Wednesday, 19 October 2011
Dáil Éireann Debate
Deputy Micheál Martin: I am sure the Taoiseach will agree this is a very difficult and shattering morning for employees in Aviva, given that the company has confirmed that there will be up to 950 job losses. This is a devastating blow to workers, their families, the surrounding communities and the economy in general. It will be felt particularly by those working in Dublin, Cork and Galway.
Last September Aviva confirmed a company review in which job losses of this magnitude were flagged. At the time the Taoiseach stated he was “concerned” about the uncertainty caused by the announcements made at that stage and the comments in the media, which caused great anxiety for those who worked in Aviva. He added that the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and representatives of the IDA would be in direct contact with the company. Yesterday, the Minister stated he had been briefed by the company last week on some of the issues involved. He also indicated that they had discussed opportunities which the IDA had identified in respect of the company’s long-term plans and that the final details would be discussed with the company’s workforce. I understand that is happening.
There is a big difference, however, between being briefed and engaging with a company. What issues were discussed between the Minister and personnel from Aviva? Were measures taken to address areas of concern in Aviva to prevent the extensive job losses which have now been confirmed? Since the flagging of job losses in September, has the Taoiseach met or been in direct contact with Aviva headquarters to try to avert these extensive job losses or deal with these issues with the company? Specifically, has he met the chief executive officer of Aviva Europe, Mr. Igal Mayer, who I understand is in Dublin this morning?
The Taoiseach: This is an awful day for employees at Aviva. Those of us who have served in this House during the years will have experienced the shock, anxiety and consequences of job losses of any scale. Jobs give people dignity and the opportunity to contribute to the local economy, as well as to maintain their own lifestyle and family life. In that respect, I share the empathy of everybody in the House at the announcement made by Aviva management to workers in the Irish centres. It was in 2009 when Aviva announced its intention to restructure its 12 separate businesses across Europe, excluding the United Kingdom and the Benelux countries. This process has been ongoing since and there has been a series of leaks, rumours and speculation, which has added to the concern and anxiety of the workforce.
I do not have a copy of Aviva’s formal statement. I did not meet the European chief executive, but, as far as I know, the Minister for Jobs, Enterprise and Innovation met local, regional and European managers. When this first became known some time ago, there was an offer to have IDA Ireland stand ready to assist the company with the new outsourced jobs referred to to be based in Ireland but which would deal with issues arising abroad. IDA Ireland can only deal with that element of the company. I understand from reports that the jobs referred to will be based in Ireland. I also understand the details of the announcement made will take effect from March next year for two years. Deputy Martin is aware that Aviva acquired Hibernian, a company of long-standing in Ireland, and many of the workforce were employed by Hibernian in the first instance.
This is a stark reminder of what the Government must do in facing the competitiveness challenge for a range of companies and employment creation in general. The Deputy is also aware that the Clearing House Group of the Irish Financial Services Centre, IFSC, which is chaired by the Secretary General of the Department of the Taoiseach, is constantly considering the question of the further attraction of insurance jobs to Ireland. There has been much success in this regard in the IFSC. What is happening is a major shock for those directly involved and a stark reminder to everybody of the long road we must travel to have our competitiveness at a level at which we can protect jobs across the spectrum and grow the economy to a point where we will enjoy prosperity and create opportunities for all the people.
Like the Deputy, I feel for the employees of Aviva and, in so far as the Government can assist, it will. IDA Ireland has already been instructed by the Minister for Jobs, Enterprise and Innovation to work with the company where it can do so, but it remains to be seen what details are being given to the workers about the redundancy packages on offer, etc. I understand the decision will take effect from March next year for two years. We must focus continuously on what we must do as a country to have our competitiveness level right in order that we will be able to withstand such shocks. I empathise with the Deputy on his point about the distress caused for some workers this morning.
Deputy Micheál Martin: I am disappointed the Taoiseach did not engage with the company, given the concerns he articulated in the Dáil last September. Given the scale of the job losses announced, close to 1,000, I do not get a sense from the Taoiseach’s comments that there has been real engagement by the Government with the company either to restructure or otherwise avert some of the job losses announced. What we are hearing from the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, is about making contact and briefings. That is a far cry from actively and proactively engaging to try to change the situation, difficult and all as it may be. The Taoiseach knows the details announced this morning, as does the Minister. This is the national Parliament. The full details should be confirmed in the House because the Taoiseach knows every detail of what is being announced——
Deputy Micheál Martin: ——as the Minister has confirmed. In addition, in that context, will the European Stabilisation Fund be applied and activated? Has the Taoiseach received any indication from other companies in the insurance sector about job losses? Has he had direct contact with the leaders of the industry? He mentioned the Clearing House Group. The announcement could signal a serious issue within the insurance sector generally. I hope it does not, nonetheless, it flags an issue. In that context, has the Government dealt with the sector generally to avert future job losses and provide alternatives for the jobs lost?
The Taoiseach: The answer to Deputy Martin’s question is that I do not have all the details of the announcement. I understand management is speaking to the workforce. The Minister for Jobs, Enterprise and Innovation has been speaking to the company directly, which is his responsibility.
The Taoiseach: He has instructed IDA Ireland to work with the company to see what it can do. When I was in the IFSC recently, I talked to a range of facility providers. The Deputy is aware of the extent of employment provided in the IFSC. I have had no other contact with any insurance company about employment.
The Taoiseach: ——to speak to promoters about their views on how we could enhance our position to continue to attract quality jobs to the country and the IFSC, in particular. That is why I say the situation, unfortunately, is a very stark reminder of the scale of the challenge the country faces in becoming competitive, to protect employment and to be able to create new jobs. If we do not deal with that issue as a country, we will continue to make ourselves uncompetitive.
The Taoiseach: The Minister for Education and Skills, Deputy Quinn, will establish quickly whether EGF support can be accessed by Aviva workers. However, we cannot make such an assessment until we see the details of the redundancies involved. Deputy Martin is aware of this arrangement under European regulations. The Minister for Education and Skills will follow this through. The matter is up for further discussion in the Topical Issue debate as approved by the Ceann Comhairle. We are all concerned about the issue, but in dealing with this problem we want to get it right for the future of the country. That means we must make changes to legal services, the way the health system is structured and the cost base for every industry to ensure the competitiveness of the country as a whole.
Deputy Gerry Adams: Mar a dúirt an Taoiseach, tá a fhios aige go bhfuil oibrithe ag dul ag obair ar maidin chuig Aviva agus fios acu go mbeidh leath dóibh gan post. Is dona an scéal é go bhfuil siad agus a gceardchumann fágtha sa dorchadas faoin bplean atá ag Aviva dóibh ar maidin. Freisin, tá an Taoiseach ag rá go bhfuil seisean gan eolas faoin bplean atá ag Aviva.
Aviva is a profitable company and a big player in the Irish market, with a 20% market share. Its chief executive, Mr. Andrew Moss, claims there is a culture of entitlement in this country and that it must change. He is on a salary of £1.8 million, with the award of at least £1 million in shares and other perks last year. Does the Taoiseach agree that the entitlements of Aviva workers are being set aside to sustain the excesses of elites such as the one to which Mr. Moss belongs? The Taoiseach should have met Aviva representatives. IDA Ireland and other State agencies should have gone through the business plan of the company, particularly given that it gave notice of its review, downsizing and restructuring of the company. Did Department of Finance officials meet representatives of the company and unions to see what could be done to reduce costs and protect as many jobs as possible and, if not, why not?
The Taoiseach: Ní raibh an Teachta anseo inné nuair a bhí a chomhghleacaí do mo cheistiú faoi phoist agus faoin chruth atá ar dhaoine a bhfuil brú orthu imeacht óna dtithe de bharr droch thógáil. Dúirt mé léi gur botún mór é nach raibh tú anseo.
The Taoiseach: Níl mise ag seasamh anseo ag déanamh ráitis ar son Aviva. Tá siad ag caint leis na hoibrithe agus muid anseo. Níl na mion ráitis agamsa agus mé ag seasamh anseo. I do not determine the salary scales for the employees of Aviva, but I am concerned about the general situation in terms of our competitiveness as a country. This is the difficult road the Government must travel with the people to ensure the country remains competitive and that we can protect jobs, create new ones and achieve my ambition by 2016 of proving that this is the best small country in the world in which to do business. That is why, despite the opposition of the Deputy, we must change the structure of many things in this country such as legal services, the cost of medical services and so many other areas that require to be changed for the betterment of all the people and the economic competitiveness of the country.
The Deputy is aware that industry statistics show that the figures in respect of general motor and home insurance have dropped by 20% in the past two years. That is due to the fact that there are fewer houses, cars and businesses. The figures in respect of life assurance and pensions have dropped by more than 30%. Since 2009 Aviva has been indicating it intends to restructure its 12 businesses across Europe, excluding the United Kingdom and the Benelux countries. That means there is serious concern in this country about the workforce. In so far as the Government is concerned, the facilities and assistance of IDA Ireland will be available. The checking as to whether the European assistance fund can be made available will be carried out rapidly by the Department of Education and Skills. We want to move to a point where we can continue to focus on reducing our cost base, increasing our competitiveness and proving our attractiveness for continued locational investment in this country.
In response to Deputy Martin I said I had met IFSC representatives. The Clearing House Group which works under the auspices of the Department of the Taoiseach will continue to emphasise the essential items we must provide and the actions we must take to ensure the country will continue to be seen as competitive. I do not speak for the Aviva board, but I am concerned about the announcement which will affect so many workers. I understand that from next March for the following two years the outsourced jobs will be based in this country and that IDA Ireland stands ready on the Minister’s instructions to assist the company in so far as it can.
Deputy Gerry Adams: Expressions of serious concern are not good enough. Caithfidh an Taoiseach na poist seo a chosaint. Eisean an Taoiseach agus sin an jab atá aige. He noticed — he said it himself — this was coming since 2009. As he did not answer my question I have to presume the Minister for Finance did not get officials to meet with the company and the unions to see what cost reductions could be brought about.
The Taoiseach lectures me about my opposition. We are for investment in jobs. This Government is not investing any money in jobs. We will not cut our way out of this recession. We will not cut our way out of the difficulties we are in by bringing in the type of budget which he is heralding. We need to invest in job creation and defend citizens. The main focus and responsibility of a Government is to defend the citizens. The workers in Aviva have been treated disgracefully and it is a mark of extreme arrogance that a man who earns £1.8 million plus——
Deputy Gerry Adams: ——can say there is a culture of entitlement here. When the Taoiseach speaks about making the country more competitive he is saying in a different way what Mr. Moss has said. It is not good enough.
The Taoiseach: It is not good enough for the Deputy to equate Mr. Moss’s words with my views on this. He represents the Aviva company. I lead the Government and we have a job to do to make our country competitive.
The Taoiseach: I advise the leader of the Sinn Féin Party that Deputy Ó Caoláin was always accurate in his views about what should be done. I thank him for that comment. He will not stand by people living in a firetrap with that anxiety and concern.
The Taoiseach: I remind the leader of Deputy Caoimhghín Ó Caoláin’s party that the Minister for Jobs, Enterprise and Innovation has responsibility for jobs. He has been speaking with Aviva management.
The Taoiseach: It is why the Government introduced its jobs initiative. It is why the Government reduced the VAT rate across the hospitality sector, with implications for Louth and every other constituency. It is why the Government reduced the rate of PRSI for employers to make it easier to hold on to employees and take on new ones. For the first time ever, we are faced——
An Ceann Comhairle: Sorry Deputy, would you stay quiet for a moment? I ask people to remember that when we speak in this Chamber, we are speaking about people who are not here to defend themselves. All sorts of charges are being made. Political charge within this Chamber is permissible.
Deputy Joe Higgins: I blush to think Aviva workers might be looking to us with hope that we might rescue their jobs. On a different issue, is the Taoiseach ashamed to stand in the Dáil the morning after his Minister for Finance crushed the hopes of 300,000 mortgage holders? These mortgage holders, the majority of whom are ordinary people with partners and families, are swamped by negative equity and monthly mortgage payments that devour the bulk of their incomes. The Minister merely regurgitated the Keane report, a banker’s charter written by bankers.
The Government’s attitude to the victims of ruthless blackmail by property speculators and bankers has been insulting and begrudging. It constantly implies that an army of borrowers are waiting to cheat on their mortgages in order to excuse its inaction. Simply by an accident of birth dates, an entire generation is in mortgage bondage to the banks but the Government does not want to know. The Taoiseach knows about the man who fell among thieves while travelling from Jerusalem to Jericho and was left dazed and badly beaten by the side of the road. The first passersby to come along were a priest and a Levite, who diverted their gaze and no doubt murmured to themselves that he must have done something to deserve it. That is the Government’s response to the victims of the bankers and the developers.
Deputy Joe Higgins: The Keane report wants us to be scandalised that writing down rip-off mortgages would amount to €14 billion but the Taoiseach does not even blush when he proposes to gouge the Irish people for at least €47 billion in interest and principal between now and 2031 to compensate the private gamblers in Anglo Irish Bank alone. Negative equity and extortionate monthly payments are a millstone around the necks of not only these 300,000 mortgage holders and their families but also the entire Irish economy, by diverting billions of euro from services and shops that could sustain and create jobs.
Will the Taoiseach take a leap of imagination and policy, for a change, by marking down the rip-off speculative mortgages that people were blackmailed into taking? If the mortgages were marked down to their real value, and the monthly payments were marked down pro rata, a generation would be freed from this nightmare and the burden that is on them. The immense resources that would be freed in such circumstances would regenerate the real economy and sustain and create jobs and services.
The Taoiseach: Deputy Higgins has asked me to take a leap of imagination. I have no difficulty in taking the odd leap of imagination, but I have no intention of taking a leap of madness as he suggests. This is not a matter to be treated lightly. The Keane report identifies 50,000 people who are in serious difficulties with their mortgages. I understand that 70,000 people have made arrangements with their banks for a structure and a framework to deal with their problems. The Deputy is aware that 45,000 householders are now in arrears of more than 90 days. The Keane report proposed ten measures to set out how some people in mortgage difficulties could be dealt with. Some of the proposals included trade-down mortgages, split mortgages and mortgages-to-rent. That is why we are having a two-day debate in the House this week. In fairness, that is why the Government did not object to the Bill proposed by Deputy Michael McGrath in respect of this matter. If it is necessary to talk about it next week, we will do so. The point is that the Minister for Finance wishes to draw down the thread of every constructive proposition that is coming from any Deputy in this House, with a view to arriving at a conclusion that can help people who are in difficulties with their mortgages. I see reports in today’s newspapers about discussions between the troika and the banks.
The Taoiseach: Every Deputy has met people who are stressed and have mortgage concerns. Some of the people in question have been left bereft as a result of a death or an accident that took place without arrangements being made for such an eventuality. Other people are in difficulty with their businesses and are really strapped because of the conditions they entered into. We want to try to help people who are having serious problems with their mortgages. I do not have €14 billion to write off all the mortgages that are in difficulty. We are trying to consider the best of all the propositions and produce a set of decisions that will help the maximum number of people. I hope Deputy Higgins will make a good contribution to that process.
I will respond to the Deputy’s comments about the European situation. Obviously, the negotiations that were conducted by Ireland and its European colleagues have resulted in serious savings for the Irish taxpayer arising from the interest rate reductions. The Deputy is aware that we are pursuing the possibility, as outlined by the Minister for Finance, of being able to do something about the promissory note that was signed off on. The Deputy will appreciate that the €3 billion which has been committed every year for ten years would help the Government to focus on job initiatives, enterprise and employment. Clearly, there is scope for serious savings to be made by the Irish taxpayer in that area. We will pursue it at every possibility.
Deputy Joe Higgins: According to the Taoiseach, it is a leap of madness to say that hundreds of thousands of our people should be bailed out from blackmail mortgages that were gouged from them by speculators and developers with the consent of the regulator and the Government.
Deputy Joe Higgins: Apparently, it is a leap of madness that these people should be free from their debt and the economy should be freed up. Rather than paying the bulk of their incomes to the banks, these people should be free to spend their money on services in a way that would create tens of thousands of desperately needed new jobs. The Taoiseach thinks that is a leap of madness, but he does not think it is a leap of madness to give €80 billion or €90 billion to bankers and bond holders whose private debts for private profit we have no responsibility for. The Taoiseach needs to get real. He said he is intent on listening to different ideas. Why did the mortgage arrears working group not bring in home owners and mortgage holders who are in distress?
Deputy Joe Higgins: Why did it not bring in representatives of the Money Advice and Budgeting Service so that when the report came out, it was informed by the real world rather than by the agenda of bankers?
The Taoiseach: For the first time in the history of this State, our economic sovereignty is not under our direct control. If we want to make major or minor changes, in most cases we have to renegotiate a memorandum of understanding that was signed off some time ago.
The Taoiseach: When we commissioned the Keane report, we always said it would not be a repository of all wisdom. It is a reflection on the issues by good people and has produced ten serious proposals. We could have formed all kinds of committees that would have run for months. That would not have helped the people who are under pressure.
The Taoiseach: We need a swift response to a situation that is a crisis, every minute of every day, for those who are locked into it. Every Deputy, including Deputy Higgins and I, has met such people. Their concerns are palpable.
The Taoiseach: We know about all the things they have had to cut out, take away and reduce. The strain is evident on their faces. The Minister, Deputy Burton, has met many of these people. The Minister of State, Deputy Penrose, will meet representatives of New Beginning. They were in these premises yesterday to express their views and outline their propositions.
The Taoiseach: I am genuine when I say that if anyone here has an initiative or a proposition that is not currently on offer, is not in the Keane report or does not relate to New Beginning, we would like to hear it in the next two days. The Minister for Finance and the Government will respond, within whatever capability we have, by helping as many people as we can. As I said at the outset, it is important to distinguish one fundamental principle. I do not want the roof to be taken from over anybody’s head. I do not want to see that happen. It is also important to distinguish between those who can pay and those who will not pay.
An Ceann Comhairle: I want to make one thing quite clear. Each question dealt with under Leaders’ Questions should last seven minutes — two minutes for the person asking the question, three minutes for a reply from the Taoiseach, one minute for a supplementary question and one minute for a reply to that. I will stick rigidly to it. Members are beginning to abuse this by shouting and roaring. I am going to put a stop to it.
An Ceann Comhairle: I ask those who are in a position to do so to ask their questions and to reply while being conscious of the time. We are now nearly 40 minutes at this, and the situation cannot continue. I put Members on notice that, as and from tomorrow, that is the way it is going to be. Is that understood?
An Ceann Comhairle: I ask the leaders of groups to tell the people behind them to stay quiet while questions are being asked, and I ask the Taoiseach to ask his people to stay quiet so he can answer the questions. Is that understood?
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