we are bailing out in this scheme — 2% below us in terms of debt to GDP ratio. The Minister should do what we are asking and at least allow himself the power to burn the bondholders or deal with debt for equity swaps in terms of senior bondholders, whether or not he invokes them. We argue that the Minister should invoke them. If the Minister had those powers and dealt with bank debt separately from sovereign debt there would be no reason we could not go back into the markets after a short period.
Deputy Brian Lenihan: We are in Argentina now.
Deputy Pearse Doherty: The reality is that four weeks ago he was defending the fact that we did not need the IMF, ECB or EU bailout.
Deputy Arthur Morgan: The Minister took umbrage at the suggestion.
Deputy Pearse Doherty: The Minister has turned many corners in his career and has made many U-turns and should not laugh at me when I repeat what he said in this Chamber and to the nation and whole world just four weeks ago. Either the Minister was lying to us then or he was wrong. The reality is that the ECB has——
An Ceann Comhairle: Deputy Doherty, it is inappropriate to use the word “lying”.
Deputy Pearse Doherty: I did not say that the Minister was lying. I am saying he was either lying or——
An Ceann Comhairle: It is inappropriate to use that word and I ask the Deputy to reconsider it. I am sure the Deputy can find an alternative word.
Deputy Pearse Doherty: I accept it is not appropriate to use the word “lying” in the Chamber. The Minister either deliberately misled us or was ill-informed at the time. What I am saying is what the Minister said in terms of not needing the EU-IMF bailout because we could depend on the international bond markets. The difference between my approach and the approach taken by the Minister four weeks ago is that he was depending on the international bond markets and was allowing private debt to become sovereign debt. The reason our yields on ten year bonds has spiked to 9% is the international bond markets believe the Irish State does not have the ability to pay its debt. We do not have the ability to pay because we have tied in private bank gamblers’ debt with sovereign debt.
I referred earlier to the information given by Mr. David McWilliams. If we separate bank and sovereign debt our debt to GDP ratio will be below that of other countries. Let us take the example of Belgium, which yesterday raised money at 1.8%. Our debt to GDP ratio and, [427]indeed, our debt to GNP ratio would be below Belgium. It is implausible for the Minister to argue that the bondholders would not look at us if we took this approach.
Deputy Arthur Morgan: Exactly.
Deputy Pearse Doherty: We are not in government and cannot invoke the instruments that would burn the senior bondholders in Anglo Irish Bank. We are arguing that the Minister should at least empower the Houses of the Oireachtas, through this Bill, to take those measures. The Minister is attempting to enshrine in legislation debt for equity swaps and burning subordinate bondholders, gamblers who gambled in banks which, apart from being propped up by the State, are toxic and insolvent. The same should happen to gamblers who are called senior bondholders. That is the elephant in the room. We can waste as much time as we want discussing this. It is wrong that this legislation is being forced through the Houses of the Oireachtas in such a short period. The Minister cannot continually refer to the powers transferred to him under this Bill without dealing with the big issue, namely, that we cannot allow senior bondholders to be paid by the Irish taxpayer.
Deputy Aengus Ó Snodaigh: Hear, hear.
Deputy Pearse Doherty: Our structural deficit can be reorganised. We may have differences of opinion in regard to how this can be done but it can be reorganised. We can get the deficit within the margins of 3%. There is only a year in terms of difference between the Sinn Féin approach and that of Government and other parties. I appreciate that I will not get to speak on the amendments I have tabled. However, I hope to have the opportunity to call a vote on them, thus exposing all the parties in this House in terms of whether they support the burning of senior bondholders in Anglo Irish Bank and the reduction of €1 in the minimum wage which will be pumped into those gamblers, the multimillionaires who are scattered across the world whom we have bailed out once more.
Deputy Arthur Morgan: When summing up, perhaps the Minister will advise us——
Deputy Brian Lenihan: We are on Committee Stage, I will not be summing up.
Deputy Arthur Morgan: ——-how he proposes to deal with the problem of too much debt, of which we have too much in this State because the Minister has linked private debt in the banks with State debt. The Minister has joined the two and made the taxpayer responsible for it. The Minister proposes to deal with our debt by linking bank debt to sovereign debt.
Deputy Aengus Ó Snodaigh: Hear, hear.
Deputy Arthur Morgan: Does the Minister think that will work? Where is the logic in that? Does the Minister believe that, even on a good day, we have the economic base to produce the revenue to make that happen? If the Minister examines his Department’s figures he will see that revenue streams are dropping rather than increasing. Before us is the Credit Institutions (Stabilisation) Bill 2010. Where are the stabilisation measures for the real economy and the people on the front line trying to feed their children?
An Ceann Comhairle: Debate on this Bill is due to conclude at 10 p.m. I am anxious that the Minister will have an opportunity to reply and the Deputy’s colleague, Deputy Ó Snodaigh, wishes to make a contribution.
Deputy Arthur Morgan: I am most anxious to hear from the Minister.
[428]Deputy Joan Burton: We want to hear about the revival of Anglo Irish Bank.
Deputy Arthur Morgan: I will be honest with the Minister.
Deputy Brian Lenihan: There will be no revival or reanimation.
Deputy Arthur Morgan: I can assure him that I do not mean to be personal. However, the decisions made by this Government over the past two years have not been good. The Government has spent the past two years dealing with the banks and ignoring the real economy.
An Ceann Comhairle: The Deputy is moving away from the amendment.
Deputy Arthur Morgan: It is now grabbing money from low income families and reducing the minimum wage, which is dreadful. Perhaps the Minister will deal in a straightforward fashion with some of the points I have made.
An Ceann Comhairle: As I mentioned earlier, I am anxious to allow the Minister for Finance to respond.
Deputy Joan Burton: We are anxious for a vote.
Deputy Aengus Ó Snodaigh: I too am anxious, but that the Minister give us enough time to deal with this legislation.
An Ceann Comhairle: The Deputy is drifting from the amendment.
Deputy Aengus Ó Snodaigh: I have only uttered one sentence and the Ceann Comhairle is already down my throat.
I support the amendment, which relates to section 1 and deals with the Short Title and commencement of the Act. At the end of the day, this Act may be cited as the Credit Institutions (Stabilisation) Act 2010.
An Ceann Comhairle: We are on section 2, amendment No. 1, in the name of Deputy Burton.
Deputy Aengus Ó Snodaigh: Even better.
Deputy Pat Rabbitte: Táimid ar an dara leasú.
Deputy Aengus Ó Snodaigh: Tá brón orm gur dhéan mé botún.
Deputy Brian Lenihan: Níl aon bhrón ar an Teachta. Bhris sé an geata lasmuigh den Tigh seo.
Deputy Aengus Ó Snodaigh: Tá brón orm. Tá sé seo níos tábhachtaí ná an chéad rud mar déaneann sé seo déileáil leis na príomhrialacha a bhaineann leis an Acht seo, agus an interpretation. Táimidne ag déanamh iarrachta déileáil leis seo. Táimid ag déanamh iarrachta cur ina luí ar an Aire go bhfuil gá le hathrú meoin ag an Rialtas.
Tá brón orm nach raibh mé sa Teach ar feadh tréimhse ghairid den díospóireacht ar an reachtaíocht seo, mar bhí cruinnú eile agam. Bhí mé anseo ag an tús agus ag an deireadh. Ní raibh an chuid is mó de Theachtaí an Rialtais sa Teach in aon chor. Is droch rud é sin, go háirithe toisc go bhfuilimid ag déileáil le cumhachtaí breise a thabhairt don Aire. Sa deireadh thiar thall, is rud tábhachtach é cumhachtaí breise a mholadh. Tá dainséar ann i gcónaí nuair atáimid ag moladh cumhachtaí breise don Aire. Sa chás seo, tá mise i gcoinne roinnt de na cumhachtaí atáá dtabhairt againn don Aire, mar níl an tAire ná an Roinn ag déileáil leis an [429]bpríomhfhadhb. Tá siad ag cur léi ó thaobh an gheilleagair de. Tá siad ag cur leis an bhfadhb agus beidh siad ag cur léi amach anseo.
Sa deireadh thiar thall, seachas bheith ag déileáil leis an bhfadhb agus fáil réidh leis na fiacha atá againn ina leith siúd a bhfuil bannaí sinsearacha acu, táimid ag glacadh leis na fiacha leo mar fhiacha náisiúnta. Níor chóir go dtarlódh sé sin ariamh, mar is rud iomlán difriúil na fiacha sin. Ba chóir don Aire é sin a thuiscint agus déanamh mar a dúradh leis ag go leor eacnamaithe agus ag daoine ar na binsí seo. Ba chóir na creidiúnaithe sinsearacha sin a dhó. Dá mbeadh sé sin déanta aige le bliain anuas bheadh an geilleagair i staid i bhfad níos fearr agus bheimis in ann déileáil leis na cinntí atá sa chuid seo den reachtaíocht.
Táimid ag déileáil sa chuid seo den reachtaíocht le Coimisiún an Chúlchiste Náisiúnta Pinsean, mar is ceist mhór íó thaobh an gheilleagair de agus leis an tslí a bheidh an tAire ag caitheamh leis an gciste amach anseo. Sin ceist mhór. Cuireadh le chéile an chiste chun brabús a dhéanamh chun déanamh cinnte de go n-íocfar an pinsean náisiúnta agus go mbeadh pinsinéaraí slán sábhailte. Leis an tslí atá an tAire ag caitheamh léi, tá an chiste á cur isteach i bpoll dubh, agus ní thiocfaidh an t-airgead sin as arís. Iad siúd atá ar phinsean a bheidh thíos leis amach anseo. Ní tharlóidh seo i mbliana nó sa bhliain seo chugainn ach amach anseo. Tá mé cinnte go mbeidh siad thíos leis.
Táimid ag déileáil le geallghlacadóirí. Is daoine iad a chuir geall ar rud. Cosúil le duine a chuireann geall ar chapall, ba chóir dóibh glacadh leis go mbeidís ciontach as pé geall a chuireadh. Má theipeann ar gheall, teipeann air. Má eiríonn leis, fair dues. Sa chás seo, níor éirigh leis an gheall agus ba chóir duinn “Slán libh; táimidne slán agus táimid chun déileáil lenár bhfadhbanna féin” a rá leis na geallglacadóirí sin. Ní sin an cinneadh atá déanta sa reachtaíocht seo. Tá an tAire ag iarraidh tacú leo siúd a bhíonn ag glacadh geallta.
An Ceann Comhairle: Tá cúig nóiméad fágtha don díospóireacht.
Deputy Aengus Ó Snodaigh: Tuigim sin. Níl an locht ormsa nó ar aon duine ar an bhFreasúra as an easpa ama. Lorgamar níos mó ama níos luaithe inniu chun déileáil le gach uile leasú. Seo Céim an Choiste. Níl aon srian ar an méid ama atá agam, fad is atá mé ag déileáil leis an leasú. Níl mé sásta seasamh siar chun seans a thabhairt don Aire bladar nó shite as. Tá mé sásta déileáil leis an reachtaíocht atá os mo chomhair. Té mé chun leanúint agus níl mé sásta seasamh siar chun am a thabhairt don Aire. Tá mé ag déileáil leis an reachtaíocht. Deir sé anseo “Minister means Minister for Finance”. Cén fáth?
An Ceann Comhairle: Tá an Teachta Damien English ag iarraidh labhairt.
Deputy Aengus Ó Snodaigh: Tuigim go bhfuil daoine eile ag iarraidh labhairt, tá mise ag iarraidh ligean don Teachta Martin Ferris labhairt. Tá mé sásta ligean don 165 Teachta eile nach bhfuil anseo teacht isteach ach níor thug an Dáil seo seans do gach uile Teachta déileáil leis an reachtaíocht seo. Sin an scannal is mó. Tá seans againn teacht isteach an tseachtain seo chugainn ach ní raibh an Rialtas sásta leis sin. Tá seans ag an Rialtas, ní bheidh na scoileanna ar saoire an tseachtain seo chugainn agus beidh gnóthaí ag obair go dtí Déardaoin seo chugainn. Cén fáth nach bhfuilimid sásta sin a dhéanamh? Tá brón orm, níl mise sásta leis ach táim ag déileáil leis an mBille. Mar is gnách, ní féidir liom déileáil leis ó thaobh na Gaeilge de mar níl an Bille ar fáil as Gaeilge. Seo Bille um Fhorais Chreidmheasa (Cobhsúchán) 2010. Níor chuala mé an focal sin “cobhsúchán” riamh i mo shaol. Bheadh sé deacair déileáil leis sin in aon teanga.
Níl muinín agam as aon rud atá sa Bhille seo agus níl muinín agam san Aire. Dá mbeadh muinín agam san Aire, bheinn sásta tacú le haon chumhachtaí breise a thabhfar dó. Táimse ag cur go huile is go hiomlán i gcoinne na reachtaíochta seo agus an ailt seo.
[430]Luaigh an tAire nach raibh mise ag déileáil leis an alt ceart. In alt 2, an phríomhalt i reachtaíocht ar bith, an interpretation section, déileáileann sin leis an treoir agus leis an mhíniúchán atáimidne ag déanamh ar fhocail dhifriúla. Sa chás seo, táimid ag déileáil le——
Deputy Pat Rabbitte: The Minister of State, Deputy Mansergh, to reply as Gaeilge.
Deputy Aengus Ó Snodaigh: Bheadh sé go hiontach dá mbeadh an tAire Stáit, an Teachta Mansergh, nó aon Aire, sásta tacú liom ó thaobh reachtaíochta as Gaeilge, as Béarla nó as teanga ar bith eile. Sa deireadh thiar thall, níl siad in ann aon fhreagra cuí a thabhairt in aon teanga.
Níl mise sásta tacú leis seo, níl mé sásta glacadh leis na míniúcháin sa chuid seo den reachtaíocht agus níl mé sásta glacadh leis go bhfuil an reachtaíocht cuí agus go mbeidh sé ag dul ar aghaidh. Déanfaidh an Bille damáiste don gheilleagar náisiúnta agus cuirfidh sé ualach thar fulaingt ar ghnáthphobal na tíre. Deir sé san alt, “’financial support’ has the same meaning as the Act of 2008”. Financial support has a different meaning to the vast majority of people because they do not have it, it has been withdrawn from in terms of the Social Welfare Bill last week.
Tá a lán eile lena bhféadfainn déileáil ó thaobh míniúchán de. Le nóiméad nó dhó fágtha, bheinn sásta seal a thabhairt do Theachta eile ach is scannal é go bhfuil an Dáil ag déileáil le reachtaíocht atá chomh tábhachtach leis seo i gceann cúpla uair an chloig agus nach rabhamar sásta déileáil leis i gceart, ar an Dara Chéim, nuair a bheadh gach duine in ann ráitis a thabhairt agus ansin déileáil leis ar Chéim an Choiste sa dóigh is go mbeimis in ann iniúchadh ceart a dhéanamh, líne ar líne, ar Bhille chomh tábhachtach seo. Líne ar líne. Ní rabhamar in ann seo a dhéanamh toisc go raibh an tAire ag iarraidh an Bhille a rith chomh tapaidh sin, in ainneoin go bhfuil seans againn suí i rith na seachtaine seo chugainn. Ní raibh mise sásta leis toisc nach raibh sé ag teacht ar ais.
An Ceann Comhairle: Tá an t-am caite.
Deputy Aengus Ó Snodaigh: Is trua go bhfuil an t-am caite mar d’fhéadfainn labhairt níos faide.
Deputy Arthur Morgan: Is there any chance of extending the debate by an hour? Can the Minister accede to an additional hour to allow him to reply?
Deputy Leo Varadkar: It is not even 10 p.m.
An Ceann Comhairle: As it is ten o’clock I am now required to put the following question in accordance with an order of the Dáil of this day: “That in respect of each of the sections undisposed of, the section is hereby agreed to in Committee, Schedules 1 and 2 and the Preamble and the Title are hereby agreed to in Committee, the Bill is accordingly reported to the House without amendment, Fourth Stage is hereby completed and the Bill is hereby passed.”
[431]The Dáil divided: Tá, 78; Níl, 71.
| Tá | |
| Ahern, Bertie. | Ahern, Dermot. |
| Ahern, Michael. | Ahern, Noel. |
| Andrews, Barry. | Andrews, Chris. |
| Ardagh, Seán. | Aylward, Bobby. |
| Behan, Joe. | Blaney, Niall. |
| Brady, Áine. | Brady, Cyprian. |
| Brady, Johnny. | Browne, John. |
| Byrne, Thomas. | Calleary, Dara. |
| Carey, Pat. | Collins, Niall. |
| Conlon, Margaret. | Connick, Seán. |
| Coughlan, Mary. | Cregan, John. |
| Cuffe, Ciarán. | Curran, John. |
| Dempsey, Noel. | Devins, Jimmy. |
| Dooley, Timmy. | Fahey, Frank. |
| Finneran, Michael. | Fitzpatrick, Michael. |
| Fleming, Seán. | Gogarty, Paul. |
| Gormley, John. | Hanafin, Mary. |
| Harney, Mary. | Haughey, Seán. |
| Hoctor, Máire. | Kelleher, Billy. |
| Kelly, Peter. | Kenneally, Brendan. |
| Kennedy, Michael. | Killeen, Tony. |
| Kitt, Michael P. | Kitt, Tom. |
| Lenihan, Brian. | Lenihan, Conor. |
| Lowry, Michael. | McEllistrim, Thomas. |
| McGrath, Mattie. | McGrath, Michael. |
| McGuinness, John. | Mansergh, Martin. |
| Martin, Micheál. | Moloney, John. |
| Moynihan, Michael. | Mulcahy, Michael. |
| Nolan, M.J. | Ó Cuív, Éamon. |
| Ó Fearghaíl, Seán. | O’Brien, Darragh. |
| O’Connor, Charlie. | O’Dea, Willie. |
| O’Donoghue, John. | O’Flynn, Noel. |
| O’Keeffe, Batt. | O’Keeffe, Edward. |
| O’Sullivan, Christy. | Power, Peter. |
| Power, Seán. | Roche, Dick. |
| Ryan, Eamon. | Sargent, Trevor. |
| Scanlon, Eamon. | Smith, Brendan. |
| Treacy, Noel. | Wallace, Mary. |
| White, Mary Alexandra. | Woods, Michael. |
| Níl | |
| Bannon, James. | Barrett, Seán. |
| Breen, Pat. | Broughan, Thomas P. |
| Bruton, Richard. | Burke, Ulick. |
| Burton, Joan. | Byrne, Catherine. |
| Carey, Joe. | Clune, Deirdre. |
| Connaughton, Paul. | Coonan, Noel J. |
| Costello, Joe. | Coveney, Simon. |
| Creed, Michael. | Creighton, Lucinda. |
| D’Arcy, Michael. | Deasy, John. |
| Deenihan, Jimmy. | Doherty, Pearse. |
| Doyle, Andrew. | Durkan, Bernard J. |
| English, Damien. | Feighan, Frank. |
| Ferris, Martin. | Flanagan, Terence. |
| Gilmore, Eamon. | Hayes, Brian. |
| Hayes, Tom. | Higgins, Michael D. |
| Hogan, Phil. | Howlin, Brendan. |
| Kehoe, Paul. | Lynch, Ciarán. |
| Lynch, Kathleen. | McCormack, Pádraic. |
| McEntee, Shane. | McGinley, Dinny. |
| McGrath, Finian. | Mitchell, Olivia. |
| Morgan, Arthur. | Naughten, Denis. |
| Neville, Dan. | Noonan, Michael. |
| Ó Caoláin, Caoimhghín. | Ó Snodaigh, Aengus. |
| O’Donnell, Kieran. | O’Dowd, Fergus. |
| O’Keeffe, Jim. | O’Mahony, John. |
| O’Shea, Brian. | O’Sullivan, Jan. |
| O’Sullivan, Maureen. | Penrose, Willie. |
| Perry, John. | Quinn, Ruairí. |
| Rabbitte, Pat. | Reilly, James. |
| Ring, Michael. | Shatter, Alan. |
| Sheahan, Tom. | Sheehan, P.J. |
| Sherlock, Seán. | Shortall, Róisín. |
| Stagg, Emmet. | Stanton, David. |
| Timmins, Billy. | Tuffy, Joanna. |
| Upton, Mary. | Varadkar, Leo. |
| Wall, Jack. | |
Tellers: Tá, Deputies John Cregan and John Curran; Níl, Deputies Emmet Stagg and Paul Kehoe.
An Ceann Comhairle: The Bill will now be sent to the Seanad.
Minister for Justice and Law Reform (Deputy Dermot Ahern): I move: “That Report Stage be taken now.”
An Leas-Cheann Comhairle: Before we begin, I wish to bring to the attention of Members two errors in the printed list of amendments. Amendment No. 88 should list an t-Aire Dlí agus Cirt as the sponsor. In amendment No. 120, the asterisk that appears beside the figure 18 in the text of item 7 is an error. The asterisk should only appear beside the figure 18 in the text of item six. This correction will not affect the meaning of the amendment.
Amendments Nos. 1, 2, 14, 15, 19, 26, 32, 35, 45, 47, 48 and 113 are related and will be discussed together.
Deputy Pat Rabbitte: I move amendment No. 1:
I do not intend to take up the time of the House on this. We discussed it on Committee Stage and unfortunately, we do not have the time on Report Stage that this Bill deserves. It is important that the Bill is concluded because there are many people out there who need the protection that comes from the regulation of management companies.
Amendment No. 1 requires that a development would be completed to the satisfaction of the developer and the management company. All Members know that this business of unfinished developments and estates has pockmarked the lives of so many communities over the years. It is a torture for residents and it is important that the Minister addresses it. It is also important in the context of the Law Reform Commission recommendation that the management company [433]would sequester 5% of the price of the purchase until such time as the development is finished. The Law Reform Commission set out its reasoning behind that. I am surprised that the Minister was not sure about whether he would take that on board on Committee Stage. It is not a proposal coming from the Labour Party or from Fine Gael. It is a proposal supported by both parties that is coming from the Law Reform Commission. I would have thought that the Minister would be minded to take that on board.
I am not minded to give the Minister a long lecture tonight about the sacrosanct links between his party and builders, but he has to advance an explanation as to why he has taken so much of the Law Reform Commission report on board, but not this particular recommendation. From experience in my own constituency and speaking to colleagues from across the House, this business of unfinished developments is a huge problem and we have an opportunity here to deal with it.
Minister for Justice and Law Reform (Deputy Dermot Ahern): I agree with Deputy Rabbitte that it is important to pass this Bill, and I accept that time is short. Given that we are coming up to Christmas and that there is a short term after that, it is important to pass it. Most of the amendments go to the very heart of the legislation we are dealing with, which is how best to ensure satisfactory completion of the common areas of multi-unit developments. Obviously, there are differing views on the issue of completion, and whether this Bill can reasonably deal with the issue of ultimate completion and snagging of multi-unit developments is a moot point.
In amendment No. 1, Deputy Rabbitte seeks to involve the planning authority in the process of ensuring satisfactory completion of the common areas. In Nos. 2 and 35, Deputy Stanton proposes a similar solution involving the planning authority and its inspectors. However, the planning authority can have no role here because the planning code does not deal with completion issues. The planning Acts would have to be changed if the planning authorities were to be given such a role. In amendments Nos. 18 and 19, Deputies Rabbitte and Stanton propose the retention of 5% of the purchase price pending completion of the development. This is, in a superficial way, an attractive idea, and was, as Deputy Rabbitte said, advocated by the Law Reform Commission in its report. However, the Law Reform Commission was pretty silent about how this could be dealt with. My Department has discussed this proposal with various stakeholders and, while there is some support for the idea, there is also great concern that such a retention would lead to unnecessary disputes and disagreements between developers and owner management companies, OMCs. I have considered this closely because I undertook to do this on Committee Stage in order to try to accommodate Deputies’ concerns.
Deputy Rabbitte has tabled two further amendments with regard to completion. No. 47 sets out an excessively detailed and complex procedure concerning completion. I believe the provisions in sections 3, 4, 5, 11, 12 and 21 deal adequately with the issues raised in this amendment and, for that reason, I cannot accept No. 47. With regard to amendment No. 48, which was also tabled by Deputy Rabbitte, I am not aware of any provision under the Planning and Development Acts or the Building Control Acts which would permit planning authorities to require performance bonds in order to ensure snagging of multi-unit developments. The proposal in subsection (3) of the amendment is a matter which would need to be considered by the Department of the Environment, Heritage and Local Government in conjunction with the planning authorities in the context of future reform of these codes.
As I explained at the select committee, I fully recognise that difficulties arise in ensuring completion. I have already amended the Bill by providing that, in future, there must be a contract between the developer and the OMC which will contain particulars of arrangements relating to compliance with statutory requirements and the completion of common areas. I have also provided that the OMC will have independent legal advice at the expense of the [434]developer. I am now tabling a further amendment, No. 16, to complement these earlier changes, which were made in response to representations from the Opposition. This amendment has two elements. First, it acknowledges that the contract between the developer and the OMC may make provision for retention of moneys pending completion of the common areas. This will not be mandatory, but where the contract provides for retention of moneys, it must also provide for a mechanism to release such funds. Second, the contract must contain details of a process for resolving any disputes between the parties about completion of the development. This could take the form of expert determination, arbitration or other forms of alternative dispute resolution. The objective is to avoid recourse, if at all possible, to the courts.
Amendment No. 15 is a technical amendment linked to No. 16. Section 5, which deals with multi-unit developments that have been substantially completed, requires that the developer transfer the common areas to the OMC without retention of any beneficial interest. The question of the point at which the development is substantially completed has arisen and, in order to provide certainty about this, I am tabling amendment No. 32, which provides that the development is regarded as substantially completed when the sale of 80% of the residential units has been completed.
With regard to amendment No. 17, tabled by Deputy Rabbitte, this matter has already been addressed by the insertion of section 8(3), which requires that a unit owner must provide contact details to the OMC. Deputy Rabbitte has also tabled amendment No. 45, which seeks to delete section 3(11). This subsection explains what is meant by unreasonable withholding of consent, which is referred to in subsection (2). It has been included in order to safeguard the interests of mortgagees, and consequently, I am not able to accept this amendment.
Finally, I come to the amendments dealing with fire safety in multi-unit developments, which is an important matter that must be addressed. In amendment No. 113, Deputy Stanton proposes that prior to occupation of a development, a fire officer must inspect the building and confirm that it is compliant with fire safety standards. I agree with the thrust of this amendment. In amendment No. 14, I am proposing that, in future, a developer must provide the OMC with certification of compliance with the requirements of the fire safety certificate issued by the building control authority in advance of the construction of the development. The certificate must cover the common areas being transferred to the OMC and must be supplied to the OMC prior to the sale of the first residential unit. I intend to make regulations, as provided for in amendment No. 26, specifying the categories of suitably qualified persons who may certify such compliance following consultation with the Minister for the Environment, Heritage and Local Government.
I apologise for the length of this intervention, but these amendments go to the core of two important issues in this Bill. I acknowledge the concerns underpinning the amendments that have been tabled by Deputies Rabbitte and Stanton, but I believe the amendments I have tabled, taken together with earlier amendments, will address their concerns in a manner much more in keeping with the structure and content of this Bill.
Deputy Pat Rabbitte: I appreciate the Minister’s taking time to put the rationale for his case on the record of the House, and I accept that this is a reforming Bill which will greatly improve the living circumstances of many tens of thousands of people. However, it is a great pity to spoil the ship for a hap’orth of tar, which is what we are doing here. I accept that amendment No. 16, for example, goes some way towards addressing some of my concerns, but, as he pointed out himself, the process is not mandatory. It is a milk-and-water gesture towards the recommendations of the Law Reform Commission.
[435]For some reason, this House cannot bring itself to legislate for builders to complete their work properly. There are many good builders in Ireland, some of whom do very good work and so on and so forth, but there is a cultural inhibition about requiring that their work be completed to an acceptable standard. If there was a requirement in Irish law that builders could not be given planning permission for new developments until they had finished the previous ones to a proper standard, we would not have the kind of problems we have, but for some reason we are reluctant to do this.
If we consider the glut of legislation in the Department of Justice and Law Reform alone — whether the areas of justice and law reform should ever have been brought back together is an open question — we can see that this Bill will not be revisited lightly. This is our opportunity to deal with these issues. The notion of a bond is a good one. If a small percentage of the purchase price was allocated to the OMC and there was a system of arbitration to determine what constituted completion to standard, that would result in an immense improvement. All of the disputes envisaged by the Minister are not likely to happen. These are not the problems we have. This new type of housing, which has taken off in Ireland in the last ten years, sometimes works very well. People also pay a healthy tariff for those that work well.
However, some of them do not work so well and it is possible to look down the road a little and to acknowledge and foresee the problems that will arise, especially in some of the blocks in urban areas. Were the amendment to be accepted by the Minister it would make a contribution to provide against that in future.
Deputy Dermot Ahern: I have sympathy for the point Deputy Rabbitte made with regard to the retention and I have considered the matter carefully. However, all the advice I have received is that it could be the source of considerable dispute as to what is or is not “completion”. The fact is that the planning and building control laws do not provide any guidance with regard to issues such as snagging. Ultimately, such issues can be the cause of disputes between developers and purchasers even in the case of single purchases.
I have tried to provide a via media, that is, an opportunity for the two parties to agree that there would be a retention but not to make it a statutory requirement. Purchasers can look at developments in future and decide whether they seek a development with or without a retention. The problem is that a significant amount of money could be retained over an entire development and the whole question of the release of that money is not properly dealt with, even in the amendments proposed by Deputy Rabbitte. I believe our amendment is better since it allows for the provision of this eventuality in the event of the parties being of such a mind. As a result of discussions on Second and Committee Stages we have provided measures, including the mandatory requirement for a contract to be available and for the legal advice of the owner management company to be paid for by the developer. This is a significant safeguard for the purchasers and the owner management companies.
Deputy Bernard J. Durkan: I agree with several of the remarks of Deputy Pat Rabbitte. In my time in public life many developments have been subject to a lack of clarity, that is to say, a lack of something the consumer or purchaser could rely on and be assured that he or she entered into a contract with the end in sight. Such an arrangement would ensure he or she was provided for and some means existed to ensure that there would be no long drawn-out efforts on the part of local authorities dealing directly with the management company or with the developer. In some cases the developer may have left the scene; this has taken place in many cases recently. There are a significant number of developments throughout the country at present where the developer is no longer functioning on the scene. In some cases, the management company originally set up has disappeared or has malfunctioned because either the development has not been completed in accordance with the planning permission conditions [436]or because of the economic conditions which prevail. It would have been far better if some assurance could have been given at the outset such that when each party to the contract, that is, the buyer and the seller, entered into that contract, he or she knew where the end would be.
The Minister and Deputy Rabbitte referred to snags. Snags are being dealt with for three, four, five or ten years in some cases. Recently, I was in an estate where there is ten years of snagging. I read a letter written by the local authority to the developer, the likes of which I have never read before. It is a crazy situation. The unfortunate residents in such situations are stuck and they wonder how they arrived at that position.
Some 25 or 35 years ago it was possible for a local authority to challenge a developer seeking further or subsequent planning permission in cases where that developer had not completed the current development. It was possible for the local authority to refuse planning permission because the developer had not proved in a satisfactory fashion that he or she was a capable person. What happened then? Someone went to court and, sadly, the courts changed the position. That is case law. I put it to the Minister there is a serious need for an assurance to protect the purchaser. Sadly, many purchasers have been let down through a variety of circumstances, some of which are of their own making but some of which are not.
Deputy Terence Flanagan: I welcome the Minister’s two amendments in the area of fire safety, an area which requires and should receive due attention. At present, the system of fire certificates is such that they are awarded by local authorities based on drawings. No physical inspection takes place to ensure the complex is completed and constructed in accordance with the drawings. Some developers have submitted perfect drawings but the actual construction of the corresponding apartment complex has not been in accordance with these drawings. This is the nub of the problem. One such complex is in my constituency and in this case Dublin City Council has removed its tenants but the tenants in privately owned dwellings remain in an unsafe and unfit building. Their lives are at risk and this has been ongoing for the best part of two years. It is most unsatisfactory. Will the Minister advise on who would be a suitably qualified person to issue a fire certificate? Will there be a change in the current procedure? Will there be a physical inspection of the complexes to ensure they are constructed in accordance with the drawings and that there is no question of light touch regulation?
I fully support the amendments tabled by Deputy Stanton. Deputy Rabbitte referred to the issue of completion of a development. The nub of the problem is where a complex has not been completed and the developer has moved on to the next project without addressing adequately the first complex. The issue of the bond and the 5% retention is remarkably relevant in this regard. The matter was raised previously by the Law Reform Commission and it provided an excellent suggestion. It is a pity it cannot be enshrined in the legislation. The local authority should take more of a role to ensure that a development is constructed in accordance with the planning permission it has granted. That should somehow be included in the legislation.
An Leas-Cheann Comhairle: With the indulgence of the House I will allow the Minister in for a moment. Although it is strictly not allowed, his intervention may be welcome.
Deputy Dermot Ahern: I may end up simply repeating myself, save to say that I have sympathy with regard to the retention issue. However a problem arises in the case of an apartment block with many units. If a retention of 5% were allowed, vast figures could be retained by the owner management company. For example, if there were a retention such that the entire amount retained by the owner management company was €500,000 or €1 million, the whole issue of how and when that would be released would be extremely complex. Would it be [437]released in stages depending on what has yet to be finished? It is likely any such provision would apply to relatively small issues such as whether the tiles are properly laid in the common areas or the carpets in the halls leading to apartments are satisfactory. The issue of snagging cannot really be dealt with.
I have been involved in disputes before with regard to single purchasers of houses built by builders where retention moneys have been at issue until the development is finished. It is always the source of much complaint. If there is to be retention, there is a provision in the Government amendment to allow for alternative dispute resolution to prevent people from having to go to court. However, if an owners’ management company had a massive amount of money retained and there was a dispute over the completion, it would end up in court, unfortunately.
I will make regulations specifying who would be considered qualified to conduct a prior fire safety inspection and issue fire safety certificates subsequently.
Deputy Pat Rabbitte: I am not persuaded by the Minister’s argument. Amendment No. 47 in my name encompasses two pages of procedures on the completion of a development. A great deal of thought and work went into this by professionals in this area. The Minister says he has a great deal of sympathy with the notion of retaining a bond but he envisages a great many disputes as a result. This amendment address this very matter. It provides:
Is the Minister seriously telling the House that it is beyond his and his officials’ capacity to make a regulation establishing a disputes-resolution mechanism that is fair and effective? I do not believe him. The Minister claims there could be much money, even €1 million or more, involved in these cases. With such amounts involved, I can assure the House a developer will see he gets his back even if it means finishing a development to a proper standard.
Deputy Terence Flanagan: It would focus a developer’s mind.
Deputy Pat Rabbitte: I am not persuaded by the substance of the Minister’s argument. The Law Reform Commission examined this issue against some knowledge and visits to some of the messes left by developers and came up with a similar proposal to my amendment.
People claim there are cases where it does not matter who is in the ministerial hot seat. In this case, it does. While a different incumbent in this Department may not perform as well in certain areas as this Minister has, in many respects he or she would still have gone for the Law Reform Commission solution on this matter. It might not be so easy to dismiss the Law Reform Commission proposal, however.
A bond is not unknown in the building industry. There are bonds in it and many others such as the airline industry. A great opportunity to deal with this issue has been missed, however, and I do not find the Minister’s arguments persuasive.
Amendment put and declared lost.
Deputy Terence Flanagan: I move amendment No. 2:
Amendment put and declared lost.
An Leas-Cheann Comhairle: Recommittal is necessary in respect of amendment No. 3 as it does not arise from Committee Stage proceedings. Amendments Nos. 6, 8, 9, 11 to 13, inclusive, 20, 21, 23 to 25, inclusive, 28 to 30, inclusive, 33, 34, 36 to 42 inclusive, 44, 46, 49, 50, 52, 53 to 55, inclusive, 57, 62, 63, 67, 71, 76, 78, 91, 94, 95, 100, 102 and 109 are related and will be discussed together.
Bill recommitted in respect of amendment No. 3.
Deputy Dermot Ahern: I move amendment No. 3:
These are drafting amendments. As the Leas-Cheann Comhairle indicated, this is a large group of drafting amendments that arise from earlier amendments to the scope of the Bill. The Bill’s scope was extended on earlier Seanad Stages and in the select committee to include traditional housing estates which have an owner-management company structure and to cover mixed-use multi-unit developments.
These changes necessitated amendments to definitions, including the introduction of the definition of “commercial unit” which now appears in section 1. The Bill already included a definition of “unit” as meaning a “residential unit”. The Bill, as it now stands, makes numerous references to units. It is not always clear whether such a reference is intended to refer to residential units, commercial units or both. In the interests of clarity, amendment No. 3 proposes the definition of “unit” be removed and that in the other amendments under consideration the term “residential” be inserted before the term “unit” wherever appropriate. The same problem arises wherever the term “development” is used. It is no longer clear whether it refers to multi-unit development, mixed-use multi-unit development or to both. Several amendments are proposed to clarify what is intended. The opportunity has also been taken to improve the Bill’s text, readability and comprehension.
An Leas-Cheann Comhairle: Amendments Nos. 4, 10, 72, 77 and 79 are related and will be discussed together.
Deputy Dermot Ahern: I move amendment No. 4:
Deputy Dermot Ahern: I move amendment No. 5:
I have tabled this amendment to avoid possible confusion concerning the impact of the Bill on multi-unit developments which may have different owner-management companies in respect of different parts of a development. It clarifies that the Bill does not require that only one owner-management company be established for a development and that the provisions of the legislation may be complied with if there is more than one owner-management company.
An Leas-Cheann Comhairle: Recommittal is necessary in respect of amendment No. 6 as it does not arise from Committee Stage proceedings.
Bill recommitted in respect of amendment No. 6.
Deputy Dermot Ahern: I move amendment No. 6:
Deputy Dermot Ahern: I move amendment No. 7:
This amendment is to clarify the scope of section 2(2), which applies certain provisions of the Bill, as set out in Schedule 2, to traditional-type housing estates which have an owner-manage[440]ment company. It is essentially a drafting amendment that does not alter the substance of the existing text. The new wording is intended to make it clear that relevant provisions — that is, those outlined in Schedule 2 — apply to such housing estate developments whether they contain detached, semi-detached or terraced houses, or a combination of any such units.
I also table amendments Nos. 117 to 120, inclusive, which amend Schedule 2 in order to apply the following sections of the Bill to these types of developments: sections 4, 6, 9, 11, 12, 18 and 19.
Deputy Dermot Ahern: I move amendment No. 8:
Deputy Dermot Ahern: I move amendment No. 9:
Deputy Dermot Ahern: I move amendment No. 10:
Deputy Dermot Ahern: I move amendment No. 11:
Deputy Dermot Ahern: I move amendment No. 12:
Deputy Dermot Ahern: I move amendment No. 13:
Deputy Dermot Ahern: I move amendment No. 14:
Deputy Dermot Ahern: I move amendment No. 15:
Deputy Dermot Ahern: I move amendment No. 16:
Deputy Pat Rabbitte: I move amendment No. 18:
Amendment put and declared lost.
Deputy Terence Flanagan: I move amendment No. 19:
Amendment put and declared lost.
Deputy Dermot Ahern: I move amendment No. 20:
Deputy Dermot Ahern: I move amendment No. 21:
Deputy Dermot Ahern: I move amendment No. 22:
This is a technical amendment which does not change the substance of the paragraph. It seeks to make clear that the transfer of ownership of relevant parts of the common areas to the owner-management company includes an obligation on the part of the developer to ensure that the owner of each residential unit can enjoy the peaceful and quiet occupation of his or her apartment.
Deputy Dermot Ahern: I move amendment No. 23:
Deputy Dermot Ahern: I move amendment No. 24:
Deputy Dermot Ahern: I move amendment No. 25:
Deputy Dermot Ahern: I move amendment No. 26:
Deputy Terence Flanagan: How soon does the Minister expect to be in a position to bring forward the regulations?
Deputy Dermot Ahern: We have to go back to the Seanad with any amendments that we make here, so I would think it will be shortly after that.
Deputy Pat Rabbitte: I move amendment No. 27:
This amendment arises from a suggestion by the Apartment Owners’ Network. They make the point, which is manifestly the case, that in this Bill second-hand sales are not regulated. Such purchasers are often unaware of the obligations of membership of an owner-management company. To a large extent, the success of this type of housing depends on the collective effort of citizens being prepared to make the concept of a management company work. There are many obstacles in the way of that, especially during a housing crash. Many young people bought such apartments but are now in negative equity as well as being unemployed. This amendment seeks to address one aspect, which is the second-hand ownership issue. I cannot think of any reason the Minister would not want to accede to it.
Deputy Dermot Ahern: On Committee Stage I amended section 8(3) to require that unit owners must provide the owner-management company with relevant contact details. I understand the motivation behind this amendment but I have serious reservations about how it would work in practice. The amendment suggests that the sale of apartments be made conditional on compliance with undertakings with the purchaser. However, there is no means by which a vendor could ensure that the purchaser abided by any such commitments at the time of purchase by the purchaser. It also casts doubt on the validity of the sale if the purchaser did not subsequently respect the undertakings given. As a result of amendments agreed on Committee Stage, I believe section 8 now addresses the substance of what Deputy Rabbitte seeks. Section 8(3) states that a unit owner, whether the owner of a residential unit or a commercial unit, shall be under an obligation to furnish to the relevant owner-management company particulars of his or her name, particulars of his or her address, particulars of the names of the tenants in the unit, particulars of any habitual occupiers of the units other than tenants, and such other contact particulars as the owner-management company may reasonably request, and shall promptly notify the owner-management company of any [444]change in such particulars. However, on how the seller can subsequently be required to provide those details on an ongoing basis, from a practical viewpoint it would be unreasonable.
An Leas-Cheann Comhairle: Is Deputy Rabbitte pressing the amendment?
Deputy Pat Rabbitte: Manifestly not, because the Minister will not take it on board.
Amendment, by leave, withdrawn.
Deputy Dermot Ahern: I move amendment No. 28:
Deputy Dermot Ahern: I move amendment No. 29:
Deputy Dermot Ahern: I move amendment No. 30:
An Leas-Cheann Comhairle: As it is now 11 o’clock, I am required to put the following question in accordance with an order of the Dáil of this day: “That the amendments set down by the Minister for Justice and Law Reform and not disposed of are hereby made to the Bill; Fourth Stage is hereby completed and the Bill is hereby passed.”
Minister for Justice and Law Reform (Deputy Dermot Ahern): I thank you, a Leas-Cheann Comhairle and Members on the other side of the House for their work on this legislation. It was difficult legislation, from my point of view. While I was the sponsoring Minister, it crossed over a number of Departments, particularly the Departments of the Environment, Heritage and Local Government and Enterprise, Trade and Innovation. We had a number of meetings to tease out the issues involved. With respect to the Law Reform Commission, its recommendations were not as comprehensive as we required for good legislation in this area.
The amendments we have agreed will be taken to the Seanad, but I hope this legislation will be enacted in the new year.
Deputy Pat Rabbitte: I join the Minister in thanking you, a Leas-Cheann Comhairle, for guiding the conclusion of the Bill, and I thank the Minister’s officials. This is reforming legislation for which Members on this side of the House have campaigned for six or seven years. It is not perfect. No legislation is. I would have preferred some matters to have taken a different direction. Nevertheless, it is worthwhile.
I thank the Minister for his co-operation in the prosecution of the Bill and acknowledge that this may be the last time he takes Report Stage of a Bill in the House. We do not know.
Deputy Tom Hayes: Who knows? He could be back.
[445]Deputy Pat Rabbitte: If it is, I wish him many years in retirement with his surf board. I hope it goes well.
Deputy Dermot Ahern: That is all past me, unfortunately.
Deputy Terence Flanagan: I welcome the completion of Report Stage of this important legislation. For the first time, apartment owners can have their voices heard and have someone to turn to regarding the multiple problems that can appear in apartment complexes.
I thank the Minister for his efforts and his officials for their good work. I am delighted the Minister has brought forward amendments in the area of fire safety, which was overlooked initially and deserves the attention it is now getting. Fine Gael, and most Deputies, have been campaigning for proper legislation in this area in the past ten years. I am delighted the Bill will become law as soon as possible.
I thank the Minister again and wish him well.
Deputy Bernard J. Durkan: On the surf board.
An Leas-Cheann Comhairle: The Bill, which is considered by virtue of Article 22.2 of the Constitution as a Bill initiated in Dáil Éireann, will now be sent to the Seanad.
Deputy Dan Neville: I thank the Ceann Comhairle for giving me the opportunity to raise the urgent need for an extension to Nicker national school — Roll No. 142314 — in County Limerick. The school has 94 pupils and it is forecast that this figure could reach 120 within four years.
The school seeks the necessary funds to carry out major important work to the school. The main school building has two mainstream classrooms, a smaller room used by the resource teacher and a similar room serving the dual purpose of office and staff room. There are two pre-fabs, both used as mainstream classrooms, which have been on the site for more than 40 years. These are in very poor condition and in no way represent an appropriate environment for the safe and successful education of children. We know, from experience of these situations, that changes of temperature in very warm or very cold weather make these classrooms very uncomfortable and unsuitable for teachers and pupils. There is also a small pre-fab that was bought some years ago by the school. It is used by the learning support teacher.
The toilets are in a separate building at the rear of the main school building. It is totally inappropriate that children must go out into the open when using the toilets. This would be totally unacceptable in any school in Ireland and should not be the case in Nicker school in County Limerick.
The issues I have raised make for a very unsatisfactory, sub-standard and defective working environment. They present all kinds of health and safety issues concerning the children and their welfare, especially when children are leaving the classrooms to use the toilets.
The wall in front of the school is between 18” and 24” from the ground on the inside, but there is a drop of 4 ft. on the road side. Due to the very limited play area at the back of the school, the younger children must use the area between the front of the main building and this [446]wall. Despite the constant and watchful eyes of those on yard duty, this is an accident waiting to happen. We are concerned for the safety of the children who play in this area. We cannot tolerate putting children in danger.
The board of management has purchased a piece of land adjacent to the school. The plan is to build the extension onto the rear of the present main building and use the land that was bought as a play area. The extension will involve two mainstream classrooms, a classroom for the learning support teacher, an office, indoor toilets and a general purpose room. There is no facility to build indoor toilets unless the extension is built.
The land was purchased last February at a cost of €23,650. I congratulate the board of management on a very successful fund-raising event, which places it in a position to provide the specified local contribution for the capital works the school wishes to undertake. Alternatively, the board would be happy for the Minister to look at allocating funding under the devolved grant scheme, if that would be more suitable.
I ask the Minister to prioritise this school in the next schools building programme, because of the condition of the toilets and the prefabs and for the safety of the children.
Minister of State at the Department of Education and Skills (Deputy Seán Haughey): I am taking his Adjournment debate on behalf of my colleague, the Minister for Education and Skills, Deputy Mary Coughlan.
I thank the Deputy for raising this matter as it provides me with the opportunity to outline to the Dáil the Government strategy for capital investment in education projects and to outline the current position of the application for capital funding from Nicker national school, County Limerick.
Modernising facilities in our existing building stock as well as the need to respond to the emerging needs of areas of rapid population growth is a significant challenge. The Government has shown a consistent determination to improve the condition of our school buildings and to ensure that appropriate facilities are in place to enable the implementation of a broad and balanced curriculum.
The planning and building unit in the Department of Education and Skills assesses all applications for capital funding. The assessment process determines the extent and type of need arising, based on the demographics of an area, proposed housing developments, condition of buildings, site capacity, etc., and leads ultimately to an appropriate accommodation solution.
The staffing level at Nicker national school comprises a principal, three mainstream teachers, one shared permanent learning support teacher and one shared permanent resource teacher. The school had an enrolment of 94 pupils in September 2009. In July 2010, the school submitted an application for grant aid for major capital works to the school building. The application is for an extensive refurbishment of the existing accommodation and an extension to provide additional classrooms, a general purpose room and other appropriate ancillary accommodation. The application is being considered and assessed in accordance with the published prioritisation criteria for large-scale building projects. This assessment process will take account of the factors to which I have just referred.
The priority attaching to individual projects is determined by published prioritisation criteria, which were formulated following consultation with the education partners. There are four band ratings under these criteria, each of which describes the extent of accommodation required and the urgency attaching to it. Band 1 is the highest priority rating and band 4 is the lowest. Documents explaining the band-rating system are available on the website of the Department of Education and Skills. When a band rating is confirmed for this proposed project, it will be [447]added to the list of all assessed applications for major capital works, which is also available on the website.
The progression of all large-scale building projects — including this project — from initial design stage through to construction phase will be considered in the context of the Department’s multi-annual school building and modernisation programme. However, in light of current competing demands on the capital budget of the Department, it is not currently possible to give an indicative timeframe for the progression of the project.
In the interim, I can confirm that the school authority applied for funding under the summer works scheme 2010 for external works to the school. This was the category of works which the school chose to prioritise in its application. I am pleased to be able to confirm that the school’s application was successful and that it received funding under the summer works scheme earlier this year. These works have now been completed and all the funding has been drawn down by the school authority. The school was also awarded contingency funding in respect of works to the building earlier in the year. I am pleased to confirm the school authority has also drawn down this funding.
I again thank the Deputy for giving me the opportunity to outline to the House the current position regarding the school building project for Nicker national school, County Limerick. I took note of what he said earlier and of the queries he raised in respect of this matter. I will bring his comments to the attention of the school building section.
Deputy Noel J. Coonan: The Garda college in Templemore, County Tipperary, is probably one of the best police academies in Europe if not the world. In an effort to accommodate the increasing numbers of recruits who were attending the college some years ago, a number of facilities were removed in order to put in place an accommodation block. The facilities to which I refer were used for the purposes of skills training and included a streetscape that was used as a firing range and to train officers in dealing with public order offences.
Unfortunately, the Garda Síochána is not recruiting at present. However, in 2006 the authorities in Templemore had the foresight to purchase a plot of land some miles from the college, on which facilities similar to those to which I refer were to be put in place. In the interim, the lands to which I refer have lain idle and the necessary facilities have not been put in place. The terrain at the site in question is particularly suited to training officers to use four-wheel-drive vehicles. The plot in question incorporates a mixture of terrains, including ordinary land, forestry and an area of bog. The authorities at the Garda college are of the view that it would be suited to accommodating an automated firearms range for the purposes of training.
The relevant facilities have not yet been put in place. If a streetscape such as that which previously existed were put in place, officers could be trained to deal with bank robberies, etc. With a little effort and a modicum of investment, the facilities to which I refer could be provided. Such a project would not have to be completed immediately and could proceed on a staged basis.
Will the Government provide the funding necessary to ensure the skills of members of the Garda Síochána remain at the required level? Will it provide the facilities to which I refer and which, sadly, are not currently available? The authorities at the college have put forward a plan in respect of this matter and the Office of Public Works has been working on this for a number of years. All that is missing is investment on the part of the Government. What would be involved would be an industrial-type development and the provision of some sheds. The terrain could be developed to allow for training in the handling of four-wheel-drive vehicles on normal land and through wooded areas. Will the Minister of State indicate when the required [448]investment will be made in order that the Garda Síochána will retain its place as one of the finest police forces in the world? There is no question that it is one of the finest forces in Europe. I ask that the investment to which I refer be provided.
Deputy Seán Haughey: I thank the Deputy for raising this matter, to which I will respond on behalf of the Minister for Justice and Law Reform, Deputy Dermot Ahern.
The Garda college is the national centre for police education and development in this country. It provides a total of 280 training courses, programmes and training interventions annually. In 2010, in excess of 13,000 members of An Garda Síochána participated in programmes at the college. The Garda College provides a significant four-wheel-drive training programme for the organisation, utilising a number of locations throughout the State including Templemore, certain military lands and the site referred to which the Deputy refers. The provision of a dedicated four-wheel-drive training circuit at this site is currently being examined by An Garda Síochána.
The Garda authorities have advised that extensive public order training is provided to members of the force by means of a multi-phase approach. This is done within the student-probationer programme, within divisions for public order teams, at operational command level for inspectors and superintendents and for public order instructors. In addition, the Garda authorities have confirmed that there has been considerable investment in the provision of firearms training facilities for members of the force in recent years. This investment has included the provision of two prefabricated modular firearms ranges, one at the Garda college and the other in the Dublin metropolitan region. These ranges are designed to facilitate live fire shooting in a carefully contained environment which adheres to all range safety requirements.
A number of firearms automated training system units are also utilised by An Garda Síochána. These have proven to be a very successful and have facilitated the development of tactical firearms training as well as traditional marksmanship training in a non-live fire environment. An Garda Síochána also has access to a number of Army ranges.
In late 2006, the Office of Public Works purchased the site referred to by the Deputy on behalf of An Garda Síochána for use as a long-term practical training centre. I am advised by the Garda authorities that plans for the further development of this site are currently being refined by the Office of Public Works. The provision of Garda accommodation, including training facilities, is progressed on the basis of An Garda Síochána’s identified accommodation priorities. The further development of this site will be progressed on the basis of these priorities and in the context of available resources. The Garda authorities have reported that, in the interim, use will continue to be made of the site to facilitate training.
Deputy Tom Hayes: I thank the Ceann Comhairle for selecting what is an important topic for me. While it may not be of interest or importance to many people, it is extremely important to me as it pertains to the place in which I live, namely, my native village of Golden. I am highly disappointed because requests have been made for many years for a new plant to be put in place for the sewerage scheme in Golden. Although it is terrible to say this in this day and age, raw sewage is flowing freely from a pipe beside the houses in the village right into the River Suir. The village is one of the most picturesque in the country and the river otherwise also is one of the cleanest. Moreover, the farming community has made great efforts in that area to keep it clean and to do the best for the environment. However, on arrival in the village, one can see that raw sewage from houses, be they public or private, is flowing into the river.
I am very disappointed that the Minister for the Environment, Heritage and Local Government, who speaks a lot about cleaning up the environment, is not present to listen to what I [449]have to say. Over many years, his Department has granted money to local authorities to build houses. Although South Tipperary County Council has given planning permission for houses, that raw sewage still flows into the River Suir. I ask that a scheme be put in place to alleviate this problem. In the past, South Tipperary County Council has applied under the small capital schemes programme to the Department of the Environment, Heritage and Local Government and has been quite hopeful in this regard. In fact, Golden was top of the priority list but alas, when it arrived at the aforementioned Department, it was taken out.
I am both extremely disappointed and extremely annoyed. I acknowledge that it is very late, at 11.20 p.m., to raise an issue such as this but it is an absolute disgrace to see what is happening. Over the past ten to 15 years, the Department has ignored it, even though the county council has sought to have this scheme included and dealt with. Since his election to the local authority in 1979, local councillor Councillor Michael Fitzgerald has raised this issue on a consistent basis. Nevertheless, despite his efforts and those of the engineers in the locality, the Department of the Environment, Heritage and Local Government has simply turned a blind eye. This is not good enough as a considerable number of farmers in the area are involved in the REP scheme keeping clean their environment. Despite this, sewage is flowing into the river, with the blessing of the aforementioned Department. Shame on the Minister, Deputy Gormley, and shame on his absence from the Chamber to listen to what I have to say. Very few villages in Ireland could claim to have put as much effort into their community as Golden. Great effort has been put into initiatives such as the Tidy Towns competition and every aspect of village life, including development of the village, keeping the committee going and building the village infrastructure such as a new GAA field and a top-class music centre. All have been put in place and the only missing link is a sewerage scheme, which has been blocked by the Department of the Environment, Heritage and Local Government. I acknowledge this is not the Minister of State’s area of responsibility but this is highly unfair to the people of County Tipperary and the people of Golden. If the Minister of State’s response is not good enough — I understand how Adjournment debate answers are delivered — I ask him to make this issue a top priority for the Minister in the coming year.
Deputy Seán Haughey: I thank the Deputy for raising this matter. I am taking this Adjournment matter on behalf of my colleague, the Minister for the Environment, Heritage and Local Government, Deputy Gormley, and I have listened with interest to the Deputy’s remarks.
Primary responsibility among public authorities for the protection and improvement of water quality is statutorily assigned to local authorities acting under the general supervision of the Environmental Protection Agency, EPA. Responsibility for the monitoring, management, protection and improvement of water quality is assigned to local authorities under the Local Government (Water Pollution) Acts and related legislation. The EPA has powers to issue advice, recommendations or directions to a local authority regarding the performance by the authority of its functions in respect of environmental protection and a local authority is required to comply with such a direction. Similarly, responsibility for the provision, maintenance and operation of waste water treatment plants is a matter for the local authorities, which in this case is South Tipperary County Council.
The Minister for the Environment, Heritage and Local Government understands, from inquiries made of South Tipperary County Council, that there was a minor overflow from the Golden waste water treatment plant recently. The council has indicated that the occurrence was of short-term duration and related to an operational matter on which it is following up to help ensure that it will not be repeated. The Deputy may wish to liaise directly with the council with regard to the follow-up steps it is taking.
[450]It is understood that the council is considering the provision of an upgraded waste water treatment plant at Golden under the small schemes measure of the Department’s rural water programme. Responsibility for the administration of this programme, within the overall priorities set by the Department and subject to the block grant funding provided, has been devolved to local authorities since 1997. The selection and approval of the individual schemes to be progressed under the programme is therefore a matter for the relevant local authority or again, in this case, South Tipperary County Council. The Department allocated a block grant of €450,000 this year to South Tipperary County Council under the small schemes measure of the rural water programme. Almost €2 million has been provided to the council towards such schemes during the past three years.
Finally, the Waste Water Discharge (Authorisation) Regulations 2007 provide for the operation of an authorisation regime by the EPA for local authority waste water discharges. The regulations require discharges from agglomerations with population equivalents greater than 500 to be licensed. In the case of smaller agglomerations, with a population equivalent of below 500, the regulations provide that a local authority will not be authorised to permit a discharge from a waste water works without certification by the EPA. The agency is currently involved in a programme of licensing and certification in accordance with the regulations. The deadline for completion of the certification part of the programme, which commenced on 22 June 2009, is June 2011. Information on progress with this programme is available from the EPA website at www.epa.ie.
I will conclude by stating that the Minister remains fully committed to the provision of water services infrastructure in south Tipperary. Towards this end, his Department’s Water Services Investment Programme 2010-2012, which was launched earlier this year, includes a range of contracts at various stages of planning and construction for south Tipperary. I hope this information is of some assistance to the Deputy.
Acting Chairman (Deputy Joe Costello): Seanad Éireann has passed the Financial Emergency Measures in the Public Interest (No. 2) Bill 2010, without amendment.
The Dáil adjourned at 11.30 p.m. until 10.30 a.m. on Thursday, 16 December 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 9, inclusive, answered orally.
Questions Nos. 10 to 18, inclusive, resubmitted.
Questions Nos. 19 to 28, inclusive, answered orally.
29. Deputy Michael Noonan asked the Minister for Defence his role and that of the Naval Service on the inter-departmental maritime surveillance working group; and if he will make a statement on the matter. [46293/10]
Minister for Defence (Deputy Tony Killeen): An Inter-Departmental Maritime Surveillance Co-ordination Group (MarSur CG), chaired by the Department of Transport, was established in 2009 under the auspices of the Maritime Co-ordination Group of Assistant Secretaries.
The MarSur Co-ordination Group is working towards the creation of a common information-sharing environment to enhance safety and security within the Irish maritime domain. The Department of Defence and the Naval Service are represented on this Group along with other Government Departments and Agencies responsible for safety and security in the maritime environment.
The Naval Service as the primary seagoing agency of the State, and in its role as support to the Revenue Commissioners and the Garda Síochána, require the most complete knowledge that is possible of activity in Ireland’s maritime environment. The development of a national Recognised Maritime Picture, (RMP) will service the needs of all the stakeholders of the Irish maritime domain.
There is also a European driven desire to improve maritime surveillance and security and to avoid the duplication of resources. The Department and Defence and the Naval Service are actively involved in the European Defence Agency’s MarSur project. The EDA recognises the need to develop a RMP for ESDP maritime missions and tasks.
The MarSur Co-ordination Group has to date identified the core common elements of maritime information to be shared between the different user communities and has created a work[452]ing group to develop the technical and data-sharing framework which will provide for the appropriate data exchanges between the various national agencies.
Internationally, the establishment in 2007 of the Maritime Analysis and Operations Centre — Narcotics (MAOC-N) has led to a greater focus on intelligence exchange amongst countries to tackle large drug shipments by sea. The Centre was set up by seven European countries and is designed as an international co-ordination force with access to national tasking agencies and requires participation and resources from all active members. An Garda Síochána and the Customs Service have full-time officers based at the Centre in Lisbon. Irish Naval Service personnel travel to the Centre when requested by the Joint Task Force.
30. Deputy Aengus Ó Snodaigh asked the Minister for Defence the reason he has not convened the all-party Oireachtas consultation group on the centenary of the 1916 Rising since 2 December 2009; if he will he do so now and include on the agenda for the day a presentation regarding the proposal to extend the national monument, 17 Moore Street, to include from 10-20 Moore Street, including the full footprint of the houses and gardens and laneways, as a national monument in view of the fact that the State now controls most of this property through the National Asset Management Agency; and if he will make a statement on the matter. [47284/10]
51. Deputy Caoimhghín Ó Caoláin asked the Minister for Defence if he is represented on the committee established to mark the centenary of the 1916 Rising; and if he will make a statement on the matter. [46966/10]
Minister for Defence (Deputy Tony Killeen): I propose to take Questions Nos. 30 and 51 together.
The All Party Oireachtas Consultation Group on the Centenary of the Rising, which I chair and represent the Government on, also comprises Deputy Jimmy Deenihan (Fine Gael), Deputy Joe Costello (Labour), Deputy Aengus Ó Snodaigh (Sinn Féin) and Deputy Michael Lowry (for independent members).
The Secretariat is provided by the Department of the Taoiseach.
I am aware of the interest of members to have a meeting of the Group and it will be convened as soon as progress on a sufficient range of projects has been achieved to justify renewed consultation with the Group.
It is the Government’s intention that the centenary commemoration programme in the lead up to the event will include a wide range of commemorative, cultural and artistic initiatives at national, regional and local level. The Programme for Government 2007 — 2012 sets out the Government’s intentions in this regard and includes plans to:
Establish the GPO as a museum of celebration of Irish progress and achievement across a broad spectrum as a landmark 1916 centenary project.
Support the creation of programmes of events in all cities and towns in Ireland.
Make available to historians and to the public, records of the Military Pensions Archive in the Department of Defence.
Advance the redevelopment of Glasnevin Cemetery.
[453]Restore 16 Moore Street and establish therein an interpretative centre, linked to the GPO, to honour those who fought in the 1916 Rising.
Ensure a prominent cultural component to the 1916 Centenary commemoration.
Provide a fund to which community groups can apply for support for the refurbishment of existing monuments commemorating events during the period 1913-23.
Official consideration of several projects and possibilities will be concluded in the context of the preparation of the 2011 Estimates. I believe that this will create the opportunity for meaningful discussions of the scope and extent of an appropriate commemorative framework. I would be grateful to receive any proposals for presentations at the meeting that the Deputies wish to submit for consideration. I thank the Deputies for their continuing patience.
31. Deputy Willie Penrose asked the Minister for Defence the number of officers and the number of enlisted personnel who have retired from the Permanent Defence Forces to date in 2010; and if he will make a statement on the matter. [47273/10]
Minister for Defence (Deputy Tony Killeen): I am advised by the military authorities that the strength of the Permanent Defence Forces as at 30 November 2010, the latest date for which figures are currently available, was 9,502 comprising 7,704 Army, 769 Air Corps and 1,029 Naval Service Personnel.
The number of officers and the number of enlisted personnel who have left the Permanent Defence Forces to date in 2010 is 43 and 425 respectively.
Within the context of consolidating the public finances, the Government is focused firmly on maintaining the operational efficiency of the Permanent Defence Force. Government approval was secured in the context of Budget 2010 for a level of 10,000 all ranks. This reflects the reductions in personnel recommended in the Report of the Special Group on Public Service Numbers and Expenditure Programmes. In 2011, the Permanent Defence Force, like all areas of the public service, will operate on a reduced budget.
Agreement has been reached with the Department of Finance and official confirmation received, on the Employment Control Framework (ECF) for the Defence Forces. The ECF is based on a figure of 10,000 all ranks Permanent Defence Force personnel, appropriately configured across the Army, Naval Service and Air Corps to enable them to meet the roles assigned by Government.
Targeted recruitment is being carried out in 2010 in order to maintain the operational capability of the Defence Forces. In this regard I have approved the recruitment of 40 recruits to the Naval Service, limited recruitment to the Army and the intake of 30 Cadets from the Cadetship Competition 2010. To date, 37 of the 40 recruits for the Naval Service were enlisted on 30 November 2010, along with 40 recruits to the Eastern Brigade and 37 recruits to the Southern Brigade on 3 and 6 December 2010 respectively. A further 3 recruits are due to be enlisted to each of the Naval Service and the Southern Brigade as soon as the final elements of their selection process have been completed. The 30 Cadets were inducted on 6 December 2010. The enlistment selection process to the Western Brigade and the Defence Forces Training Centre has commenced with enlistment of successful candidates scheduled to take place in January 2011.
While it is not possible to anticipate strength figures for 2011 and beyond, I can confirm that with the support of the Chief of Staff, and within the resources available, I intend to retain the [454]capacity of the organisation to operate effectively across all roles while contributing to the necessary public service economies.
The priority in the coming year will be on maintaining the capability of the Defence Forces to deliver effective services across all of the roles assigned by Government.
I am advised that at this time the Defence Forces retain the capacity to undertake the tasks laid down by Government both at home and overseas.
32. Deputy Pádraic McCormack asked the Minister for Defence if he is satisfied that the Air Corps resources are being effectively used in combating drug trafficking through joint task force; and if he will make a statement on the matter. [46280/10]
42. Deputy Olivia Mitchell asked the Minister for Defence if he is satisfied that the Naval Service resources are being effectively used in combating drug trafficking through the joint task force; and if he will make a statement on the matter. [46287/10]
Minister for Defence (Deputy Tony Killeen): I propose to take Questions Nos. 32 and 42 together.
Responsibility for the prevention of drug trafficking rests primarily with the Customs Service of the Revenue Commissioners. Responsibility for the prevention of crime rests primarily with An Garda Síochána. However, the White Paper on Defence provides for a security role for the Naval Service and the Air Corps to assist and support the civil authorities in this important work.
The Joint Task Force on Drug Interdiction was established in 1993 as a Government measure to improve law enforcement in relation to drugs and consists of members of An Garda Síochána, the Customs Service and the Naval Service.
Internationally, the establishment in 2007 of the Maritime Analysis and Operations Centre — Narcotics (MAOC-N) has led to a greater focus on intelligence exchange amongst countries to tackle large drug shipments by sea. MAOC-N was set up by seven European countries and is designed as an international co-ordination force with access to national tasking agencies and requires participation and resources from all active members. An Garda Síochána and the Customs Service have full-time officers based at the Centre in Lisbon. Irish Naval Service personnel travel to the Centre when requested by the Joint Task Force.
Drug interdiction is carried out by Naval ships on receipt of intelligence from the Joint Task Force. The Air Corps provides air support and on occasion carries the Customs National Drugs Team in an observational capacity for the purposes of monitoring vessels suspected of drug trafficking.
The Naval Service operates 8 general purpose patrol ships, which are tasked with coastal and offshore patrolling and surveillance for the State in that part of the seas where State jurisdiction applies. The primary day to day tasking of the Naval Service is to provide a fishery protection service in accordance with the State’s obligations as a member of the European Union. However, as the need arises, Naval Service vessels are deployed to other duties including drug interdiction operations.
The Naval Service is committed to having at least three vessels on patrol within the Irish Exclusive Economic Zone at any one time. All vessels are multi-tasked in the sense that they also undertake general surveillance, security and other duties while on fisheries patrol.
[455]Naval Service patrols at sea undoubtedly act as a deterrent in the fight against drug trafficking. However, increasingly this role is governed by intelligence led operations and greater cooperation between both national and international agencies.
Naval Service patrols are complemented by assistance provided by the Air Corps. The Air Corps Maritime Squadron carries out aerial surveillance of our Exclusive Economic Zone using the two CASA maritime patrol aircraft.
Just one example of the effectiveness of the Naval Service role in the Joint Task Force is the 2009 conviction of three persons for the attempted importation by sea of a substantial quantity of cocaine with an estimated street value of €500 million. This conviction followed the international intelligence-led OPERATION SEA BIGHT involving the Joint Task Force, during which the Naval Service boarded a suspect vessel in November 2008. The Naval Service subsequently assisted in the preparation of evidence, and provided technical expertise and witness statements. The Air Corps CASA maritime patrol aircraft was also involved in providing aerial reconnaissance for this operation.
I am satisfied that Air Corps and Naval Service resources are being used effectively in combatting drug trafficking through the Joint Task Force.
33. Deputy Kathleen Lynch asked the Minister for Defence when the Irish Red Cross is to appoint a new secretary general; and if he will make a statement on the matter. [47267/10]
Minister for Defence (Deputy Tony Killeen): The Minister for Defence has no role in relation to the appointment of a new Secretary General of the Irish Red Cross Society which is an independent charitable organisation with full powers to manage and administer its affairs. However, I understand that interviews for the post of Secretary General of the Irish Red Cross Society commenced earlier this week. In these circumstances, I would anticipate that an appointment will be made early in the new year.
34. Deputy Brian O’Shea asked the Minister for Defence the situation regarding the possibility of substantial numbers of Irish troops serving abroad again, particularly in the Lebanon, as suggested by the Chief of Staff in his address to the recent Permanent Defence Forces Other Ranks Representative Association conference; and if he will make a statement on the matter. [38261/10]
36. Deputy Damien English asked the Minister for Defence his plans in relation to future Defence Forces overseas missions; and if he will make a statement on the matter. [46260/10]
40. Deputy Willie Penrose asked the Minister for Defence the progress made regarding a Defence Forces overseas mission in 2011; and if he will make a statement on the matter. [47274/10]
50. Deputy Bernard J. Durkan asked the Minister for Defence the extent to which Irish troops are likely to participate in overseas peacekeeping missions in the next 12 months; if agreements or arrangements have been entered into with the EU or UN in respect of any such participation; if agreement has been reached in respect of actual numbers; and if he will make a statement on the matter. [47204/10]
52. Deputy Charles Flanagan asked the Minister for Defence the number of Defence Forces personnel currently serving overseas; and if he will make a statement on the matter. [46266/10]
[456]240. Deputy Bernard J. Durkan asked the Minister for Defence the extent of any discussions he has had at EU or UN level in connection with deployment of Irish troops overseas on peacekeeping, peace enforcing or stabilising missions; and if he will make a statement on the matter. [46603/10]
244. Deputy Bernard J. Durkan asked the Minister for Defence the total number of the Defence Forces at all ranks currently serving overseas; and if he will make a statement on the matter. [46607/10]
Minister for Defence (Deputy Tony Killeen): I propose to take Questions Nos 34, 36, 40, 50, 52, 240 and 244 together.
Ireland has offered, through the UN Standby Arrangements System (UNSAS), to provide up to 850 military personnel for overseas service at any one time. This figure equates to some 10% of Ireland’s standing Army (excluding Reserves) and demonstrates Ireland’s commitment to the cause of international peace. This is the maximum sustainable commitment that Ireland can make to overseas peacekeeping operations.
Ireland is currently contributing 137 Defence Forces personnel to 12 different missions throughout the world. Of the 137 personnel currently serving overseas, 81 are officers and 56 are drawn from other ranks. Full details of all personnel currently serving overseas are listed in the tabular statement below.
The main overseas missions, in which Defence Forces personnel are currently deployed, are the EU-led operation ALTHEA in Bosnia and Herzegovina, with 43 personnel, the NATO-led International Security presence (KFOR) in Kosovo with 12 personnel and the NATO-led International Security Assistance Force (ISAF) in Afghanistan with 7 personnel. Other personnel are serving as monitors and observers with the United Nations and the Organisation for Security and Cooperation in Europe (OSCE). Staff are also deployed at the organisational headquarters of the EU, OSCE and NATO.
With regard to future deployments, Ireland receives requests, from time to time, in relation to participation in various missions and these are considered on a case-by-case basis. When considering any particular request, the existence of realistic objectives and a clear mandate, which has the potential to contribute to a political solution, consideration of how the mission relates to the priorities of Irish foreign policy and the degree of risk involved are amongst the factors considered. Apart from a recent UN request to despatch a contingent to the UN mission in Lebanon (UNIFIL), no other deployments are planned or envisaged at this time.
Despite the reduced budgetary resources that are available to the Department generally, Ireland remains open to participation in peacekeeping operations. In that regard, I am glad to be able to advise the House that the Government yesterday approved the deployment of a contingent of the Defence Forces, as part of a joint Finnish/Irish battalion to UNIFIL. Up to 440 personnel could be deployed in the second quarter of next year to this mission. Discussions will now commence with the UN and with Finland on finalising the composition of the contingent and the deployment schedule. Thereafter, I will proceed in the New Year to seek Dáil approval for the mission. This will complete the Triple Lock mechanism of UN, Government and Dáil approval before deploying members of the Defence Forces overseas.
Once we deploy to UNIFIL it is expected that our total overseas deployment at that stage will amount to just over 500. This is a very significant contribution in the context of the reduced resources available and reflects the Government’s continued commitment to international peacekeeping and to the ongoing development of the Defence Forces.
35. Deputy Kathleen Lynch asked the Minister for Defence if he received the report of the internal investigation in the Irish Red Cross regarding the Tipperary bank account; and if he will make a statement on the matter. [47268/10]
Minister for Defence (Deputy Tony Killeen): Last weekend the Irish Red Cross published the report of its internal investigation. I have examined the report and I note there was no misappropriation or mis-allocation of funds. However, there were serious administrative failures in the Society with regard to the management of some of the monies collected for the [458]Tsunami Appeal in 2005. The report states that the Society did not have sufficient staff or management controls in place to deal with the huge response to the appeal. The Society collected over €32 million in this appeal. The most serious issue addressed in the report is the delay by the Tipperary Branch of the Society in forwarding €162,960 from the Branch account to HQ. The report stresses that the Tipperary Branch in no way attempted to hide or retain the monies.
The report shows serious deficiencies in accounting procedures. Since his appointment in September 2010 the new Chairman of the Society has put improved governance of the Society’s affairs at the top of his agenda. The Society has already implemented procedures to avoid a recurrence of these events and is well advanced in strengthening new financial procedures. I understand from the Society that the recommendations in the report will also be implemented as a matter of urgency. Importantly, every cent of the monies donated for areas affected by the Tsunami has been and will go to relief projects in the affected areas.
Question No. 36 answered with Question No. 34.
37. Deputy James Reilly asked the Minister for Defence the number of times the army bomb disposal unit has been called out in 2009 and to date in 2010; and if he will make a statement on the matter. [46304/10]
Minister for Defence (Deputy Tony Killeen): The primary responsibility for the maintenance of law and order rests with An Garda Síochána. The Defence Forces, pursuant to their role of rendering aid to the civil power, assist the Gardaí as required. Requests for aid to the civil power are normally made by a member of An Garda Síochána not below the rank of Inspector. Requests made by An Garda Síochána for assistance in dealing with a suspect device or for the removal of old ordnance are responded to by the Explosive Ordnance Disposal (EOD) Team in the relevant Brigade.
The details requested are set out in the following tabular statement.
| Year | Callouts |
|---|---|
| 2009 | 196 |
| 2010 to date | 197 |
Question No. 38 answered with Question No. 26.
Question No. 39 answered with Question No. 27.
Question No. 40 answered with Question No. 34.
41. Deputy Pat Breen asked the Minister for Defence when he expects the new White Paper on defence to be published; and if he will make a statement on the matter. [46231/10]
48. Deputy Seán Barrett asked the Minister for Defence if he has received Cabinet approval to progress the new White Paper on defence; the progress made in relation to same; and if he will make a statement on the matter. [46229/10]
[459]Minister for Defence (Deputy Tony Killeen): I propose to take Questions Nos. 41 and 48 together.
I circulated a draft memorandum to my cabinet colleagues, in October 2010, outlining the proposed approach to the development of the new White Paper on Defence. I have considered the comments received and these will be reflected in the final memorandum.
The National Recovery Plan 2011-2014, which was published recently, sets out the requirement for the Department of Defence to deliver cumulative savings of €106m over the next four (4) years. As a preliminary stage in the White Paper process, the Department has to develop a framework of options to achieve this target.
I have deferred bringing the final memorandum to cabinet to allow time for officials in the Department, in consultation with the military authorities, to prepare this framework.
I intend to continue the white paper process, at the end of the first quarter in 2011. Pending publication of the new white paper, the current White Paper on Defence will continue to provide the policy framework for the Defence Organisation.
Question No. 42 answered with Question No. 32.
43. Deputy Pearse Doherty asked the Minister for Defence if prior to deployment each member of the Defence Forces has a consultation with a doctor where a prescription for the drug Lariam is issued and added to their medical file. [47283/10]
53. Deputy Martin Ferris asked the Minister for Defence the reason the cases of seven military personnel referred to in his reply to questions recently who were exhibiting less dramatic symptoms which are being reviewed by the Defence Forces psychiatrist have not been reported to the Irish Medicines Board. [47281/10]
56. Deputy Arthur Morgan asked the Minister for Defence the number of suicides there have been each year since Larium was first used by the Defence Forces; the number of these victims who were either taking or had taken Larium in the past, and if in the past, when they had last taken Larium; and the number of these suicides where the victims had taken Larium that were reported to the Irish Medicines Board. [47282/10]
63. Deputy Aengus Ó Snodaigh asked the Minister for Defence if he will discuss with the military authorities the need to review the future dispensing of the Mefloquine Larium to soldiers on overseas missions in view of the fact that the drug has been linked with severe psychiatric or psychological and physical side effects, including a number of deaths. [47279/10]
70. Deputy Martin Ferris asked the Minister for Defence if his attention has been drawn to any reference by the military authorities of the drug Larium to the Irish Medicines Board as required by the board when it states that all health care professionals are requested to report suspected adverse reactions observed in their practice, of particular importance, all suspected reactions to newly authorised products and serious reactions to established products; and the steps the military authorities took in response to the special guidelines issued by the Irish Medicines Board in its drug safety newsletter of May 1996 and again in its drug safety newsletter of July 2003 that any suspected cases of neuropsychiatric effects should be reported to the IMB in relation to the drug Larium, which is the drug administered to Irish soldiers serving overseas. [47280/10]
[460]Minister for Defence (Deputy Tony Killeen): I propose to take Questions Nos. 43, 53, 56, 63 and 70 together.
I am satisfied that the screening system employed by the Defence Forces adheres to international best practice. This screening system automatically rules out personnel from overseas service with certain conditions e.g. depression, anxiety, neurodegenerative disorders etc. which, as has been indicated by the Irish Medicine Board (IMB), are more likely to precipitate serious adverse reactions to Lariam. Pregnant personnel are also excluded.
In the case of overseas missions to malarious areas, this screening system also involves an assessment of the individual’s suitability to be prescribed the selected anti-malarial agent in line with current IMB guidelines. This typically involves review of the individual’s previous experience, if any, with the medication. The individual’s medical history is also screened for those conditions which have been identified as precipitating serious side effects in association with the medication.
In addition, blood tests are carried out to ensure that the liver is healthy as liver disease is an accepted contraindication to the use of Lariam. Lariam is only dispensed by the pharmacy upon production of a prescription for same. A record of this prescription is kept by the pharmacy and the aforementioned suitability assessment is documented in the person’s medical file.
I wish to reiterate that the Defence Forces take all necessary precautions in assessing the suitability of personnel before prescribing Larium in accordance with the prescribing instructions and information provided by the IMB. Personnel are screened both before and after deployments and all necessary actions are taken to ensure that those with contraindications to Larium use are deemed unsuitable for overseas service and are not prescribed the medication.
I am advised by the Military authorities that three members of Defence Forces have recently been treated for a serious symptomatology which may have been caused or contributed to by Lariam, although there is nothing conclusive in this regard. I am advised that all these personnel have made a full recovery and that, in line with the special guidelines issued by the IMB in 1996 and again in 2003, these cases have been reported to the Board.
The seven cases previously referred to with less dramatic symptomatology have not been reported to the IMB as they are still under review by the Military authorities. As yet, a definite linkage with Lariam usage has not been established.
I am advised by the military authorities that the Defence Forces Personnel Management System does not capture data on the number of suicides there have been in the Defence Forces during a specific period of time. In this context the information requested in relation to the number of suicide victims who were either taking Lariam, or who had taken Lariam prior to committing suicide, is not available.
44. Deputy Simon Coveney asked the Minister for Defence if a work plan has been designed by his Department or the military authorities to address the issues raised in the medical services review; and if he will make a statement on the matter. [46245/10]
47. Deputy Noel J. Coonan asked the Minister for Defence the progress made in implementing the recommendations of the medical services review for a future model of medical service provision; and if he will make a statement on the matter. [46244/10]
Minister for Defence (Deputy Tony Killeen): I propose to take Questions Nos. 44 and 47 together.
[461]The PA Report assessed the current arrangements for the provision of medical services and proposed a model for future delivery of those services. The Consultants recommended a programme of major change. As recommended by PA, Working Groups have been set up to progress the various projects identified. These continue to meet regularly and all have submitted reports.
PA did not identify structures, numbers and processes within the Centralised Command Structure in detail. Work on this is being undertaken by the Organisation and Establishment Working Group which will bring forward recommendations on an overall structure to include staff appointments for the Future Medical Service. Following consideration by the Steering Group of their initial report, the Working Group is now conducting some further analysis which it is now expected will be finalised by the end of December 2010. Final reports from two of the Working Groups, the Training & Education and the Financial Arrangements & Outsourcing Working Groups have been completed. The final report of the Future Medical Information System Working Group will also be completed by the end of this month, and it, along with the aforementioned final reports, will be considered by the Steering Group. The Clinical Review Working Group will not be submitting its final report until February 2011. However, monthly reports are being submitted in the interim and action on items is being taken as decisions are made.
Following completion of this phase of work by the Working Groups and the finalisation and approval of their reports by the Steering Group, the full implementation of the PA recommendations can then be progressed. The process for implementation also requires that consultation with the Representative Associations must take place regarding any change within the scope of representation.
The structure and systems recommended by PA have been designed to meet the demands and needs of the modern Defence Forces and I am committed to providing a sustainable medical service to meet the needs of the Defence Forces both at home and overseas.
45. Deputy Ulick Burke asked the Minister for Defence his views on the progress of the Reserve Defence Forces value for money review to date; if it will be completed in the first quarter of 2011; and if he will make a statement on the matter. [46236/10]
Minister for Defence (Deputy Tony Killeen): The Reserve Defence Force was selected for review as part of the 2009 — 2011 phase of the Government’s Value for Money and Policy Review initiative and this review commenced in February 2010. A Steering Committee comprising representatives from the Department of Defence, the Defence Forces and the Department of Finance is overseeing the Review. In accordance with revised guidelines for the conduct of Value for Money Reviews, an independent chair was appointed to the Steering Committee. The Steering Committee has met on six occasions since the review commenced and a further meeting is scheduled for later this week.
A Working Group has also been formed to assist the Steering Committee with the review, comprising both civil and military personnel. The working group has undertaken an extensive programme of work under the direction of the Steering Committee over this period.
As part of the review process, the Steering Committee have established an extensive consultation process with all key stakeholders. The representative associations have made written submissions and met with the Steering Committee. The Working Group has conducted focus group meetings with reservists and with Cadre personnel throughout the country. The results [462]of these meetings are currently being evaluated and further meetings with military personnel who have responsibility for the Reserve are being scheduled.
Extensive analysis across the range of Reserve activities is also progressing and additional information requirements are being addressed as they arise.
The Steering Committee are working towards a target date of end March 2011 for the completion of the review. The stakeholder consultation process has proven particularly fruitful, however, it has, together with the related data gathering, taken longer than anticipated. The Steering Committee will review progress at their meeting this week.
This is an important review and I am satisfied that the time taken is necessary to ensure that we get a comprehensive review that significantly contributes to the formulation of future plans for the Reserve.
I have asked that the review proceed as quickly as possible and expect to receive the report shortly after the review is completed.
46. Deputy John O’Mahony asked the Minister for Defence the role of the Naval Service in the Maritime Analysis and Operations Centre — Narcotics; and if he will make a statement on the matter. [46299/10]
An Ceann Comhairle: The Maritime Analysis and Operations Centre — Narcotics (MAOC-N) was established in 2007 by seven European countries, including Ireland to focus on intelligence exchange amongst countries to tackle large drug shipments by sea and by air. It is designed as an international co-ordination force with access to national tasking agencies and requires participation and resources from all active members. The Centre composes of an Executive Board, a Director, liaison officers and staff. An Garda Síochána and the Customs Service have full-time liaison officers based at the Centre in Lisbon. Irish Naval Service personnel travel to the Centre when requested by the Joint Task Force.
The establishment in 1993 of the Joint Task Force, (JTF) involving An Garda Síochána, the Customs Service and the Naval Service who work together to deal with intelligence — driven drugs interdiction operations. The JTF is brought together when An Garda Síochana and the Customs Service review intelligence received and consider that a joint operation should be mounted. Information received from the MAOC(N) Centre is one source of such intelligence.
Naval Service involvement in the JTF will be operationally-driven based on the intelligence received and will operate in the maritime environment only.
Question No. 47 answered with Question No. 44.
Question No. 48 answered with Question No. 41.
49. Deputy Joan Burton asked the Minister for Defence if, arising from the budget 2011 announcement, he will outline the acquisition of replacement equipment and the building and maintenance projects that will be deferred or cancelled; and if he will make a statement on the matter. [47260/10]
Minister for Defence (Deputy Tony Killeen): The Department of Defence and the Defence Forces, like all areas of the public service, will operate on a reduced budget in 2011. The gross [463]allocation in 2011 for Defence and Army Pensions combined is €933m, an overall reduction of 4% on the 2010 allocation.
Investment in new equipment and infrastructure for the Defence Forces is normally provided for under various Subheads of the Defence Vote relating to defensive equipment, mechanical transport, aircraft, Naval Service ships and stores, property, building and engineering, communications and Information Technology equipment. Each of these Subheads will operate with a reduced allocation in 2011. The exception is the Naval Service Subhead, the allocation for which in 2011 includes continuation of payment for the new ships contract.
The Department is engaged on an ongoing capital building programme designed to modernise and enhance the training, operational and accommodation facilities available to members of the Defence Forces. The programme provides for new starts and the continuation of capital building projects already underway. No projects will be cancelled as a result of the reduced capital allocation in 2011. However the capital programme will be revised to reflect available funding.
The specifics in relation to equipment acquisitions that will be deferred or postponed will be the subject of review with the military authorities in January 2011.
The steady investment since 2000 means that the Defence Forces are well placed in addressing the challenges for 2011 and the adjustments required under the National Recovery Plan.
The priority in the coming year will be on maintaining the capability of the Defence Forces to deliver effective services across all of the roles assigned by Government.
Question No. 50 answered with Question No. 34.
Question No. 51 answered with Question No. 30.
Question No. 52 answered with Question No. 34.
Question No. 53 answered with Question No. 43.
54. Deputy Joe Costello asked the Minister for Defence the extent to which he intends to revise the proposals of the internal group of the Irish Red Cross in regard to the governance of that organisation; and if he will make a statement on the matter. [47263/10]
58. Deputy Brian O’Shea asked the Minister for Defence his proposals regarding the governance of the Irish Red Cross; if these new proposals have been approved by the International Red Cross at the recent meeting of the chairman and acting secretary general of the Irish Red Cross in Geneva; and if he will make a statement on the matter. [47256/10]
60. Deputy Jim O’Keeffe asked the Minister for Defence the proposals for the amendments to the Irish Red Cross Society Order 1939; and if he will make a statement on the matter. [47361/10]
72. Deputy Joe Costello asked the Minister for Defence his plans to introduce revised proposals regarding the length of time that persons may serve on the executive of the Irish Red Cross; and if he will make a statement on the matter. [47264/10]
Minister for Defence (Deputy Tony Killeen): I propose to take Questions Nos. 54, 58, 60 and 72 together.
[464]Proposals for reform of the governance of the Irish Red Cross Society arise from a resolution that was passed in November 2007 by the Council of Delegates of the International Federation of Red Cross and Red Crescent Societies (IFRC) which urged all National Societies to examine and update their Statutes — the rules of the National Societies — and related legal texts by 2010, in accordance with the “Guidance for National Society Statutes” and relevant International Conference resolutions. This task is being undertaken by many Red Cross and Red Crescent Societies around the world. The current proposals have the support of the IFRC.
A Working Group to propose changes in governance, including those recommended by the International Federation, was established by the Irish Red Cross Society in 2008. The Chairman of the Working Group presented the findings to the Central Council of the Irish Red Cross Society at a meeting held in November 2009. The Working Group’s report was later submitted to the Department of Defence earlier this year.
In order to implement the recommendations made in the Working Group’s report, significant amendments to the existing Red Cross legislation, including the Irish Red Cross Society Order 1939, will be required. Representatives of the Society and officials from the Department of Defence have had a number of meetings this year to discuss the specific changes required. A draft Irish Red Cross (Amendment) Order 2010, which would substantially amend the 1939 Order, has been drawn up and was recently referred to the Office of the Attorney General.
The proposed changes address issues relating to “higher level” areas of corporate governance such as, organisational structures, electoral arrangements and membership. The main areas for consideration are:
2. Appointments to Central Council
3. Proposed changes to the terms of office, rotation and election of members to the Executive Committee
4. Clarification of the role of the President of the Society
5. The establishment of an external (independent) appeals mechanism as well as an Arbitration Committee
As recently as last week, further proposals were received by the Department of Defence from the Irish Red Cross Society. These further proposals are being examined and further discussions with the Society, and with the Office of the Attorney General on the draft Amendment Order, will take place shortly.
When the consultative process has been concluded, I propose to present the amendments to the Joint Committee on Justice, Defence and Women’s Rights for its consideration prior to seeking Government approval to change the legislation.
Apart from the legislative changes that are being progressed, a new Chairman, Mr David J O’Callaghan, was recently appointed by the President. Mr. O’Callaghan is a former Secretary General of the Department of Defence and has vast experience of public administration at senior management level.
Since his appointment in September 2010 the new Chairman has put improved governance of the Society’s affairs at the top of his agenda. The Society has already implemented procedures to avoid a recurrence of the events that led to the recently completed investigation into the delay by the Tipperary Branch of the Society in forwarding funds, raised during the [465]Asian Tsunami appeal, from the Branch account to Headquarters. Furthermore, I understand that the Society is well advanced in introducing strengthened new financial procedures. I understand from the Society that the recommendations in the report will also be implemented as a matter of urgency. I am fully confident that the new Chairman will expedite the reform process that is underway in the Society which, I understand, also involves the drafting of a new Constitution.
As part of the ongoing process of change that is being advanced within the Irish Red Cross, I am aware that the new Chairman and the Acting Secretary General of the Society met with senior officials of the International Federation in Geneva last week to apprise them of the proposed legislative changes. I have been informed that the International Federation have indicated that they would welcome an opportunity to contribute to the final stages of the proposed legislative changes and I would be happy to facilitate them in this regard.
55. Deputy Joan Burton asked the Minister for Defence the number of civilian posts that are likely to be shed as a result of the budget 2011 decision to reduce the number of such posts; and if he will make a statement on the matter. [47259/10]
Minister for Defence (Deputy Tony Killeen): Civilian employees are based at various military installations in every brigade area. The application of the moratorium on recruitment in the public service has resulted in a significant reduction in the number of civilian employees. It is anticipated that there will be a further reduction in the size of the civilian employee workforce of up to 40 in 2011. This reduction will occur primarily through natural wastage and will contribute to a significant decrease in the Department’s payroll costs.
Question No. 56 answered with Question No. 43.
Question No. 57 answered with Question No. 25.
Question No. 58 answered with Question No. 54.
59. Deputy Thomas P. Broughan asked the Minister for Defence the expected level of recruitment to the Defence Forces during 2011 in view of the measures announced in budget 2011; and if he will make a statement on the matter. [47262/10]
68. Deputy Bernard J. Durkan asked the Minister for Defence the degree to which it is intended to maintain the strength of the Defence Forces at all levels over the next four years; and if he will make a statement on the matter. [47205/10]
Minister for Defence (Deputy Tony Killeen): I propose to take Questions Nos. 59 and 68 together.
Within the context of consolidating the public finances, the Government is focused firmly on maintaining the operational efficiency of the Permanent Defence Force. Government approval was secured in the context of Budget 2010 for a level of 10,000 all ranks. This reflects the reductions in personnel recommended in the Report of the Special Group on Public Service Numbers and Expenditure Programmes. However in 2011, the Permanent Defence Force, like all areas of the public service, will operate on a reduced budget.
I am advised by the Military Authorities that the strength of the Permanent Defence Force as of 30 November 2010 was 9,502 comprising 7,704 Army, 769 Air Corps and 1,029 Naval Service personnel.
[466]Targeted recruitment is being carried out in 2010 in order to maintain the operational capability of the Defence Forces. In this regard I have approved the recruitment of 40 recruits to the Naval Service, limited recruitment to the Army and the intake of 30 Cadets from the Cadetship Competition 2010.
To date, 37 of the 40 recruits for the Naval Service were enlisted on 30 November 2010, along with 40 recruits to the Eastern Brigade and 37 recruits to the Southern Brigade on 3 and 6 December 2010 respectively. A further 3 recruits are due to be enlisted to each of the Naval Service and the Southern Brigade as soon as the final elements of their selection process have been completed. The 30 Cadets were inducted on 6 December 2010. The enlistment selection process to the Western Brigade and the Defence Forces Training Centre has commenced with enlistment of successful candidates scheduled to take place in January 2011.
Agreement has been reached with the Department of Finance and official confirmation received, on the Employment Control Framework (ECF) for the Defence Forces. The ECF is based on a figure of 10,000 all ranks Permanent Defence Force personnel, appropriately configured across the Army, Naval Service and Air Corps to enable them to meet the roles assigned by Government.
The official confirmation of the numbers, provided by the Employment Control Framework, along with the publishing of the National Recovery Plan 2011-2014 are being considered by the Military Authorities and officials of the Department for the purpose of outlining a structure capable of meeting the roles assigned by Government to the Defence Forces.
While it is not possible to anticipate strength figures over the next four years, I can confirm that with the support of the Chief of Staff, and within the resources available, I intend to retain the capacity of the organisation to operate effectively across all roles while contributing to the necessary public service economies.
While these are challenging times, my priority is to ensure that the Defence Forces are organised, equipped and staffed in a manner which will ensure that they can continue to deliver the services required of them by Government.
I am advised that at this time the Defence Forces retain the capacity to undertake the tasks laid down by Government both at home and overseas.
Question No. 60 answered with Question No. 54.
Question No. 61 answered with Question No. 24.
62. Deputy Seán Sherlock asked the Minister for Defence the number of requests received by the Defence Forces for assistance from civil authorities during the current cold spell; and if he will make a statement on the matter. [47276/10]
Minister for Defence (Deputy Tony Killeen): During the severe weather period, the Defence Forces conducted 708 operations and acceded to all requests for assistance from An Garda Síochána, the Health Service Executive, Local Authorities and other bodies such as the Blood Bank, St. Vincent de Paul, the Hospice Movement and Meals on Wheels. All operations in support of Aid to the Civil Authority ended on 13 December, 2010.
Question No. 63 answered with Question No. 43.
64. Deputy Ciarán Lynch asked the Minister for Defence if any part of the grant-in-aid paid to the Irish Red Cross has been used to fund the ongoing legal action being taken against a company (details supplied) or if any part of it will be used for the continuing action against the company; and if he will make a statement on the matter. [47265/10]
Minister for Defence (Deputy Tony Killeen): The Irish Red Cross Society is an independent statute based charitable organisation with full power to manage its own affairs. The annual grant in aid paid to the Society (currently €951,000) includes the Government’s annual contribution (€130,000) to the International Committee of the Red Cross. The balance of the grant in aid is used towards the administration and running costs of the Irish office. In 2009 the grant in aid paid to the Irish Red Cross from the Defence Vote represented approximately 13% of the Society’s total income. The Minister for Defence does not get involved in the day-to-day running of its affairs. There is an obligation on Governments to protect the independence of National Red Cross Organisations.
65. Deputy Seán Sherlock asked the Minister for Defence the expected delivery date for the two new Naval Service vessels; and if he will make a statement on the matter. [47275/10]
Minister for Defence (Deputy Tony Killeen): Following a two-stage tender competition a contract has recently been awarded to the preferred bidder, Babcock Marine, for the provision of two new Offshore Patrol Vessels (OPVs) for the Naval Service. Preparations for the construction of these new vessels have commenced and the first new vessel is scheduled for delivery in early 2014. The second vessel will follow one year later.
The acquisition of these modern new vessels, combined with a continuous process of refurbishment and repair, will ensure that the operational capability of the Naval Service is maintained at a satisfactory level.
Question No. 66 answered with Question No. 25.
67. Deputy Liz McManus asked the Minister for Defence the legal nature of his role in relation to the Irish Red Cross; and if he will make a statement on the matter. [47269/10]
Minister for Defence (Deputy Tony Killeen): The Irish Red Cross Society was established by the Irish Red Cross Society Order 1939 (S.I. No. 206/1939). The Order sets out the basis on which the Society shall be governed. I am satisfied that it is not appropriate for the Minister for Defence to be involved in the day to day running of the Society which is a body corporate and, in accordance with the existing legislation, is responsible for the handling of its own internal affairs.
Question No. 68 answered with Question No. 59.
Question No. 69 answered with Question No. 28.
Question No. 70 answered with Question No. 43.
Question No. 71 answered with Question No. 28.
Question No. 72 answered with Question No. 54.
[468]73. Deputy Ciarán Lynch asked the Minister for Defence when he will respond to correspondence from the recently dismissed senior manager of the Irish Red Cross; and if he will make a statement on the matter. [47266/10]
Minister for Defence (Deputy Tony Killeen): The position in relation to correspondence received by my Office on the 2nd of November 2010 is that a response issued on the 25th of November last. I understand that the person in question has confirmed receipt of this letter.
74. Deputy Finian McGrath asked the Tánaiste and Minister for Education and Skills the position regarding apprentices at FÁS (details supplied). [47533/10]
Minister of State at the Department of Education and Skills (Deputy Seán Haughey): FÁS is introducing a new Redundant Apprentice Placement Scheme in 2011 to enable eligible apprentices in all trades to undertake their on-the-job training and assessment at training phases 3, 5 and 7. The scheme, for which €7.3m in funding is being provided, will include placements with employers in both the private and the public sectors to ensure as many apprentices as possible are progressed through their apprenticeship and attain their necessary qualifications. The scheme aims to provide placement and training for up to 1,000 apprentices. For the first time, the State will be fully funding the allowance paid to on-the-job redundant apprentices with no wage contribution required of employers. Eligible redundant apprentices will be referred by FÁS to approved employers to participate in the scheme.
A number of additional labour market activation measures are also being introduced by FÁS in 2011 in conjunction with the higher educational sector to assist up to 700 redundant apprentices and craftspersons. These measures include:
Assisting referred apprentices who wish to progress in their apprenticeships;
Inclusion of verifiable work experience abroad in the portfolio of evidence towards completion of apprenticeship;
Further funding under the Leonardo da Vinci mobility programme for the placement of redundant apprentices to complete their Phase 5 on-the-job training overseas;
A post Phase 6 pilot programme for a certificate in craft transferable skills;
The development with the Dublin Institute of Technology of a special course in advanced skills for redundant plastering craftspersons;
A specially developed training programme for redundant craftspersons to obtain a certificate in entrepreneurship in the Institute of Technology Blanchardstown.
The Department of Education and Skills is providing a wide range of labour market activation measures to assist those who are unemployed improve their skill levels and maintain a close link with the labour market.
This year the Department of Education and Skills will be providing:
Over 160,000 training and employment places for the unemployed, delivered through FÁS, Skillnets and the Labour Market Activation Fund;
170,000 full time and part time Further Education places;
156,000 places in the Higher Education sector which can be accessed by the unemployed.
[469]In addition, as part of Budget 2011 the Department will be expanding the Work Placement Programme from the 2,000 placements currently on offer to 7,500. 5,000 of the additional placements will be offered in the public sector. The Work Placement Programme provides up to 9 months work experience to unemployed individuals. The aim of the programme is to keep participants close to the labour market and to provide them with valuable work experience, which will assist them securing employment in the future.
Also announced in Budget 2011 was the new Skills Development and Internship Programme. Under this Programme, participants will receive a significant education and training component while being placed in a company for a period of 12 months. It is expected that this programme will be launched in early March 2011.
75. Deputy Tom Hayes asked the Tánaiste and Minister for Education and Skills the position regarding an application for funding for a new school (details supplied); when the contracts will be agreed with South Tipperary County Council; and if she will make a statement on the matter. [47369/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): The Contracts referred to by the Deputy are agreed, in principle, and my Department is awaiting same in duplicate for execution. Once this acquisition is concluded, the proposed building project will be considered in the context of the capital budget available to my Department for school buildings generally.
76. Deputy Denis Naughten asked the Tánaiste and Minister for Education and Skills when the EPSEN Act 2004 will be implemented in full; when the aspects dealing with rights to assessments, provision of services and of individual education plans, independent appeals process, decisions, role and duties of the Health Service Executive and schools will be implemented; and if she will make a statement on the matter. [47428/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): A number of sections of the EPSEN Act have been commenced, principally those establishing the National Council for Special Education (NCSE) and those promoting an inclusive approach to the education of children with special educational needs. However, full implementation of the Act has been deferred pending an upturn in economic conditions.
The renewed programme for Government re-stated the Government’s commitment to the full implementation of EPSEN and committed to the development, in consultation with stakeholders, of a costed multi-annual plan, to plan for the implementation of EPSEN focussing on measurable, practical progress in education and health services for children with special needs.
Discussions have commenced between the Department of Education and Skills, the Health Service Executive and the Department of Health and Children to further the implementation of this commitment. Pending the outcome of these considerations, it is not possible to say when individual outstanding aspects of the act will be commenced.
Each non-commenced part of the EPSEN legislation is being considered. However, commencement of individual aspects of the EPSEN legislation in isolation is difficult, as many aspects of the act are interlinked and therefore interdependent.
In the meantime, children with special education needs will continue to receive an education appropriate to their needs and the National Council for Special Education will continue to [470]support schools, parents and children and teachers and provide for resources to be deployed to schools, in line with my Department's policies.
77. Deputy Ruairí Quinn asked the Tánaiste and Minister for Education and Skills the amount spent by her on further education broken down according to current spending on pay and current non-pay spending; capital spending; the number of places being funded by her according to type of further education; and if she will make a statement on the matter. [47441/10]
Minister of State at the Department of Education and Skills (Deputy Seán Haughey): The 2010 provision for further education programmes is just over €426 million, made up of €197.3 million for pay costs, €228.9 million for non-pay costs. In addition, my Department provided just over €3.87 million for capital costs. This will enable over 170,000 learners to participate in a range of full-time and part-time further education programmes.
For the current academic year (2010/2011), there are just over 41,000 approved full-time places available in Post Leaving Certificate (PLC — 31,688), Vocational Training Opportunities Scheme (VTOS — 5,000), Youthreach (3,692) and Senior Traveller Training Centres (STTCs — 684).
In relation to PLC, in 2009/2010 VECs and other PLC providers enrolled over 38,600 learners and it is hoped that they will be able to maintain this level of enrolment. I understand that the other full-time programmes are fully subscribed.
Part-time Further Education opportunities will be provided for an estimated 125,000 participants during 2010 under the Back to Education Initiative (BTEI), Adult Literacy and Community Education Schemes.
78. Deputy Denis Naughten asked the Tánaiste and Minister for Education and Skills the impact of the 2011 budget on the number of special needs assistants; and if she will make a statement on the matter. [47472/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): The Deputy will be aware that there has been unprecedented investment in providing supports for pupils with special educational needs in recent years and special education continues to be a key Government priority. Expenditure on the Special Needs Assistant (SNA) scheme has increased by 922% in the period 2001-2009. The total number of SNAs across the school system has also increased from 2988 in 2001, to 10,342 in 2009 during the same period.
The Government is continuing to prioritise special education. The National Recovery Plan 2011-14, while noting that there has been significant increases in the number of SNAs in recent years, and that while no reduction in SNA numbers is proposed over the period of the plan, stated that it is intended to cap SNA numbers at the 2011 level and to introduce a new system to facilitate the management of these finite SNA resources in a proactive manner.
This number of posts represents a substantial and significant level of support to schools which have enrolled students with special educational needs and who also have additional care needs.
79. Deputy Denis Naughten asked the Tánaiste and Minister for Education and Skills the position regarding a post-primary school building unit application by a school (details supplied) in County Leitrim; and if she will make a statement on the matter. [47477/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): I can confirm that the school to which the Deputy refers has made an application to my Department for large scale capital funding for an extension. In accordance with the published criteria for large scale building projects, the application was assessed and the project was assigned a Band 2.4 rating.
Information in respect of the current school building programme, along with all assessed applications for major capital works, including this project, is available on my Department’s website at www.education.ie.
The progression of all large scale building projects, including this project, from initial design stage through to construction phase will be considered in the context of my Department’s multi-annual School Building and Modernisation Programme. However, in light of current competing demands on the capital budget of the Department, it is not possible to give an indicative timeframe for the progression of the project at this time.
80. Deputy Denis Naughten asked the Tánaiste and Minister for Education and Skills the position regarding a new primary school for a school (details supplied) in County Roscommon; and if she will make a statement on the matter. [47481/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): I can confirm that the school to which the Deputy refers has made an application to my Department for large scale capital funding for a new school building. In accordance with the published criteria for large scale building projects, the application was assessed and the project was assigned a Band 2.2 rating.
Information in respect of the current school building programme, along with all assessed applications for major capital works, including this project, is available on my Department’s website at www.education.ie.
The progression of all large scale building projects, including this project, from initial design stage through to construction phase will be considered in the context of my Department’s multi-annual School Building and Modernisation Programme. However, in light of current competing demands on the capital budget of the Department, it is not possible to give an indicative timeframe for the progression of the project at this time.
81. Deputy Denis Naughten asked the Tánaiste and Minister for Education and Skills the position regarding an extension to a primary school (details supplied) in County Roscommon; and if she will make a statement on the matter. [47482/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): I can confirm to the Deputy that my Department wrote to the school authority to which he refers in April 2010 approving an all-in devolved grant for the provision of an additional mainstream classroom.
Following receipt of submissions from the school authority appealing this decision and seeking additional funding, my Department increased the funding to allow the school to build a second mainstream classroom and to convert an existing classroom into two learning support rooms. The school authority has been told that no further funding is available at this time.
To date, the school has not drawn down any of the funding already approved.
82. Deputy Denis Naughten asked the Tánaiste and Minister for Education and Skills the status of her review of school transport catchment boundaries; and if she will make a statement on the matter. [47483/10]
Minister of State at the Department of Education and Skills (Deputy Seán Haughey): As the Deputy is aware, the School Transport scheme was approved by Government as a topic for inclusion as part of the 2009-2011 round of Value for Money Reviews.
This review looked at the original objectives of the scheme, whether these objectives remain valid today, the extent to which the objectives are being achieved, and whether there are possibilities for economies or efficiencies that would improve the value for money of the scheme. In this context, the review also looked at fundamental issues such as eligibility criteria and catchment boundaries, with a view to achieving efficiencies and value for money in the Scheme.
The report of the Value for Money Review of the School Transport Scheme, which will outline the recommendations of the Steering Committee on catchment boundaries, has recently been finalised and the findings and recommendations in the report were considered as part of the budget and estimates process. The report it is to be considered by Government in advance of publication in the near future.
The Deputy will also be aware that as part of the budget changes announced in relation to school transport, from the 2012/13 school year, the use of the catchment boundary system will cease for all new post-primary children. Eligibility for all new children entering post-primary transport will be on the basis of the nearest post-primary centre or school. Existing arrangements will remain in place for existing post primary pupils for the duration of their schooling.
83. Deputy Ruairí Quinn asked the Tánaiste and Minister for Education and Skills if she has received an application to establish a new school (details supplied) in County Kildare; the position regarding that application; if she will recognise that this area has a rapidly expanding school going population and that a large number of parents wish to send their children to a multi-denominational school; and if she will make a statement on the matter. [47494/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): A review of the procedures for the establishment of new primary schools is currently being carried out under the Commission on School Accommodation. In the interim it is not proposed to recognise any new primary schools, except in areas where the increases in pupil numbers cannot be catered for in existing schools and which require the provision of new schools. The Commission is due to report to me shortly at which time I will have to consider the policy matters and necessary arrangements and revised procedures that will need to be put in place.
The establishment of new schools, including the one referred to by the Deputy, will be considered in this context.
84. Deputy Ruairí Quinn asked the Tánaiste and Minister for Education and Skills if she has received correspondence (details supplied) relating to possible fraud at a special education centre; if she is acting to investigate these allegations; the person carrying out the investigation; if the investigations are being conducted externally or internally by her; when she expects the findings to be made; and if she will make a statement on the matter. [47496/10]
[473]Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): Correspondence has been received in relation to a special education centre referred to by the Deputy. This centre receives funding from the Department of Education and Skills but it is not formally recognised as a school or Centre for Education under the Education Act 1998. The content of the correspondence is being considered by my Department.
85. Deputy Seán Ó Fearghaíl asked the Tánaiste and Minister for Education and Skills the advice available from her to schools which have had to close for significant periods in recent times due to inclement weather; her plans to address further closures in the event of future adverse weather conditions; her views on how lost tuition time can be recovered; and if she will make a statement on the matter. [47517/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): The position in relation to the recent weather conditions will vary from school to school. The actual impact on teaching and learning is something that can only be assessed at individual school level by school authorities.
My Department’s approach during exceptional and widespread adverse weather conditions is that schools should make all reasonable efforts to make up for lost time due to unforeseen school closures.
86. Deputy Ruairí Quinn asked the Tánaiste and Minister for Education and Skills if she will provide details of the 15,410 training places for the unemployed that will be cut as a result of the €43 million reduction to the allocation to FÁS; the programmes and courses, the number of places, locations and duration of courses that will be cut as a result of this decision; and if she will make a statement on the matter. [47537/10]
Minister of State at the Department of Education and Skills (Deputy Seán Haughey): Detailed discussions have commenced between officials from my Department and officials from FÁS to determine the specific implications for FÁS training programmes of the 2011 allocation for training the unemployed.
It should be noted that FÁS programmes are expected to deliver approximately 100,000 training and employment places for the unemployed in 2011. This is a significant increase on the provision of 66,000 places which were delivered by FÁS in 2008.
In addition, there are a range of other measures which my Department are still providing for the unemployed. These include the 170,000 Further Education and Training places and the 156,000 places that are available in the Higher Education Sector.
Yesterday we approved a new €20 million Higher Education Activation Fund, enhanced measures to support redundant apprentices, an expanded Work Placement Programme and the new Skills Development Internship Programme. These measures will expand the range of activation provision that will be available to the unemployed in 2011.
87. Deputy Ruairí Quinn asked the Tánaiste and Minister for Education and Skills the reason she is reducing the training budget for the unemployed and the number of training places at a time when demand is growing and when the evidence suggests it makes sense to retain jobseekers in education and training and close to the labour market; and if she will make a statement on the matter. [47538/10]
[474]Minister of State at the Department of Education and Skills (Deputy Seán Haughey): Detailed discussions have commenced between officials from my Department and officials from FÁS to determine the specific implications for FÁS training programmes of the 2011 allocation for training the unemployed, which due to the present fiscal situation and resources available is reduced next year.
FÁS programmes are still expected to deliver approximately 100,000 training and employment places for the unemployed in 2011, which is a significant increase on the provision of 66,000 places which were delivered by FÁS in 2008. I agree that it makes sense to keep unemployed people in education and training and close to the labour market. That is why my Department will provide 170,000 Further Education places and approximately 156,000 Higher Education places next year.
In addition, next year's provision for the unemployed includes a new €20 million Higher Education Activation Fund, enhanced measures to assist redundant apprentices, an expanded Work Placement Programme and the new Skills Development and Internship Programme. This represents a significant diverse range of provision that is available for the unemployed in 2011.
88. Deputy Ruairí Quinn asked the Tánaiste and Minister for Education and Skills further to Parliamentary Question No. 55 of 9 March 2010, if she has received the report of the training and employment framework for young persons and early school leavers which was to be published before the end of the year; if she will confirm that consultations have taken place with youth organisations as promised; if she will confirm when the framework will be published; and if she will make a statement on the matter. [47539/10]
Minister of State at the Department of Education and Skills (Deputy Seán Haughey): The broad elements of the framework have been drafted and will form the basis of discussion and consultation with other relevant Youth Agencies. Wider consultation, as referred to in my answer to Question No. 55 of 9 March 2010, has been deferred pending the integration of elements of FÁS with the Department of Social Protection and the establishment of a freshly mandated Skills Agency, which will impact on any proposed Youth Framework as FÁS’s remit is subject to change going forward.
89. Deputy Róisín Shortall asked the Tánaiste and Minister for Education and Skills the FÁS training and community employment rates that will apply in 2011. [47556/10]
Minister of State at the Department of Education and Skills (Deputy Seán Haughey): The following are the details of the weekly pay rates for Community Employment participants for 2011:
CE Single Adult Rate: €208.00; Increase for Qualified Adult: €124.80; Full rate Child Dependant: €29.80; Half rate Child Dependant: €14.90.
90. Deputy Ruairí Quinn asked the Tánaiste and Minister for Education and Skills further to Parliamentary Question No. 75 of 30 November 2010, when a reply will issue; and if she will make a statement on the matter. [47557/10]
Minister of State at the Department of Education and Skills (Deputy Seán Haughey): The information requested by the Deputy is set out in the tables below. Table 1 sets out the total non-pay funding allocated by FÁS in 2010 for the training of persons seeking employment [475]broken down by programme. The table also provides total non-pay funding allocated to the training of persons in employment broken down by programme. The pay elements are currently being worked on by FÁS and will be provided to the Deputy as soon as possible.
Table 2 sets out the number of persons who have received training directly by FÁS broken down by headline measure. These figures relate to persons who have been trained by FÁS-employed instructors. They do not include those persons who have received training funded by FÁS but delivered under contract, including those undertaking training at Community Training Centres and those who have received training by private providers.
Finally, FÁS currently has 17 Training Centre facilities. These are located at:
| Headline Measure | 2009 | 2010 (as at September) |
|---|---|---|
| Mainline daytime training courses | 16,200 | 11,700 |
| Evening Courses | 27,200 | 31,500 |
| Online | 12,300 | 13,700 |
| Apprenticeship | 4,600 | 2,100 |
| Total | 603,00 | 59,000 |
91. Deputy Lucinda Creighton asked the Tánaiste and Minister for Education and Skills the number of persons who have availed of the vocational training opportunities scheme in each of the years 2007, 2008, 2009 and to date in 2010; and if she will make a statement on the matter. [47560/10]
Minister of State at the Department of Education and Skills (Deputy Seán Haughey): The Vocational Training Opportunities Scheme is a full-time further education programme open to people over 21 years of age who are at least six months unemployed. The information requested by the Deputy is set out below:
92. Deputy David Stanton asked the Tánaiste and Minister for Education and Skills when the change in non-adjacent rate of the third level maintenance grant as per B17 of budget measures 2011 will come into effect; if this change will affect current grant holders or only be applied to new third level students in September 2010; and if she will make a statement on the matter. [47564/10]
[477]Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): The Deputy is referring to the change in the qualifying distance criterion for entitlement to the higher non-adjacent rate of student grant from 24 kilometres to 45 Kilometres
This measure is being introduced from September 2011. It will apply to all students i.e. both new and existing grant holders.
93. Deputy Noel Ahern asked the Tánaiste and Minister for Education and Skills the proposed staffing allocation for 2011 at a school (details supplied) in Dublin 11; if staffing levels in special schools have a smaller pupil teacher ratio and a higher complement of special needs assistants than mainstream schools, and if the situation at this school is reflective of same; if an assessment of staffing needs was carried out over the past few years; the factors taken into account in any such assessment; if it was purely an examination of pupil teacher numbers or did a more qualitative assessment take place that examined the particular special needs of pupils at this school and any decisions that were made on the basis of same; if any changes in staffing levels are possible in view of any assessment, and if the school will be in a position to appeal same; if the school can ask for an independent assessment of its needs to be carried out by a qualified party other than the local SENO coordinator; if the results of an independent assessment can be taken into account in the event of the school appealing any decisions made by her on the future staffing levels; and if she will make a statement on the matter. [47571/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): Special schools have significantly reduced pupil teacher ratios, special needs assistant support and increased levels of capitation. The staffing of special schools is determined by reference to the recommendations outlined in the Report of the Special Education Review Committee, 1993, also known as the SERC Report. These ratios range from 6:1 to 11:1 depending on the level of disability.
As the Deputy may be aware, the National Council for Special Education (NCSE) is responsible, through its network of local Special Educational Needs Organisers (SENOs) for allocating resource teachers and Special Needs Assistants to schools to support children with special educational needs. The NCSE operates within my Department’s criteria in allocating such support. I have arranged for the details supplied to be forwarded to the NCSE for their attention and direct reply.
All schools have the names and contact details of their local SENO. Parents may also contact their local SENO directly to discuss their child’s special educational needs, using the contact details available on www.ncse.ie. Although there is not presently an independent appeal mechanism, schools may appeal a decision to the NCSE. Information regarding the NCSE appeals process is available on the NCSE’s website at www.ncse.ie
94. Deputy Noel Ahern asked the Tánaiste and Minister for Education and Skills the eligibility requirements for a person to access funding under the labour market activation fund; the length of time a person must be in receipt of jobseeker’s allowance or benefit before they can access funding under this programme; if a third level graduate who has been on jobseeker’s allowance or benefit for three months since graduating is eligible to participate in a course approved by this scheme, and if they are entitled to funding while completing same; if a person (details supplied) in Dublin 15 is eligible for same; and if she will make a statement on the matter. [47573/10]
[478]Minister of State at the Department of Education and Skills (Deputy Seán Haughey): Following a public request for tender, funding from the Labour Market Activation Fund, 2010 was made available to fifty-nine projects to provide education and training places for up to 12,000 unemployed people.
For the purposes of this Fund, prospective participants on programmes eligible for Fund support must be jobseekers who have been in receipt of an unemployment payment for a period of at least three consecutive months.
Course participants pursuing training courses may qualify for retention of Department of Social Protection (D/SP) welfare payments while on courses for so long as they are entitled to receive such payments under D/SP eligibility rules. Eligibility criteria for individual social welfare payments is a matter for the Minister for Social Protection.
Having regard to these criteria, and other programme-specific admission requirements, the project providing the programme is responsible for assessing and deciding upon the applicant’s eligibility to participate.
A full list of projects and the courses they are providing is available on the National Learners’ Database www.qualifax.ie.
95. Deputy Brian O’Shea asked the Tánaiste and Minister for Education and Skills if she will review the Irish language requirement in the leaving certificate, an honour in the higher paper, for entry into national teaching (details supplied); and if she will make a statement on the matter. [47578/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): My Department currently specifies the minimum academic requirements for entry to primary teacher training courses provided in the Colleges of Education. As part of these requirements, all candidates, including school leavers, mature students and university graduates, must have a minimum of a Grade C in Higher Level in Irish in the Leaving Certificate, or an approved equivalent.
It is essential that teachers in the primary sector have a high standard of Irish on entry to teacher education programmes in Ireland. It is a particular feature of Irish primary education that children, from the beginning of schooling, have an experience of language learning in two subjects, Irish and English. In addition the use of Irish is integrated throughout the primary curriculum where possible and Irish is used as a natural means of communication in the daily life of the class and the school. For these reasons, there are no plans to reduce the Irish language requirement for entry to teacher education programmes.
EU Directive 2005/36/EC governing the recognition of professional qualifications came into force on 20 October 2007. The Teaching Council is the designated authority for recognition of qualifications for the regulated profession of primary and secondary teachers. Where an applicant for registration as a primary teacher has completed a programme of teacher education outside of Ireland, an Irish Language Requirement condition will normally be applied to his/her registration. This can be addressed by either completing an Aptitude Test (SCG — An Scrúdú le hAghaidh Cáilíochta sa Ghaeilge) or an Adaptation Period (OCG — Oiriúnú le hAghaidh Cáilíochta sa Ghaeilge). Conditional registration is granted to those who are in the process of completing this requirement. A maximum period of three years is permitted to satisfy this condition.
The Teaching Council has statutory responsibility in relation to the standards of education and training appropriate to a person entering a programme of teacher education and training. [479] The Council is currently drafting a policy paper on the continuum of teacher education spanning all stages of the teacher’s career from initial teacher education through induction to continuing professional development. The policy paper will provide the framework within which the Council will implement its functions relating to teacher education, including initial teacher education and I look forward to the outcome of the Council’s work in due course.
Procedures for the appointment of Special Needs Assistants (SNA) are set out in my Department Circulars 05/2001 and SNA 03/03. These Circulars specify that the minimum qualification necessary for appointment as an SNA is an award of Grade D (or pass) in Irish, English and Mathematics in the Intermediate Certificate/Junior Certificate or Day Vocational Certificate Examination or in an examination of equivalent standard.
In this context, a qualification of equivalent standard is any qualification at Level 3 or higher on the National Framework of Qualifications (NFQ) established by the National Qualifications Authority of Ireland (NQAI), provided that the qualification, or a combination of such qualifications, certifies to the achievement of a minimum of a pass in the subjects Irish, English and Mathematics.
With regard to the means by which a person may attain the necessary educational requirements, local education service providers (e.g. Vocational Education Committees) may be able to assist with access to an appropriate course or courses which will, on successful completion, lead to an award of the required standard.
The terms and conditions and appointment criteria pertaining to Special Needs Assistants have been agreed at national level with the various representative organisations and it would not be appropriate for the Minister to comment in individual cases.
96. Deputy Emmet Stagg asked the Tánaiste and Minister for Education and Skills if she has made a decision regarding the location of a new national school in the Clane-Prosperous area of north Kildare, and if she supports an organisation (details supplied) in the setting up of the new national school. [47684/10]
Tánaiste and Minister for Education and Skills (Deputy Mary Coughlan): A review of the procedures for the establishment of new primary schools is currently being carried out under the Commission on School Accommodation. In the interim it is not proposed to recognise any new primary schools, except in areas where the increases in pupil numbers cannot be catered for in existing schools and which require the provision of new schools. The Commission is due to report to me shortly at which time I will have to consider the policy matters and necessary arrangements and revised procedures that will need to be put in place.
The establishment of new schools, including the one referred to by the Deputy, will be considered in this context.
97. Deputy John Deasy asked the Minister for Finance the number of companies in Waterford city and county availing of the research and development tax credit in each of the past five years and to date in 2010; the number of jobs supported by this measure in each of those years; and if he will make a statement on the matter. [47543/10]
115. Deputy John Deasy asked the Minister for Finance the number of companies in Waterford city and county availing of the research and development tax credit in each of the [480]past five years and to date in 2010; the value of these tax credits in each of those years; and if he will make a statement on the matter. [47546/10]
Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 97 and 115 together.
I am informed by the Revenue Commissioners that the information given in the table below provides figures of the numbers of companies in Waterford city and county that claimed a tax credit for research and development and the amount of such credits allowed for the years 2004 to 2008 inclusive, the latest year for which this information is available. However, because of the Revenue Commissioners’ obligation to observe confidentiality in relation to the taxation affairs of individual taxpayers and small groups of taxpayers, the precise numbers of companies are expressed in the table as being “less than 10” for each year.
As the provision of employment support is not a condition of qualifying for the research and development tax credit, Revenue figures on claims for the credit do not provide a basis for compiling information on the number of jobs supported.
An estimated breakdown of the figures on a geographical basis is available on the basis of “bailiwick”, meaning, in this case, the jurisdiction or boundaries within which Revenue Sheriffs, County Registrars or their officers operate for the purposes of enforcement of tax debt and which equates geographically with “county”.
Companies are associated on the tax record with the county address of the head-office or branch with which contact is established for tax purposes, which may be different to the city or county addresses of other branches. The distribution of corporate tax between regions can also vary from year to year as companies relocate.
98. Deputy John Deasy asked the Minister for Finance the number of companies in Waterford city and county applying for credit review; the number of decisions by credit institutions that were reversed by these reviews; the amount of finance involved for companies in Waterford city and county applying for credit reviews; the number of jobs supported by companies in Waterford city and county applying for credit reviews; and if he will make a statement on the matter. [47544/10]
Minister for Finance (Deputy Brian Lenihan): The Credit Review Office does not collect details of the geographical distribution of requests to the banks for internal review. The banks provide information on the geographical distribution of SME lending and Mr Trethowan has reported that the geographic data show that there has been no appreciable movement in the [481]percentage share of lending to the various geographic regions since the base month in January 2010.
The recently published second quarterly report from the Credit Review Office stated that the number of requests for review to the Credit Review Office received was 37. This small number means that divulging information on a county specific basis could reveal commercially sensitive information about specific businesses. I do not intend to do this particularly at a time when we are encouraging any businesses which are refused credit to make internal appeals within the bank and then to the Credit Review Office if necessary.
99. Deputy Niall Collins asked the Minister for Finance if the new universal social charge will apply to the incomes of medical card holders; and if he will make a statement on the matter. [47327/10]
Minister for Finance (Deputy Brian Lenihan): The position is that having an entitlement to a medical card will not exempt an individual from the Universal Social Charge. However, it should be noted that payments from the Department of Social Protection such as job seeker’s benefit, job seeker’s allowance and the contributory and non-contributory State pension will be exempt from the Universal Social Charge. Therefore, the Universal Social Charge will apply to the income or portion of the income of a medical card holder to the extent that it is not a payment from the Department of Social Protection.
100. Deputy Michael McGrath asked the Minister for Finance the position regarding the present rules allowing a person to withdraw their contributions from an occupational pension scheme; his plans to change those rules; and if he will make a statement on the matter. [47439/10]
Minister for Finance (Deputy Brian Lenihan): I am advised by the Revenue Commissioners that the ability of a scheme member to withdraw their contributions from an occupational pension scheme is limited to circumstances where the scheme member leaves his or her employment with less than 2 years’ qualifying service. Qualifying service normally means 2 years in the pension plan as a member for pension purposes. In such circumstances, and assuming Revenue practice and the scheme rules permit, a scheme member can get a refund of his or her contributions which may include interest at a reasonable rate. The benefit of any employer contributions are surrendered where this occurs.
In general, a refund of contributions is liable to tax at the standard rate of tax applying when the refund is made. Once a scheme member has at least 2 years qualifying service he or she is entitled under the Pensions Acts to preserved benefits and cannot get a contribution refund. Under the preserved benefit rules, a member leaving a scheme has several options including leaving the accumulated benefits in place with the former employer’s scheme or transferring the benefits to a new employer’s scheme, to a Personal Retirement Savings Account or to a buy out bond.
The limited circumstances in which employee contributions can be accessed under current arrangements reflects the fundamental nature of pension savings. The rationale for giving various tax reliefs to pension savings schemes in the first place is to encourage and promote savings over the long term in order that individuals will have an adequate replacement income in old age. Emerging demographic indicators point to increasing numbers of people living longer and healthier lives with more of their lives spent in retirement than previously. In these circum[482]stances, and while I am conscious of the case being made for access to pension funds which can be further examined, it is also important to protect pension savings to ensure an adequate post-retirement income.
101. Deputy Pat Rabbitte asked the Minister for Finance if the €40 million paid in AIB as bonus payments was provided for in the financial statements of the bank as an accrual, a provision or a contingency; in the event that AIB failed to so provide, the steps he will take to refer the matter to the Office of the Director of Corporate Enforcement; and if he will make a statement on the matter. [47440/10]
Minister for Finance (Deputy Brian Lenihan): I am advised by AIB that all bonuses were fully provided for and charged against income in the financial year to which they relate. The Bank had originally scheduled the payment of bonuses in the following financial year. As the Deputy will be aware the bonuses to which he refers in his question are not now being paid.
102. Deputy Mary Upton asked the Minister for Finance the amount of national lottery funding available in 2011; the way this money will be allocated; and if he will make a statement on the matter. [47446/10]
Minister for Finance (Deputy Brian Lenihan): The estimated amount of receipts to the Exchequer from the National Lottery in 2011, as published in the White Paper on Receipts and Expenditure, is €235m. Section 5 of the National Lottery Act 1986 provides that the surplus from the National Lottery may be used for the following purposes: sport and other recreation; national culture, including the Irish Language; the arts, within the meaning of the Arts Act 1951; the health of the community; and for such other purposes as the Government may determine. The following additional categories have been so determined: youth, welfare, national heritage and amenities.
In order to give effect to this statutory provision, the surplus from the National Lottery is transferred to the Exchequer on a regular basis and is applied each year to part-fund the Exchequer allocations to a specified range of expenditure subheads across various Votes. Each year, the amount transferred to the Exchequer from the National Lottery surplus, together with details of the total Exchequer allocations to the relevant subheads are set out in Appendix 1 of the annual “Revised Estimates for Public Services”, which is typically published around February each year.
103. Deputy Mary Upton asked the Minister for Finance the purpose for which the national lottery money was intended; if he is satisfied that the money has been allocated as prescribed in legislation; and if he will make a statement on the matter. [47447/10]
Minister for Finance (Deputy Brian Lenihan): Section 5 of the National Lottery Act 1986 provides that the surplus from the National Lottery may be used for the following purposes: sport and other recreation; national culture, including the Irish Language; the arts, within the meaning of the Arts Act 1951; the health of the community; and for such other purposes as the Government may determine. The following additional categories have been so determined: youth, welfare, national heritage and amenities. In order to give effect to this statutory provision, the surplus from the National Lottery is transferred to the Exchequer on a regular basis and is applied each year to part-fund the Exchequer allocations to a specified range of expendi[483]ture subheads across various Votes. Each year, the amount transferred to the Exchequer from the National Lottery surplus, together with details of the total Exchequer allocations to the relevant subheads are set out in Appendix 1 of the annual “Revised Estimates for Public Services”.
104. Deputy Joan Burton asked the Minister for Finance if, in the case of post-1995 public servants, the State pension will be taken into account for the purposes of the reductions to public service pensions as announced in the 2011 budget; and if he will make a statement on the matter. [47448/10]
Minister for Finance (Deputy Brian Lenihan): The Government decided not to make an adjustment to the state pension in the Budget. For that reason the public service pension reduction measure is only applied to the occupational element and does not take the State pension into account.
105. Deputy John Browne asked the Minister for Finance if he will arrange to have the Revenue Commissioners put a stay on a demand for payment to a person (details supplied) in County Wexford as their only income is now jobseeker’s allowance. [47453/10]
Minister for Finance (Deputy Brian Lenihan): This is a matter for the Revenue Commissioners. I am advised by Revenue that the tax debt in question arose from invalid repayment claims submitted by the person concerned. I am further advised that, due to the failure of the person concerned to respond to Revenue’s written demand for payment, the debts have since been referred to the Revenue Sheriff for collection. It is incumbent on the person concerned to contact Revenue without delay to discuss his particular circumstances and any means of bringing matters to an agreed resolution.
106. Deputy John Browne asked the Minister for Finance if he will arrange to have an attachment order placed by the Revenue Commissioners for the arrears due to them lifted in respect of a person (details supplied) in County Wexford on the basis that they are prepared to make two payments by the end of December 2010. [47454/10]
Minister for Finance (Deputy Brian Lenihan): This is a matter for the Revenue Commissioners and I do not consider it appropriate that I would intervene directly in this matter. I am advised by the Revenue Commissioners that the initiation of enforcement action is not something undertaken lightly and that once it is underway it is only in very exceptional circumstances that there would be any cessation or deferral of such action. The person concerned is advised to immediately contact Revenue directly if a fresh proposal for payment of the debt is contemplated.
107. Deputy Denis Naughten asked the Minister for Finance when he will enact the payment service directive into law; if it is intended to include provisions covering direct debit charges and penalties for consumers not using such a payment mechanism; and if he will make a statement on the matter. [47485/10]
Minister for Finance (Deputy Brian Lenihan): The Payment Services Directive (Directive 2007/64/EC) was transposed into Irish law through the European Communities (Payment [484]Services) Regulations 2009 (S.I. 383 of 2009), made on 25 September 2009. The Directive does not regulate charges for the use of direct debit or other payment instruments. Article 52(3) of the Directive prohibits payment service providers from preventing merchants applying a charge or offering a reduction for the use of a given payment instrument, in order to ensure that the costs of efficient and inefficient payment instruments are transparent.
Article 52(3) also included an option for Member States to forbid or limit the right to request such charges for the use of a particular payment instrument taking into account the need to encourage competition and promote the use of efficient payment instruments. However, a substantive case, consistent with the objectives of the Directive, was not made to me by stakeholders during the transposition of the Directive and the option was not therefore exercised. The Directive does not allow Member States to impose penalties for the use of a particular payment instrument.
In addition to charges to consumers, as I set out in answer to Question No. 59 of 7 December 2010, fees may also be imposed on merchants by banks for the use of debit or credit cards. These fees are a commercial matter between the given card scheme, the acquiring bank and their customers.
108. Deputy Ruairí Quinn asked the Minister for Finance if active civil servants who availed of the incentivised scheme for early retirement, ISER, as set out in Department of Finance Circular 12/09 and who signed a legal document not to re-enter the labour market and whose PPS numbers were noted in order that they could not breach the ISER contract, are now released from this contractual obligation in view of the unilateral decision by the Government to reduce the pensions income of civil servants by 4% in the recent budget; and if he will make a statement on the matter. [47508/10]
Minister for Finance (Deputy Brian Lenihan): Individuals who availed of the Incentivised Scheme of Early Retirement are not de-barred from re-entering the labour market generally; however, they are not eligible for re-employment in the same part of the public service from which they retired. They may take up employment in other areas of the public service, in which case their pension may be abated. I have no plans to change this position.
109. Deputy Martin Ferris asked the Minister for Finance when the Special Group on Public Service Numbers and Expenditure Programmes is due to report on the possible disposal of State assets. [47516/10]
Minister for Finance (Deputy Brian Lenihan): I presume that the Deputy is referring to the Review Group on State Assets and Liabilities which I established in July 2010 under the Chairmanship of Mr. Colm McCarthy. I understand that the Review Group will report in early 2011.
110. Deputy Jack Wall asked the Minister for Finance if he or the Revenue Commissioners have any outstanding issues that need to be addressed regarding the financial affairs or taxation payments in respect of a person (details supplied) in County Kildare. [47519/10]
[485]Minister for Finance (Deputy Brian Lenihan): I have been advised by the Revenue Commissioners that this is a complex case which is on-going and they will contact the person concerned shortly in relation to his tax affairs.
111. Deputy Finian McGrath asked the Minister for Finance the position regarding taxation and social welfare legislation (details supplied). [47524/10]
Minister for Finance (Deputy Brian Lenihan): It is intended that the necessary changes to tax legislation arising from the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 will be included in the forthcoming Finance Bill. The provisions will provide for the same tax treatment for registered civil partners as for married couples and will have effect for the year of assessment 2011. It should be noted that Social Protection legislation is a matter for the Minister for Social Protection.
112. Deputy Mary Wallace asked the Minister for Finance the way in which the new standard rate of tax relief on expenditure up to €10,000 on home energy savings works will operate; the works covered by the scheme; and if he will make a statement on the matter. [47529/10]
Minister for Finance (Deputy Brian Lenihan): Tax relief for Energy Efficiency Measures (REEM) was announced in the Budget and will be introduced in the forthcoming Finance Bill. It is intended that the relief will encourage individuals to invest in making their homes more energy efficient. The incentive will complement the grant aid that is available through various schemes currently operated by the Sustainable Energy Authority of Ireland. Standard rated tax relief will be available, on a subsequent year basis, on expenditure of up to €10,000 on a list of approved works. The total relief available in any one tax year will be €30 million which will allow for remedial works to be carried out on a minimum of 15,000 homes.
Full details of the new incentive will be provided in the forthcoming Finance Bill.
113. Deputy Richard Bruton asked the Minister for Finance if changes in respect of civil unions affecting taxation matters have been included in the budget and the forthcoming finance Bill; and if he will make a statement on the matter. [47530/10]
Minister for Finance (Deputy Brian Lenihan): It is intended that the forthcoming Finance Bill will provide for the same tax treatment for registered civil partners as for married couples and will have effect for the year of assessment 2011. These changes are as a result of the passing of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010.
114. Deputy Michael McGrath asked the Minister for Finance if the new rates of stamp duty approved by Dáil Éireann following budget 2011 could also be applied to the purchase of a site by a person wishing to build and own their first home. [47535/10]
Minister for Finance (Deputy Brian Lenihan): Budget 2011 provides for a major reform of the charge to Stamp Duty on transactions of residential property. The change involves a simplification of the system by lowering the rates of Stamp Duty and abolishing a number of exemptions and reliefs. The new Stamp Duty rates — 1% where the consideration does not exceed €1 million and 2% on the excess of the consideration over €1 million — apply to transfers of residential property and as such do not apply to the purchase of a site. The question [486]of whether a property is residential or non-residential is determined by the use of the property at the time of the transaction, rather than its potential future use. Extending the residential rates to some non-residential transfers but not others could give rise to verification difficulties and potential evasion.
The Stamp Duty rates for non-residential property which have been in operation since 15 October 2008 remain unchanged. They are as set out in the following table:
| Aggregate Consideration | Rate of Duty |
|---|---|
| Up to €10,000 | Exempt |
| €10,001 to €20,000 | 1% |
| €20,001 to €30,000 | 2% |
| €30,001 to €40,000 | 3% |
| €40,001 to €70,000 | 4% |
| €70,001 to €80,000 | 5% |
| Over €80,000 | 6% |
Question No. 115 answered with Question No. 97.
116. Deputy Noel Ahern asked the Minister for Finance the position regarding a couple over 66 years who are in receipt of contributory old age pension and social welfare pension when one of the persons also is in receipt of an occupational pension of approximately €100 a week; if he will list the taxation, levy, PRSI, health contribution levels before and after the recent budget including universal social charge; and if he will make a statement on the matter. [47566/10]
Minister for Finance (Deputy Brian Lenihan): It is assumed that the Deputy is referring to a couple aged over 66 but younger than 80 and that one of the individuals is in receipt of an occupational pension of approximately €5,200 per annum and in receipt of a contributory State pension of €22,703 which includes an increase for a qualified adult. On that basis, the indicative calculations for Income Tax, PRSI, Income Levy, Health Levy and the Universal Social Charge for 2010 and 2011 are set below:
117. Deputy John Deasy asked the Minister for Health and Children the number of persons in Waterford city and county in receipt of blind welfare allowance in each of the past five years and to date in 2010; and if she will make a statement on the matter. [47354/10]
Minister of State at the Department of Health and Children (Deputy John Moloney): As the Deputy’s question relates to service matters I have arranged for the question to be referred to the Health Service Executive for direct reply to the Deputy.
118. Deputy Tom Hayes asked the Minister for Health and Children the information and studies taken into account in deciding to use Gardasil as a vaccine for the prevention of cervical cancer; and if she will make a statement on the matter. [47367/10]
Minister for Health and Children (Deputy Mary Harney): The Irish Medicines Board (IMB), together with its EU counterparts is responsible for monitoring national and international emerging evidence about the safety of medicines, including vaccine safety.
The Health Information and Quality Authority (HIQA) was asked to establish the cost effectiveness of a combined national HPV vaccination and cervcial cancer screening programme. This assessment took account of the available evidence on the epidemiology of HPV and cervical cancer and included an assessment of the safety and efficacy of the HPV vaccines available. A copy of this report along with details of international evidence examined is available on the HIQA website at www.hiqa.ie.
The decision to proceed with a National HPV vaccination programme was also informed by the National Immunisation Advisory Committee (NIAC). This is represented in the NIAC Immunisation Guidance which can be found on the website at www.rcpi.ie. International evidence as to the safety profile and side-effects of vaccines is considered by NIAC in formulating its advice and is kept under constant review.
The public procurement process which was engaged by the HSE assessed the relative costs and benefits of the two HPV vaccines on the market and made recommendations on this basis in favour of the use of Gardasil.
Gardasil has been authorised by the European Commission for use across the European Union (EU) since 2006 and has been in widespread use in a number of Member States since then. In addition to the European approval, it is currently registered and authorised for use in 131 countries worldwide, including approvals by both the US Food and Drug Administration (FDA) and the Therapeutic Good Administration in Australia (TGA). More than 65 million doses of this vaccine have been distributed world-wide. The basis for the European Commission decision to authorise the product is contained in the European Public Assessment Report which is available on the website of the European Medicines Agency www.ema.europa.eu. Gardasil was licensed for use in Ireland in September 2007.
The highest priority is attached to ensuring the safety of all vaccines administered as part of the public immunisation programme in Ireland.
119. Deputy Denis Naughten asked the Minister for Health and Children her plans to introduce a national foot screening programme as part of the treatment of diabetic foot disease; the estimated cost of same; and if she will make a statement on the matter. [47419/10]
120. Deputy Denis Naughten asked the Minister for Health and Children if she has received the report from the expert advisory group on diabetes; her plans to implement the recom[488]mendations particularly regarding paediatric services in the Cork area; and if she will make a statement on the matter. [47420/10]
Minister for Health and Children (Deputy Mary Harney): I propose to take Questions Nos. 119 and 120 together.
The Health Service Executive (HSE) Report of the Expert Advisory Group on Diabetes was published in 2008. The implementation of the recommendations in this Report with respect to service delivery is a matter for the HSE. Therefore, the issues raised by the Deputy have been referred to the HSE for direct reply.
121. Deputy Denis Naughten asked the Minister for Health and Children the position regarding the roll-out of the national diabetes programme in east Roscommon; the number of persons who have been treated in Roscommon for preventable diabetic foot complications in the past five years; the amount of money spent on treating preventable diabetic foot disease in Roscommon in the past five years; the current levels of spending on podiatry services in Roscommon; her plans for screening diabetics in Roscommon; if a diabetic foot disease screening programme will be implemented nationwide; and if she will make a statement on the matter. [47421/10]
122. Deputy Denis Naughten asked the Minister for Health and Children the position regarding the roll-out of the national diabetes programme in east Leitrim; the number of persons who have been treated in Leitrim for preventable diabetic foot complications in Leitrim in the past five years; the amount of money spent on treating preventable diabetic foot disease in Leitrim in the past five years; the current levels of spending on podiatry services in Leitrim; her plans for screening diabetics in Leitrim; if a diabetic foot disease screening programme will be implemented nationwide; and if she will make a statement on the matter. [47422/10]
Minister for Health and Children (Deputy Mary Harney): I propose to take Questions Nos. 121 and 122 together.
As this is a service matter it has been referred to the Health Service Executive for direct reply.
123. Deputy Denis Naughten asked the Minister for Health and Children further to Parliamentary Question No. 181 of 9 July 2009, if staff referred to have been recruited; when the screening programme will commence in the west; and if she will make a statement on the matter. [47423/10]
Minister for Health and Children (Deputy Mary Harney): As this is a service matter it has been referred to the Health Service Executive for direct reply.
124. Deputy Denis Naughten asked the Minister for Health and Children the position regarding the implementation of the Disability Act 2005; when Part 2 will be fully implemented; and if she will make a statement on the matter. [47426/10]
Minister of State at the Department of Health and Children (Deputy John Moloney): Part 2 of the Disability Act 2005 was commenced on 1 June 2007 in respect of children aged under 5. In October 2008 the Government decided, in the light of financial circumstances, to defer further implementation of the Act. No alternative timescales for full implementation of Part 2 of the Act have been developed to date.
125. Deputy Denis Naughten asked the Minister for Health and Children the number of specific stroke units within the health system; the incidence of stroke; the number of rehabilitative consultants employed here; and if she will make a statement on the matter. [47427/10]
Minister for Health and Children (Deputy Mary Harney): As this is a service matter it has been referred to the Health Service Executive for direct reply.
126. Deputy Denis Naughten asked the Minister for Health and Children further to Parliamentary Question No. 158 of 20 October 2010, if she will provide the corresponding figures for 2010; and if she will make a statement on the matter. [47435/10]
Minister for Health and Children (Deputy Mary Harney): The funding made available to disability organisations through Vote 39 from the National Lottery to date, in 2010, is set out in the table below. The table details the names of the organisation to whom the grant was paid and the amount of the grant.
The Deputy will be aware that the Health Service Executive funds a wide range of disability organisations through Vote 40. Therefore, my Department has requested the Parliamentary [490]Affairs Division on the Executve to provide details of the funding provided by the HSE and to have a reply issued directly to the Deputy.
127. Deputy John O’Donoghue asked the Minister for Health and Children when a person (details supplied) in County Kerry will receive the result of their application for a full medical card. [47457/10]
Minister for Health and Children (Deputy Mary Harney): As this is a service matter it has been referred to the Health Service Executive for direct reply to the Deputy.
128. Deputy John O’Donoghue asked the Minister for Health and Children when a person (details supplied) in County Kerry will receive their medical card. [47462/10]
Minister for Health and Children (Deputy Mary Harney): As this is a service matter it has been referred to the Health Service Executive for direct reply to the Deputy.
129. Deputy John O’Donoghue asked the Minister for Health and Children when a person (details supplied) in County Kerry will receive the result of their application for a medical card. [47464/10]
Minister for Health and Children (Deputy Mary Harney): As this is a service matter it has been referred to the Health Service Executive for direct reply to the Deputy.
130. Deputy Jimmy Devins asked the Minister for Health and Children further to Parliamentary Question No. 221 of 1 June 2010, if she is now in a position to answer the question. [47468/10]
Minister for Health and Children (Deputy Mary Harney): I understand that the HSE replied directly to the Deputy by letter on the 15 July in relation to this matter.
131. Deputy Denis Naughten asked the Minister for Health and Children the funding to be provided in 2011 to establish a no fault compensation fund for vaccine damaged children; and if she will make a statement on the matter. [47470/10]
Minister for Health and Children (Deputy Mary Harney): My Department is currently examining the recommendations of the Vaccine Damage Steering Group in detail. The report raises many complex issues that require further consideration and I expect to have my Department’s assessment of these in the near future.
132. Deputy Denis Naughten asked the Minister for Health and Children if she will approve additional funds for a child care project (details supplied) in County Roscommon; and if she will make a statement on the matter. [47474/10]
Minister of State at the Department of Health and Children (Deputy Barry Andrews): I have responsibility for implementation of the National Childcare Investment Programme 2006-2010 (NCIP) which included a capital grant programme to develop childcare facilities. As the Deputy [491]is aware, the company in question was approved capital grant funding under the NCIP of up to €520,000 and subsequently sought additional funding to complete the project. The request for additional capital funding is currently being examined by Pobal, who assist my Office in the day to day management of the NCIP. I understand that Pobal is awaiting a response from the company in relation to a number of issues. When these issues have been responded to and resolved, Pobal will make a report to my Office following which a decision on the request will be made and communicated to the company.
133. Deputy Denis Naughten asked the Minister for Health and Children further to Parliamentary Question No. 175 of 10 November 2009, the steps she is taking to resolve this situation; the timetable for the opening of the facility to resolve this situation; the issues of concern raised by the union and the further steps she is taking to address these issues; and if she will make a statement on the matter. [47475/10]
Minister of State at the Department of the Health and Children (Deputy Áine Brady): As this is a service matter it has been referred to the Health Service Executive for direct reply.
134. Deputy Denis Naughten asked the Minister for Health and Children the funding available in 2009 and 2010 to the disability sector; the budget for 2011; and if she will make a statement on the matter. [47486/10]
Minister of State at the Department of Health and Children (Deputy John Moloney): My Department collects disability expenditure information on a twice yearly basis. At the end of 2009, disability expenditure amounted to €1,581.88 million. By the end of 2010, disability expenditure is estimated to be €1,468.94 million. Special consideration has been given to disability and mental health in Budget 2011, through a maximum reduction of just 1.8% or €40 million overall in the allocation for the two sectors. The relatively lower reduction, compared to other areas of the health budget, recognises that these services are provided to vulnerable groups. Furthermore, an additional €10 million in funding is being provided to the HSE for disability in 2011, to meet anticipated extra demand in respect of emergency residential, respite and personal assistant/home support hours for people with disabilities, and day places for school leavers in September 2011. The HSE is in the final phase of completing work on its 2011 National Service Plan and the actual amount of disability funding allocated in 2011 will not be known until the Service Plan is approved by the Minister for Health & Children in early 2011.
135. Deputy Deirdre Clune asked the Minister for Health and Children when she will appoint a replacement to the position of consultant in paediatric diabetic services in the Health Service Executive south area to fill a vacancy that has existed since April 2010; and if she will make a statement on the matter. [47518/10]
Minister for Health and Children (Deputy Mary Harney): As this is a service matter, it has been referred to the HSE for direct reply.
136. Deputy Jan O’Sullivan asked the Minister for Health and Children if those who suffer from haemochromatosis and have to have blood removed regularly can be facilitated by [492]allowing them to donate the extra blood to a blood clinic if they fulfil the criteria; if they will be facilitated at clinics in their local area and be exempted from the €75 outpatients fee each time they have to attend the hospital; and if she will make a statement on the matter. [47527/10]
Minister for Health and Children (Deputy Mary Harney): The IBTS provides phlebotomy for people with haemochromatosis on a weekly basis in Dublin. Donors are referred from their consultant for initial screening for suitability for blood donation. The donors are reviewed once per year by the referring consultant, but are otherwise cared for by the IBTS clinical staff. The service was initially set up as a pilot in 2007, but has become an established service following the success of the pilot scheme. The clinic has the capacity at the present time to provide a service for up to 600 blood donors with haemochromatosis. Blood collected at this clinic is treated in the same way as all other blood collected by the IBTS.
The IBTS does not offer the service to people who would otherwise have to pay for phlebotomy, on the basis that it could be seen as offering a degree of financial incentive to donate blood. This would be contrary to good practice and to the requirements of European law on promoting unremunerated donations. The IBTS is considering the options and opportunities for an expansion of its service for haemochromatosis patients throughout the country, and is exploring this position with stakeholders at present. My officials have already written to the HSE requesting that it would apply a consistent system for management of venesection patients in all hospitals.
137. Deputy Michael Creed asked the Minister for Health and Children if the universal social charge will be an allowable expense when calculating entitlement to a medical card, in view of the fact that medical card holders were exempt from the income levy; and if she will make a statement on the matter. [47531/10]
Minister for Health and Children (Deputy Mary Harney): My colleague Mr Brian Lenihan, Minister for Finance has advised that there will be no exemption for medical card holders from the Universal Social Charge (USC). However, all Social Welfare Payments will be exempt from the Charge. The situation is that most medical card holders are in receipt of social welfare payments. Those payment will not be subject to the Universal Social Charge. However, where a medical card holder has other income, that will be subject to USC.
138. Deputy Charlie O’Connor asked the Minister for Health and Children the action being taken to deal with the waiting lists for scans at Tallaght Hospital; and if she will make a statement on the matter. [47542/10]
Minister for Health and Children (Deputy Mary Harney): As this is a service matter, it has been referred to the Health Service Executive for direct reply.
139. Deputy Lucinda Creighton asked the Minister for Health and Children the progress she has made in implementing the youth homeless strategy (2001); and if she will make a statement on the matter. [47558/10]
[493]Minister of State at the Department of Health and Children (Deputy Barry Andrews): The Government has shown significant commitment to tackling youth homelessness. It has done this by targeting significant resources at the youth homeless service in the context of the development of the broader child welfare services. In 2001 the Youth Homelessness Strategy was launched providing a strategic framework for youth homelessness to be tackled on a national basis. The goal of the Strategy is “to reduce and if possible eliminate youth homelessness through preventative strategies and where child becomes homeless to ensure that he/she benefits from a comprehensive range of services aimed at reintegrating him/her into his/her community as quickly as possible.”
Aftercare is a key element to achieving positive outcomes for young people leaving care. Aftercare services have been developed in Ireland to assist young people in care in bridging the transition from care to independent adult life in the community. Consideration was given to the legal position with regard to the provisions of aftercare services, having regard to the existing legislative provisions of the Childcare Act 1991. The legal advice is that the Act creates a statutory power and the HSE, as recipient of this power, must put itself in a position where it can exercise the power should the need arise.
In order to ensure that there was no doubt about the matter, and to emphasise the importance of aftercare services, I wrote to the HSE in June clarifying the issue and directing the HSE to formulate and implement aftercare policies. Officials from my Department recently met with the HSE to discuss their draft National Aftercare Policy which is currently in the process of being finalised. In line with the Government commitment as reflected in the Ryan Implementation Plan, funding of €1.0m was set aside by the HSE in its 2010 Service Plan, for the development of aftercare services in 2010.
My Officials have also engaged with the HSE to discuss the linkages between the provision of aftercare and the issue of homelessness for young people and the wider issues attaching to the implementation of the Youth Homeless Strategy for young people becoming homeless who were not formerly known to the childcare services. Work is ongoing to ensure the implementation of the Youth Homeless Strategy in a co-ordinated manner and my officials will be meeting with the HSE in January 2011 to continue the progress in this area.
140. Deputy Lucinda Creighton asked the Minister for Health and Children the number of children in voluntary care here; the number of children in care under emergency care orders; the number in care under care orders; the number in care under interim care orders; the number in care under supervision orders; the number in care under interim special care orders; the number in care under special care orders; the number of children in foster care, residential care, special care units and the number being cared for by relatives; the number of persons between the ages of 12 and 18 who have been in care and are receiving after care services; the number of children receiving out of hours care and the number of children receiving out of hours care who have been accommodated in Garda stations and bed and breakfasts in the past 12 months; and if she will make a statement on the matter. [47562/10]
Minister of State at the Department of Health and Children (Deputy Barry Andrews): As this is a service matter it has been referred to the HSE for direct reply.
141. Deputy Noel Ahern asked the Minister for Health and Children the position regarding the private importation of medicines (details supplied) which are normally supplied under [494]prescription; if private importation for personal use is in order; the way this can be done when the normal approved alternative medicine is not suited to the individual; if it is normal for such importations to be confiscated by customs and passed to the Irish Medicines Board. [47567/10]
Minister for Health and Children (Deputy Mary Harney): It is understood that the medicinal product referred to in the question is a prescription only product and is supplied from India through an internet site. The Medicinal Products (Prescription and Control of Supply) Regulations 2003(S.I. 540 of 2003) prohibited the supply by mail order of medicinal products. An amending regulation (S.I. 510 of 2005) relaxed this overall prohibition and it no longer applies to non-prescription only medicinal products. However, prescription only medicinal products may not be sold by mail order or by internet in, into or out of Ireland.
The Medicinal Products (Control of Placing on the Market) Regulations 2007 (SI 540 of 2007) permit the importation of a medicinal product, from a country that is not an EEA State, by a person for his own personal use, not being an importation resulting directly from a mail order advertisement directed at members of the public. Under the regulations (as amended), an Irish-registered practitioner may prescribe a medicinal product which is not available as an authorised product in Ireland. This type of product is defined as ‘exempt medicinal product’. The sale or supply of an exempt medicinal product is subject to certain conditions which include a requirement for the product to be supplied by an appropriately licensed manufacturer or wholesaler.
I am advised by the Irish Medicines Board (IMB) that if a patient presents a prescription for the product in question at a pharmacy in Ireland, the pharmacy may order the product from a wholesaler holding the appropriate licence to source exempt products and a licensed wholesaler may supply the product to the pharmacy. Where the Customs becomes aware that unauthorised medicinal products are being imported, the products are confiscated and passed to the IMB to ascertain the route of supply.
142. Deputy Seymour Crawford asked the Minister for Health and Children the number of public hospital beds that were in place in 1997 and the number now available in December 2010; the number of private hospital beds in place in 1997 and the number now available; if she is satisfied that sufficient beds are now available; and if she will make a statement on the matter. [47687/10]
Minister for Health and Children (Deputy Mary Harney): The national average number of acute hospital beds available in public hospitals for the year 1997 broken down by public, private and non-designated is set out in the following table. Acute bed numbers in public hospitals are counted as an average of beds available over each year, given that the number of beds available in each hospital can vary over any year for operational reasons. This data comprehends inpatient beds and day places.
The latest year in respect of which validated national data on average available acute hospital beds has been compiled by the HSE is 2008. However, the HSE has furnished data on public, private and non-designated acute hospital beds available in public hospitals in respect of June 2010. This data, broken down by public, private and non-designated is also contained in the table. While these figures do not represent full-year validated data they provide a useful benchmark for comparison with the 1997 data.
The emphasis for the HSE in 2011 will continue to be to make the most effective use of acute bed capacity through shorter length of stay, increased rates of day-of-surgery admission [495]and more day surgery. In this way the acute hospital system can ensure that, within the level of resources available, it facilitates the maximum number of patients with safe, effective and efficient care.
| Year | Public | Private | Non-Designated | Total |
|---|---|---|---|---|
| 1997 | 8,442 | 2,414 | 871 | 11,727 |
| 2010* | 9,586 | 2,383 | 1,066 | 13,035 |
143. Deputy Denis Naughten asked the Minister for Transport his plans to increase fines or other enforcement measures for persons who park illegally in places designated for disabled drivers; and if he will make a statement on the matter. [47424/10]
Minister for Transport (Deputy Noel Dempsey): Last July I launched a report on the Disabled Parking Scheme which made a number of recommendations to improve the operation of the Scheme. This Report considered the question of whether fines for illegal parking in disabled parking spaces should be increased. The Report noted that the current fixed charge of €80 which applies to illegal parking in a designated disabled person’s parking bay is double the amount of fixed charge that applies to any other illegal parking offence. This charge increases by 50% if paid after 28 days and within 56 days after issue of the fixed charge notice. If unpaid within the 56-day period, court proceedings are initiated and, on conviction, substantial fines, and/or a prison term is available to the court.
While the level of fine imposed on conviction in any individual case is at the discretion of the court, since 2006 the court can impose a fine up to a maximum of €1,000 for a first offence. For a second or subsequent such offence, a person is liable to a fine not exceeding €2,000 and if the offence is a third or subsequent such offence committed within 12 months the Court can impose a fine not exceeding €2,000 or imprisonment for a term not exceeding 3 months or both. In addition, in respect of any road traffic offence a judge has discretion to impose disqualification under section 27 of the Road Traffic Act 1961.
Given these strong penalties already in place, the Report did not recommend an increase in the penalties for illegal parking in a disabled parking space, and I agree with this conclusion.
144. Deputy Denis Naughten asked the Minister for Justice and Law Reform when the Mental Capacity Bill will be published; and if he will make a statement on the matter. [47430/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): As stated in my response to Question No. 213 of 10 November 2010, the Government Legislation Programme indicates that the Mental Capacity Bill is expected to be published in this Session. The Bill will reform the law on mental capacity taking into account the Law Reform Commission’s Report on Vulnerable Adults and the Law. The Bill will replace the Wards of Court system with a modern statutory framework governing decision-making on behalf of adults who lack capacity.
145. Deputy Caoimhghín Ó Caoláin asked the Minister for Justice and Law Reform if he has brought the Legal Services Ombudsman Act 2009 into effect yet, and if not, when he plans to do so [47325/10]
[496]Minister for Justice and Law Reform (Deputy Dermot Ahern): The position of Legal Services Ombudsman will be filled early in the New Year through an open competition conducted by the Public Appointments Service. The competition was advertised on 19 November, 2010 and the closing date for applications was 9 December, 2010. The Legal Services Ombudsman Act 2009 will be commenced prior to the appointment.
146. Deputy Alan Shatter asked the Minister for Justice and Law Reform the reason a €20 million computerised finger-printing system acquired to detect immigrants illegally claiming social welfare is unused four years after its installation in the Garda Immigration Bureau; the nature of the difficulties that have occurred and the attempts made to-date to resolve them; if the system was intended to be linked to other European Union police forces and the difficulties which have resulted from the linkage not occurring; and if he will make a statement on the matter. [47370/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): The Automated Fingerprint Identification System is integrated with the Garda National Immigration Bureau Information System, and 48 units have been installed nationwide to record fingerprints as part of the process of registration of non-Irish nationals. Of these, 6 are currently not in use due to a refusal by CPSU members, who are civilian staff working in the Garda National Immigration Bureau, to operate them. It is most certainly not the case, therefore, that the system is unused. The matter is currently being dealt with within the Industrial Relations framework of An Garda Síochána.
The Garda Síochána continue to exchange information on an operational basis with other police forces on immigration-related matters.
147. Deputy Alan Shatter asked the Minister for Justice and Law Reform further to Parliamentary Question No. 148 of 17 November 2010 when the information he requested to be furnished by the Central Statistics Office to this Deputy will be received; and if he will contact the Central Statistics Office regarding this matter. [47372/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): The Central Statistics Office, as the national statistical agency, is responsible for the compilation and publication of crime statistics.
I am informed by the Central Statistics Office that, in response to Parliamentary Questions Nos. 147 and 148 of 17 November, it provided to the Deputy on 7 December statistics in respect of 2007 and 2008 on the numbers of recorded prison offences which led to criminal proceedings and convictions. As was explained to the Deputy, statistics in respect of 2009 and 2010 are not available. I am also informed that more detailed statistics than those provided are not available.
148. Deputy Denis Naughten asked the Minister for Justice and Law Reform the progress made on the drafting of the Legal Costs Bill and the Family Law Bill; and if he will make a statement on the matter. [47478/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): The details of my proposals for a Legal Costs Bill are well advanced in my Department in line with a commitment in the Government Legislation Programme, the National Recovery Plan 2011-2014 and the Programme of Financial Support for Ireland.
[497]The proposals for a Family Law Bill are being advanced in my Department as quickly as possible, subject to the disposal of other priorities.
149. Deputy Finian McGrath asked the Minister for Justice and Law Reform further to Parliamentary Question No. 95 of 24 November 2010, the number of internal competitions that have taken place in the past six years to fill posts in visa offices abroad; the date they were advertised; if these internal competitions were run in conformity with the terms and requirements of the code of practice of the Commission for Public Service Appointments; if his attention has been drawn to any allegations of a breach of the code; if any of these allegations were reviewed by the Commission for Public Service Appointments; if the commission upheld any complaints; and if he will make a statement on the matter. [47489/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): My Department’s Human Resources Division has held some 75 competitions for promotion or other assignments over the past six years, including six external competitions under its recruitment licence. In all, some 3,800 applications have been processed through these competitions. Only six applicants sought a review in relation to alleged breaches of the Commission for Public Service Appointments’ (CPSA) Code of Practice, four of which were ultimately reviewed by the CPSA and three of which related to one competition for assignment to Visa Officer posts at Executive Officer level held in 2008. While the CPSA partially upheld these allegations, on essentially technical grounds, none of their reviews concluded that the outcome of the selection process was affected. I would also add that the CPSA carried out a comprehensive audit of my Department’s competitive selection processes in 2009 and found that it complied with the principles of its Code of Practice.
Specifically in relation to competitions for assignment to Visa Office posts, a total of 15 such competitions were held over the past six years, when assignments for all grade levels concerned are taken into account. Some competitions were for multiple locations, others for individual locations. Competitions for assignment to Higher Executive Officer or Administrative Officer level posts in Visa Offices were advertised on 27 May 2005, 24 January 2006, 20 September 2006, 29 May 2008, 19 November 2008 and 7 April 2010. Competitions for assignment to Executive Officer level posts were advertised on 27 May 2005, 20 September 2006 (for three separate locations), 15 February 2008, 29 May 2008 and 7 April 2010. Competitions for assignment to Clerical Officer level posts were advertised on 20 September 2006 and 18 November 2009. While such competitions are conducted in accordance with the principles set down in the CPSA’s Code of Practice, the Commission advised earlier this year that the Code does not in fact apply to such assignments.
Finally, the Deputy will appreciate that not all applicants can be successful in competitions and some will understandably be disappointed. I think it is fair to say that this is more due to the nature of the competitive process, involving as it does relativity to other candidates, rather than any perceived weakness in the implementation of that process.
150. Deputy Finian McGrath asked the Minister for Justice and Law Reform if his attention has been drawn to reports that legal advice has been provided by the Civil and Public Service Union that grades represented by that union are legally unable to perform duties of immigration officers; if he has sought legal advice on this matter and if it confirms the position of the CPSU; if he will ensure that the duties of immigration officers are only performed by staff [498]who can properly perform such duties; and if he will make a statement on the matter. [47490/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): Provision is made at section 3(1) of the Immigration Act 2004 for the Minister for Justice and Law Reform to appoint such and so many persons as he or she considers appropriate (referred to in the Act of 2004 as “immigration officers”) to perform the functions conferred on immigration officers by the said Act . A person so appointed holds the office on such terms and conditions as are determined by the Minister at the time of the appointment.
Members of the grades represented by the CPSU are not immigration officers and while they assist immigration officers in the carrying out of their legal duties, they do not perform, nor are they asked to perform, any duties which are solely the function of immigration officers.
151. Deputy John O’Mahony asked the Minister for Justice and Law Reform the number of gardaí, in rank order, at present stationed in the Garda training centre in Templemore; and if he will make a statement on the matter. [47500/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): I have sought the information required from the Garda Authorities and I will revert to the Deputy as soon as it is received.
152. Deputy John O’Mahony asked the Minister for Justice and Law Reform the number of student gardaí currently undergoing training in the Garda training centre in Templemore; and if he will make a statement on the matter. [47501/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): I have sought the information required from the Garda Authorities and I will revert to the Deputy as soon as it is received.
153. Deputy John O’Mahony asked the Minister for Justice and Law Reform the number of civilian staff currently employed in the Garda training centre in Templemore; and if he will make a statement on the matter. [47502/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): I have sought the information required from the Garda Authorities and I will revert to the Deputy as soon as it is received.
154. Deputy John O’Mahony asked the Minister for Justice and Law Reform when recruitment will commence for gardaí; and if he will make a statement on the matter. [47503/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): The moratorium on recruitment and appointments continues to apply to An Garda Síochána with provisions for exceptions following agreement with the Minister for Finance. The purpose of organising a recruitment campaign earlier this year was to begin the process of establishing a panel of potential applicants who could go on to be recruited as members of An Garda Síochána.
Since that announcement was made, the National Recovery Plan 2011- 2014 was developed and published. The plan provides for a reduction in the number of members of An Garda Síochána to 13,000 by the end of 2014. This reduction, and the rate at which it is achieved through retirements, will be taken into account in determining when recruitment will commence.
155. Deputy John O’Mahony asked the Minister for Justice and Law Reform his plans for the Garda training centre in Templemore; and if he will make a statement on the matter. [47504/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): The Garda College in Templemore continues to provide both in-service training for serving members and training for recruits and it will continue to fulfil this important function.
156. Deputy Fergus O’Dowd asked the Minister for Justice and Law Reform in the context of refusing international student visa applications, which occupations are not considered relevant to learning the English language; the previous educational or employment backgrounds which are deemed to be at odds with studying English as an international student; and if he will make a statement on the matter. [47512/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): I can advise the Deputy that, in considering a visa application, the purpose of which is to study English, a visa officer would not generally consider the occupation of an applicant in isolation as a reason to refuse the granting of the visa sought. Each visa application is considered on its individual merits, the onus resting with the applicant to satisfy the Visa Officer as to why the visa should be granted. I would refer the Deputy to the comprehensive explanation of the decision making process set out in my reply to his Question 41988/10 of 10 November, 2010.
If the Deputy has a specific case in mind and he supplies full details, I will arrange for officials of my Department to examine the matter and revert to the Deputy with a more specific response.
157. Deputy Fergus O’Dowd asked the Minister for Justice and Law Reform if a visa may be refused on the grounds that documentation supplied is out of date if the delay incurred is as a result of processing an application; and if he will make a statement on the matter. [47513/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): In assessing a visa application a Visa Officer takes into consideration a number of factors before arriving at a decision. Each case is essentially considered on its individual merits, the onus resting with the applicant to satisfy the Visa Officer that the visa should be granted. It is possible that a visa may be refused where documentation supplied is out of date: however, this would be a relatively rare event and it is likely that other factors would also be in play in any such refusal.
It should be borne in mind that delays incurred in processing a visa often result from the applicant not having submitted all the required documentation in the first instance. A Visa Officer may, at their discretion and based on the particular circumstances of the case at hand, provide an applicant with the opportunity to submit further documents.
I would refer the Deputy to the comprehensive explanation of the decision making process set out in my reply to his Question 41988/10 of 10 November, 2010. If the Deputy has a specific case in mind and he supplies full details, I will arrange for officials of my Department to examine the matter and revert to the Deputy with a more specific response.
158. Deputy Mary Wallace asked the Minister for Justice and Law Reform if he will confirm that neither he nor any agencies funded by him have any involvement in providing accom[500]modation for clients at an address in an area (details supplied); and if he will make a statement on the matter. [47541/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): I refer the Deputy to Question No. 177 of 07 December 2010 and the Written response to that Question. If the Deputy can provide more information I would be happy to investigate the matter further.
159. Deputy Noel Ahern asked the Minister for Justice and Law Reform the position regarding the new prison at the Thornton Hall site in north County Dublin; the original site purchase cost of same; other costs spent to date; the cost of the recent contract for a perimeter wall and phase 1 and what was included in same; and if he will make a statement on the matter. [47572/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): As the Deputy will be aware the development of the new prison campus at Thornton Hall, Kilsallaghan, County Dublin is now proceeding on a phased basis. Phase one, which is currently in progress, comprises essential preliminary works to facilitate the prison development including the construction of a dedicated access road, the installation of off-site services and the construction of the perimeter wall of the prison. The second phase of the project involves the provision of 400 cells along with related support facilities suitable to accommodate up to 700 prisoners. Subsequent phases of the project will see the provision of the balance of the 1,000 cells providing a total of 1,400 cells when completed with operational flexibility to accommodate up to 2,200 prisoners, thus future proofing the development.
The contract for the construction of the access road to serve the prison development was awarded to SIAC Construction Limited in July 2010. Construction work is already well underway with the access road and underpass scheduled to be completed during February next year. Off-site Works
I am pleased to advise the Deputy that the contract for the installation of the off-site services to serve the prison development was awarded to P.J. Hegarty and Sons recently. Construction work on the installation of the off-site services is scheduled to commence immediately and will take approximately eight months to complete.
The procurement process for the design and construction of the perimeter security wall of the prison is already in progress. A pre-qualification competition for the design and construction of the perimeter security wall of the prison and related works issued on the E-tenders web site in August 2010. Twenty submissions were received and the evaluation of these submissions has been completed. Five companies have been short-listed and tender documents for the construction of the perimeter security wall and ancillary works issued to these contractors last month. Tenders are due to be returned next month. Construction of the perimeter wall is scheduled to commence in the first quarter of 2011 and will take just under a year to complete.
As I mentioned previously in the House, my priority is to provide good quality regime focussed prison accommodation at Thornton Hall prison campus as quickly as possible. A phased development of the prison campus is now being pursued. The next phase of the works [501]will see the procurement of prison accommodation blocks and related support facilities commencing in the new year using traditional procurement methods. It makes sense to tender for the construction of these much needed prison facilities now in an environment where construction costs have fallen significantly.
In relation to expenditure on the project, the total expenditure to end November was €43.3 million. This sum includes the site cost of €29.9 million. The cost of the site was almost completely offset by the sale of surplus prison lands at Shanganagh, County Dublin, for €29 million. An additional 8.7 acres has also been acquired at a cost of €1.3 million to provide a dedicated access route to the main prison site. This was done following representations from the local community which reflected concern in relation to the potential effect of increased traffic generated by the prison development.
This sum also includes €7.4 million expended on professional fees, €2.9 million on site preparation and various surveys, €0.5 million on landscaping and €0.5 million on security. As is the case with all major infrastructure projects, a comprehensive set of geological, engineering, archaeological and environmental surveys have been undertaken at the site in order to advance the construction programme for the development. These surveys will enable the Irish Prison Service to accelerate the timeframe for the construction of the first phase of the prison buildings to a maximum of two years.
As at end of November 2010, €0.8m had been expended on the construction of the access road and no construction costs had been incurred on the off-site works contract. As the tender for the perimeter security wall and related works is in progress and has not been awarded yet, no construction costs have been incurred on this element of the phase one works to date.
160. Deputy Noel Ahern asked the Minister for Justice and Law Reform the legislation that covers the area of verbal abuse and harassment; if there are any penalties for persons responsible for the repeated verbal harassment of their neighbours; if any specific provision exists within this legislation for persons who make fun of persons with physical and or intellectual disabilities; the penalties for such behaviour; and if he will make a statement on the matter. [47576/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): Section 10 of the Non-Fatal Offences Against the Person Act 1997 provides for the offence of harassment. Subsections (1) and (2) states:
While there is no specific reference to neighbours or persons with disabilities, it is clear that the legislation addresses any person harassing another.
[502]Summary conviction for the offence carries a penalty of a fine of up to £1,500 (€1905) and or 12 months imprisonment. A person convicted on indictment is liable to an unlimited fine an or seven years imprisonment.
A court may also order a person convicted of the offence not to communicate with or approach their victim. Even in circumstances where a person is not found guilty of the offence a court is empowered to may make such an order if it is in the interests of justice to do so.
The Criminal Justice Act 2006 provides another means by which harassment as a form of anti-social behaviour may be tackled. Part 11 deals with such behaviour by adults while Part 13 deals with the arrangements for children between 12 and 18 years. In both cases, the process begins with a warning to desist, issued by a Garda. That is followed by a number of steps before a court order (commonly called an anti-social behaviour order) is sought. Breach of the court order is a criminal offence punishable on conviction in the case of an adult, by a fine not exceeding €3,000 and/or a sentence of imprisonment not exceeding 6 months and, in the case of a child, by a fine not exceeding €800 and/or detention in a children detention school not exceeding 3 months.
Any such harassment as outlined by the Deputy in his question is reprehensible and should be reported to the Garda Síochána. A person suffering such harassment from neighbours could also seek advice as to the civil remedies in damages and injunctive relief which may be available in the circumstances.
161. Deputy Denis Naughten asked the Minister for Justice and Law Reform the reason for the delay in implementing the ban on the below cost selling of alcohol; his plans to implement the ban; and if he will make a statement on the matter. [47680/10]
Minister for Justice and Law Reform (Deputy Dermot Ahern): In March 2009, the Government agreed to include alcohol in the National Substance Misuse Strategy and a Steering Group was subsequently established under the aegis of the Departments of Health and Children and Community, Equality and Gaeltacht Affairs to develop proposals for integrating alcohol misuse into that Strategy. I understand that the Steering Group has been examining a range of issues relating to alcohol policy, including pricing issues, and that it is due to submit its report, including policy recommendations, in early 2011.
162. Deputy Róisín Shortall asked the Minister for Foreign Affairs the charges that will apply to pensioners in respect of passports in 2011. [47554/10]
Minister for Foreign Affairs (Deputy Micheál Martin): The charge that will apply in future to passport applicants over sixty five will be that of a standard adult passport. The cost of such a passport at present is 80 euro.
163. Deputy Finian McGrath asked the Minister for Foreign Affairs the number of civil servants that are employed in the Permanent Representation in Brussels; if he will provide a breakdown by grade for this staff; if these staff are paid any extra payment for the nature of the work involved; the way these staff are selected for these appointments; if the selection of these staff is conducted in conformity with the terms and requirements of the code of practice of the Commission for Public Service Appointments; if there has been any allegations of a breach of the code; if any of these allegations were reviewed by the Commission for Public [503]Service Appointments; if the commission upheld any complaints; and if he will make a statement on the matter. [47488/10]
Minister for Foreign Affairs (Deputy Micheál Martin): A total of seventy-five civil servants are assigned from Ireland to the Permanent Representation in Brussels, of which 39 are officials of the Department of Foreign Affairs and 36 are from other Government Departments and Offices. A full breakdown by grade is contained in the table below. Officers assigned to the Permanent Representation do not receive extra remuneration in connection with the nature of the work involved there. They do, however, receive foreign service allowances under a scheme approved by the Minister for Finance to defray certain additional expenses which officers incur as a result of serving abroad. The amount payable is determined by an independent agency on the basis of the cost of living differential between Dublin and Brussels. Allowance rates are regularly reviewed to take account of changes in this respect.
Temporary service abroad is a normal feature of working life in the Department of Foreign Affairs. For most grades, decisions about temporary foreign assignments are made by the Department’s Management Advisory Committee on the basis of lists of preferences submitted by staff members. Ambassadors, however, are appointed by the President, based on nominations by the Government which in turn is advised by the Minister for Foreign Affairs. The average duration of foreign assignments is 4-5 years, following which the officer normally returns to Headquarters.
My Department has no role in the selection by other Government Departments or Offices of staff to fill their 36 posts in the Permanent Representation.
Temporary assignments to posts in Irish Missions abroad do not involve appointments to the civil service or promotions to higher grades. I am not, therefore, aware of any role in the matter for the Commission for Public Service Appointments. Nor have I been informed about any suggestion that its Code of Practice has been breached.
164. Deputy Róisín Shortall asked the Minister for Social Protection the basis on which the estimate for the yield of €145 million from the abolition of the PRSI ceiling was arrived at when all previous estimates and replies given to parliamentary questions put the figure at €119 million in a full year. [47550/10]
[504]Minister for Social Protection (Deputy Éamon Ó Cuív): Estimates regarding potential yields and costs resulting from changes to the PRSI system are calculated by the Department of Social Protection, based on macro-economic projections produced by the Department of Finance.
The estimate of a yield of €119m from the abolition of the PRSI ceiling for ordinary employees was based on projections produced in 2009. Final economic projections for 2010 were furnished to this Department by the Department of Finance in late 2010 and the €145m estimate is based on these more up to date projections.
165. Deputy John Deasy asked the Minister for Social Protection the number of persons in Waterford city and county in receipt of illness benefit in each of the past five years and to date in 2010; and if he will make a statement on the matter. [47338/10]
166. Deputy John Deasy asked the Minister for Social Protection the number of persons in Waterford city and county in receipt of occupational injury benefit in each of the past five years and to date in 2010; and if he will make a statement on the matter. [47339/10]
167. Deputy John Deasy asked the Minister for Social Protection the number of persons in Waterford city and county in receipt of injury benefit in each of the past five years and to date in 2010; and if he will make a statement on the matter. [47340/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): I propose to take Questions Nos. 165 to 167, inclusive, together.
The number of persons in receipt of illness benefit and the number of persons in receipt of injury benefit under the scheme of occupational injuries benefits, for the past five years and to date in 2010, are set out in the table below. The figures quoted refer to those in receipt of these benefits at the end of each year except for 2010 where the figure refers to week ending 12 December.
It should be noted that although claimants often refer to Occupational Injury Benefit and Injury Benefit as if there are two separate benefits, there is in fact only one benefit paid — injury benefit. This benefit is part of the occupational injuries scheme which also provides for other benefits (e.g. Medical expenses) in certain circumstances.
168. Deputy John Deasy asked the Minister for Social Protection the number of persons in Waterford city and county in receipt of pre-retirement allowance in each of the past five years and to date in 2010; and if he will make a statement on the matter. [47349/10]
[505]Minister for Social Protection (Deputy Éamon Ó Cuív): The information requested by the deputy is contained in the tabular statement below. The number of recipients of pre-retirement allowance has been in decline since 2007 as the scheme was ended for new claimants on 4th July 2007.
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 (November) |
|---|---|---|---|---|---|
| 446 | 442 | 406 | 333 | 282 | 234 |
169. Deputy John Deasy asked the Minister for Social Protection the number of persons in Waterford city and county in receipt of domiciliary carer’s allowance in each of the past five years and to date in 2010; and if he will make a statement on the matter. [47353/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): The domiciliary care allowance scheme (DCA) transferred from the Health Service Executive on foot of a Government decision to reassign certain functions between Departments and Agencies as part of the health service reform programme. This Department has been accepting new claims for DCA since the 1st of April 2009 and has responsibility for former HSE customers from September 2009. As a result statistics in relation to customers in payment are only held by the Department from these dates.
The number of DCA claimants with an address in Waterford City or County in payment as of 31 December 2009 was 579. The number in payment as of 30 November 2010 was 575. Statistics for the period before 2009 are the responsibility of the HSE.
170. Deputy John Deasy asked the Minister for Social Protection the number of persons in Waterford city and county in receipt of basic supplementary welfare allowance in each of the past five years and to date in 2010; and if he will make a statement on the matter. [47356/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): The supplementary welfare allowance (SWA) scheme is the safety net within the overall social welfare system in that it provides a basic income support payment to eligible people in the State whose means are insufficient to meet their needs and those of their dependants. The main purpose of the basic supplementary welfare allowance scheme is to provide immediate and flexible assistance for those in need who do not qualify for payment under other State schemes.
The information the Deputy requested is shown in the following tabular statement.
| Year | Recipients |
|---|---|
| 2005 | 884 |
| 2006 | 689 |
| 2007 | 779 |
| 2008 | 881 |
| 2009 | 1,238 |
| 2010* | 1,100 |
171. Deputy John Deasy asked the Minister for Social Protection the number of persons in Waterford city and county in receipt of mortgage interest supplement in each of the past five years and to date in 2010; and if he will make a statement on the matter. [47357/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): The supplementary welfare allowance scheme provides for a weekly or monthly supplement to be paid in respect mortgage interest to any person in the State whose means are insufficient to meet their needs. The purpose of mortgage interest supplement is to provide short-term income support to eligible people who are unable to meet their mortgage interest repayments in respect of a house which is their sole place of residence. The supplement assists with the interest portion of the mortgage repayments only.
The information the Deputy requested is shown in the following tabular statement.
| Year | Recipients |
|---|---|
| 2005 | 68 |
| 2006 | 76 |
| 2007 | 91 |
| 2008 | 229 |
| 2009 | 438 |
| 2010* | 497 |
172. Deputy John Deasy asked the Minister for Social Protection the number of persons in Waterford availing of the rural social scheme in each of the past five years and to date in 2010; and if he will make a statement on the matter. [47358/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): Nationally, there is provision for 2,600 Participant plus 130 Supervisor places on the Rural Social Scheme (RSS). The Scheme is delivered locally by Local Development Companies operating in rural areas and Údarás na Gaeltachta. All available places have been allocated to each of the Local Development Companies and Údarás na Gaeltachta. Waterford Leader Partnership Limited manages the RSS in County Waterford and have been allocated 12 positions. The number of participants has remained at 12 for the past five years.
174. Deputy Denis Naughten asked the Minister for Social Protection when the National Carer’s Strategy will be published; the plans to address the specific issues related to young carer’s; and if he will make a statement on the matter. [47429/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): 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 was not possible to set targets or time limits which could be achieved. In that context, rather than publishing a [507]document which did not include any significant plans for the future, the Government decided not to publish a strategy. This position remains unchanged.
As regards young carers, in response to a commitment given in the Towards 2016 partnership agreement, the Office of the Minister for Children and Youth Affairs in 2008 commissioned Dr Allyn Fives and colleagues from the Child and Family Research Centre, National University of Galway, to carry out a study on young carers. The research took place during 2009 and the report was launched by Minister of State, Barry Andrews, T.D. at the annual conference of the Carers Association on 7th May 2010.
The particular service areas identified in the report, and the welfare of young carers as children, are primarily the responsibility of the Department of Health and Children and the Health Services Executive, as well as the Department of Education and Skills and the National Educational Welfare Board.
The Department of Social Protection provides income supports for adult carers who are unable to work because of their full time caring responsibilities. It does this through the carer’s allowance, carer’s benefit and the respite care grant, as well as additional supports such as the household benefits package and free travel. These supports are generally available to full time carers over the age of 18. The respite care grant is available to full time carers over the age of 16.
While the work of a young carer is clearly important in many families, it would not be in the interests of a child attending school that they be treated as a full time carer in need of income support in their own right.
175. Deputy Michael Ring asked the Minister for Social Protection when a person (details supplied) in County Mayo may expect to have their appeal for a disability allowance dealt with. [47450/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): The Social Welfare Appeals Office has advised me that an appeal by the person concerned was registered in that office on 18 November 2010. It is a statutory requirement of the appeals process that the relevant Departmental papers and comments by the Social Welfare Services on the grounds of appeal be sought. When received, the appeal in question will be referred to an Appeals Officer for consideration. As part of this consideration, the Appeals Officer will decide if an oral hearing is appropriate in this case.
The Social Welfare Appeals Office functions independently of the Minister for Social Protection and of the Department and is responsible for determining appeals against decisions on social welfare entitlements.
176. Deputy Denis Naughten asked the Minister for Social Protection if he will review the situation whereby persons in receipt of the carer’s allowance who are providing care to a child are eligible for the free travel pass, however, the child is not; if he has evaluated the cost of extending this entitlement to such children; and if he will make a statement on the matter. [47476/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): For a child requiring full-time care who is under age 16, a domiciliary care allowance of €309.50 per month may be paid to the parent or guardian. This payment is not means tested and is to provide for the additional costs [508]involved in providing care and supervision that is substantially more than that normally needed by a child of the same age. This may include additional travel costs.
A child who is attending school may be eligible for assistance under the Department of Education and Skills school transport scheme. The Health Service Executive (HSE) may also assist with transport costs in certain circumstances.
I have no plans at present to review the qualifying criteria for the free travel scheme.
177. Deputy Fergus O’Dowd asked the Minister for Social Protection if PRSI Class S cover will be extended to include other welfare schemes and benefits; and if he will make a statement on the matter. [47525/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): In 2011, self-employed workers will be liable for PRSI at the Class S rate of 4% — the same personal rate as is paid by ordinary employees.
However, employers also make a PRSI contribution of 10.75% in respect of their employees, resulting in the payment of a combined 14.75% rate per employee under full-rate PRSI Class A. As a result, ordinary employees can build entitlement towards the full range of social welfare benefits. Class S contributions will continue to provide cover for long-term benefits such as State pension (contributory) and widow’s/widower’s pension (contributory) only.
PRSI coverage is related to the risks associated with employment or self-employment, the annualised system of contributions for self-employed people and the practicalities of administering and controlling access to short-term payment for self-employed people. A system of separate arrangements for employed and self-employed workers within a social insurance context is common in other European social protection systems.
It may also be noted that the 2005 Actuarial Review of the Social Insurance Fund found that the fund favours the self-employed over the employed when both employer and employee contributions are included in respect of the employed person. The analysis demonstrates that, despite the fact that they are eligible for a narrower range of benefits, self-employed persons gain relatively more from the fund than employees.
There are no plans to extend cover for short-term benefits to this group of insured workers. Any such measure would have significant financial implications and would have to be considered in the context of a much more significant rise in the rate of contribution payable.
178. Deputy Fergus O’Dowd asked the Minister for Social Protection the changes, if any, to the length of time illness benefit is paid; and if he will make a statement on the matter. [47526/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): I understand that the Deputy is referring to changes to the Illness Benefit scheme introduced by the Social Welfare (Miscellaneous Provisions) Act 2008.
Illness Benefit is an income support payment for people of working age who are unable to work due to illness and who satisfy certain social insurance conditions. The scheme is intended to provide income replacement for insured persons during short spells of incapacity or illness, while other payments are available to people who are unable to work long-term because of a disability or a medical condition.
[509]Prior to the introduction of changes provided for in the Social Welfare (Miscellaneous Provisions) Act 2008, there was no limit on the amount of time for which Illness Benefit could be paid to people who had more than 260 social insurance contributions. An OECD review entitled “Sickness, Disability and Work: breaking the Barriers” noted that paying illness or sickness benefit without a time limitation was very unusual across the OECD, and pointed to the risk that people in such circumstances will never return to the labour market.
Against that background, the 2008 Act provided for entitlement to Illness Benefit to be limited to two years (or 624 days) duration for new claims from the 5th January, 2009.
179. Deputy Michael Creed asked the Minister for Social Protection the changes he proposes regarding eligibility for payments for persons with physical disability; and if he will make a statement on the matter. [47532/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): The Social Welfare (Miscellaneous Provisions) Bill, 2010, which is currently before the Oireachtas, includes provisions which will facilitate the introduction in 2011 of a Partial Capacity Benefit scheme.
In essence, the intention behind the scheme is to provide an opportunity for people with disabilities, and assessed to have an employment capacity which is restricted when compared to the norm, to avail of employment opportunities while continuing to receive an income support payment. It recognises that the current structure of the welfare system, which categorises people as ‘fit to work’ or ‘unfit to work’, does not reflect the reality for many existing welfare customers who have some capacity to work.
The scheme will be open to people who are in receipt of Invalidity Pension (IP) or who have been in receipt of Illness Benefit (IB) for a minimum of six months. Participation in the scheme will be voluntary and the scheme is designed in particular to respond to the needs of people who currently seek to avail of ‘exemptions’ in order to take up employment opportunities.
Under the terms of the legislation and the consequent regulations, it is envisaged that IP and IB customers who wish to avail of employment opportunities will be required to undertake a partial capacity assessment by a Medical Assessor. On the basis of this assessment of their employment capacity, their personal-rate payment may be adjusted. Any reduction in payment rates will be applied to the personal rate only and increases paid in respect of qualified adults and/or children will not be affected.
180. Deputy Róisín Shortall asked the Minister for Social Protection the steps he is taking to ensure a €30 saving on the household benefit package in 2011. [47549/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): My Department is currently reviewing the relevant schemes with a view to maximising the opportunities presented by greater competition in the energy and telecommunications sectors in terms of value for money.
181. Deputy Róisín Shortall asked the Minister for Social Protection the way in which he intends to reform rent supplement to yield savings of €60m in 2011. [47551/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): The purpose of rent supplement is to provide short-term support to eligible people living in private rented accommodation, whose means are insufficient to meet their accommodation costs and who do not have accommodation available to them from any other source. Since 2005 the number of individuals in receipt of a [510]rent supplement payment has increased from 60,176 to over 97,000 today. During the same period expenditure on the scheme has increased from some €368 million in 2005 to an estimated €509 million in 2010.
In the coming months my Department will be initiating a number of reforms to the rent supplement schemes in order to generate savings of €60 million in the next year. These reforms include entering discussions with the Department of the Environment, Heritage and Local Government with a view to aligning more closely the minimum contribution with the local authority differential rent scheme; reviewing entitlement of people who refuse local authority housing; the reduction of payments made to landlords with a corresponding reduction in rent limits, where appropriate; and increased control activities.
The introduction of a €2 differential between the rate of basic supplementary welfare allowance and other schemes from January 2011 will generate over €10 million in savings in the rent and mortgage interest schemes. These will arise as entitlement to rent and mortgage interest supplement is based on the weekly rates of basic supplementary welfare allowance. Pensioners, carers and people on basic supplementary welfare allowance will not be affected by this change.
182. Deputy Róisín Shortall asked the Minister for Social Protection the way the treatment benefit scheme will operate in 2011. [47552/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): The Treatment Benefit Scheme will continue to operate in 2011 as it did in 2010, whereby an annual dental examination and bi-annual optical examination are avail able free of charge to qualified customers.
The Medical Appliance scheme remains unchanged. The Department will pay up to half the cost of purchase or repair of a hearing aid on behalf of qualified customers, subject to a fixed maximum contribution of €760 for 1 aid or €1520 for 2 aids.
183. Deputy Róisín Shortall asked the Minister for Social Protection if he will provide full details of the measures relating to control, eligibility and structural reform referred to in the Budget documentation and the way cumulatively these will yield €49m in 2011. [47553/10]
Minister for Social Protection (Deputy Éamon Ó Cuív): These savings will be made through enhanced controls including the introduction of the Public Service Card, electronics signing, implementation of the Social Welfare Miscellaneous Act (1) 2010 and other structural reforms largely based on the proposals in the three policy documents published by my department recently. These policy documents are as follows:
A Policy and Value for Money Review of Child Income Support and Associated Spending Programmes;
Report on the Desirability and Feasibility of introducing a Single Social Assistance Payment for People of Working Age;
Value for Money Review of the Disability Allowance Scheme.
184. Deputy Mary Upton asked the Minister for Tourism, Culture and Sport the amount of national lottery money, if any, she expects to be allocated from the Department of Finance in [511]2011 for culture, sport and tourism projects, respectively; and if she will make a statement on the matter. [47445/10]
Minister for Tourism, Culture and Sport (Deputy Mary Hanafin): The elements of the Department’s Vote which are part-funded by the proceeds of the National Lottery are as follows:
Subhead C.1: Grants for sporting bodies and the provision of sports and recreational facilities under the Sports Capital Programme;
Subhead C.3: Grant-in-Aid provided to the Irish Sports Council in respect of general assistance to sports organisations and expenditure in relation to sports activities; and
Subhead D.7: Grant-in-Aid provided to the Arts Council in respect of arts activities.
The financial allocations in respect of Subheads C.1, C.3 and D.7 for the year 2011 are €28 million, €46.877 million and €65.167 million, respectively. Moreover, in respect of Subhead C.1, an additional amount of €5 million in unspent capital funding in 2010 is being carried forward to 2011 and is available for spending on this subhead.
185. Deputy John O’Donoghue asked the Minister for Tourism, Culture and Sport when the sports capital grant will be paid to a club (details supplied) to enable them to pay the contractor now that the work is completed. [47465/10]
Minister for Tourism, Culture and Sport (Deputy Mary Hanafin): The club in question has received two allocations under the Sports Capital Programme, €130,000 in 2007 and €100,000 in 2008. €83,601 of the 2008 allocation has been drawn down in three payments between October 2009 and March 2010. The Department received a letter from the club on 16 September last stating that the contractor employed to carry out the grant assisted works had gone into voluntary liquidation and stating that the club proposed to engage another building contractor to complete the work. The Department wrote back to the grantee on the same date setting out in detail the items to be submitted to the Department to obtain formal approval for the new contractor. The Department is currently awaiting a response to that letter.
€70,794 of the 2007 allocation was paid to the club in July 2009. A further invoice in the amount of €95,998.30 was received by the Department on 4 October 2010. It is a long standing condition of the Programme that the Department pays grants by reimbursing grantees’ costs when they submit original, valid, paid invoices or certificates of payment which have been certified by an architect or engineer. Allocations may be drawn down by way of a single payment or in stages as a project progresses. My Department has more recently sought copies of bank statements from grantees to verify that invoices have been paid before grants can be drawn down. The Department wrote to the club in on 12 November 2010 seeking copies of bank statements to verify that the invoice has been paid. A response has not been received.
186. Deputy Ulick Burke asked the Minister for the Environment, Heritage and Local Government the grants or financial supports that have been given to Bird Watch Ireland in support of the work of this organisation by him; and if he will make a statement on the matter. [47363/10]
[512]Minister for the Environment, Heritage and Local Government (Deputy John Gormley): I refer to the reply to Question No. 370, of 5 October 2010. My Department has allocated €293,275 for grant aid to Birdwatch Ireland for 2010.
187. Deputy Joanna Tuffy asked the Minister for the Environment, Heritage and Local Government the steps that have been taken to ensure the Haulbowline site is in compliance with European Union directives; and if he will make a statement on the matter. [48002/10]
196. Deputy David Stanton asked the Minister for the Environment, Heritage and Local Government further to Parliamentary Question No. 26 of 25 November 2010, if he has finalised the reply to the European Commission’s letter of formal notice regarding a valid waste authorisation permit for the Irish Ispat site at Haulbowline following a 2005 European Court of Justice decision on case 494/01; when he expects to receive a response from the Commission to the reply; and if he will make a statement on the matter. [47514/10]
Minister for the Environment, Heritage and Local Government (Deputy John Gormley): I propose to take Questions Nos. 187 and 196 together.
In June 2009, the Government decided that the Office of Public Works (OPW) would chair a working group to develop a structured and coherent approach to the further management and development of the former Irish Ispat site. The group is now established and has held a number of meetings.
The Terms of Reference of the OPW Working Group include looking at the regulatory requirements for the site and advising the Government on the most beneficial future use of the site. The future use will in itself determine the levels and extent of further works and/or remediation required, as well as helping to clarify the further regulatory requirements which may fall to be met.
The issue of an appropriate authorisation for the site was raised in a letter of formal notification issued to Ireland in respect of European Court of Justice case C-494/01. Ireland’s response to the letter of formal notice has been the subject of engagement with the European Commission and I expect to finalise a formal reply shortly.
188. Deputy Brian Hayes asked the Minister for the Environment, Heritage and Local Government the position regarding discussions between him and Dublin City Council in respect of land (details supplied); and if he will make a statement on the matter. [47324/10]
Minister of State at the Department of the Environment; Heritage and Local Government (Deputy Michael Finneran): In June 2008 my Department issued approval to Dublin City Council to proceed to detailed design stage for a social housing project at the site in question. My Department is currently awaiting Dublin City Council’s detailed proposal for this project. It is a matter for the Council, in the first instance, to prioritise and manage the advancement of projects within the programme, having regard to its available funding resources.
189. Deputy Denis Naughten asked the Minister for the Environment, Heritage and Local Government the funding provided to each local authority in 2009, 2010 and in the estimate for 2011 to fund housing adaptation grants; and if he will make a statement on the matter. [47432/10]
[513]190. Deputy Denis Naughten asked the Minister for the Environment, Heritage and Local Government the funding provided to each local authority in 2009, 2010 and in the estimate for 2011 to fund the mobility aids housing grant scheme; and if he will make a statement on the matter. [47433/10]
191. Deputy Denis Naughten asked the Minister for the Environment, Heritage and Local Government the funding provided to each local authority in 2009, 2010 and in the estimate for 2011 to fund the housing aid for older people scheme; and if he will make a statement on the matter. [47434/10]
Minister of State at the Department of the Environment; Heritage and Local Government (Deputy Michael Finneran): I propose to take Questions Nos. 189 to 191, inclusive, together.
My Department’s involvement with the Housing Adaptation Grant Schemes for Older People and People with a Disability relates primarily to the recoupment of a proportion of local authority expenditure on the payment of individual grants. The grant schemes, introduced in November 2007, are funded by 80% recoupment available from my Department together with a 20% contribution from the resources of the local authority.
It is a matter for each local authority to decide on the specific level of funding to be directed to each of the various grant measures from within the allocations notified to them by my Department and to manage the operation of the schemes in their areas from within their allocation.
Details of the Exchequer allocations to each local authority in 2009 and 2010 are set out in the table below.
The estimates provision for my Department’s housing programme in 2011 is €520 million. I will announce details of capital allocations to local authorities in respect of the grant schemes as early as possible in the new year.
192. Deputy John Browne asked the Minister for the Environment, Heritage and Local Government if he will consider making a payment to Donegal County Council towards the cost of incineration of whales beached on the strand at Rutland Island, County Donegal. [47455/10]
Minister for the Environment, Heritage and Local Government (Deputy John Gormley): My Department does not have funding available to allocate to any local authority for such purposes.
193. Deputy Denis Naughten asked the Minister for the Environment, Heritage and Local Government, further to Parliamentary Question No. 501 of 27 October 2010, his plans to reform the motor tax system to allow any motor tax office to issue a disc on behalf of an adjoining local authority; and if he will make a statement on the matter. [47473/10]
Minister for the Environment, Heritage and Local Government (Deputy John Gormley): At present a local authority may only issue a licence for a vehicle which is in its own county area. The possibility of permitting a licensing authority to issue a licence without such restriction is one of the issues being examined in the context of proposals for a revision and consolidation of motor tax law being developed in my Department at present. It is the intention in this regard that Heads of a Bill will be brought to Government in 2011.
194. Deputy Denis Naughten asked the Minister for the Environment, Heritage and Local Government if, in view of recent studies highlighting the problems with septic tanks, he will [515]introduce a grant for their upgrade and revise the level of grant aid available for group sewerage schemes; and if he will make a statement on the matter. [47479/10]
Minister for the Environment, Heritage and Local Government (Deputy John Gormley): While the Programme for Government included a commitment to introduce a scheme of support for the replacement and upgrade of septic tanks older than 15 years with newer systems, it is no longer feasible to introduce such a grant scheme in the light of budgetary constraints.
Under my Department’s Rural Water Programme, grants are available to provide groups of households with the opportunity of connecting to public sewerage networks through communal sewage collection systems that are, in turn, connected to local authority sewers. Alternatively, the communal sewage collection system may be connected to sewage treatment facilities provided by the groups themselves. The rate of grant available for Group Sewerage Schemes is €2,031.58 per house or 75% of the cost of the scheme, whichever is the lesser. The level of grant aid available must be managed within current budgetary constraints and therefore I have no plans to increase this amount.
195. Deputy Denis Naughten asked the Minister for the Environment, Heritage and Local Government the status of a housing project (details supplied) in County Roscommon; and if he will make a statement on the matter. [47480/10]
Minister of State at the Department of the Environment; Heritage and Local Government (Deputy Michael Finneran): In February 2010 my Department approved the proposal by Roscommon County Council to proceed to tender with Phase 1 of this p
