Dáil Éireann

Vol. 707 Wednesday, No. 4 28 April 2010

DÍOSPÓIREACHTAÍ PARLAIMINTE PARLIAMENTARY DEBATES

DÁIL ÉIREANN

TUAIRISC OIFIGIÚIL—Neamhcheartaithe (OFFICIAL REPORT—Unrevised)

Wednesday, 28 April 2010.

Leaders’ Questions ……………………………… 609 Ceisteanna—Questions Taoiseach ………………………………… 612 Requests to move Adjournment of Dáil under Standing Order 32 ……………… 624 Order of Business ……………………………… 624 Non-Medicinal Psychoactive Substances Bill 2010: First Stage ……………… 637 Criminal Justice (Money Laundering and Terrorist Financing) Bill 2009: From the Seanad … … 637 Central Bank Reform Bill 2010: Second Stage (resumed)…………………651 Ceisteanna—Questions (resumed) Minister for Finance Priority Questions …………………………… 659 Other Questions …………………………… 671 Adjournment Debate Matters …………………………… 682 Central Bank Reform Bill 2010: Second Stage (resumed) ………………… 683 Private Members’ Business Strategic Investment Bank: Motion (resumed) …………………… 717 Adjournment Debate Patient Support Schemes …………………………… 741 Social Welfare Offices …………………………… 746 Litter Pollution ……………………………… 748 Questions: Written Answers …………………………… 751 DÁIL ÉIREANN

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Dé Céadaoin, 28 Aibreán 2010. Wednesday, 28 April 2010.

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Chuaigh an Ceann Comhairle i gceannas ar 10.30 a.m.

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Paidir. Prayer.

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Leaders’ Questions. Deputy Enda Kenny: The circumstances in Greece worsened last night and there is obviously a consequence for Ireland in terms of the cost of borrowing. Given the crisis in Greece and the flawed policy pursued by the Government in regard to Anglo Irish Bank, the Irish economy is more sensitive and vulnerable to international speculators than before. Will the Taoiseach state how much money is owed by Greece to the Irish banks? Can he give a breakdown of how much is owed to each individual bank?

The Taoiseach: Without having been given notice, I would not have that sort of information. It would be a matter for the Minister for Finance to reply to the Deputy.

Deputy Enda Kenny: The position, as reported to me, is that Greek exposure to the Irish banks could be of the order of €7 billion. This means the fiscal targets set by the Government are even further out than we had imagined. An EU official commented last week that Ireland would either have to move its targets back or find more savings. On the day of the budget, 9 December 2009, I asked the Taoiseach in the House whether the moneys being put into Anglo Irish Bank by the Government were to be regarded as spending. He said they were not and that they were an investment. EUROSTAT confirmed last week that the moneys do not represent an investment but are effectively money down the drain. It implied the transaction is to be regarded as spending by the Irish Government and must be included in its budgetary targets as a consequence. Is the Taoiseach now prepared to correct the record of the Dáil of 9 December 2009, on which he stated the moneys represent an investment rather than expenditure? Will he confirm that, as a consequence of the EUROSTAT decision on the Government’s recapitalisation programme for the banks, the Government will now have to change its fiscal parameters and targets? Will he confirm that the Government is still on target to achieve its fiscal targets? Will it have to find extra savings to meet those targets as a consequence of the EUROSTAT decision?

The Taoiseach: No. As the Government, including the Minister for Finance, pointed out on the occasion, the arrangement in question is a technical reclassification which changes on a once-off basis the deficit figure for this year. It has been factored in by the bond market and market analysts, as confirmed by the continuing support that exists for the Irish economy. That a private offer was successful at the beginning of this week in regard to recapitalisation issues in Bank of Ireland is an indication of a vote of confidence in the Irish economy. 609 Leaders’ 28 April 2010. Questions

Deputy Eamon Gilmore: I have been asking the Taoiseach about his knowledge of various malpractices and cronyism in the banking system that led to the problems currently being experienced by our banking sector and economy. In response, he has been telling me he did not hear of or know about any of these practices when he was Minister for Finance. As a result of parliamentary questions tabled by Deputy Joan Burton and freedom of information material obtained by The Irish Times and published in an article on Monday, we have some idea of the state of the Taoiseach’s thinking on these matters when he was Minister for Finance. In 2007, he set up an advisory forum on financial regulation and legislation. The forum was to draft the heads of a Bill to modernise financial regulation. It was quite active and met seven times in 2007 and 2008. There are two points of interest in respect of the forum. The first is that the Taoiseach brought in people from the banking and financial institutions to become part of the forum to draft the legislation. Second, he gave them a brief to prepare what was called “cross-sectoral principles-led regulation of the financial sector”, which is the official way of expressing light- touch regulation. As it turned out, the Government changed its mind on the kind of legislation in question and the means of preparing it because the forum was wound up quietly in 2009 and the legislation it was preparing has disappeared. Does the Taoiseach now accept, given all we now know about what was going on in the financial institutions and about their malpractice, that he made a mistake in bringing in the bankers to write their own legislation? Does he accept he made a mistake in giving them a brief to prepare light-touch regulation given what we now know about the consequences of light-touch regulation in the banking and financial services sector?

The Taoiseach: During the period 2007-09, there was a sea-change in regard to the view of the regulatory system and its adequacy. For that reason, whatever work was ongoing had to take account of the new circumstances after autumn 2008. On the membership of any advisory group, I am sure the members in question were recommended within the Department. There has been a very close working relationship between the financial services sector generally and the Department in terms of the determining how to develop the sector since the time the IFSC was set up. The sector has been providing much employment and revenue for the State down through the years. With regard to the question on the regulatory system, we have received from the new Finan- cial Regulator a very clear statement on the sort of regulatory regime he believes is required in the circumstances in which we now find ourselves. The desired changes are being mirrored by much change in other regulatory systems across Europe and globally. That is because of the inadequacy of the former regulatory system, which was clearly not sufficient to address the systemic risk that eventually emerged.

Deputy Eamon Gilmore: The Taoiseach would have the House believe that he had nothing to do with the past.

Deputy Joan Burton: He was the Minister.

Deputy Eamon Gilmore: He is the past, and certainly so as far as this is concerned because he was the Minister for Finance. He brought in bankers to draft legislation on banking, to write their own rules. This is what that committee was about. He gave them a brief. He now says that light touch regulation was something in the past, but he gave them a brief to prepare light touch regulation. The problem is that the Taoiseach says he saw and heard nothing, and he will admit nothing. He has learned nothing and changed nothing. 610 Leaders’ 28 April 2010. Questions

In another story we heard about in the past couple of days, which was highlighted on RTE’s “News at One” on Monday, Irish Nationwide hired forensic accountants to unearth and pursue the malpractices that were occurring in the building society. The forensic accountants hired were from the very firm that acted as auditors to Anglo Irish Bank, the people who could not see the loans that Seán FitzPatrick was transferring between Anglo Irish Bank and Irish Nationwide. Will the Taoiseach say what will happen when they come to forensically examine the loans that were transferred by Seán FitzPatrick from Anglo Irish Bank to Irish Nationwide and the role the auditors played in that process? There is a clear conflict of interest. Was the appointment of these people approved? The difficulty is that, because of the Taoiseach’s approach where he heard and saw nothing and has not learned anything, nothing has changed and we are back to the “same old same old” where the people on the inside track and in the golden circle are still being reappointed to examine themselves.

The Taoiseach: I do not accept that in any sense whatsoever. I do not accept the assertions being made by the Deputy. On the question of the involvement of the financial sector in the preparation of legislation, yesterday the Financial Regulator, Mr. Elderfield, and the Governor of the Central Bank, Professor Honohan, produced a consultation paper on various regulatory changes they now envisage in respect of corporate governance matters. They are putting that out for consultation so that they may hear the views of people in the industry. This does not mean that they are beholden to the industry, but rather that they are listening to the industry to see whether there are practical issues to be considered — to ensure that the best possible practice is applied and that it will be effective and will work. That is not regarded as something that should not be done, yet the Deputy suggests that the same process in the past was somewhat nefarious. I do not see the consistency in that approach.

(Interruptions).

The Taoiseach: That is the answer to that particular point.

Deputy Joan Burton: No, it is not. That is not the answer.

The Taoiseach: There is no reply I could give that would satisfy Deputy Burton on anything. That has been the experience of everyone.

Deputy Joan Burton: Given the Taoiseach’s performance——

The Taoiseach: I am sure there may even be a few people in her own party that have the same feeling from time to time. However, in relation to——

Deputy Joan Burton: The Taoiseach was always like that. It is a pity he never learned a bit——

(Interruptions).

An Ceann Comhairle: An Taoiseach, without interruption, please.

The Taoiseach: In relation to the appointment of the firm referred to by Irish Nationwide, that decision was taken by the building society’s operational management which it obviously stands over. I believe we should wait and see what work they do rather than deciding that they are not capable of doing it.

Deputy Eamon Gilmore: My question was about whether it was approved. 611 Ceisteanna — 28 April 2010. Questions

Ceisteanna — Questions.

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National Economic and Social Development Office. 1. Deputy Caoimhghín Ó Caoláin asked the Taoiseach if he will set out the role of the National Economic and Social Council and the National Economic and Social Development Office now in view of the dissolution of the National Economic and Social Forum and the National Centre for Partnership Performance; and if he will make a statement on the matter. [11532/10]

2. Deputy Eamon Gilmore asked the Taoiseach the current or proposed work programme of the National Economic and Social Council and the National Economic and Social Development Office; and if he will make a statement on the matter. [13686/10]

3. Deputy Enda Kenny asked the Taoiseach if he will report on the current work programme of the National Economic and Social Development Office; and if he will make a statement on the matter. [16304/10]

The Taoiseach: I propose to take Questions Nos. 1 to 3, inclusive, together. Deputies will be aware of the recent Government decision to amalgamate the three constituent bodies of the National Economic and Social Development Office by absorbing the National Economic and Social Forum, NESF, and the National Centre for Partnership and Performance, NCPP, into the National Economic and Social Council, NESC. The two bodies have been dissolved with effect from 1 April 2010 by orders which have been made under section 34 of the National Economic and Social Development Office Act 2006. During this year, the NESC will further adapt its work programme to ensure that appropriate aspects of the work of the NESF and NCPP are continued, while focusing on economic and social aspects of the ongoing crisis, including support for those who have lost their jobs, as well as on completion of its report on the role of the European Union in Ireland’s economic and social development. The NESC has embarked on a new study of Ireland’s services to the unemployed and active labour market policies. In addition, the council is beginning work on two other projects, namely, economic restructuring and enterprise adjustment in the crisis and service quality and provision in constrained public budgets. Following the dissolution of the two bodies, the National Economic and Social Development Office continues as the statutory agency that employs all staff and provides all administration and support services for the NESC, and submits to Government all reports, recommendations and conclusions arising from any projects carried out by the NESC. It also arranges for the publication of such items. The director of the NESC is also the chief officer of the NESDO. Under the legislation it is possible in the future, if the Government so decides, that other bodies could be created within the NESDO framework without the need for separate administrative support. This is a useful facility which can remain available to this and future Govern- ments. Its continuation gives rise to no substantive additional costs beyond those of the NESC itself.

Deputy Caoimhghín Ó Caoláin: I thank the Taoiseach for his reply. As I have indicated before, the NESF produced a series of extremely useful reports over the years which were always intended to inform the policy making of Government. Having taken significant guidance 612 Ceisteanna — 28 April 2010. Questions from several of the reports produced, I believe that they have stood the test of time. I am thinking in particular of the 2002 report on the health services which stated that structural change in the delivery of services was absolutely necessary. That was specifically to address the two-tier public-private health system in the acute hospital network. Most significantly, this particular NESF report indicated that the system was left unchanged in the Government’s health strategy. Clearly, despite the fact that the NESF reports were intended to inform policy making, the Government has chosen to ignore them time and again. They still stand the test of time, however, and have a currency and relevance for the future. I have two questions. Given that the specific report, which is just a sample of the range produced, showed that there was a far greater private use of public hospitals in this jurisdiction than in any other EU member state, as well as the unfavourable level of inequity relative to all other member states in access to first referral for consultant appointments for public as against private patients, what does the Government intend to do with the NESF’s body of work over all those years? What is the situation in relation to the reports produced by the NESF and the recommendations contained therein? With the passage of time it has been consistently demonstrated that the Government failed to take on board the recommendations, at the public’s cost in real terms. I take note of what the Taoiseach has said in his reply, but will the NESC now fulfil the same role as the NESF? Will it carry out required research and make recommendations to Government in relation to social and economic policy across all the policy areas that affect the daily lives of our citizens?

The Taoiseach: The Deputy’s questions are detailed ones about the contents of reports, which may be better put to the line Ministers concerned. I do not have a detailed knowledge of all the reports referred to. However, I will make the general point that the purpose of the change in the consultants’ contract is to ensure that the availability of consultant staff is properly monitored and that the service is consultant-provided rather than consultant-led. This means that people are entitled to see their consultants, regardless of whether they are public or private patients, on the basis of medical need. The changes in the contract were to ensure those contractual commitments were adhered to. I commend the work done by the National Economic and Social Forum, which for many years was a good collaborative and participative forum under the chairmanship of Maureen Gaffney. It covered a whole range of social policy as well as economic areas. Many of its reports served a purpose in terms of providing a voice for those who are members of the forum and also, as part of the social partnership process, feeding into policy formulation and the various strands that exist in this regard. I cannot be more specific than that. Questions about the recommendations of specific reports should be forwarded to the line Ministers concerned.

Deputy Caoimhghín Ó Caoláin: I agree with the Taoiseach that the work of the NESF was indeed invaluable. However, my concern is now about what will be done with the body of work it produced over the years. I am particularly interested in the area of health and children, but across all subjects the Government has sadly ignored much of what the NESF has commended to it in terms of policy direction. The Taoiseach mentioned the consultants’ contract. Sadly, any Dáil Deputy, including those on the Government back benches, will be able to tell him that we have nothing but a plethora of difficulties in terms of access to consultants in the public health system by ordinary people who are dependent on medical cards. The waiting times for first appointments are outrageous. In real terms, there has been no difference in the vast majority of cases that are brought to my attention on a weekly basis, including as recently as yesterday. It is all very well—— 613 Ceisteanna — 28 April 2010. Questions

An Ceann Comhairle: Does the Deputy have a question?

Deputy Caoimhghín Ó Caoláin: The Taoiseach raised the point and I am responding to it. I will not delay.

An Ceann Comhairle: I know, but there is too much comment and not enough questions.

Deputy Caoimhghín Ó Caoláin: It is not acceptable that the Government negotiated a new consultants’ contract and then left it to the consultants themselves to police their adherence to it. There is not 100% adherence——

An Ceann Comhairle: Could we have a supplementary question, please, Deputy?

Deputy Caoimhghín Ó Caoláin: ——and it is important that Government takes up this issue. The last question in my opening engagement with the Taoiseach was about the role of the National Economic and Social Council. I ask again for clarification. Is it intended that the NESC will continue the work that hitherto had been done by the NESF, including research and the recommendation of specific policy directions across all key areas related to the social and economic condition of society?

The Taoiseach: The NESC was the first of the bodies established back in 1973 as an advisory body to the Government on economic and social matters. Its mandate was to analyse and report on strategic issues relating to the efficient development of the economy, the achievement of social progress and the development of a strategic framework for the conduct of negotiations and agreements between Governments and social partners. The role of the NESC will not change considerably following the dissolution of the NESF and the NCPP. The particular experience and expertise of the staff of those two bodies who are now working within the NESC secretariat will add further dimensions to NESC’s traditional role of policy analysis by facilitating greater exploration of the challenges of policy implementation and, where appropriate, the study of the employment relations dimension of both economic development and public sector transformation. The secretariats that have served the NESF and the NCPP will continue to work within the NESC.

Deputy Eamon Gilmore: First there was one body, the NESC, which was, as the Taoiseach said, set up in 1973 and has produced a large number of reports over the years. Then there was the NESF, which has done great work, and then the partnership body, the NCPP. The National Economic and Social Development Office was then set up to co-ordinate these three bodies and provide shared services for them. Next, the Government decided it would amalgamate the three former bodies into one by absorbing the NESF and the NCPP into the NESC. However, it left in place NESDO. Thus, we now have one body, the NESC, and one body to co-ordinate it, NESDO. When the then Minister of State, Deputy Carey, was introducing this legislation in the House he told us that NESDO was being left in place in case the Government decided to create any other bodies and that it would be necessary to have a co-ordinating body in place should the Government decide to create another body under its remit. What is now the function of NESDO, since there is now only one body to co-ordinate? How many staff does it have and how much does it cost? The Minister of State said, when introducing the arrangement, that he expected further savings to arise in future years as a result of the amalgamation. Can the Taoiseach give us some indication of what those savings are? I note there are five Secretaries General on the NESC council. Does the Taoiseach consider that the presence of such a large number of Secretaries General compromises the role of the 614 Ceisteanna — 28 April 2010. Questions

NESC, particularly when it comes to providing critical examination of the delivery of programmes by the State sector?

The Taoiseach: I am sorry; what was the Deputy’s final question?

Deputy Eamon Gilmore: It was about the presence of five Secretaries General on the council of NESC, one of the roles of which is to consider and evaluate the performance of Depart- ments. Does the Taoiseach feel that the presence of such a large number of Secretaries General compromises the organisation in carrying out critical evaluation of the way in which the State sector is delivering services and programmes?

The Taoiseach: I do not think so. I think there is sufficient rigour.

Deputy Eamon Gilmore: That is a surprise.

The Taoiseach: Well, I do not think so. The Deputy might think that because——

Deputy Eamon Gilmore: I accept that.

The Taoiseach: The Deputy has a view that with five Secretaries General around the table, nobody can open his or her mouth. However, the Secretaries General bring the input of their departmental work to the table. There are other members of the NESC, independent of these, who are quite capable of putting across their own points of view. Out of that an accurate picture emerges. Without some sort of departmental input, we might not obtain an accurate analysis. As always in such cases, there is a requirement to know what is happening in an operational sense and a requirement to know what needs to be done arising from this and what changes should be recommended. There may be an idea that there is a repository of wisdom outside the public service and that these people can come in and tell the public service how it should be run — or, alternatively, that the monopoly of wisdom is within the public service and people outside do not know what they are talking about — but neither of these is true. This is not the 11 o’clock best way to provide a policy analysis. We need a rigorous objective and challeng- ing analysis, but we also need an input that explains the present situation and the constraints. Which service delivery mechanisms are causing problems and where are there pressures on services? How can this be changed? How are Departments interacting with each other? How do we better co-ordinate the governmental system? There is a fair amount of institutional memory and expertise to be brought to the table to deal with all of this. In terms of portraying people as too compliant or too indifferent because of the presence of certain others, neither point of view is correct. One might ask whether less is better. I do not know the answer but there is a reason for their involvement and NESC has always been able to come forward with substantive, balanced and informed reports. The presence of people who are of the system and those who come from outside it probably contributes to an analysis of where change is necessary and, more importantly, how it can be achieved. In regard to grant-in-aid and the retention of NESDO, there was no substantive increase over and above the cost of NESC. Under the legislation, it will be possible in the future to create other bodies within this framework if the Government so decides. The retention of the framework does not incur substantive costs and it is available to ensure co-ordination in the event of other bodies being required. We believe it is prudent to leave it in place under the legislation given that there are no substantive additional costs beyond those of NESC itself. The Department Estimate for 2010 in respect of these activities is €3.854 million. This represents a decrease of €1.205 million over the 2009 Estimate. The savings on the non-pay side 615 Ceisteanna — 28 April 2010. Questions

[The Taoiseach.] have arisen mainly as a result of savings on rent. The dissolution of the forum and the NCPP has made it possible to reduce the accommodation required. Additional savings will arise in 2010 as a result of this decision but these are largely offset by once-off establishment costs for the enlarged NESC. However, further savings are likely to be made from efficiency improvements in the years ahead as the decision is implemented. Overall, NESDO employs 20.4 whole time equivalent staff, broken into areas including the director, various social policy analysts and senior economists. The existing employees of the forum and the NCPP have been given the option of transferring to NESC, which will maintain certain aspects of their work programmes.

Deputy Eamon Gilmore: I refer the Taoiseach to the last report of NESC, which issued in October. Among the observations made in that report on the state of the economy was that Ireland’s tax burden remains significantly below the European Union average and that an increase in the tax share of GNP from 2009 levels will be needed to provide satisfactory public services and welfare benefits. That recommendation flies in the face of what I understand has been Government policy for some time. What consideration has the Government given to this report and, in particular, NESC’s recommendations on taxation?

The Taoiseach: The Deputy will be aware from last year’s supplementary budget that there has been a fair increase in income tax levels and impositions on income earners as a result of the need to close the gap between expenditure and revenue. At a time of fragile economic recovery, we are doing as much as we can to protect and maintain jobs and increase competitiveness. Over the longer term, that will involve expenditure savings and the budgetary policy for this has been outlined to and agreed with the European Commission. Tax takes are a higher percentage of GNP or GDP in continental countries and the demo- graphics are also different. At the time when there was growth in this economy, growth rates in those countries were not as great as we achieved in Ireland. Mr. Trichet and others have looked to the model we tried to progress in terms of maintaining low tax rates on income as one of the ways by which employment growth could be encouraged. The wider issue that arises of expanding the tax base over time has been considered by the Commission on Taxation. We have to look to that as a means of finding a sustainable way forward in light the new circumstances in which we find ourselves. The issue has to be carefully considered in the context of those recommendations.

Deputy Enda Kenny: In view of the many fine reports produced by NESC over the years, a number of which concerned the quality of our public services, I ask the Taoiseach to update us on the current status of the Croke Park deal. Many of the public services that the public expect are not being provided because of the industrial difficulty. This is clearly impacting on people who did not cause the economic and fiscal difficulties we now face. Would the Taoiseach like to comment on that matter?

An Ceann Comhairle: We are broadening the issue but I ask the Taoiseach to respond.

The Taoiseach: These matters are beyond the remit of the questions but I will make the general point that they are being considered and ballots are being organised on the draft agreement drawn up in Croke Park. I believe it provides the best way forward and I would like everybody to share the view that industrial strife and continuing problems in that area will do nothing for job security or income stability in the medium or longer term. The implementation of the agreement will give us the means by which we can provide people with a period of stability and an opportunity for trade union representatives to participate in the transformation of public services which everyone agrees is necessary and urgent. 616 Ceisteanna — 28 April 2010. Questions

Cabinet Committees. 4. Deputy Caoimhghín Ó Caoláin asked the Taoiseach if he will state the Cabinet committees on which he serves and their membership. [11533/10]

5. Deputy Eamon Gilmore asked the Taoiseach if he will list the Cabinet sub-committees on which he serves or is represented. [12490/10]

6. Deputy Caoimhghín Ó Caoláin asked the Taoiseach the changes in personnel in Cabinet committees arising from the Cabinet reconfiguration of 23 March 2010 [13708/10]

7. Deputy Enda Kenny asked the Taoiseach the Cabinet committees in which he serves; and the membership in each case [16303/10]

The Taoiseach: I propose to take Questions Nos. 4 to 7, inclusive, together. I sit on the following Cabinet Committees: European affairs; climate change and energy security; science, technology and innovation; social inclusion, children and integration; health; Irish and the Gaeltacht; economic renewal; and transforming public services. The necessity for and the roles and working methods of Cabinet committees are kept under review. Their primary function is to allow for engagement by Ministers with important policy issues of cross-departmental significance. They are supplementary to the engagement with these issues by the Government as a whole. Significant policy issues in all of these areas are matters for decision by the Government in accordance with the Cabinet handbook. For the information of Deputies, the table lists all Cabinet committees and their membership following the recent changes of Ministers and Ministers of State.

Cabinet Committee Membership

European Affairs Taoiseach (Chair) Minister for Enterprise, Trade and Employment Minister for Finance Minister for Health and Children Minister for Foreign Affairs Minister for the Environment, Heritage and Local Government Minister for Communications, Energy and Natural Resources Minister for Agriculture, Fisheries and Food Minister for Justice, Equality and Law Reform Minister for Transport Minister of State for European Affairs Attorney General

Climate Change and Energy Security Taoiseach (Chair) Tánaiste and Minister for Education and Science Minister for Finance Minister for the Environment Heritage and Local Government Minister for Communications, Energy and Natural Resources Minister for Agriculture, Fisheries and Food Minister for Foreign Affairs Minister for Health and Children Minister for Transport Minister for Enterprise, Trade and Employment

617 Ceisteanna — 28 April 2010. Questions

[The Taoiseach.] Cabinet Committee Membership

Minister for Communications, Energy and Natural Resources Minister of State for Horticulture, Sustainable Travel and Planning and Heritage Attorney General

Science, Technology and Innovation Taoiseach (Chair) Tánaiste and Minister for Education and Science Minister for Enterprise, Trade and Employment Minister for Finance Minister for Communications, Energy and Natural Resources Minister for Health and Children Minister for Agriculture, Fisheries and Food Minister of State for Science, Technology, Innovation and Natural Resources

Social Inclusion, Children and Taoiseach (Chair) Integration Tánaiste and Minister for Education and Science Minister for Finance Minister for the Environment, Heritage and Local Government Minister for Health and Children Minister for Justice, Equality and Law Reform Minister for Social and Family Affairs Minister for Community, Rural and Gaeltacht Affairs Minister for Enterprise, Trade and Employment Minister for Children and Youth Affairs Chief Whip Minister of State for Housing and Local Services Minister of State for Disability Issues and Mental Health Minister of State for Public Service Transformation and Labour Affairs Minister of State for Older People and Health Promotion Minister of State for Equality and Human Rights, and Integration

Health Taoiseach (Chair) Minister for Health and Children Minister for Finance Minister for Children and Youth Affairs

Irish and the Gaeltacht Taoiseach (Chair) Tánaiste and Minister for Education and Science Minister for Enterprise, Trade and Employment Minister for Finance Minister for Transport Minister for Community, Rural and Gaeltacht Affairs Minister for Social and Family Affairs Minister for the Environment, Heritage and Local Government Minister for Foreign Affairs Minister for Communications, Energy and Natural Resources Chief Whip

618 Ceisteanna — 28 April 2010. Questions

Cabinet Committee Membership

Aspects of International Human Minister for Finance (Chair) Rights Minister for Foreign Affairs Minister for Justice, Equality and Law Reform Minister for Transport Minister for the Environment, Heritage and Local Government Minister for Communications, Energy and Natural Resources Attorney General

Economic Renewal Taoiseach (Chair) Tánaiste and Minister for Education and Science Minister for Finance Minister for Enterprise, Trade and Employment Minister for Health and Children Minister for the Environment, Heritage and Local Government

Transforming Public Services Taoiseach Tánaiste and Minister for Education and Science Minister for Finance Minister for Health and Children Minister for the Environment, Heritage and Local Government Minister for Justice, Equality and Law Reform Minister of State for Public Service Transformation and Labour Affairs

Strategic Directions for Local Minister for the Environment, Heritage and Local Government (Chair) Government Minister for Transport Minister for Social and Family Affairs Minister for Communications, Energy and Natural Resources Minister for Finance Minister for Enterprise, Trade and Employment Minister for Community, Rural and Gaeltacht Affairs

Deputy Caoimhghín Ó Caoláin: Which Cabinet committee deals with banking, the financial institutions, the State guarantee and NAMA? Would the Taoiseach accept that given the huge sums of public money poured into the financial institutions, it is not unreasonable for people to believe he who pays the piper should call the tune? We have learned, however, that the Minister for Finance approved the top-up to the pension arrangements for the CEO of Bank of Ireland. The Taoiseach personally defended that decision in the Dáil last week. What Cabinet committee is addressing these matters? 619 Ceisteanna — 28 April 2010. Questions

[Deputy Caoimhghín Ó Caoláin.]

Major strategic decisions are being taken on an almost daily basis, certainly in the recent past, by the Minister for Finance, yet there is no clear indication as to where is the prior engagement in this regard in terms of the collective responsibility of Cabinet. Without breaching Cabinet confidentiality, all of which I understand, will the Taoiseach give the Chamber an indication as to which committee is taking the overview and oversight responsibility along with the Minister for Finance and the Taoiseach vis-à-vis the issues that are unfolding daily regarding banking, the financial institutions, the State guarantee and NAMA? On a second matter, which Cabinet committee is tasked with addressing the issue of the promised referendum on the rights of children? Is it the case that there is a special Cabinet committee that deals with all referenda proposals or is it a particular Cabinet committee that deals with the particular remit of the referendum focus? For example, in terms of children’s rights being placed in the referendum, would that come under a Cabinet committee dealing with health and children? Will the Taoiseach clarify this point? Is there a Cabinet committee with responsibility for employment policy and strategy? We have all noted with some alarm that there is no longer a Department, a Minister or a Minister of State in whose title the word “employment” appears as a result of the Taoiseach’s recent reshuffle. The word “employment” is crucial. Is it the case, as I have already inquired, that there are a raft of Cabinet committees addressing the issue of employment and that it has been piecemealed out in regard to specific sectors under the different Cabinet committees’ roles and responsibilities? Would the Taoiseach agree that, in regard to employment in particular, there should be a specified, stand-alone, dedicated Cabinet committee, given the serious situation this economy is facing today, with growing numbers of young people being offered only the dole queue or the emigrant flight or boat? Surely we should have a dedicated Cabinet committee dealing with all of the issues in regard to fighting unemployment, devising strategies to protect and save jobs and, very importantly, creating new ones.

The Taoiseach: No. On the issue raised by the Deputy regarding employment, the Cabinet committee on economic renewal would deal with all of the major issues in the economic area. Much detail is dealt with in the Cabinet, such as the detail on the banking institutions. From time to time, a related issue may arise at a Cabinet committee but, at the end of the day, Cabinet discusses the ultimate issues. These committees are called together where there are cross-sectoral issues that need to be resolved and discussed, and where policy decisions need to be co-ordinated. Then, as a result of discussion at committee, a proposal is brought forward to Cabinet for decision. That is the position. With regard to the question on the referendum on children, as I said in the House yesterday on the Order of Business, the Minister of State with special responsibility for children, Deputy Barry Andrews, is at present engaged with the various Departments arising out of the report of the Oireachtas committee, which, as I said, did some very good work, to see in what way that can be progressed with the Attorney General’s office before coming to Cabinet with a considered proposal.

Deputy Caoimhghín Ó Caoláin: The Taoiseach has only referred to two of the three questions in his reply and they hardly measure up as replies, with all respect to him. A Cabinet committee on economic renewal does not address the concerns I have expressed in regard to the existing terrible reality of unemployment in our economy and the growing threat that daily presents. I am not convinced this demonstrates any resolve on the Government’s part as it has

620 Ceisteanna — 28 April 2010. Questions already failed to present a strategy to sustain current employment, let alone create new employment.

An Ceann Comhairle: Can we have a supplementary question?

Deputy Caoimhghín Ó Caoláin: With regard to children, we want to see the referendum on children’s rights brought forward in the current year. I was a member of the committee that brought forward the report and recommendations to Government of a specific wording that we would be all be willing to row in behind and urge endorsement of by the electorate. I again ask about the issue of the referenda. The Taoiseach was asked these questions yesterday regarding whether a referendum or referenda would be held in the current year, and no decision has been reached. Is there any address of these issues? There are a number of possible referenda that need to be addressed, most particularly the one on children in the current year. Will the Taoiseach tell us if this is being addressed and by what committee? The question the Taoiseach did not address at all is in regard to what Cabinet committee currently has responsibility for addressing all of the areas concerning banking, the financial institutions, the State guarantee and NAMA. This is a huge area. With respect, given the particular roles of the Minister for Finance, there is a concern that there needs to be some Cabinet grouping with which——

An Ceann Comhairle: Can we conclude with a question?

Deputy Caoimhghín Ó Caoláin: ——the Minister would engage on a continuous basis. On the one hand, he is responsible for, hopefully, bringing about a sea change in terms of the conduct and governance of the financial institutions but, on the other, we only discovered by a slow extraction, worse than any dentist’s operation, the information that he had actually approved Mr. Boucher’s €1.5 million pension top-up. I repeat the question. Is there a Cabinet committee dealing with all of these matters? Does the Minister for Finance engage with that Cabinet committee? Will the Taoiseach be specific?

The Taoiseach: I have the answered the question. There seems to be an assumption in the Deputy’s question that all aspects of Cabinet have to be doled out to every committee or that the committee covers all of the role of the Cabinet. The Cabinet meets weekly and it is the place where the decisions are taken. The function of Cabinet committees arises where there are policy issues to be discussed in preparation for Cabinet discussions, in finalising positions between Departments or where there are varying views between Departments that need to be heard, discussed and resolved, or where some political input is required to progress the issue and get it to Cabinet with a view to having an outcome that is a coherent decision — that is what the process is about. There are weekly Cabinet meetings and, from time to time, as work is required or an issue arises, a committee is called. We do not just have meetings for the sake of having them. We have them if there is an issue to be resolved, and they are in place for that purpose. With regard to employment, I made the point to the Deputy that the Cabinet committee on economic renewal was established to focus on the key policies and programmes necessary to ensure an appropriate and cohesive response to the scale of the challenges facing the economy. Out of that emerged the Government’s smart economy framework for sustainable economic renewal. The committee continues to oversee implementation of plans for a return to growth within the parameters of our five-year consolidation programme for restoring stability to the public finances.

621 Ceisteanna — 28 April 2010. Questions

[The Taoiseach.]

With regard to banking matters, I have explained that those issues are dealt with in the main at Cabinet. There are issues that are ongoing on a daily, monthly and weekly basis. Cabinet meets every week and sometimes it meets twice a week, depending on what it is we have to discuss.

Deputy Caoimhghín Ó Caoláin: There is no specific Cabinet committee in that area.

The Taoiseach: There is no Cabinet committee on banking. There is a Cabinet that deals with banking. The Cabinet has been making many big decisions, as the Deputy said. The existence or otherwise of a committee is neither here nor there in that respect. As to this idea that one farms out all the work to all the committees and brings it back in as if one is out collecting sheep and bringing them in at evening time, that is not the purpose of committees.

Deputy Eamon Gilmore: Which of the committees has dealt with the issue of the carbon levy? In particular, has that committee addressed the promise the Government made that it would introduce a special fuel allowance to assist pensioners and the 300,000-plus families on low incomes who were promised at the time of the budget that an allowance would be introduced before the carbon levy was introduced? The carbon levy on heating oil is being introduced on Saturday which mean an increase of 9% in the price of heating oil. The Minister, Deputy Ó Cuív, yesterday issued a statement saying he will do something about an allowance next October. The problem is a large number of pensioners, particularly elderly people, will have to buy heating oil between now and October and they were promised there would be an allowance.

An Ceann Comhairle: Detailed questions should be directed to the line Minister.

Deputy Eamon Gilmore: Which of these committees has been dealing with the issue of the carbon levy and which of these committees has failed in its responsibility to bring forward the promised fuel allowance? I wish to ask the Taoiseach about the ghost housing estates all over the country, half-finished housing estates and empty houses that cannot be sold. NAMA is talking about demolishing some of these estates and dwellings. Has the housing committee been considering the issue of the ghost housing estates? Has there been any consideration given to how the so-called ghost housing estates——

An Ceann Comhairle: The Deputy should submit a parliamentary question to the line Mini- ster on these matters.

Deputy Eamon Gilmore: ——might address the problem of the numbers of people who are on local authority waiting lists, the provision of housing for returning emigrants and the need for sheltered accommodation for elderly people? Has the health committee recently considered the Government’s policy on co-location? The Taoiseach will recall this was the Minister for Health and Children’s plan which she announced five years ago and which she said would fast-track the provision of hospital beds. Is the co- location policy dead or is it being actively considered by the health committee or by any other of the committees listed here?

The Taoiseach: The Deputy will be aware a statement was issued yesterday by the Minister, Deputy Ó Cuív, with regard to the fuel issue and that statement outlines the Government’s position which is being dealt with at Cabinet level.

622 Ceisteanna — 28 April 2010. Questions

With regard to the housing issue, the Minister of State, Deputy Michael Finneran, has been actively engaged with local authorities on many occasions and has been recommending the option of leasing existing housing stock as a means of ensuring that councils can take up capacity where this is available and suitable. He has implemented various initiatives to take account of the new reality and to help local authorities meet their statutory responsibilities. The health committee has been discussing the 2010 national service plan, finance and industrial issues, HSE restructuring and progress on the A Vision for Change strategy. There has been progress on specific matters regarding the capital programme but the financial situation has changed in respect of some of the private financing initiatives, the PPPs and co-location which is about ensuring we improve access for public patients and ensuring the hospital beds designated for public patients are given to them.

Deputy Eamon Gilmore: With regard to the carbon levy and the fuel allowance, the statement yesterday by the Minister, Deputy Ó Cuív, does not address the issue; all it does is state that the Government has welched on the promise it made to these 300,000 low-income households——

An Ceann Comhairle: These questions are in too much detail. It is not appropriate for Taoiseach’s Question Time.

Deputy Eamon Gilmore: ——that there would be a fuel allowance, a vouched fuel system introduced before the carbon levy. This was confirmed by the then Minister for Social and Family Affairs, Deputy Mary Hanafin, last February. The Government has now welched on that promise to the poorest households in the country. It is a disgrace. The Government is telling them they will have to wait.

An Ceann Comhairle: Will the Deputy consider submitting an Adjournment matter to the Minister?

Deputy Eamon Gilmore: A total of 300,000 households will have to wait until next October. The Government is telling people with empty oil tanks who, if last year is anything to go by, will have to go through a number of cold months between now and October, that they will not be able to buy heating oil until next October when this promise is delivered. That is scandalous. The Taoiseach has talked in general terms about the work of the health committee. Is the Government going ahead with the co-location plan? Is the co-location plan dead in the water? We know — the Taoiseach has effectively acknowledged this in the House — that because of the changed economic circumstances the private finance does not now appear to be available for the planned co-located hospitals. Is the plan over? Will any of these co-located hospitals be built?

An Ceann Comhairle: That is a matter for the Minister for Health and Children.

Deputy Eamon Gilmore: No, it is about the health committee. One of these committees is the Cabinet committee on health. The Taoiseach has acknowledged that it has been considering the capital budget and the health capital programme, and this is part of it.

An Ceann Comhairle: The Deputy will have to put down a question to the Minister for Health and Children if he wishes to pursue it.

Deputy Eamon Gilmore: Are the co-located hospitals going ahead or are they over? Is co- location finished?

623 Order of 28 April 2010. Business

The Taoiseach: Those proposals are still being proceeded with. They have not been progressed as quickly as would have been the case in different financial circumstances. I do not have the detailed information to hand. I had the information with me on another occasion. I could update the Deputy as to the situation but a question to the Minister for Health and Children will obtain that information.

Deputy Eamon Gilmore: What about the fuel allowance? What will happen to the pensioners who will be left in the cold until October? Is the Taoiseach going to leave them in the cold?

The Taoiseach: They will not be in the cold.

An Ceann Comhairle: I ask Deputy Gilmore to allow Deputy Kenny speak.

Deputy Enda Kenny: Since May 2008 the Cabinet committee on housing, infrastructure and PPPs met once, the committee on science, technology and innovation met twice and the committee on social inclusion, children and integration met three times. In view of the changed portfolios of some of the members of the Cabinet, is it intended to change the membership and the structure of the committees?

The Taoiseach: As I stated in my original reply, I have circulated with the Official Report for the information of Deputies a list of all Cabinet committees and their membership following the recent changes in Ministers and Ministers of State.

Deputy Enda Kenny: I have two further questions for the Taoiseach. What is the current situation with regard to public-private partnerships? Significant developments have taken place in the past eight years on major arterial routes and this is to be acknowledged.

An Ceann Comhairle: I suggest Deputy Kenny consider submitting a question to the line Minister.

Deputy Enda Kenny: I specifically mentioned these developments in housing, infrastructure and PPPs for the information of the Ceann Comhairle, as there is a specific committee.

An Ceann Comhairle: This is detail which is more appropriate to the line Minister.

Request to move Adjournment of Dáil under Standing Order 32. An Ceann Comhairle: Before coming to the Order of Business I propose to deal with a notice under Standing Order 32.

Deputy James Bannon: I seek the adjournment of the Dáil under Standing Order 32 to raise a matter of national importance, namely, the devastation that will be caused to rural dwellers who will be forced from this weekend to pay carbon tax on essential fuels despite being pro- hibited from cutting their own turf, left without the winter fuel allowance and given no promised help by this Government, which has presided over the destruction of the countryside and the impoverishment of its inhabitants.

An Ceann Comhairle: Having considered the matter raised, it is not in order under Standing Order 32.

Order of Business. The Taoiseach: It is proposed to take No. 1, Criminal Justice (Money Laundering and Terror- ist Financing) Bill 2009 — amendments from the Seanad; No. 20, Central Bank Reform Bill

624 Order of 28 April 2010. Business

2010 — Second Stage (resumed); No. 21, Energy (Biofuel Obligation and Miscellaneous Provisions) Bill 2010 [Seanad] — Second Stage (resumed); No. 22, Merchant Shipping Bill 2009 — Report and Final Stages (resumed). Private Members’ business shall be No. 74 — motion re strategic investment bank (resumed) to conclude at 8.30 p.m. tonight, if not previously concluded.

An Ceann Comhairle: There are no proposals to put to the House today. I call Deputy Kenny.

Deputy Enda Kenny: When is it expected to introduce the Bill giving effect to the proposal for a directly elected mayor of Dublin? In his Budget Statement in October 2008, the Minister for Finance announced the merger of the National Consumer Agency and the Competition Authority yet this still has not happened almost two years on. Why such a delay? Are we waiting for legislation? What is the problem in giving effect to the Minister’s announcement in this regard in October 2008?

The Taoiseach: The first Bill referred to will be introduced in this session. The heads of the consumer competition Bill are being prepared.

Deputy Seán Barrett: For goodness sake, the Government should scrap this idea of a mayor for Dublin.

An Ceann Comhairle: Deputy Barrett, please.

Deputy Seán Barrett: The Taoiseach talks about saving money. This proposal is absolutely ridiculous.

An Ceann Comhairle: Deputy Barrett, please. I call Deputy Gilmore.

Deputy Seán Barrett: It is absolutely ridiculous when we have scarce resources to set up another local authority in Dublin.

An Ceann Comhairle: Deputy Barrett, I have called Deputy Gilmore.

Deputy Seán Barrett: It is an absolute farce.

Deputy P. J. Sheehan: It is a Green joke.

Deputy James Bannon: The great Green fail.

Deputy Seán Barrett: The Taoiseach talks about delaying fuel allowances for people who cannot afford to heat their homes while setting up another mayor for Dublin at the cost of €500,000.

An Ceann Comhairle: Deputy Barrett is interrupting the proceedings of the House.

Deputy Seán Barrett: Yes, but it is so annoying when moneys are spent this way.

An Ceann Comhairle: Yes, but I have called Deputy Gilmore.

Deputy Eamon Gilmore: Some clarity from the Taoiseach about the proposed election for a directly elected mayor of Dublin would help.

Deputy Seán Barrett: It is an absolute joke.

625 Order of 28 April 2010. Business

Deputy Eamon Gilmore: Will the election take place this year or not? If it is going to take place this year, when will the legislation for it be brought before the House? The second issue I wish to raise is the allowance promised to the 300,000 families who will be affected by the introduction of the carbon levy on home heating oil from next Saturday. It is not acceptable that the poorest households can be dismissed, as the Taoiseach and the Mini- ster for so-called Social Protection did yesterday in their statement. The Government is welsh- ing and reneging on the promise of a special allowance for these families before the carbon levy is introduced. The Minister, Deputy Ó Cuív, now says they will not get this allowance until next October. Those affected are families dependent on oil for home heating and who have seen its price go up by 37% in the past year with another 9% increase due after the introduction of the carbon levy. These people were promised an allowance to offset this. I did not expect the allowance to be huge but it would have been some assistance to these families in paying the increased costs for heating their homes.

An Ceann Comhairle: It must be promised legislation on the Order of Business.

Deputy Eamon Gilmore: The carbon levy will be introduced on Saturday while the Minister, Deputy Ó Cuív, says wait until October.

Deputy Seán Barrett: We need to have a mayor for Dublin though.

Deputy Eamon Gilmore: The Government’s new position for pensioners and low-income households is that they can wait until October. That is not good enough. There was a promise of an allowance before the carbon levy was introduced which was confirmed in the House during the budget. The Minister’s excuse of a statement yesterday is an absolute insult to those people.

The Taoiseach: On promised legislation, the programme for Government states the election for a mayor for Dublin will be held in 2010. Such elections would have a statutory requirement which is being prepared and is due to be published this session, we hope. On the other matter, I have outlined to the Deputy twice already, both yesterday and today, how the existing schemes will be used. The exceptional needs payment is also in place for anyone who experiences hardship in the meantime.

Deputy Eamon Gilmore: The existing scheme, as the Taoiseach well knows, runs out——

An Ceann Comhairle: We are on the Order of Business. There are many other ways to pursue the matter.

Deputy Eamon Gilmore: Sorry, a Cheann Comhairle, I know but we are talking about poor people. Every time an issue is raised concerning poor people and low-income households, suddenly it is dismissed as out of order. This levy will be introduced on Saturday.

An Ceann Comhairle: There are other ways to raise the matter other than on the Order of Business.

Deputy Eamon Gilmore: The Government promised in the budget that an allowance would be introduced to cover the carbon levy for low-income households. It has not brought it in.

An Ceann Comhairle: Deputy Gilmore will have to pursue this another way.

626 Order of 28 April 2010. Business

Deputy Eamon Gilmore: This is the only opportunity I have to raise this matter. The levy will be introduced on Saturday. The Ceann Comhairle told my colleague, Deputy Shortall, she could down a parliamentary question on the matter. If she does, it will not be due for answer until next week by which time the carbon levy will be in.

An Ceann Comhairle: The matter can be raised on the Adjournment.

Deputy Eamon Gilmore: Raising this on the Order of Business is the only way. The Govern- ment promised it would bring in an allowance in advance of the carbon levy. It has welshed on that promise. The Minister, Deputy Ó Cuív, yesterday told all those pensioners and low- income households dependent on oil for home heating that they can wait until October for the allowance. That is not good enough. I want a more sympathetic and responsive answer from the Taoiseach than what he has just given about existing schemes.

An Ceann Comhairle: Deputy Gilmore will have to pursue this another way.

Deputy Caoimhghín Ó Caoláin: Yesterday, I received a letter from the General Office regarding a parliamentary question I had tabled to the Taoiseach requesting him to report on his meeting with representatives of the Catholic religious institutions on 15 April. The letter I received informed me the Taoiseach will not answer the question and it will be referred instead to the Department of Education and Science. Yesterday, a parliamentary question in the same vein, tabled by a Fianna Fáil backbencher, got a full and detailed report of the meeting.

An Ceann Comhairle: Deputy——

Deputy Caoimhghín Ó Caoláin: No Deputy anything, a Cheann Comhairle.

An Ceann Comhairle: A question on promised legislation is what is appropriate for the Order of Business.

Deputy Caoimhghín Ó Caoláin: I want to know why there is a clear difference of approach in replies to parliamentary questions from the Opposition and from the Government back- benches. This is a serious matter.

Deputies: Hear, hear.

An Ceann Comhairle: Deputy Ó Caoláin will have to find another way of raising this matter.

Deputy Caoimhghín Ó Caoláin: This is a serious matter for you, a Cheann Comhairle, who is supposed to ensure fair play and equality of treatment for all Deputies.

An Ceann Comhairle: I do not have responsibility for answers to parliamentary questions.

Deputy Caoimhghín Ó Caoláin: It is also a matter for the Taoiseach and his Department. My inquiry this morning——

An Ceann Comhairle: TheDeputy will have to find another way of raising this matter.

Deputy Caoimhghín Ó Caoláin: ——found that it was the Taoiseach office’s instruction that this would be the response to a Sinn Féin Deputy.

An Ceann Comhairle: The Deputy will have to find another way of raising this matter.

627 Order of 28 April 2010. Business

Deputy Caoimhghín Ó Caoláin: At the same time a detailed account of the engagement with the religious institutions on 15 April was proffered to Deputy Michael Kennedy. Good luck to him for getting it.

An Ceann Comhairle: This is the Order of Business and the Deputy will have to find another way to raise this matter.

Deputy Caoimhghín Ó Caoláin: Why is there a difference in response?This is also a matter for the Minister for Communications, Energy and Natural Resources, Deputy Ryan, whose party is with this Fianna Fáil Government. This matter must be addressed.

An Ceann Comhairle: Yes but there are other ways of raising it.

Deputy Caoimhghín Ó Caoláin: There are not. I am demanding — not asking — that the Ceann Comhairle takes a personal and direct interest——

An Ceann Comhairle: The Chair does not have responsibility for the quality of answers given to parliamentary questions.

Deputy Caoimhghín Ó Caoláin: ——in ensuring equity of treatment for all elected representatives with no bias for questions posed by Government backbenchers.

Deputy Bernard J. Durkan: Hear, hear.

An Ceann Comhairle: The Deputy will have to find another way of raising this matter. The Deputy should resume his seat.

Deputy Caoimhghín Ó Caoláin: I will resume my seat when I have finished my point. Will the Taoiseach revisit this parliamentary question? Will he indicate to the House——

An Ceann Comhairle: Deputy Ó Caoláin, this is not appropriate for the Order of Business.

Deputy Caoimhghín Ó Caoláin: It is not appropriate to be dismissed with this sort of nonsense.

An Ceann Comhairle: The Deputy will have to find another way to raise the matter. There are other ways of raising the matter in the House, a fact of which I have advised several Deputies.

Deputy Caoimhghín Ó Caoláin: The Ceann Comhairle keeps telling us that but there is no other way to raise this matter.

An Ceann Comhairle: I have endeavoured to facilitate Members as best I can.

Deputy Caoimhghín Ó Caoláin: There is no other way but to expose such outrageous conduct.

An Ceann Comhairle: This is not appropriate for the Order of Business. The Deputy will resume his seat. I call Deputy Burton.

Deputy Joan Burton: Is it correct that the Irish participation in the IMF loans to Greece will require primary legislation? Has the Taoiseach a date in mind for this? Has a draft of the legislation been produced? If so, will the Government publish an outline of it so we can prepare to examine the legislation?

628 Order of 28 April 2010. Business

The commitment in the programme for Government on the carbon levy was that it was to be revenue-neutral. An ESRI report, and many reports from the Green Party, indicated that the money would be recycled to reduce employment costs, particularly for low paid workers, and spent in such a way——

An Ceann Comhairle: Deputy, the Order of Business is not Question Time.

Deputy Joan Burton: ——as to ensure that people on low incomes who are suffering fuel poverty would be protected. That is reflected in the programme for Government.

An Ceann Comhairle: Deputy, the Order of Business is not Question Time. If you have an inquiry on promised legislation——

Deputy Joan Burton: A question on the programme for Government is in order, and dealing with the carbon levy is in the programme for Government of the two parties.

An Ceann Comhairle: Deputy, an inquiry on that matter is not a licence to turn the Order of Business into Question Time.

Deputy Joan Burton: The programme for Government is a matter for the Order of Business.

An Ceann Comhairle: Yes, but the pursuance of other matters by way of questions is not appropriate.

Deputy Seán Barrett: What other way is there to raise it?

Deputy Joan Burton: I believe I am in order in raising an item on the programme for Govern- ment of the two parties.

Deputy Emmet Stagg: The Deputy is in order.

An Ceann Comhairle: Only questions on promised business may be raised on the Order of Business.

Deputy Joan Burton: One was always allowed to raise an item on the programme for Govern- ment in this House.

An Ceann Comhairle: That is fine, but the Deputy must refrain from the subsequent elaboration.

Deputy Joan Burton: The programme for Government contains many pages----

An Ceann Comhairle: I am sure we can get a considered response to the Deputy’s original query.

Deputy Joan Burton: When will the legislation on the International Monetary Fund support for and loans to Greece come before the House? What is the position on the carbon levy commitments in the programme for Government and, in particular, the commitment to protecting people who are suffering from what the ESRI, other agencies and the Green Party describe as fuel poverty, that is, the people on pensions and social welfare income?

The Taoiseach: The Minister for Finance is answering questions today and he will be able to deal with any detailed questions on whether legislative requirements are needed on the IMF loan.

629 Order of 28 April 2010. Business

[The Taoiseach.]

On the other issue regarding the programme for Government, it is proposed that the existing schemes, which cover the 32 weeks that heating is required by people on low income, will be augmented this year as a result of the changes coming forward. I want to give the reassurance that assistance continues to be available as usual over the summer months for people with special or additional heating needs through the heating supplement and exceptional needs payment under the supplementary welfare allowance scheme.

Deputy Joan Burton: Regarding the first question, I understand that legislation such as that dealing with the loan to Greece requires Government approval. Has the Government taken a decision in principle to support the IMF package of assistance to Greece and, if so, has the Government, in its scheduling of business involving the Chief Whip and so on, set aside a date for that legislation?

An Ceann Comhairle: The Deputy should submit a parliamentary question to the line Mini- ster, the Minister for Finance.

Deputy Joan Burton: No. The Taoiseach is the head of the Government and it is reasonable to ask him about the scheduling of legislation. The Taoiseach’s reply to the question on the carbon levy and the compensation the Green Party promised people who are poor and living in fuel poverty——

An Ceann Comhairle: Deputy, will you please refrain from going off on a tangent.

Deputy Joan Burton: ——means that we now have a U-turn on a solemn promise made by the Green Party.

An Ceann Comhairle: Is legislation promised in this area, Taoiseach?

Deputy Joan Burton: It was a solemn promised made. Will Senator Dan Boyle tweet about that?

The Taoiseach: As I said, Ireland outlined in successive European Council communiques our support for the proposal being drafted in respect of the Greek position, working with the European Central Bank and the Commission. Whatever requirements are to be made here in the House will be brought forward but until that is brought to Government I do not have any further information.

Deputy Bernard J. Durkan: With regard to the question raised by Deputy Burton and having regard to the commitment previously given by Government, will the Taoiseach indicate if it is intended to review the impact of the carbon levy on the various sectors that will be negatively affected by this extra imposition in the course of the current year——

An Ceann Comhairle: Deputy Durkan, that is not promised business. The only inquiry we can have is on promised business.

Deputy Bernard J. Durkan: It was promised.

An Ceann Comhairle: Deputy, we are turning the Order of Business into Question Time, which is inappropriate.

Deputy Bernard J. Durkan: Does the Ceann Comhairle believe there should not be an Order of Business?

630 Order of 28 April 2010. Business

An Ceann Comhairle: This should be the Order of Business, not Question Time.

Deputy Bernard J. Durkan: This question is in order. This is in the programme for Govern- ment. Is a review likely of the impact, negative or otherwise, of the carbon tax as the year progresses? That is the question, and it is on promised legislation.

An Ceann Comhairle: Is legislation promised?

Deputy Bernard J. Durkan: It is promised legislation.

The Taoiseach: I dealt with that matter earlier, Deputy.

Deputy Bernard J. Durkan: I was here.

The Taoiseach: The fact that it has been repeated does not mean the answer is different.

Deputy Bernard J. Durkan: No, but the Taoiseach could expand on it. I am giving the Taoiseach an opportunity.

Deputy Jim O’Keeffe: Let them eat cake.

The Taoiseach: That is wrong. We have outlined the position, namely, that there is the heating supplement and exceptional needs payment under the supplementary welfare allowance scheme and the fact that we will bring forward augmented measures under the existing schemes for supporting people.

Deputy Bernard J. Durkan: On a separate issue, legislation was promised in the House during the passage of the NAMA legislation to the effect that measures will be introduced to assist people whose mortgages had fallen into arrears through no fault of their where unemployment had overtaken their position and where, subsequent to that, a group——

An Ceann Comhairle: Deputy, will you take up the matter with the Minister for Finance? That question is clearly to do with his——

Deputy Bernard J. Durkan: I am sorry but this is to do with legislation promised in the House. I was here when the Minister and the Taoiseach promised it, as was everybody else.

The Taoiseach: Is legislation promised in this area?

Deputy Bernard J. Durkan: It arose as a result of amendments from Fine Gael and Labour relative to that particular section in the NAMA legislation. The question is simple. What has happened regarding the expert group set up to advise the Government on the measures that could be taken to assist those who have mortgage arrears, on modest houses, of up to €100,000?

An Ceann Comhairle: Is business promised in this area?

The Taoiseach: There is not promised legislation in the area but we are examining all possible ways and means of addressing it. As part of that ongoing review process there were presentations recently including from Start Mortgages, the Money Advice and Budgeting Service and financial institutions and updates on local authority housing and on the review of the mortgage interest supplement scheme. Also, on a rolling basis initiatives can be taken by the Minister for Finance where that is deemed appropriate.

631 Order of 28 April 2010. Business

Deputy Pat Rabbitte: I am sure the Taoiseach is aware of the campaign under way this week to highlight the worsening exploitation of domestic servants who have the protection of virtually no labour law in this country and, where labour law applies to them, it is not enforced. I refer to people being paid a fraction of the national minimum wage or who are grossly exploited in terms of hours. These workers are largely migrants. Is the Government contemplat- ing any legislative measures to give some protection to this weakest section of the migrant worker population?

The Taoiseach: I am not aware that legislation is proposed for this session to cover any such position. A question to the Minister for labour affairs might elicit a more accurate and updated reply. No one in the House would condone exploitation of any people, particularly vulnerable people, and therefore whatever labour law framework we have in place should be as supportive and protective of those people as possible. I cannot be any more specific.

Deputy James Bannon: On two items of promised legislation, first, the noise nuisance Bill has been promised for some time. It is to give greater powers to local authorities to deal with the issue of noise pollution. It is on the programme for the past three years. The second item is the forestry Bill to develop the forestry industry, which is going through a very rough period at the present time.

The Taoiseach: What was the second Bill, Deputy?

Deputy James Bannon: The forestry Bill.

The Taoiseach: I understand the noise nuisance Bill will not be introduced before the next session. The forestry Bill will be introduced late this year.

Deputy James Reilly: On promised legislation, can I ask the Taoiseach what the Minister for Health and Children meant in the statement she issued today saying there will be further drastic cuts in the health services as a result of the breakdown of talks with IMPACT?

An Ceann Comhairle: Deputy, there is not any promised legislation on that.

Deputy James Reilly: There is. The eligibility for health and personal social services Bill is No. 63 on the clár. I would like to know when that Bill will be introduced and will people get eligibility to the services they have been promised. The front page of the Irish Dail Mail tells us there will be chaos in the cancer vaccine programme. I must put it to the Taoiseach——

An Ceann Comhairle: Deputy, we discourage Members from displaying newspapers in the Chamber.

Deputy James Reilly: The Ceann Comhairle continually advises Members of the House to try another route but there is no other route. My colleague, Deputy Mitchell, tabled to the Minister for Health and Children a parliamentary question regarding a patient and got the following response, which I will read for the Ceann Comhairle’s information. It states:

I wish to advise the Deputy that due to industrial action by the Health Service Executive it is not possible for the Executive to supply the information requested. If this matter remains of continuing concern to you however I would invite you to raise it with me again.

This inquiry relates to a patient who has an aneurysm, which is a life threatening condition, who has been waiting 18 months for surgery. What does this answer mean? Does it mean the Deputy should contact the Minister again if the patient is still alive?

632 Order of 28 April 2010. Business

(Interruptions).

An Ceann Comhairle: The are other ways the Deputy can raise the issue.

Deputy James Reilly: This is a disgrace.

Deputy Seán Barrett: I received a similar reply to a parliamentary question.

Deputy James Reilly: I want to know from the Taoiseach what further cuts are to be made to patient services. On one day in January, there were 500 people lying on trolleys. There has been a 70% increase in delayed discharges——

An Ceann Comhairle: We will inquire about the position in regard to the legislation under promised business.

Deputy James Reilly: ——and 20,000 operations were cancelled last year. What are the further implications for patients in this country as a consequence of the failure of these talks?

An Ceann Comhairle: I call the Taoiseach on promised business in this area.

The Taoiseach: No date has been fixed for the eligibility legislation, which is the relevant legislation referred to by the Deputy in his comment.

Deputy Seymour Crawford: Given that Glanbia plc is in the process of being broken up and returned to a co-operative, which is a major breakthrough for this country, when will the industrial and provident societies and friendly societies (miscellaneous provisions) Bill, which is supposed to be of benefit to the co-operative movement, be introduced? I welcome the re- establishment of co-operatives. The Taoiseach, when announcing the recent reshuffle of ministries, stated FÁS was to become the responsibility of three different Departments. Will legislation be needed in this regard and how will this affect support to the Quinn Group and the hundreds of jobs therein which are at risk? What other support is the Government giving to the Quinn Group to ensure that as many people as possible continue to be employed by it?

An Ceann Comhairle: I call the Taoiseach on promised legislation.

The Taoiseach: There is no change in the operational arrangements of FÁS. The transfer of placement services under social welfare will require the introduction of primary legislation in due course.

Deputy Seymour Crawford: What about the industrial Bill?

Deputy Emmet Stagg: As regards the renewed programme for Government and the Green Party proposal regarding a tax on fuels, a tax which I understand will be ringfenced to fund some its pet projects at a cost to the taxpayer, the Taoiseach said this matter might be dealt with by way of the supplementary welfare officers scheme. I am sure he is aware that scheme has been swamped by people in regard to bread on the table issues.

An Ceann Comhairle: The Deputy is pursuing this matter through a rather securitive route. Does the Deputy have a question in regard to promised legislation?

Deputy Emmet Stagg: I am coming to it now. That system will not be able to cope with further demand. We are speaking in this regard of 300,000 people——

633 Order of 28 April 2010. Business

An Ceann Comhairle: The Deputy is into commentary now. This matter being raised is not relevant to the Order of Business.

Deputy Emmet Stagg: ——to be seen under the supplementary welfare officers scheme. That will not work. Is there a need, arising from the fact that there will be a new subhead for expenditure, for secondary or primary legislation to implement the proposal announced in the Budget and when will that legislation come before the House?

An Ceann Comhairle: Is legislation promised in this area?

Deputy Emmet Stagg: I am asking if legislation in this regard is required?

The Taoiseach: I made the point that this is about augmenting existing schemes which operate from October to March and April. Where exceptional needs or hardship arise during the summer months, we have in place exceptional needs payments, as is always the case.

Deputy Eamon Gilmore: Another broken Fianna Fáil promise.

Deputy Emmet Stagg: One cannot get near them.

An Ceann Comhairle: I call Deputy Costello.

Deputy Joe Costello: I wish to raise two points, one of which relates to the national paediatric hospital to be located at the Mater Hospital site on the North Circular Road. Recent reports in the media state that a deal has been done by Government with the Church authorities and religious congregations on the funding of the new hospital. Perhaps the Taoiseach will state if this is the case. It is some time now since the decision was taken——

An Ceann Comhairle: Does the Deputy have a query in regard to promised legislation?

Deputy Joe Costello: ——to build the hospital and as yet there is no sign of the €500 million required to do so. Is this now to be the approach? I note the Minister for Justice, Equality and Law Reform is in the House. Ten days ago, he indicated he would bring forth urgent proposals to deal with head shops. Another community will today march on the Dáil in regard to head shops. I understood the Minister was to urgently bring forward proposals on this matter and would not await legislation from the Minister for Health and Children in regard to the ban on certain named drugs. When is that legislation likely to appear? Also, is there any chance of our getting a look at the heads of the Bill? I understood from the Minister’s remarks that this legislation in terms of new powers for the Garda Síochána is well advanced.

An Ceann Comhairle: I call the Taoiseach on promised business in this area.

Deputy Aengus Ó Snodaigh: May I ask a question on the same issue?

An Ceann Comhairle: Yes.

Deputy Aengus Ó Snodaigh: I agree with Deputy Costello in regard to the urgency of legislation to deal with head shops. When trawling through emails which I received in recent years I came across a letter I received in 2006 from the family of a man who——

An Ceann Comhairle: The Deputy is going into detail. We are on the Order of Business.

Deputy Aengus Ó Snodaigh: The matter is related. We have had three Ministers dealing with the drugs strategy since this man died in 2006 as a result of the effects of products sold to

634 Order of 28 April 2010. Business him by a head shop. The family asked at the time that all that can be done be done to ensure that all mind altering——

An Ceann Comhairle: This topic is more appropriate at a different time.

Deputy Aengus Ó Snodaigh: ——-hallucinogenic substances are taken off the shelves. Another option would be the close these shops. It is not that this issue has not be raised previously. It has been before Government for four years at this stage. The legislative programme contains nothing to address this issue despite a promise by a former Minister with responsibility for the drugs strategy that it would be addressed.

An Ceann Comhairle: We will make inquiries about the Deputy’s queries in regard to legislation.

Deputy Aengus Ó Snodaigh: Only last week, the Secretary General of the Department of Justice, Equality and Law Reform stated that we needed to be imaginative on this and that we should watch this space. However, there is nothing in the space. We need a timeframe in regard to legislation on this issue.

An Ceann Comhairle: I call the Taoiseach on promised business in this area.

The Taoiseach: In response to Deputy Costello, there is no promised legislation in regard to the first issue raised by him. On the issue of head shops, the Minister for Justice, Equality and Law Reform is actively involved in urgently bringing forward proposals in this area. As soon as the heads of a Bill have been agreed with the Attorney General, the Minister will publish them.

Deputy Fergus O’Dowd: Given that a journalist, Mr. Eamon Quinn, has written in two consecutive issues of The Sunday Tribune about court applications by Mr. Fitzpatrick in regard to the €60 million owed by him to Anglo Irish Bank——

An Ceann Comhairle: The Deputy will have to find another way of raising that matter which is not in order on the Order of Business.

Deputy Fergus O’Dowd: I have a question for the Taoiseach. Will the Taoiseach ensure the details of any arrangements made by Mr. Fitzpatrick with Anglo Irish Bank or any other State institution are transparent?

An Ceann Comhairle: The Deputy’s query does not relate to promised legislation.

Deputy Fergus O’Dowd: It would be an absolute outrage if Mr. Fitzpatrick succeeded in camera to hide the details of whatever deal he is doing, notwithstanding the fact that he may have the right to make such application. Perhaps the Taoiseach will answer that question.

An Ceann Comhairle: I understand questions to the Department of Finance are listed on the Order Paper for later today at which time the Deputy can raise this issue with the line Minister.

The Taoiseach: I cannot interfere in a court process.

Deputy Fergus O’Dowd: I understand and accept that. However, will the Taoiseach insist that any deal done with Mr. Sean Fitzpatrick by Anglo Irish Bank will be laid before the Dáil for debate?

An Ceann Comhairle: The Deputy can raise the issue with the line Minister this afternoon.

635 Order of 28 April 2010. Business

Deputy Fergus O’Dowd: If my house was being repossessed by a bank the matter would be dealt with by the High Court and in public. Mr. Fitzpatrick can make whatever application he wants to the courts——

An Ceann Comhairle: The Deputy should pursue this matter with the line Minister.

Deputy Fergus O’Dowd: ——but there must be transparency in respect of any deal that may be done.

An Ceann Comhairle: I call Deputy Phil Hogan.

Deputy Phil Hogan: I have three queries on promised legislation. The Minister for Enterprise, Trade and Employed promised some time ago to put on a statutory footing a code of practice that would balance the rights of producers and consumers of food. Currently, the price of products for producers is decreasing, the profitability of multiples is 12 o’clock increasing and consumers are not getting value for money. A reduction in the cost of products was promised in legislation introduced in this House a couple of years ago. When will the fair trade Bill be introduced? Also, when will the legislation regarding the merger of the Competition Authority and National Consumer Agency be introduced in light of the recent proposal that a bonus be awarded to the chief executive of the National Consumer Agency? When will the merger of those two agencies take place?

An Ceann Comhairle: We will make inquiries about the promised legislation for the Deputy.

Deputy Phil Hogan: When will we see the sale of alcohol Bill promised to ensure there is no stampede to supermarkets for low-priced products that are damaging the health of so many of our young people?

The Taoiseach: I will have to get back to the Deputy on the first issue. I am not aware of where that is or when the legislation is being brought forward. I already answered a question on the consumer and competition Bill earlier today, stating the heads of the Bill are being prepared. I understand the sale of alcohol Bill is due later this year.

Deputy Olivia Mitchell: Last year, Aer Lingus paid €40 million in travel tax to the State. At least partly as a result, it then posted a loss of €81 million that year. Last week, as a result of the volcanic ash and the grounding of all the aircraft, it lost a further €25 million in revenue.

An Ceann Comhairle: I am drawing the conclusion that the Deputy is not in order.

Deputy Olivia Mitchell: A very good question is coming.

An Ceann Comhairle: I trust it is on legislation.

Deputy Olivia Mitchell: As a result of that it is now in a very precarious position as an airline. The Minister, Deputy Dempsey, has indicated he will not give any State aid to any of the airlines. Will the Taoiseach use the opportunity of the financial Bill before the Dáil at the moment to abolish the travel tax to ensure we continue to have two airlines serving this island? It will be too late if we continue with this tax.

An Ceann Comhairle: Is there promised legislation?

The Taoiseach: There are no proposals.

636 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

Non-Medicinal Psychoactive Substances Bill 2010: First Stage. Deputy Aengus Ó Snodaigh: I move:

That leave be granted to introduce a Bill entitled Non-Medicinal Psychoactive Substances Bill 2010 and to provide for related matters.

An Ceann Comhairle: Is the Bill opposed?

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): No.

Question put and agreed to.

An Ceann Comhairle: Since this is a Private Members’ Bill, Second Stage must, under Stand- ing Orders, be taken in Private Members’ time.

Deputy Aengus Ó Snodaigh: I move: “That the Bill be taken in Private Members’ time.”

Question put and agreed to.

Criminal Justice (Money Laundering and Terrorist Financing) Bill 2009: From the Seanad.

The Dáil went into Committee to consider amendments from the Seanad. Acting Chairman (Deputy Noel O’Flynn): Seanad amendments Nos. 1 and 2 are related and may be discussed together by agreement.

Seanad amendment No. 1: Section 8: In page 12, subsection (1), line 39, to delete “that constitutes an offence under the law of that place and”.

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): Section 8 provides for the offences of money laundering outside the State in certain circumstances. The opening words in Section 8 (1) provide that the offence is committed only if the conduct concerned is an offence under the law of the place in which it has occurred, that is, outside the State. The advice of the Office of the Attorney General is that sections 8(1)(a) and 8(1)(b), which deal with conduct that takes place on board an Irish ship or aircraft registered in the State, are incorrect. Therefore, the provision requires amendment. There is no change of policy in respect of these amendments.

Deputy Charles Flanagan: I accept what the Minister has stated in this regard. This matter was debated in the Seanad and I believe it is a worthwhile amendment. On behalf of Fine Gael, I support the amendment.

Seanad amendment agreed to.

Seanad amendment No. 2: Section 8: In page 13, subsection (1), to delete lines 1 to 5 and substitute the following: “(c) the conduct constitutes an offence under the law of that place and the person is— (i) an individual who is a citizen of Ireland or ordinarily resident in the State, or (ii) a body corporate established under the law of the State or a company registered under the Companies Acts,”.

637 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

Seanad amendment agreed to.

Acting Chairman (Deputy Noel O’Flynn): Seanad amendments Nos. 3, 6, 8, 9, 22 and 23 are related and may be discussed together by agreement.

Seanad amendment No. 3: Section 24: In page 20, subsection (1), between lines 6 and 7, to insert the following: ““barrister” means a practising barrister;”.

Deputy Dermot Ahern: Amendments Nos. 3, 6, 8 and 9 deal with the definitions of various professional groups and the application of these terms within the Bill. The reason for including the definitions “barrister” meaning a practising barrister and “solicitor” meaning a practising solicitor is to clarify that the persons referred to are practising in their professions. The amendments to section 40 relate to the reliance on the relevant third party to carry out customary due diligence. The amendments replace the references to “Law Society of Ireland” in sections 40(1)(a)(iv) and 40(1)(a)(vi) with “solicitor”. The reference to a member of the Law Society of Ireland could have the effect of including persons who are members but not practising, such as myself and probably Deputy Flanagan, although I do not know about that. As the legislation stands, such persons could be relied upon under the third party provisions. The inclusion of definitions for members of a designated accountancy body and the Irish Taxation Institute is due to the fact that the current reference to members could have the effect of including persons not subject to the regulatory regime, for example, students in those bodies. In addition, membership of such bodies is a criterion used in several importance sections. As a consequence, the definition of a relevant profession adviser has also been amended because it is no longer necessary to refer to the condition stated and these provisions will now be covered by individual definitions.

Seanad amendment agreed to.

Acting Chairman (Deputy Noel O’Flynn): Seanad amendments Nos. 4 and 5 are related and may be discussed together by agreement.

Seanad amendment No. 4: Section 24: In page 21, subsection (1), line 39, after “1995” to insert the following: “(other than a non-life insurance intermediary within the meaning of that Act)”.

Deputy Dermot Ahern: On Committee Stage in the Dáil an amendment was made to the definition of a financial institution in section 24 to include the category of an investment business firm, within the meaning of the Investment Intermediaries Act 1995, to bring within the scope of the Bill certain insurance intermediaries not otherwise covered. However, this had the unintended effect of bringing non-life insurance intermediaries within the scope of the Bill. Non-life insurance intermediaries are not covered by the third EU money laundering directive because the products they sell do not constitute a material money laundering risk. There is no requirement to include this group in the Bill and, therefore, the amendment excludes them. The second amendment relates to section 24(1)(g), that is, the definition of financial institution in respect of An Post. The amendment is tabled for the same reasons. The matter was discussed at length in the Seanad.

638 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

Deputy Charles Flanagan: I do not have a problem with the amendment but I am unsure why the Minister does not leave it as it was on the basis that it was broadened. We made changes on Committee Stage to deal with a broadening of certain categories. Now it is intended to exempt certain intermediaries. Why have a specific exemption? If the non-life insurance people were not directly affected, then they would remain silent to any obligation under the act. As the Minister correctly stated, it would not apply to them because they are not engaged in the business. Why is there a need or requirement to introduce an exemption for non-life insurance intermediaries having regard to what the Minister has stated about the broadening of the categories since the Bill was first introduced?

Deputy Dermot Ahern: The reason for the exclusion of non-life insurance business is mainly because much of the non-life insurance business is relatively small. It includes motor insurance policies and house policies. We tried to be as broad as possible to include as many circumstances as possible in which a money laundering risk could arise. It is unreasonable to extend the provisions of money laundering legislation to individual, small contracts to do with motor cars and house insurance etc. By and large these deal only with a very small amount of money. It was not included as a requirement under the third EU money laundering directive, which this legislation attempts to transpose. In the aftermath of the inclusion of investment insurance intermediaries, some insurance companies made representations to the Department of Finance, which in turn raised them with the Department of Justice, Equality and Law Reform, to the effect that it would be somewhat unreasonable to include all of them, as it would cause many bureaucratic problems.

Deputy Charles Flanagan: I accept the Minister’s explanation.

Seanad amendment agreed to.

Seanad amendment No. 5: Section 24: In page 22, subsection (1), line 10, after “1995” to insert the following: “(other than a non-life insurance intermediary within the meaning of that Act)”.

Seanad amendment agreed to. Seanad amendment No. 6: Section 24: In page 22, subsection (1), between lines 31 and 32, to insert the following: ““member”, in relation to a designated accountancy body, means a member, within the meaning of Part 2 of the Companies (Auditing and Accounting) Act 2003, of a designated accountancy body; “member”, in relation to the Irish Taxation Institute, means a person who is subject to the professional and ethical standards of the Institute, including its investigation and disciplinary procedures, but does not include a person who is admitted to its membership as a student;”.

Seanad amendment agreed to.

Acting Chairman (Deputy Noel O’Flynn): As Seanad amendments Nos. 7, 10 and 14 are related, they may be discussed together. Seanad amendment No. 7:

Section 24: In page 22, subsection (1), between lines 31 and 32, to insert the following:

639 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

[Deputy Noel O’Flynn.]

““occasional transaction”, in relation to a customer of a designated person, means a single transaction, or a series of transactions that are or appear to be linked to each other, where—

(a) the designated person does not have a business relationship with the customer, and

(b) the total amount of money paid by the customer in the single transaction or series is greater than €15,000;”.

Deputy Dermot Ahern: This amendment provides for a definition of “occasional transaction” in section 24 of the Bill. It has been included so that the term “occasional transaction” can be used in the relevant sections of the Bill without needing to be described separately each time as it applies. The amendments to sections 33 and 37 delete the current text, which in each case describes an “occasional transaction”, and instead refers to the new definition set out in section 24.

Deputy Charles Flanagan: I accept that.

Seanad amendment agreed to.

Seanad amendment No. 8: Section 24: In page 24, subsection (1), to delete lines 5 to 14 and substitute the following: ““relevant professional adviser” means an accountant, auditor or tax adviser who is a member of a designated accountancy body or of the Irish Taxation Institute;”.

Seanad amendment agreed to.

Seanad amendment No. 9: Section 24: In page 24, subsection (1), between lines 14 and 15, to insert the following: ““solicitor” means a practising solicitor;”.

Seanad amendment agreed to.

Seanad amendment No. 10: Section 33: In page 30, subsection (1), lines 8 to 16, to delete paragraph (b) and substitute the following: “(b) prior to carrying out an occasional transaction with, for or on behalf of the customer or assisting the customer to carry out an occasional transaction,”.

Seanad amendment agreed to.

Seanad amendment No. 11: Section 33: In page 30, subsection (1), lines 36 to 40 to delete paragraph (d), and substitute the following: “(d) prior to carrying out any service for the customer if— (i) the person has reasonable grounds to doubt the veracity or adequacy of documents (whether or not in electronic form) or information that the person has previously

640 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

obtained for the purpose of verifying the identity of the customer, whether obtained under this section or section 32 of the Criminal Justice Act 1994 (“the 1994 Act”) prior to its repeal by this Act or under any administrative arrangements that the person may have applied before section 32 of the 1994 Act operated in relation to the person, and (ii) the person has not obtained any other documents or information that the person has reasonable grounds to believe can be relied upon to confirm the identity of the customer.”.

Deputy Dermot Ahern: This amendment was made to section 33, in Chapter 3 of the Bill, which relates to customer due diligence. Section 33(1)(d) provides that the identification and verification measures set out in section 33(2) must be applied before a service is carried out for a customer, if the designated person has reasonable grounds to doubt the veracity or adequacy of documents or information previously obtained relating to the verification of the customer. The amendment will ensure there is no question of whether the section applies to documents or information obtained before the commencement of section 33 of the Bill. It replaces the original section 33(1)(d) of the Bill. It states that the relevant documents or information may be obtained under section 33; under section 32 of the Criminal Justice Act 1994, which sets out the current requirements in relation to identification and verification; or under any administrative arrangements that a person may have applied before section 32 of the 1994 Act operated in relation to that person. The amendment also inserts a new section 33(1)(d)(ii), which reflects the fact that a designated person may, in the meantime, have obtained other relevant documents or information — not those which may have caused the doubt in the first instance — which adequately verify the identity of the customer.

Deputy Charles Flanagan: We addressed this matter at some length on Committee Stage. As the Seanad also dealt with it to a significant degree, I do not intend to repeat any of the points that have been made. Section 33, which deals with the verification of customers’ identities, is an important section. This specific point was made in a submission we received from Com- pliance Ireland. I am pleased that the Minister has probably introduced a more robust meaning to this section, which I support.

Deputy Dermot Ahern: I thank the Deputy.

Seanad amendment agreed to.

Acting Chairman (Deputy Noel O’Flynn): As Seanad amendments Nos. 12 and 21 are related, they may be discussed together.

Seanad amendment No. 12: Section 33: In page 33, subsection (8)(a), line 3, after “service” to insert “or carry out the transaction”.

Deputy Dermot Ahern: The purpose of these amendments is to insert the term “transaction” after the word “service” in sections 33(8)(a) and 37(8)(b) of the Bill, thereby clarifying that the provisions apply to a transaction or service, as appropriate. The reason for this change is that the carrying out of a transaction with a customer, and nothing more, does not involve the provision of a service. By contrast, the carrying out of a transaction for on behalf of a customer, or assisting a customer to carry out a transaction, involves the provision of a service.

Seanad amendment agreed to.

641 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

Seanad amendment No. 13: Section 34: In page 34, line 41, subsection (5)(d)(i), to delete “a treaties” and substitute “the treaties”.

Deputy Dermot Ahern: This amendment merely corrects a textual error in section 34 of the Bill, which should refer to “the treaties”.

Seanad amendment agreed to.

Seanad amendment No. 14: Section 37: In page 36, subsection (2), lines 42 to 44, to delete paragraph (b), and substitute the following: “(b) carrying out an occasional transaction with, for or on behalf of the customer or assisting the customer to carry out an occasional transaction.”.

Seanad amendment agreed to.

Acting Chairman (Deputy Noel O’Flynn): As Seanad amendments Nos. 15 to 20, inclusive, are related, they may be discussed together.

Seanad amendment No. 15: Section 37: In page 37, lines 4 to 16, to delete subsection (4), and substitute the following: “(4) If a designated person knows or has reasonable grounds to believe that a customer residing in a place outside the State is a politically exposed person or an immediate family member or close associate of a politically exposed person, the designated person shall— (a) ensure that approval is obtained from any senior management of the designated person before a business relationship is established with the customer, and (b) determine the source of wealth and of funds for the following transactions— (i) transactions the subject of any business relationship with the customer that are carried out with the customer or in respect of which a service is sought, or (ii) any occasional transaction that the designated person carries out with, for or on behalf of the customer or that the designated person assists the customer to carry out.”.

Deputy Dermot Ahern: These amendments to section 37 provide for enhanced customer due diligence to be carried out in the cases of people who are politically exposed. They deal with the requirements on designated persons to obtain approval from senior management before a business relationship is entered into and established with a politically exposed person and to determine the source of wealth and funds involved in such business or transactions. The amendments have the effect of setting out these provisions more clearly and thereby achieving greater clarity. For this reason, there has been some reordering of section 37(4), which now specifically states that the requirements apply if the person “knows or has reasonable grounds to” know that a person is a politically exposed person. The amendment to section 37(6), which relates to the beneficial owner, reflects the same approach as that in section 37(4). The amendments to section 37(7) specify clearly the circumstances in which a designated person is deemed to know that a person is a politically exposed person for the purposes of sections 37(4) and 37(6) and in which there are reasonable grounds for concluding that the designated person so knows. The amendment to section 37(8)(a) arises essentially from the previous amendments and, for

642 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad instance, reflects the fact that the determination of the source of wealth and funds is an ongoing responsibility.

Deputy Charles Flanagan: This point arose on Committee Stage. I think what the Minister has done is laudable. I accept these amendments.

Deputy Dermot Ahern: I thank the Deputy.

Seanad amendment agreed to.

Seanad amendment No. 16: Section 37: In page 37, subsection (5), line 17, to delete “(4)(b)” and substitute “(4)(a)”.

Seanad amendment agreed to.

Seanad amendment No. 17: Section 37: In page 37, subsection (5), line 20, to delete “(4)(b)” and substitute “(4)(a)”.

Seanad amendment agreed to.

Seanad amendment No. 18: Section 37: In page 37, lines 25 to 32 to delete subsection (6), and substitute the following: “(6) If a designated person knows or has reasonable grounds to believe that a beneficial owner residing in a place outside the State, and connected with a customer or with a service sought by a customer, is a politically exposed person or an immediate family member or close associate of a politically exposed person, the designated person shall apply the measures specified in subsection (4)(a) and (b) in relation to the customer concerned.”.

Seanad amendment agreed to.

Seanad amendment No. 19: Section 37: In page 37, lines 33 to 40 to delete subsection (7), and substitute the following: “(7) For the purposes of subsections (4) and (6), a designated person is deemed to know that another person is a politically exposed person or an immediate family member or close associate of a politically exposed person if, on the basis of— (a) information in the possession of the designated person (whether obtained under subsections (1) to (3) or otherwise), (b) in a case where the designated person has contravened subsection (1) or (2), information that would have been in the possession of the person if the person had complied with that provision, or (c) public knowledge, there are reasonable grounds for concluding that the designated person so knows.”.

Seanad amendment agreed to.

Seanad amendment No. 20:

643 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

Section 37: In page 37, subsection (8)(a), line 45, to delete “not establish any business relationship” and substitute “discontinue the business relationship (if any)”.

Seanad amendment agreed to.

Seanad amendment No. 21: Section 37: In page 37, subsection (8)(b), line 47, after “service” to insert “or carry out the transaction”.

Seanad amendment agreed to.

Seanad amendment No. 22: Section 40: In page 40, subsection (1)(a), to delete lines 38 to 40 and substitute the following: “(iv) who is a tax adviser, and who is also a solicitor or a member of a designated accountancy body or of the Irish Taxation Institute,”.

Seanad amendment agreed to.

Seanad amendment No. 23: Section 40: In page 40, subsection (1)(a)(vi), line 44, to delete “or of the Law Society of Ireland” and substitute “, a solicitor”.

Seanad amendment agreed to.

Acting Chairman (Deputy Noel O’Flynn): As Seanad amendments Nos. 24 and 25 are related, they may be discussed together.

Seanad amendment No. 24: Section 55: In page 49, lines 36 to 45, to delete subsection (4) and substitute the following: “(4) The documents and other records referred to in subsections (1) to (3) shall be retained by the designated person, at an office or other premises in the State, for a period of not less than 5 years after— (a) in the case of a record referred to in subsection (1)(a), the date on which the designated person ceases to provide any service to the customer concerned or the date of the last transaction (if any) with the customer, whichever is the later, (b) in the case of a record referred to in subsection (1)(b), the date on which the correspondent banking relationship concerned ends, (c) in the case of a record referred to in subsection (3) evidencing the carrying out of a particular transaction by the designated person with, for or on behalf of the customer (other than a record to which paragraph (d) applies), the date on which the particular transaction is completed or discontinued, (d) in the case of a record referred to in subsection (3) evidencing the carrying out of a particular occasional transaction comprised of a series of transactions, with, for or on behalf of a customer, the date on which the series of transactions is completed or discontinued, or

644 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

(e) in the case of a record referred to in subsection (3) evidencing the carrying out of a particular service for or on behalf of the customer (other than a record to which paragraph (c) or (d) applies), the date on which the particular service is completed or discontinued. (5) Subsection (4)(a) extends to any record that was required to be retained under section 32(9)(a) of the Act of 1994 immediately before the repeal of that provision by this Act. (6) Subsection (4)(c) to (e) extends to any record that was required to be retained under section 32(9)(b) of the Criminal Justice Act 1994 immediately before the repeal of that provision by this Act and for that purpose— (a) a reference in subsection (4)(c) to (e) to a record referred to in subsection(3) includes a reference to such a record, and (b) a reference in subsection (4)(d) to an occasional transaction comprised of a series of transactions includes a reference to a series of transactions referred to in section 32(3)(b) of the Criminal Justice Act 1994.”.

Deputy Dermot Ahern: These two amendments change the period of time for which documents and records must be kept from six years to five. They also provide that the period of time for which records relating to transactions and services will be kept will be five years from the date on which the transaction or service is completed or discontinued, regardless of whether the business relationship applies. This means that the time period will be the same, from the date on which the transaction or series of transactions is completed or discontinued, regardless of whether the transaction takes place in the context of a business relationship or in the context of a once-off or occasional transaction. The same principle will apply in relation to a service in the case of the new section 55(4)(e). The text of sections 55(5) and 55(6) arises from the fact that section 32 of the Criminal Justice Act 1994 is being repealed in this Bill. These provisions will ensure that the current money laundering record-keeping requirements, which are set out in section 32(9) of the 1994 Act, will continue to apply. Amendment No. 25 changes the subsection references to cater for the other amendments and additional subsections involved. Article 30 of the EU money laundering directive provides that records must be kept for a period of at least five years. Of course this does not preclude a member state from applying a longer period of time. The Bill did provide for a period of not less than six years, but amendment No. 24 will change this to five years. Various pieces of domestic legislation in respect of record-keeping provide for periods of five and six years. Following further consideration it was decided that it would be more appropriate to apply the five-year threshold, which applies in most other member states.

Deputy Charles Flanagan: I will not divide the House at this stage of the Bill, as we reach the last amendment. It strikes me as somewhat inconsistent that there are, as the Minister has said, certain professional requirements for those in the business of the delivery of a service to the public that all, or, in some cases, certain records be kept for a number of years. As far as some legislation is concerned, six years is the norm. For other professional bodies their duty is to keep records for five years. The Minister, in his closing remarks on the amendment, adverted to this inconsistency. In terms of the statute of limitations, the limitations of actions and the onus or burden placed on professional bodies, I thought we would have an element of consistency and not only would the practitioners and professions be aware of it, but members of the general public would also be aware of the duty of care or the statutory duty, in the form of an obligation, to retain certain records and make them available.

645 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

[Deputy Charles Flanagan.]

I thought we were moving, in the bulk of legislation, towards a six-year rule. It now appears that the Minister is in favour of a five-year rule. I will not make a big deal about this but I thought the Department of Finance, the Department of Justice, Equality and Law Reform or any other Department would strive for an element of consistency in this regard and not have different rules applying in different sets of circumstances in a way that is less than consistent and can give rise to an element of uncertainty or confusion on the part of the service providers and members of the general public. However, I will not divide the House on the issue.

Deputy Dermot Ahern: I can understand what the Deputy is saying but the original intention in the Bill was, because of the relevant period regarding business transactions, that the statute of limitations period would be six years. As the matter progressed and there was consultation with Departments and interested parties, it was felt that in the modern era of financial transactions a five-year period is the norm for the keeping of documents. It was done to align us with the vast majority of the requirements. Given that this is cross-border legislation it was important that we align ourselves to what is the norm among other member states. The directive indicates a period of five years as being the norm.

Deputy Joanna Tuffy: I apologise for being late; I was not notified about this debate as I am not the party spokesperson. There seems to have been some confusion. On the legislation which covers areas such as money laundering, account keeping and rules and regulations which the various professions have to abide by regarding clients’ money and so on, does the Minister plan to consolidate it in some way in order that there are not different dates and such things? When the Bill is passed, what time period will the Minister give the professional bodies in terms of informing their members about the new legislation and the provision of guidelines?

Deputy Dermot Ahern: This Bill is urgent because we are fulfilling the commitments under the directive. As I said, we have tailored it to suit our circumstances, up to a point. We had very robust money laundering legislation heretofore, but this will tighten it yet again and ensure we conform with the rest of the European Union. As regards consolidation, it will not happen in the area of money laundering per se, but I have indicated to my Department in the past couple of months that a lot of what is in the public domain regarding potential fraud in money transactions and potential corruption is covered by legislation in the area of company or criminal law. Even the area of consumer law covers the issue. I have asked my Department to bring forward a consolidated Bill on white collar crime and have a one-stop piece of legislation which may cut across a number of Departments and agencies such as the Financial Regulator and others. It would be important for us to ensure that there is one piece of legislation which determines what offences are possible not only for our own sake, but also for the various agencies which examine this type of legislation. There are a number of committees — I will not call them watchdogs — under the various international bodies to which we subscribe that examine the spread of legislation in this area. To a certain extent, we have inherited the English model and have amended, in a relatively piecemeal way, the legislation over the years. I have done this in a number of areas in the Department. For example, I have asked my officials to introduce consolidated legislation on the bail laws, the sale of alcohol and corruption and white collar crime. It will be a mammoth task because I will be delving into other areas, in particular company law. It is necessary and that work is about to start.

646 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

Deputy Joanna Tuffy: My other question concerned how long the professional bodies would be given to convey the information about the Bill to their members before it is enacted.

Acting Chairman (Deputy Noel O’Flynn): Does Deputy Flanagan wish to make a point?

Deputy Charles Flanagan: Yes. These amendments will now be approved by the House and the Bill will be enacted. As the Minister said, it represents an important component in the legal framework to combat and deal with money laundering. It also makes reference to the regulation of the gambling industry. I was interested to see the representations the Minister was reported to have made in recent times to Government colleagues on the matter of a gambling- type project in his constituency, something which I thought would be somewhat irregular and inappropriate, having regard to the fact that he, as Minister for Justice, Equality and Law Reform, is now the regulator. He promised to introduce legislation to regulate the gambling sector, with particular reference to the future of casinos, and whether, as a State, we will broaden the legislation from the current private member club framework, which is somewhat inadequate. The Minister might advise the House on where we stand regarding that legislation. The Minister referred to all- party committees, which did not materialise. This Bill was flagged as having a consequence for those clubs who engage in the practice of gambling in a casino form. Will the Minister inform the House as to his views on the changes in legislation? What is the Government’s intention in this regard? What is the timeframe for the introduction of the legislation? What framework will the legislation cover? When might the House have an opportunity of seeing his intentions?

Deputy Dermot Ahern: On my own initiative, I included private members’ gaming clubs, which have sprouted around the country, under the legislation because they have not been regulated and it was necessary to bring such clubs under some form of regulation, particularly given the large sums that wash through them. We are steering away from the purpose of the Bill but the Deputy’s questions are about money laundering generally. He referred to the issue of casinos. We have debated this many times on Question Time. I have no problem answering questions about the issue publicised last weekend. When a project was originally publicised in my locality approximately 18 months, I was asked for a comment by my local newspaper. I said I very much welcomed a new major leisure and sporting facility, which had the potential to create hundreds of jobs in my locality. My home town, Dundalk, through its local authorities, a task force on economic development and all the other agencies promoting the town, had earmarked two areas in which it could have a future as the lead town in the country. One was renewable energy research. When I served as Minister for Communications, Marine and Natural Resources, I was instrumental in ensuring Sustainable Energy Ireland was decentralised to my home town and it is connected to Dundalk Institute of Technology, which has a fine research facility with a wind turbine that provides 75% of the energy needs of the institute. That is one aspect Dundalk wishes to promote. The second aspect is we want to become the leisure capital of Ireland. We have the only indoor Olympics sized ice dome in Ireland. The Irish ice hockey association has the franchise for the dome and I was a good supporter of it. We have an all-weather racing and greyhound track. It is the only facility in Europe, if not the world, where greyhounds and horses race together. It is a fine facility and while I do not know one end of a horse from another, I was a tremendous supporter of that facility, as were the former Minister for Agriculture and Food, Joe Walsh, and the former Minister for Arts, Sport and Tourism, Deputy John O’Donoghue. This proposed project fitted easily into that. The planning application for this makes no mention of a casino for the simple reason that no legislation is in place to regulate casinos.

647 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

[Deputy Dermot Ahern.] When I was appointed to this portfolio, a major report was on my desk regarding our gambling architecture. It was commissioned by one of my predecessors, Michael McDowell, and I was informed when I became Minister that there had been an agreement that there would be an all-party approach to dealing with the report but the Labour Party clearly indicated that it was against that unless there was a commitment that fixed odds betting terminals, FOBTs, would not be included. I indicated I was not in favour of FOBTs and I would not legislate for them as Minister but I was disinclined to remove references to them because they were part of the consideration of the report. Fine Gael was an enthusiastic supporter of an all-party approach. Deputy Barrett had been nominated as the agreed chairman of the all-party committee.

Deputy Charles Flanagan: That is in dispute. That does not accord with the facts.

Deputy Dermot Ahern: The Deputy will be sorry for asking these questions by the end of this.

Deputy Charles Flanagan: The Minister knows that does not accord with the facts. We have been through all this previously.

Deputy Dermot Ahern: When the Labour Party decided on a contrary view to that originally expressed by Fine Gael, I was lobbied by Deputy Barrett and others within the party to proceed with the all-party group, which I wanted to do.

Deputy Charles Flanagan: The Minister has not stated that previously.

Deputy Dermot Ahern: However, because I could not secure the Opposition’s agreement, I then asked the primary official in the Department dealing with this to examine how we could proceed with legislation because governments of every colour since 1956 had shied away from amending the gaming and gambling laws for whatever reason. Perhaps vested interests were the reason but I do not know. I saw it as my obligation, given people spent a great deal of time on this report, to move on with it. I delegated my official to commence a consultation process and more than 70 submissions were received. People have asked to meet me regarding submissions they might make. The group in Dundalk did not discuss with me good, bad or indifferent the issue of a casino. I understand the group did not make a submission but others who asked to meet me did. However, I told anyone who asked me to meet him or her or any Deputy who asked me to meet groups about this that I would not meet them as it was a matter for consultation and they should contact the official involved.

Deputy Ulick Burke: Let the hare sit.

Deputy Dermot Ahern: With regard to the Deputy Flanagan’s question on legislation relating to casinos, my party has not discussed it nor has there been discussion at government level regarding whether we will proceed to have resort style casinos or Las Vegas-type casinos in this country. That would be a major decision, which would have to be made by the Government and the Oireachtas. The Government has had no discussion on this and no decision has been made in this respect. Some people favour them while others — I fit into this category — feel resort style casinos are not needed in the State. However, as Minister, I must have an open mind. Given that I have rarely put on a bet in my life and I do not know much about this area, it is necessary to have a discussion. One of the reasons I was in favour of the Dundalk project was that originally

648 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad it included an indoor ski slope and other leisure facilities. I am an adventure sports enthusiast, not a gambling enthusiast.

Deputy Charles Flanagan: The Minister could have had a nice official adventure yesterday afternoon. He could have done his duty.

Deputy Dermot Ahern: The Deputy also had a little adventure yesterday because word had it he was haring down to Limerick and then he had to hare back.

Acting Chairman (Deputy Noel O’Flynn): The Minister should confine his remarks to the amendments. I would like to deal with them before proceeding with the next business.

Deputy Charles Flanagan: I did not hare anywhere.

Deputy Dermot Ahern: Dundalk is halfway between Dublin and Belfast in probably one of the most pivotal areas in the country and the provision of sports and leisure facilities there would be a great addition to the desire of my town to be the leisure capital of Ireland. Resort-style casino legislation is not on the horizon. There will be legislation on gaming generally but heads of a Bill and so on are not ready because my official is still going through the 70 submissions that have been made in this respect. The Deputy wanted all the information and, as usual, he was first out when the former Minister of State at the Department of Agriculture, Fisheries and Food, Deputy Sargent, resigned. He was not man enough to apologise when he pointed the finger at me and here he is again——

Deputy Charles Flanagan: I chose my words carefully. I will revisit the issue on the publication of the Minister’s report.

Deputy Dermot Ahern: The Deputy is barking up the wrong tree.

Acting Chairman (Deputy Noel O’Flynn): We have gone miles away from the amendment. I have given tremendous latitude to both sides.

Deputy Charles Flanagan: The Minister has been allowed particular latitude. I will briefly sum up what he said. He said that he has an open mind on the matter. According to correspondence to his two colleague Ministers, the former Deputy, Martin Cullen, and Deputy Coughlan, he is minded in a certain direction which is far from open. He said that no legislation is on the horizon but, nevertheless, he confirmed that his Department is engaged in a review of the gaming laws. The sole objective of such a review is the introduction of legislation. We now have a situation where the open-minded Minister, first, is seen by way of correspondence on departmental notepaper to be minded of a certain persuasion and, second, he is not in a position either on Question Time, in the course of this important debate or otherwise, to outline his views on it to the Dáil. He would have us believe his mind is so open as to be empty. The Minister is on record as outlining his support for a Las Vegas-style winter sports development in his constituency which includes——

Deputy Dermot Ahern: Did I say that?

Deputy Charles Flanagan: Yes. It says that the Minister is in favour of it.

Deputy Dermot Ahern: No, it does not.

649 Criminal Justice (Money Laundering and Terrorist 28 April 2010. Financing) Bill 2009: From the Seanad

Deputy Charles Flanagan: I have not seen the Minister’s correspondence but he might like to place it on the record at some stage. His letter expressed “full, active support for this proposal”. I would have thought that amounted to backing, but I admit I have not seen the correspondence.

Acting Chairman (Deputy Noel O’Flynn): In fairness, we should confine our remarks to the two final amendments.

Deputy Charles Flanagan: We should.

Acting Chairman (Deputy Noel O’Flynn): Let us conclude the debate in that regard.

Deputy Charles Flanagan: I accept what the Chair has said.

Acting Chairman (Deputy Noel O’Flynn): Tremendous latitude has been allowed to both sides.

Deputy Charles Flanagan: We will have a further opportunity to discuss the matter but it is somewhat insufficient that we in the House have yet to hear the views of the Minister for Justice, Equality and Law Reform on his intentions in that regard, yet he is prepared to commit full and active backing in writing for a specific proposal.

Deputy Dermot Ahern: To answer the Deputy, if he is to extend his logic, I would not discuss the licensing laws with any publican or hotel owner in my constituency whom I support. If that was the case I would never go outside the door for fear I might meet someone with whom I might have a connection in my Department. When I supported that proposal, it was in the context of a leisure and sports facility.

Acting Chairman (Deputy Noel O’Flynn): Does the Minister have a response to Deputy Tuffy’s question?

Deputy Dermot Ahern: As I said at the weekend, if I were to introduce legislation to allow for a Las Vegas-type casino, in the event of the Government deciding to do so, which it has not, if I am still Minister I would ensure that the licensing of it would be done independently of any political input. Therefore, it is academic whether I support such a proposal.

Acting Chairman (Deputy Noel O’Flynn): Is there a response to Deputy Tuffy? Could we finish this please?

Deputy Dermot Ahern: The Bill will be commenced in various Parts in the coming months in order to give adequate time to the various people involved, including the professions. At least three months notice will be given of the first commencement which will provide a good opportunity to inform members.

Seanad amendment agreed to.

Seanad amendment No. 25: Section 55: In page 50, subsection (5), line 2, to delete “(1) to (3)” and substitute “(1) to (6)”.

Seanad amendment agreed to.

Deputy Dermot Ahern: Before we finish, I thank——

650 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

Acting Chairman (Deputy Noel O’Flynn): I am afraid to engage the Minister again in case he——

Deputy Dermot Ahern: This will all be complimentary.

Acting Chairman (Deputy Noel O’Flynn): I was moving very quickly because the Minister got tremendous latitude.

Deputy Dermot Ahern: I thank the Members opposite. Despite all the things I might say about Deputy Flanagan I thank him and Deputy Tuffy for their assistance with the Bill. It was important that the Bill would pass expeditiously through the Oireachtas. I thank them for their understanding in that respect and for the input they made to the Bill, which is better for the discussion we had not just in this House but in the other House. I made the point on other legislation — I do not make it in a political way given that proposals are floating around on the abolition of the Seanad, but as someone who has put much legislation through that House, especially in this Ministry — that having two Houses and being required to go back to the House in which the Bill commenced is very important in that it provides for a better examination of legislation. I thank my officials for their work on this complex legislation. I thank also the Acting Chair- man and his staff for their work in this respect.

Deputy Charles Flanagan: I agree. I thank the Minister. Seanad amendments reported.

Central Bank Reform Bill 2010: Second Stage (Resumed).

The following motion was moved by the Minister for Finance, Deputy Brian Lenihan, on Tuesday, 20 April 2010: That the Bill be now read a Second Time.

Debate resumed on amendment No. 1: To delete all words after “That” and substitute the following: “Dáil Éireann declines to give the Central Bank Reform Bill 2010 a second reading because: I. It has not been rooted in any proper investigation of what has gone wrong, nor any serious attempt to make key players accountable for the errors committed, both of which are necessary to determine whether this Bill is an appropriate response. II. It infers that the most urgent reform is to change the architecture of the existing regulatory bodies, when there is no verifiable evidence that such architecture was in any significant way responsible for the shortcomings of the regulatory system. III. It preserves the system of appointment of Directors to the new Central Bank Commission exclusively to Government with no proper scrutiny by the Oireachtas or any other external body. IV. It does not give the new Commission the necessary ‘bank resolution’ powers needed to put failed banks safely into a managed administration when that is the most appropriate policy outcome.”. —(Deputy Richard Bruton.)

651 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

Deputy Michael Moynihan: I welcome the opportunity to speak on the Bill. In the past 18 months to two years the spotlight has been directed in a serious way on the banking system, how it worked during the boom years and how the regulatory framework for the banking system operated. The principal aim of the Bill is the appointment of a new Central Bank structure and a new regulatory structure. Two appointments have been universally welcomed and applauded, namely, that of Professor Honohan as Governor of the Central Bank and Mr. Matthew Elderfield as Financial Regulator. Before I speak about the direction in which they are going, we must look back at what was allowed to happen in the banking sector during the past ten years and especially during the past five or six years. In the Anglo-Saxon world in particular what was allowed to happen in banks and financial institutions worldwide is a significant issue. However, we must deal with the situation in this country and try to pick up the pieces in that regard. Reference has been made to light touch regulation. The reality is that there was no regulation at all. The incen- tivised lending of money by financial institutions was probably the root cause of much that has happened. The aim was to lend money out and those who approved the lending were paid according to the amount of money they lent. That was the fundamental mistake that was made in the banking system. Long-serving Members of the House will recall the previous time money was given out so freely was after we joined the European Union and in the late 1970s up to 1979. There was a credit squeeze when the oil crisis occurred in the spring of 1979. The agricultural community in particular had borrowed heavily at that time to buy land at hugely inflated prices. Neighbour- ing farmers were loaned the same amounts of money to bid on the same parcel of land. It took many farmers who had borrowed heavily when money was freely available ten or 12 years to trade their way out of difficulty. Some farmers were not able to do so with significant consequences for them and their families’ livelihood. One cannot say that the crash or the level of credit available was unprecedented. When one considers the system operating in the late 1920s prior to the Wall Street crash in October 1929, again, what is evident is the considerable availability of credit, driving up share prices, and the unsustainable herd instinct that sent everybody in the one direction. In Ireland, the herd instinct influenced the property market. It is untrue to say what has occurred is unprecedented. The Central Bank Reform Bill 2010 and the associated measures being taken by the Government are to ensure the new regulatory framework that is to be given legislative effect will prevent a recurrence of what has happened. This involves a considerable change in the thinking on how financial institutions and systems work, a change in how financial services are being governed and a change in how we, as a nation, view these matters. Everybody has been screaming and roaring about what has been allowed in banks, particularly the major ones in serious trouble. Everybody speaks about what has happened in Irish Nationwide and Anglo Irish Bank. I want to confine my remarks to the general issues but must state it would have been much easier, in Cork North-West or elsewhere, to sell the idea of winding down Anglo Irish Bank in an orderly fashion than the idea of adopting the current arrangement. Unfortunately, the advice received, not only from experts in Ireland but also from the European Central Bank and others, is that we must manage the debt Anglo Irish Bank has accumulated. It beggars belief that the management of the bank attempted to contact the Department of Finance, including the Mini- ster, as late as August 2008 on further acquisitions in regard to the financial system or other financial houses. From perhaps the spring of 2008 onwards, it seems management believed it had enough people to back it or enough money to resolve the problem. What occurred beggars belief.

652 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

Unfortunately, the difficult political position is that we must manage Anglo Irish Bank in an orderly fashion in the best interest of the taxpayer. Unfortunately, huge sums of taxpayers’ money are required but far more would be required if we were to go another route. Very serious concerns are expressed on this matter. It would be far easier to sell the concept of a wind-down to the public, who are quite rightly enraged over what has happened. We must consider those affected by this issue. We should bear in mind the activities of sub-prime lenders, institutions that offered 30-year and 40-year mortgages and those that gave out credit without sufficient controls. Everybody has been seeking competition in the financial system and in every other sector in the best interest of the consumer but some of the financial institutions were offering credit more freely than others and on a more long-term basis. All the others followed suit and this led to the considerable problems we now face. We must respect that this Bill provides a legislative framework for the new Central Bank and regulatory regimes. Credit will and should no longer be made available with the ease with which it had been made available. If we have learned anything in the past few years and months, it is that we must have draconian measures. Wherever there is an easy 1o’clock way to make money or a quick profit to be made, there will be imaginative systems designed to facilitate one’s doing so. That is the nature of the capitalist system but we must ensure we never allow the bubble go so far as to explode in our faces. Commentators recognise that the Anglo-Saxon model, which was developed from 1980 under Ms Thatcher and Mr. Reagan and replicated in various countries, was the model that was worst hit. There is a very significant lesson to be learned from this. We must tailor our policies to ensure we will never again have an economic bubble of the kind we experienced. With regard to regulation, we must consider the mis-selling of products to individuals, companies and some financial institutions by people aligned to the stock exchange. We have all seen the headlines about a 74 or 75 year old being sold a 30-year product by a major stockbrok- ing firm. The extent of such practices must be examined. In the past ten to 15 years, there has been major emphasis on tribunals on foot of certain financial transactions and planning issues. Consider the money being spent on tribunals. They are now being challenged regarding issues and decisions they take. Money was completely wasted on very eloquent members of the law fraternity, who have been very well able to spin stories and carry on investigations for years. When engaging in investigations, future Governments must never go down the route of the tribunals because of their cost. We have heard media debates on certain payments, politicians’ earnings and pensions but we must acknowledge the amount of money earned by some people associated with the tribunals has been obscene. I question the position on the tribunals. What good can come of prolonging this saga, which should had been limited by a timeframe of nine or 12 months at the very beginning? Irrespective of the crises or issues in the public domain that need to be examined, we must learn a lesson from the tribunals. Individuals in SMEs and agriculture are constantly talking about over-regulation. Through various Departments and organisations, such as the National Employment Rights Authority and the Health and Safety Authority, we seem to have become very adept at regulating the activities of people running small businesses with three to four staff. I refer to those in the food industry in particular and to SMEs. A massive number of regulatory measures from the Euro- pean Union have been adopted to monitor these firms and ensure conformity. Subsequent to our adoption of the euro, we forgot about regulation in regard to money available on the

653 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Michael Moynihan.] wholesale money markets. We forgot to ensure proper regulatory arrangements were put in place. The Bill should be clear and direct and should ensure people in financial houses in Ireland and the world over will never again be allowed to gamble the country’s future with a view to making a quick buck, thus requiring the taxpayer to bail them out. People sometimes query why all this should not be left to the banks to sort out but for the sake of the economy we have to do this. We are also dealing with the regulation of the credit unions, as Deputy Sherlock knows, as a member of the Joint Committee on Economic and Regulatory Affairs, and all the stakeholders are involved. The credit union movement has been a fantastic initiative the length and breadth of the country. Its benefits have been seen in both urban and rural Ireland. We have seen a very innovative idea being put forward in terms of one of the Dublin credit unions and development boards are to be put in place as well to help small to medium-sized businesses, which is to be welcomed. The future regulation of credit unions is provided for in this Bill. Section 35 looks at ways of allowing people to restructure loans. That is a difficulty within the credit union movement at the moment. I am aware that as we speak new regulations are being discussed between the partners within the credit union movement, the Department of Finance and the Financial Regulator. It is important we ensure that while credit unions have to be regulated, as with all other financial institutions, there has to be confidence in the quality of all such regulation, not just in Ireland, but internationally. Credit unions, however, have been very good about keeping credit lines open in their local communities and can, perhaps, be looked at separately from the major banks. We have seen the new Financial Regulator and the new Governor of the Central Bank being very surefooted in their approach to the business we have to deal with. We need them to be very clear about what they are looking for and will accept. They also have to be very thorough about even the smallest of issues. We have seen documentation on loans being added onto existing deeds and so forth just to ensure that people got money. I have even seen signed documents which did not contain the signatures of the purported signatories, that cost the latter money down the line. We have to be very clear about investigating such cases to ensure that the individuals involved get the answers they need from the Financial Regulator and the Central Bank on such matters. The ordinary individual who is out of pocket can face a regulatory framework within the State being set up by this Bill with confidence knowing that the issues he or she raises will be dealt with for his or her benefit and indeed, that of the wider community. I welcome the Bill and commend the Minister, Deputy Brian Lenihan on it. There is a need for the public to believe passionately in the regulation that we are putting in place, and to have confidence in the legislation. I commend the Bill to the House.

Deputy Seán Sherlock: I wish to specifically address the issue of credit unions and their ability to reschedule loans and pay dividends at the same time. Part 7 refers to section 15(7) of the Bill, which seeks to amend section 35 of the Credit Union Act will make it impossible for credit unions to undertake rescheduling and pay a dividend to members. This is because the cost to credit unions of additional reserves arising from the rescheduling would leave nothing to be paid out by way of a dividend. This could cause members to withdraw savings from credit unions, resulting in them having less money to loan out and forcing members into the hands of loan sharks or moneylenders.

654 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

The Minister for Finance undertook in April 2009 to review section 35 of the Credit Union Act 1997 to make it easier for credit unions to accommodate members desiring to reschedule their loans, due to the recession. The Acting Chairman, Deputy Noel O’Flynn, will be aware that the Joint Committee on Economic Regulatory Affairs has undertaken extensive consultations with all the representative bodies on this and other regulatory provisions. The economic and regulatory affairs committee’s consultations, under the chairmanship of Deputy Moynihan, in my opinion, have surpassed those of the Department of Finance in that the latter’s consultation process has been more limited and technical difficulties are now manifesting on the eve of this legislation being passed into law. I understand that the expert committee established by the Minister’s Department was limited originally in its membership and met infrequently. The proposed regulatory requirements underpinning this legislation will result, to my mind, in the opposite to what was intended by the Minister unless amendments are made on Committee Stage. If not amended, it will mean a more restrictive regime around credit unions, denying them the ability to meet the needs of some members impacted by unemployment, wage cuts and even public service levies. I am sure this is not what the Minister had intended when the legislation was first drafted. It is impossible and unwise to look at the Central Bank Bill as it relates to an easing of restrictions on credit union loan duration limits, without looking at what the registrar proposes as the underlying requirements and operational guidelines. The Registrar of Credit Unions viewed the proposed legislative change as an opportunity to impose yet more stringent reserve and liquidity requirements upon credit unions, it could be argued. This has to be seen in the context that credit unions are the most reserve rich financial institutions in the State. The registrar introduced a regulatory or non-distributable minimum capital reserve requirement of 10% for credit unions in 2009 — a very stringent reserve requirement, given that the banks at present are baulking at their new standard of 8%. It should also be measured against the fact that the vast majority of credit unions benefit from an additional layer of protection in the form of a self-funded mutual stabilisation fund, the savings protection scheme, under the auspices of the Irish League of Credit Unions. There is a very real danger of over-egging the cake in this particular instance. The registrar proposes to apply his section 35 requirements to all credit unions regardless of whether a credit union wishes to avail of the extension to the section 35 limits. This is something that must be addressed on Committee Stage. The registrar is proposing a liquidity requirement of 25% to 30% where the section 35 exemption is availed of. Even the current 20% liquidity requirement is very onerous when measured against the standards the regulator currently applies against banking. There is every danger here that the combination of the registrar’s and Minister’s proposals will have the impact of rendering it impossible for credit unions to pay a dividend to their members. If all surplus funds must be ploughed into additional reserves, credit union dividends will suffer, driving funds out of responsible credit unions and into irresponsible banks. It must be stated, and the Minister must accept, that no credit union has needed to be bailed out by the State. No taxpayers’ money has been poured into a single credit union, to my knowledge, and the vast majority of credit unions are part of a voluntary mutual stabilisation fund which acts as a backstop to the State deposit guarantee scheme. There are ongoing calls for this stabilisation scheme to be regulated by the Registry of Credit Unions and extended to all credit unions in the State. The registrar seems to be taking the view that every rescheduled loan is an at-risk loan. This is a false assumption. Many credit union members are taking the responsible route when confronted by a drop in income and approaching their credit unions immediately, before arrears

655 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Seán Sherlock.] occur, to renegotiate their payments. This must also be considered on Committee Stage. The proposals before the House today, if unaltered, will tie the hands of credit unions behind their backs. It is inconsistent of the regulator to encourage banks to reschedule loans for their borrowers while, at the same time, financially penalising credit unions that seek to accommodate their members. Practical amendments need to be agreed on Committee Stage. A balance must be struck between the needs of borrowers and savers and the requirement to supplement already strong reserves. I understand the credit union representative associations, including the Credit Union Development Association, the Credit Union Managers’ Association, the Irish League of Credit Unions, the National Supervisors’ Forum and the credit unions themselves, have been in nego- tiation with the regulator and the Department of Finance on these issues. I look forward to the introduction of positive amendments that will add strength to the credit union movement, which is one of the few bright lights on the financial horizon. The Minister for Finance set out, in April 2009, to make it easier for credit unions to respond to the needs of members experiencing unemployment and reduced incomes by affording greater flexibility to credit unions to extend loan terms, where necessary, beyond five years. His Department entered into limited consultation on this matter and it was the registrar of credit unions and not the Department that became the driver in this reform. The result is legislation that makes it more difficult — that is, more expensive — for credit unions to respond to member requests for rescheduled loans. I am not saying credit unions should not have strong reserves. Nobody is arguing that. I fully support the registrar’s introduction of the regulatory reserve requirement in 2009 and commend credit unions for building up their capital reserves to 10% as a result of this requirement. This compares favourably with the equivalent figure for banks, which is 8%. However, this House should pause for thought when we see yet another reserve-driven initiative from the registrar that has not been the subject of a regulatory impact analysis. Credit union representative associations are responsible bodies and are warning against the financial impact of this latest — dare I say it — hurried imposition by the registrar. It is unwise for this House to consider such an imposition when the registrar and the Department have clearly not undertaken an impact analysis. Impact models produced by credit union bodies show many credit unions facing nil dividend returns to members as a result of the Minister’s proposals. The proposed change will not address the needs of unemployed credit union members but will make it impossibly expensive for credit unions to respond to the needs of their members. In addition, and equally importantly, the measure will jeopardise the ability of many credit unions to pay dividends to their members, which will drive money out of credit unions over time and ultimately damage this great not-for-profit resource. Ultimately, the only bodies that will gain from the weakening of the credit union movement will be banks and moneylenders. It could be argued that this is a hurried and ill-conceived measure. It merits careful scrutiny before damage is inflicted on the credit union sector. This sector has not demanded any bailout at taxpayers’ expense and it has acted with probity at all times, although there are some notable exceptions. Looking at the credit union movement, one must be convinced that it has acted for the common good at all times. It is a responsible sector with its own stabilisation fund. When we hear warnings from the credit union representative associations of the damage that this so- called reform will bring, we must take cognisance of this and act cautiously. The registrar of credit unions has extensive powers of regulation and is currently overseeing a review of the credit union sector on behalf of the Department of Finance. Radical proposals to heap additional reserve requirements on an already reserve-rich credit union sector need

656 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) careful consideration. I urge that this take place and that there be plenty of dialogue with the representative associations. I hope their concerns will be reflected in the Minister’s response and in amendments introduced to the Bill on Committee Stage. I ask the Acting Chairman how much time I have left.

Acting Chairman (Deputy Noel O’Flynn): The Deputy has seven minutes.

Deputy Seán Sherlock: I understand the Fine Gael speaker is next.

Acting Chairman (Deputy Noel O’Flynn): It is a Government speaker. I will be stopping the Deputy to allow Deputy Flynn to speak.

Deputy Seán Sherlock: I have made my points. If there is a Government speaker in the House, I will yield to her, if that is in order.

Acting Chairman (Deputy Noel O’Flynn): Deputy Flynn will have 12 minutes before the sos.

Deputy Beverley Flynn: I thank Deputy Sherlock for giving me some additional time. I welcome the opportunity to speak on this Bill. Over the last 18 months we have been in the middle of an economic nightmare. We have not since the 1930s seen anything similar to the collapse of the banking system, which was caused, as everyone acknowledges, by reckless lending and inadequate regulation. The consequences for the country and for every citizen have been enormous. There has been much comment from all sides of the House about the measures contained in this Bill. There have been calls for greater regulation and for people of substance, with adequate training and experience in the area of regulation, to be brought in to deal with this problem. We are dealing today with the Central Bank Reform Bill, which has been introduced to address past inadequacies in regulation and restore confidence to our economy. It is particularly important that we go about rebuilding confidence among ordinary citizens because, if we are to rebuild our economy, it is important that people believe we are coming to the end of the recession and that the comments over the last number of weeks by the ESRI about the return of growth in the second part of this year are correct. We are seeing positive signs, as indicated by the Minister for Finance this week when he stated that exports are rising and car sales are increasing, that there is an improvement in the economy, which is to be welcomed. I commend the Minister for Finance on the actions he has already taken. He has instilled confidence in the people, who believe he has a strong command of his brief and is taking the issues seriously. I welcome the appointment of the new Governor of the Central Bank, Professor Patrick Honohan, and the new Financial Regulator, Mr. Matthew Elderfield. In the short time since they were appointed, they have already begun to build a new regulatory regime and people have confidence that something is being done about this problem. My constituents certainly believe the correct steps are being taken. Now that we have gone to the trouble of putting these experts in charge of a new regime, there is no point in criticising them at the outset. We must let them get on with their jobs because creating a decent regulatory regime will probably require the introduction of tough measures. In regard to Deputy Sherlock’s comments on credit unions, we must let the regulator get on with his job. Public confidence is growing in Ireland and it has been recognised internationally that the decisions we have taken were the correct ones. The Bill before us proposes to reform the structures of the Central Bank and establish a single, fully integrated structure with a unitary board called the Central Bank commission. This

657 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Beverley Flynn.] body will be responsible for the stability of financial systems, prudential regulation of financial institutions and the protection of consumer interests. The regulatory regime clearly did not work well in the past. The former Governor of the Central Bank, who reported to the Minister for Finance, was not paid sufficient heed when he issued warnings about the direction we ultimately took. Even though the issue was raised before the Committee of Public Accounts, it did not receive the attention it deserved. For this reason, I welcome the Bill’s provisions on enhanced accountability and oversight mechanisms. The annual statement on regulatory performance, which is to be presented to the Minister and the Houses of the Oireachtas, will provide an early warning mechanism for Members. I welcome that the Central Bank will have to produce a strategy statement every three years. Regulation and accountability will be further strengthened by the international peer review of regulatory performance which will be conducted every two years. The combination of these measures will create a system that ensures true accountability to the Minister and this House through Oireachtas committees. The Governor of the Central Bank will have to come before committees to be questioned on these mechanisms. This Bill strengthens our hand as a country and puts in place a system of which we can be proud. Ordinary hard-pressed taxpayers who are already funding the recapitalisation of the banks and whose pay-packets have suffered severe losses do not want to be saddled with the cost of regulating our financial institutions. Regulation, which cost €60 million in 2009 alone, is extremely expensive. The enhanced regime we will be putting in place will cost in the region of €78 million. I welcome, therefore, the Minister’s plan to make the financial services industry bear the full cost of regulation. At present, the industry covers only half of this cost but this Bill provides for the power to claw it back through levies on financial institutions. This will be a task for the new Central Bank commission and I suggest it should make it a priority because people need to see that financial institutions are paying for the regulation that has been made necessary by their failure to self-regulate in the past. I can identify several areas which would benefit from the €78 million being spent on regulating the financial sector and I ask the Minister to raise this matter as a priority with the new commission. It is important that we recognise the positive developments. Too often, the only comments we hear in the media or this House are negative. We tend to talk ourselves down in this country but we must acknowledge that we are heading in the right direction both in terms of regulation and as an economy. The ESRI forecasts a return to export-led growth in the second half of this year which will lead to the creation of 20,000 jobs next year and 45,000 in 2012. Ordinary citizens need to be convinced that we are coming to the end of the recession rather than be told that doom and gloom will prevail into the future. The Minister’s actions have been endorsed by the European Central Bank. Deputies opposite have offered their own solutions to our current mess but the favourable reaction we have received from the financial markets reflects a recognition that the approach being taken by the Government is the correct one. I dread to think where we would be economically had the policies of Opposition Members been followed. They are in the fortunate position of being able to propose policies which they know will never come to fruition. Without having to face their policies’ drastic consequences, they can offer different viewpoints every day of the week. When one is in Government, however, one has to implement a policy that one hopes will be successful. We must ensure that the decisions we take are successful when they are implemented. We are already seeing evidence that the Central Bank Reform Bill 2009 is a step in the right direction in the proactive stance taken by the Financial Regulator on certain very public cases.

658 Priority 28 April 2010. Questions

I support the entrepreneurial spirit of those who have done so much to create employment in this country. If we are to return to growth, such people will be needed in the insurance industry, the construction sector and export businesses. However, the financial services industry, about which I know quite a lot, requires strict regulation and once we put in place the necessary measures we must let the regulators get on with their jobs. I commend the Bill to the House as a step in the right direction and I congratulate the Minister on introducing it.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.

Ceisteanna — Questions (Resumed).

Priority Questions.

————

Fiscal Policy. 40. Deputy Richard Bruton asked the Minister for Finance if he has revised his forecast for the budgetary deficit for 2011 in view of the recent developments; and the contingency planning that has commenced in his Department for this changed outlook. [17483/10]

Minister for Finance (Deputy Brian Lenihan): Budget 2010 set out the forecasts for the general Government deficit for the period to 2014. The target for 2011 is for the general Government deficit to be 10% of GDP, which is an improvement over the planned deficit for this year of 11.5% of GDP. The most recently published fiscal data, the Exchequer returns for the first quarter, were broadly in line with expectations and demonstrate that the budgetary plan, as set out in budget 2010, is on track. Consequently, at this early stage of the year, there are no proposals to revise the targets. The Exchequer deficit at the end of March 2010 was €3.9 billion compared to €3.7 billion at the end of March 2009. My Department published monthly targets for both tax revenue and net voted expenditure earlier this year. In regard to tax revenue performance, €7.2 billion in tax receipts was collected by the end of March. This was 15% below the same period in 2009 and was €266 million, or 3.5%, below target. A significant year-on-year decline is expected in the initial months of 2010, with tax revenues forecast to end the year 6% down on 2009. The overall tax revenue target for 2010 is just over €31 billion and, based on the information available so far this year, this target remains valid. Total net voted expenditure at the end of March 2010 was €10.7 billion, representing a decline of some €1.1 billion or 9.2% on the same period in 2009. This significant year-on-year reduction reflects both the expenditure policy changes which the Government has implemented and also, to a lesser extent, timing issues. The Revised Estimates volume, published on 18 February, projected a 1.9% reduction in total net voted spending for 2010 as a whole. In budget 2010, my Department estimated that the general Government deficit for 2009 would be 11.7% of GDP. The estimate for the headline deficit for 2009 has now been revised to 14.3% of GDP. The difference between these two estimates is 2.6% of GDP, of which 2.5% of GDP relates to the technical reclassification of the €4 billion transfer to Anglo Irish Bank made in 2009. It is important to note that on foot of this reclassification, no additional borrowing has taken place and the underlying position of a deficit of 11.8% of GDP for 2009 is broadly the same as that published in the budget last December. This technical reclassification has a once-off impact on the headline deficit. As such, it does not affect the Government’s forecasts for the level of debt, or the forecasts for debt servicing costs, as the €4 billion had

659 Priority 28 April 2010. Questions

[Deputy Brian Lenihan.] already been taken account of in the budgetary debt position. Furthermore, the fiscal consolidation plan as set out in the budget is not impacted by the reclassification.

Additional information not given on the floor of the House. In regard to the recently announced further recapitalisation plan for Anglo Irish Bank and Irish Nationwide Building Society, consultation is ongoing regarding the treatment of the sums involved. Pending agreement of the restructuring plans for both institutions, it is appropriate not to make a provision in the deficit measurement until the matter can be reviewed on foot of any decision by the European Commission on the plans. As the Deputy is aware, the additional capital of €10.9 billion is being made available by way of promissory notes, payable over a ten to 15-year period. This will increase the general Government debt by the full amount in 2010. However, as regards the actual borrowing that needs to be raised arising from this, it is likely that an additional Exchequer borrowing requirement of approximately €1 billion will now be required in 2011 for Anglo Irish Bank and INBS. A likely indication of the interest costs associated with this additional borrowing would be in the region of €55 million per annum and, in the context of the overall budgetary numbers, this is manageable. Work is ongoing regarding the adjustments that will be necessary in budget 2011 and, while difficult decisions will be necessary, the Government is committed to the implementation of the fiscal consolidation plan as set out in last December’s budget. The budget projected that a €3 billion adjustment — €2 billion of which would relate to current expenditure-tax revenue adjustments — would be needed in 2011 as part of the process to restore the public finances to stability. While the nature of the adjustments to be introduced will be a matter for budget 2011, a number of areas for consideration in the context of future adjustments were outlined in budget 2010. The report of the special group on public sector numbers and expenditure programmes, the work currently under way regarding local authorities and the report of the Commission on Taxation will also have a role to play in the determination of future budgetary policy.

Deputy Richard Bruton: With regard to the impact of the promissory notes, which will come to perhaps €21 billion over the next ten years, adding €2 billion each year, will the Minister in order to meet the commitments he has made to the EU in respect of borrowing over the coming years have to find that €2 billion in further cuts in expenditure or further increases in taxation? Given that we have had 250,000 job losses in the course of this recession to date, does he still hold to the view that writing whatever cheque is necessary to keep the banks afloat and fiscal retrenchment is enough to confront the jobs crisis? Does he not agree with many who believe a real strategy for the jobs economy is critical and missing from his approach to date?

Deputy Brian Lenihan: The Deputy raises two broad questions. First, our commitments under the Stability and Growth Pact remain unchanged as a result of this, and the reclassification which has already taken place does not affect in any way our Stability and Growth Pact obligations. Deputy Bruton went on to ask what impact this will have on the accounting treatment of the recapitalisation of Anglo Irish Bank and of Irish Nationwide announced by the Government in March. The matter is complex and far from clear at this stage. Further information is required in terms of the ongoing consultation with the EU about the restructuring of the bank. The further recapitalisation of Anglo Irish Bank announced on 30 March has to be considered separately from the 2009 recapitalisation. The 2010 recapitalisation should be seen in the con-

660 Priority 28 April 2010. Questions text of a restructuring plan for the bank currently being negotiated with the European Com- mission. The recapitalisation of €8.3 billion by issuing a promissory note has been recorded as increasing Ireland’s general Government debt by that full amount in 2010 and, pending the agreement of the restructuring plan, it is appropriate not to include it in the deficit measurement until the matter can be reviewed on foot of any decision made by the European Com- mission on the plan. I should stress that regardless of the eventual treatment in the general Government balance statistics, the reality is that in terms of the Exchequer borrowing requirement these payments will be made over the coming years, beginning in 2011, and will be reflected in the year such payments are made. They will not affect our obligations under the Stability and Growth Pact or the volume of reductions that may be necessary in Government expenditure.

Deputy Richard Bruton: Is the Minister giving the House a categorical assurance that the EU has agreed that in order to meet the 3% deficit by 2014 the Minister will not have to find this €2 billion per year either from spending or taxation? Does he have an assurance on this, despite his claim that it is complex and difficult?

Deputy Brian Lenihan: I am not suggesting I have already obtained such assurance. I am saying to the Deputy that the target is perfectly attainable without taking these matters into account.

Deputy Richard Bruton: We need clarity on this. Either we have to meet this €2 billion per year for the next ten years from taxation and from cuts in spending or we add it to the debt off-balance sheet and it does not affect the budgetary targets. Which is the Minister suggesting is the case?

Deputy Brian Lenihan: It does not affect the budgetary targets.

Deputy Richard Bruton: Has the EU has accepted that it will meet the requirements we have——

Deputy Brian Lenihan: The EU has not even raised the issue with us.

Deputy Richard Bruton: It is a huge issue and we need clarity at a very early date.

Deputy Brian Lenihan: I am giving the Deputy clarity now.

Deputy Richard Bruton: The Minister is not giving clarity. He is just saying it is not in his thinking. We need assurances that the EU accepts his approach so we can frame realistic budgetary proposals. Has the Minister raised it with the Commission and is he seeking assurances?

Deputy Brian Lenihan: We have not raised an issue with the Commission that has not even arisen yet in the treatment of the accounts. That is the crucial point.

Deputy Richard Bruton: It is an obvious question.

Unemployment Levels. 41. Deputy Joan Burton asked the Minister for Finance his views on the latest quarterly national accounts which showed a record 11.3% fall in GNP for 2009; his further views on the most recent quarterly national household survey which showed that the total number of persons unemployed added to those outside the labour force, but interested in finding work, increased

661 Priority 28 April 2010. Questions

[Deputy Joan Burton.] from 10.8% at end 2008 to 16.5% at end 2009 and emigration and participation trends; his views on the end of March quarterly Exchequer returns which showed a revenue shortfall of more than €1.2 billion compared to the same period last year; and if he will make a statement on the matter. [17526/10]

Deputy Brian Lenihan: Preliminary quarterly national accounts data show that the volume of GNP contracted by 11.3% last year. While this was the largest decline on record and represents a very significant decline in our living standards, it was not unexpected. In the December 2009 budget, my Department had assumed a double-digit contraction for GNP last 1 1 year of the order of 102 % and a 72 % decline in GDP. The preliminary data show that the decline in GDP last year was 7.1%. I am advised that the very sharp fall in national income last year was due mainly to a large decline in consumer spending and a contraction of nearly 50% in the level of new house building. In addition, the volume of exports fell last year, although given the prevailing international climate our export performance was relatively good. In terms of the labour market, I understand that quarterly national household survey data show that when those outside the labour force but who are interested in finding work are added to the number of unemployed, the rate increased to 16.5% in the final quarter of last year compared with 10.8% a year earlier. Such developments are a matter of concern for Government and this is why we have taken decisive action to stabilise the public finances, to rectify our banking system and to facilitate an improvement in competitiveness. Action in these areas is essential to ensure economic recovery and, hence, an improvement in the labour market. While quarterly national household survey data are the widest measure of labour market developments, they lag behind live register data. I understand these latter data are available for the first quarter of this year and that they provide some evidence that unemployment is close to its peak. However, a decline in the size of the labour force is part of the reason for this and the Government is under no illusion in this regard. The labour force is declining for two reasons, outward migration and falling participation rates. In terms of migration, I am advised that the number of non-Irish nationals in the labour force is estimated to have declined by 33,600, 10%, year-on-year in the fourth quarter of 2009. While no firm data are yet available, there is also considerable anecdotal evidence of outward migration of Irish nationals. I am also informed that the labour force participation rate fell by 1.7 percentage points year-on-year in the fourth quarter of last year, although participation rates remain higher than the euro area average. The budget day forecast is for unemployment 1 to average 134% this year. While this is still too high, it must be remembered that this time last year some commentators were projecting an unemployment rate in excess of 16% for this year. There is now mounting evidence that economic conditions are stabilising and most commentators now expect a resumption of positive growth from the second half of this year. As the economy gains momentum, we can expect a positive dividend in the labour market, both in terms of reduced unemployment and the return of many recent migrants. Turning to the public finances, the Exchequer deficit at end-March 2010, at €3.9 billion, was generally in line with expectations for that point of the year. Tax and expenditure performances to end-March were broadly in line with my budget plan. At this early stage it is unwise to draw too much from the monthly data as there is considerable volatility in the figures. My Depart- ment continues to analyse the emerging trends and I have no reason to change my view in

662 Priority 28 April 2010. Questions relation to budget day targets. When data for the first half of the year become available, a clearer picture will become evident.

Deputy Joan Burton: While the Minister and his Government remain obsessed with bailing out the banks and the developers, will he not agree that the greatest single social and economic challenge facing the country is to get nearly half a million people back to work? Will the Minister say what measures, if any, he proposes to stem the relentless rise in unemployment, under-employment and emigration? In case the Minister is not aware of it, there are literally hundreds of thousands of people on short weeks, three-day and four-day weeks. This is as a result of a desperate effort by small and medium-sized employers in particular, to hold on to people and to give them some work. I note from the figures provided by the Minister there is a significant outflow of emigration. The only reason the unemployment figures are slightly better than expected is because Fianna Fáil has returned the country to the valve of emigration. We are emigrating some of our best and brightest. What measures, if any, does the Government have to give hope to people that they can get employment in this country?

Deputy Brian Lenihan: I am not sure what the Deputy’s question is because what was said was in the nature of a political statement. The policy of the Government in this matter is, first, to stabilise the public finances. Dramatic progress has been made in that regard. The reduction required in 2009, as a result of the various budgetary measures, was 4% and the envisaged reduction or adjustment is 2.5% this year in GDP terms. These reductions have been commented upon here and elsewhere as being essential to put this country on a competitive path. The second pillar of Government policy is competition. Clearly, the adjustment in the public finances has dramatically improved competitive conditions in the economy, with reductions in prices of goods and reductions in the cost of labour. This has made Ireland a more attractive place in which to invest and work. With regard to banking, the Deputy, as she always does, took an opportunity to preface her statement with the defamatory suggestion that I am engaged in bailing out people. I am engaged in bailing out the economy which is very important and it requires a functioning banking business. I recall on 29 September 2008, on the night of the guarantee, the Deputy was willing to let all funding dry up in the banks on that occasion, which would have led to far more unemployment and far more serious economic dislocation in this country. That is now accepted by all reputable economic commentators. The Deputy can continue to peddle economic illusions to the people or she can face up to the realities as this Government has had to do and address the hard economic realities that require to be addressed.

Deputy Joan Burton: Where is the Minister’s jobs plan for the people who are out of work and who are taking the plane and the boat again to emigrate and leave the country where they were educated and had reasonable hope of making a living for themselves and their families? For the Minister to throw dust in the eyes of those people and have nothing to say to them is little short of a national disgrace. The Minister spoke about the sacrifices of Irish workers in both the public and private sectors on his €4 billion adjustment. That €4 billion adjustment, as EUROSTAT confirmed, was directly countered by the €4 billion the Minister put into Anglo Irish Bank which is a total waste of money. I acknowledge that on 29 September I told the Minister’s officials there were problems with Anglo Irish Bank and Irish Nationwide Building Society. The Minister chose to believe in the crony friends of Fianna Fáil whereas I did not. If the Minister accuses me of that, I accept that accusation but where is the Minister’s jobs plan? I ask him to show the House his jobs plan and to give hope to people who are out of work.

663 Priority 28 April 2010. Questions

Deputy Brian Lenihan: The Deputy is well aware there is no point in extending false and deceitful hopes to people, based on false policies, and standing up here every morning talking about jobs when she is incapable of creating a single one. The one thing that will create jobs is making the right economic decisions that will put this economy on a road to recovery. That is in what the Government has been engaged for the past two years, in the teeth of unrelenting opposition from the Deputy. This is what will restore jobs in this economy, not rhetoric and false promises——

Deputy Joan Burton: Where is the Minister’s plan?

Deputy Brian Lenihan: ——or illusions or magical banks, but real banks that are functioning, competitiveness in the economy, public finances in order——

Deputy Joan Burton: Is Anglo a real bank?

Deputy Brian Lenihan: ——and extensive investment which has been made by the Government.

Deputy Joan Burton: Is Anglo a real bank?

An Leas-Cheann Comhairle: Please allow the Minister to respond.

Deputy Brian Lenihan: Bank of Ireland is a real bank this week and the Deputy wanted to nationalise it a few months ago.

Deputy Joan Burton: What about some hope?

An Leas-Cheann Comhairle: Please allow the Minister to speak.

Deputy Brian Lenihan: The position is that the Government has also invested substantially in job maintenance schemes. As part of an overall package, we are investing in training and retraining. There are record numbers in third level education, all of whom are preparing for an economic recovery, which all forecasters claim will be under way later this year.

Financial Institutions Support Scheme. 42. Deputy Kieran O’Donnell asked the Minister for Finance the action he has taken on the report of the remuneration committee on the covered financial institutions and individual institutions whose actions have not sufficiently taken into account the objectives of the Credit Institutions (Financial Support) Act 2008. [17123/10]

Deputy Brian Lenihan: Under the Credit Institutions (Financial Support) Scheme 2008, the remuneration packages of directors and executives, including total salary, bonuses, pension payments and any other benefits, were subject to review by the covered institutions remuneration oversight committee, CIROC, arising from the provisions of the Credit Institutions (Financial Support) Act 2008. Paragraph 47 of the scheme required each covered institution to prepare a plan to structure the remuneration packages of directors and executives. For this purpose, remuneration includes total salary, bonuses, pension payments and any other benefits received from a covered institution and its group entities, or otherwise, received by a director or executive arising from the performance of his or her functions as a director or executive. These plans covered executive bonuses including share options, if any.

664 Priority 28 April 2010. Questions

CIROC reported on 27 February 2009, recommending reductions in prevailing base salary, bonus and pension levels for chief executives, chairs and ordinary board members that it considered to be, in many cases, markedly excessive. The Government considered the CIROC recommendations in light of the further downturn in the wider economy, the current position as regards the financial position of the covered institutions and the fact that larger economies such as the United States of America and Germany have set lower caps on the salaries of government-aided financial institutions than those suggested by CIROC. In that regard, the Government considered the CIROC recommendations regarding bonuses, pensions, long-term incentive plans and board sub-committees are appropriate but that remuneration terms should generally be lower than those recommended by CIROC. I wrote to the chairpersons of each of the covered institutions on foot of the publication of the CIROC report seeking immediate action from the boards to revise remuneration plans so that revised remuneration packages of everyone in their organisations reflected the concerns of Government in such a way as to respect the salary cap of €500,000 or amounts recommended by CIROC, whichever is the lesser. CIROC acknowledged it will be appropriate to introduce new bonus arrangements at a future date taking account of any long-term incentive initiatives. However, this should arise only where an institution is no longer part of a Government guarantee scheme. CIROC also considered pension arrangements for top management should be reviewed with the payment of cash allowances to compensate for the effects of the pensions cap imposed by the Finance Act 2006. CIROC felt it unacceptable that arrangements be put in place which would be inconsistent with the intent of the relevant legislation. CIROC signalled consideration should be given to the appropriate balance between personal employee contributions and the employer contributions in respect of the pensions of senior executives.

Additional information not given on the floor of the House Pension arrangements for senior executives in each institution should, in CIROC’s view, be at least broadly similar to those applicable to the generality of the staff of the institution. CIROC in its report recommended that the remuneration of other executives should also be adjusted to take account of the revised salaries for chief executives. The reduced salaries for executives should have regard for the need for adequate headroom between them and the chief executive. It is a matter for the remuneration committees of the covered institutions to ensure these recommendations are being adhered to. However, it is possible that in some cases the remuneration committee is restricted because of contractual arrangements entered into with individual senior executives prior to the publication of the CIROC report. It is not in any bank’s interests, as a matter of policy, to pay personnel with lesser responsibilities than the CEO higher amounts than that of the CEO unless they have no other option. I have no legal power under the scheme to force new agreements in such cases for the duration of the existing contracts. In general, the experience of the Department is that the recommendations of CIROC are being complied with and/or being attended to satisfactorily on an ongoing basis. The respective covered institutions operate in a commercial fashion. Subject to contractual considerations, they are expected, in the present economic circumstances, to take account of the necessary downward adjustment in remuneration levels affecting all sectors of the economy.

665 Priority 28 April 2010. Questions

Deputy Kieran O’Donnell: The Minister wrote to all covered institutions requesting revised remuneration plans. Has any institution not sent a revised plan? The €1 million bonus payment to Irish Nationwide’s former chief executive officer, Mr. Michael Fingleton, was not covered by the CIROC’s recommendations. Considering, however, that the Minister has put €100 million of taxpayers’ money into the building society through special investment shares, has he written to its board requesting it pursues the retrieval of this bonus through legal channels?

Deputy Brian Lenihan: All of the submissions were received from the covered institutions earlier this year.

Deputy Kieran O’Donnell: What about the revised remuneration plans?

Deputy Brian Lenihan: I understand revised plans have been approved.

Deputy Kieran O’Donnell: Has the Minister seen these?

An Leas-Cheann Comhairle: Please allow the Minister to reply without interruption.

Deputy Brian Lenihan: Revised plans were received from Bank of Ireland, AIB, Anglo Irish Bank, Irish Nationwide and EBS and were approved. I do not have the information relating to Irish Life to hand. Before I became the holder of the shares referred to, I inquired of Mr. Fingleton’s position. The legal advice given to the Irish Nationwide Building Society indicated that the 2008 €1 million bonus payment to the former chief executive officer was a contractual one and its payment did not contravene the bank guarantee scheme.

Deputy Kieran O’Donnell: CIROC recommended no bonuses would be paid in 2008 which means this payment is not in compliance with the scheme. Has the Minister written to the board of Irish Nationwide requesting a refund of the bonus through legal means? The taxpayer is entitled to know this.

Deputy Brian Lenihan: Yes, I have. The board received legal advice that it was not permitted to request a refund. That was obtained prior to my assumption of a shareholding in the building society via the special share device. If the Deputy, however, wishes me to reopen the matter with the board, I am prepared to do so.

Deputy Kieran O’Donnell: Yes, the Minister should do so as a matter of urgency.

Job Protection. 43. Deputy Joan Burton asked the Minister for Finance the steps taken to ensure the greatest possible protection of employees at a company (details supplied); the position regarding the status of the company and the wider group; the number of entities that have expressed an interest in acquiring this company; and if he will make a statement on the matter. [17527/10]

Deputy Brian Lenihan: On 15 April 2010, the High Court appointed full time administrators to Quinn Insurance Limited. This follows the company’s decision to consent to the appointment made by the High Court on application made by the Financial Regulator. It is the opinion of the Financial Regulator and Quinn Insurance that this step is in the best interests of policyholders. The company is still able to pay claims and renew policies in the

666 Priority 28 April 2010. Questions normal way in Ireland and continues to settle claims in the UK. It also puts the business on a sound commercial and financial footing which best serves the proper and orderly regulation of Quinn Insurance and the wider insurance market. I am conscious of the position of employees of Quinn Insurance as a result of the appointment of the joint administrators to the company. I am aware a key element in safeguarding employment in Quinn Insurance is the reopening of its UK business. In this regard, I welcome the decision by the Financial Regulator to allow the company to write motor insurance cover for provisional driver licence holders in the United Kingdom, including Northern Ireland, with effect from 22 April. This is an important first step in ensuring the value of the business is maintained as it enhances the prospect of the administrators being able to sell the firm as a going concern. The submission of detailed business plans and proposals for the reopening of further lines of business in the UK is a matter for the administrators. The Financial Regulator informed me he has been engaged with the administrators in recent weeks and is giving all proposals full consideration. Before making any decision on this matter, the Financial Regulator will have to be satisfied that any proposals stand up to scrutiny and are supported by robust and detailed information, actuarial analysis and pricing. The Government remains concerned about the position on employment in Quinn Insurance generally. That is why the parties involved must continue to work to find a solution that addresses the issues of putting the company back on a sound commercial and financial footing. This is the best way of protecting jobs and the wider interests of the taxpayer. The administrators said they will continue to engage constructively with staff and management at the company as they endeavour to secure its future. They will be meeting with staff representatives on Friday, 30 April, to advise them of their decision on what measures are necessary for employment levels as part of the recovery plan for the company. I cannot comment directly on the issue of the number of companies that have expressed an interest in acquiring Quinn Insurance as this is a matter for the administrators rather than my Department. However, I am aware the administrators have indicated that a significant number of companies have expressed an initial interest in the company. A complete analysis of the financial position of the company is still being carried out by the administrators and this must be completed before there is further progress on this matter. Regarding the broader Quinn Group, I have been informed by the Minister for Enterprise, Trade and Employment, Deputy Batt O’Keeffe, that the chairman and chief executive of Enterprise Ireland met with the senior management of the group earlier this month. He has indicated that Enterprise Ireland stands ready to provide all possible support to the company with a view to maintaining the maximum number of jobs when the company’s position is clarified presently.

Deputy Joan Burton: The Minister will be aware there is a great deal of shock and uncertainty among employees in the Quinn Group. All of them support the work of the Financial Regulator and administrators. What is the Government’s approach to the protection of employment in the group? Two weeks ago, newspapers reported the chairperson-designate of the State-owned Anglo Irish Bank on the €2.8 billion debt owed by Mr. Quinn and his family to the bank. The Minister has a relationship agreement with the bank. Will he clarify if he was consulted about those proposals by the bank?

667 Priority 28 April 2010. Questions

[Deputy Joan Burton.]

If a State bank is, in effect, acquiring an insurance company, do issues arise regarding competition or EU regulation? In particular, in the context of the relationship agreement, has the Minister been advised by the chairman of Anglo Irish Bank about the proposals that were reported in the media about two weekends ago? That is all we need. The lights have gone out.

Deputy Brian Lenihan: Yes, but I think I can throw some light on the questions the Deputy asked. I agree with the Deputy. The Government is very concerned about the preservation of employment, both in the insurance company and in the wider Quinn Group. That is a core concern of the Government, which is the reason we asked the chairman of 3o’clock Enterprise Ireland to take an interest in this matter just before Easter. I am aware he has liaised with the Minister for Enterprise, Trade and Employment about that particular aspect, which is of fundamental importance. The Deputy rightly made the point that there is a substantial indebtedness, which has been acknowledged by Mr. Quinn, his companies and associated members of his family, to Anglo Irish Bank. The next issue we must examine is the question of what the Government has done to support the efforts of the administrator and the regulator to sustain the viability of the Quinn Insurance company. In that connection, the Government authorised the Secretary General of the Depart- ment of Finance to put our regulator in possession of a letter of comfort from the Department of Finance for the attention of the United Kingdom authorities which made clear the legal implications of the nature of the State guarantee that already exists in our legislation for policy holders. Naturally, the United Kingdom authorities were concerned about that.

An Leas-Cheann Comhairle: We will hear a brief supplementary.

Deputy Brian Lenihan: If it is a short supplementary I can continue with the Deputy’s questions. We then have the question of Anglo Irish Bank and the relationship agreement. As I said in my reply, I am not privy to information on who is bidding in the capacity of any information the regulator would give me from the administrator but I am aware, from the chairman of Anglo Irish Bank, that Anglo Irish Bank is naturally anxious to minimise the exposure of the taxpayer in connection with the realisation of any liabilities or security it has over both the wider Quinn group and Quinn Insurance. In that connection, it is preparing a proposal for the consideration of the administrator but that proposal will have to be considered by the administrator of the court and will have to be approved under the relationship agreement by myself and the Government as well.

Deputy Joan Burton: The Minister spoke about the motor insurance business being resumed in the UK market, which is a matter of great concern to employees of Quinn Insurance. He spoke also about motor insurance for young drivers but I understand that is only 10% of the market in the UK. Is the Minister aware of the progress, if any, that is being made on other lines which are apparently profitable — nobody is talking about unprofitable lines — and what the timeframe might be? The Minister referred to the Secretary General of his Department sending a letter to the UK authorities, presumably to the Financial Services Authority, HM Treasury or to both——

Deputy Brian Lenihan: Our regulator was in possession of it for transmission to the FSA.

668 Priority 28 April 2010. Questions

Deputy Joan Burton: Can the Minister say if any progress has been made on other lines of work opening up? Also, what would the chairman of Enterprise Ireland have to do with Quinn Insurance Ltd? I heard him on the radio but I was utterly confused as to what he was on about.

Deputy Brian Lenihan: First, in regard to the United Kingdom motor business, as Deputy Burton correctly stated, the learner driver side of the market has been opened and substantial progress is being made on other elements of the motor business. However, the pricing of any policies offered in the United Kingdom must be at realistic levels. That issue has delayed progress somewhat to date but I have been advised by the regulator today that he has made progress on that issue and hopes to resolve matters within a relatively short period of time. On the question about the chairman of Enterprise Ireland, his involvement is focused exclusively on the job creation aspect and advising the Minister for Enterprise, Trade and Employ- ment of the possibilities in that regard and, through him, the Government.

Anglo Irish Bank. 44. Deputy Richard Bruton asked the Minister for Finance if he plans to publish a detailed analysis of the options regarding the future of Anglo Irish Bank in view of the growing concerns about his preferred approach. [17484/10]

Deputy Brian Lenihan: I do not have a preferred approach to the future of Anglo Irish Bank as suggested by the Deputy in his question. Indeed, I made that clear in my reply to the debate on banking which took place before Easter. As I told the House on 1 April 2010, my only concern is to minimise the cost to the taxpayer of Anglo Irish Bank. The Deputy will be aware that Anglo is currently updating its restructuring plan to take account of the EU Commission’s response on the initial plan submitted by the bank on 30 November last. The plan will examine all options for the bank’s future, including immediate liquidation, wind-down over a longer period of time, a split between a good bank and an asset management company, and maintaining the bank in its current form as a going concern. The revised plan is to be submitted to the EU Commission by the end of May of this year. Significant further work remains to be done by the bank and its advisers on the updated restructuring plan to test and verify the assumptions in each scenario for the future of the bank. The Deputy will appreciate that at this critical juncture in the process and having regard to the commercial sensitivity of the information and the need to ensure proper protocols are observed in dealing with the EU Commission, it is not appropriate for me to publish the details of the plan which is still a draft. The EU Commission in publishing its decision will include all information pertinent to the decision, subject only to an objective assessment on the commercial sensitivity and confidentiality of the information. I assure Deputy Bruton that my main concern is to ensure that in any plan the interests of the taxpayer are paramount and that my preferred approach to the options presented in the plan will be consistent with that concern. Any plan submitted by the bank will be reviewed by me and my advisers and I will take advice also from the Central Bank, the Financial Regulator and the National Treasury Management Agency. I have no plans, therefore, to give full details of the worked costings of the options regarding the future of Anglo Irish Bank at this time. I noted Deputy Bruton’s article in the Sunday Business Post last Sunday and I am formulating a reply to it.

Deputy Richard Bruton: Has the Minister obtained any independent estimate of the cost of these various options within Anglo Irish Bank? I ask that question because I heard him quote in the past documents coming from Anglo Irish Bank in respect of its estimate. It based that

669 Priority 28 April 2010. Questions

[Deputy Richard Bruton.] estimate on the basis that the loans being transferred to NAMA were worth €26 billion when it transpired it was out by €7 billion. There was a massive gap. Are we depending on the somewhat rose-tinted assessments that are conducted within Anglo Irish Bank for the direction of public policy in this area or has the Minister independent assessment? If so, will he publish that assessment? It cannot have escaped the attention of the Minister that even the former chairman of the finance committee is now taking issue with the notion of Anglo Irish Bank as a going concern and believes we should opt for an orderly wind-down. Has the Minister moved away from the notion that Anglo is a going concern? Has he abandoned that which was the pillar of the Government’s approach for a very long time and repeated time and again by him and the Taoiseach?

Deputy Brian Lenihan: The Deputy has asked a number of questions. To give a context to this debate we should heed what the Governor of the Central Bank had to say. He stated:

Let me make it absolutely clear about Anglo. The management have a plan and broadly I think the plan makes a lot of sense. [Note, he said “broadly”]. I think that is the lowest cost solution for the taxpayer and therefore I am backing that.

Deputy Richard Bruton: Was that its first plan or the new plan?

Deputy Brian Lenihan: He is talking about its new plan. I take it he has discussions——

Deputy Richard Bruton: I thought we had seen it.

Deputy Brian Lenihan: I have not seen it.

Deputy Richard Bruton: But he has seen it.

Deputy Brian Lenihan: He may not have seen it but let us be clear. The Deputy’s first question was whether the Government obtained independent advice about these matters. That is an important question. The Government had retained Rothschilds as independent commercial advisers in all these matters. The Government also has the NTMA to advise it on these matters. The Government established an independent statutory body, NAMA, to give a good, honest valuation of the loan book, which we obtained. There were many who argued — the Deputy was not among them, in fairness — that we should simply split each bank in two and let each bank decide the value of its defaulting loan book. We did not do that, and I am not suggesting the Deputy urged it by the way but quite a number of commentators in the NAMA debate did suggest it. Let us be clear. The Government has independent advice. I am open to suggestions from all parties as to the way the cost can be minimised but it is important that we recognise that the bank must formulate a plan with which I do not interfere. At that stage, I assess and express my views on the plan and engage on it with the Commission. The Central Bank, Financial Regulator and National Treasury Management Agency, NTMA, are available to advise and comment on the plan. Deputy Bruton’s final point relates to Anglo being a going concern, which is important in terms of access to funding for Anglo Irish Bank. This remains the position until final definition is brought to the future of Anglo Irish Bank through approval of an EU restructuring plan. On the restructuring plan, I made clear in the Statements on Banking in the week prior to Easter

670 Other 28 April 2010. Questions that I do not see the prospect of an immediate wind-up, which is earnestly desired by large segments of the population, as being of benefit the taxpayer.

An Leas-Cheann Comhairle: I call Deputy Bruton on a brief supplementary.

Deputy Brian Lenihan: However, I do accept that a longer-term work out is an option that must be examined. The question raised by the chairman-designate of the bank in regard to the possibility of exposure to the taxpayer being further reduced by carving a good bank, from which further profit can be made, out of the loan book of the bank will also have to be examined.

Deputy Richard Bruton: I have two supplementary questions for the Minister. Did Rothsch- ilds endorse the first Anglo version that assumed its loans transferring to NAMA would be far more valuable? This might give us an idea of the quality of the advice the Minister is getting from Rothschilds. Also, when will the House see legislation for the orderly resolution of a bank that is no longer of systemic importance to this country? We have been waiting for this legislation, without which we cannot have proper options on the table. When will this long promised legislation come before the House?

An Leas-Cheann Comhairle: A final reply from the Minister.

Deputy Brian Lenihan: On the resolution legislation, work on it is under way in my Depart- ment. It is complex legislation. The United Kingdom succeeded in drawing up legislation but, in many respects, the implications of it have been found to be unsatisfactory. Other jurisdictions which have attempted to formulate such legislation have failed to date to do so. I am engaged in this operation, as are my officials. However, the House will appreciate that the core priority for me at this stage in regard to the five actual institutions that have been taken into NAMA is to have a credible posture and future planned for them. We have already finalised this in respect of Bank of Ireland. A capital plan in respect of Allied Irish Bank must be submitted by the end of this month. We are making rapid progress in that regard. I agree with the Deputy that this matter of a resolution device is important for the future. In terms of the institutions, what is needed now is a tailored plan for each of them. Where Anglo Irish bank is concerned that tailored plan must be determined in the context of the discussions with the European Union and the structural plan.

Other Questions.

————

Public Service Reform. 45. Deputy Paul Kehoe asked the Minister for Finance his plans to introduce changes in public service management that would create more accountability of senior managers. [17174/10]

Deputy Brian Lenihan: As the Deputy will be aware, senior managers in the public service are already subject to a wide range of accountability measures. Public servants are accountable to the Oireachtas through their appearances before joint committees and the Committee of Public Accounts. They are also subject to scrutiny by the Comptroller and Auditor General and to wider scrutiny through the operation of the freedom of information legislation and the work of the Office of the Ombudsman.

671 Other 28 April 2010. Questions

[Deputy Brian Lenihan.]

The Public Service Management Act 1997 requires Secretaries General and heads of office to prepare and report on statements of strategy and makes them more directly responsible and accountable for the day-to-day management of their Departments and offices. Such responsibilities and accountability can, in turn, be assigned to other officials. In addition, annual output statements must be submitted by Departments and offices to the Oireachtas in conjunction with the annual Estimates, a system which demands a rigorous approach to the management of all resources across the Civil Service. The introduction of an integrated Performance Management and Development System, PMDS, places a strong emphasis on individual performance and accountability and the integration of this system with other human resource processes increases the level of accountability for individuals. While much has been achieved in improving the performance and accountability of public servants, I would be the first to recognise that there remains room for further improvement, consistent of course with maintaining the respective roles of Ministers and officials. Building on the recommendations of the OECD review of the Irish public service, the report of the task force on the public service, Transforming Public Services, identified the improvement of individual and organisational performance, in the context of clearer target outputs and outcomes, as a key priority. The task force made a number of recommendations, including the extension of annual output statements and PMDS to the wider public service. Work on the implementation of the task force recommendations is being overseen by the Cabinet committee on transforming public services. The proposals recently negotiated at Croke Park provide for the advancement of the next steps in increased accountability at organisational and individual level. These include proposals that merit-based, competitive promotion policies will be the norm; that there will be significantly improved performance management across all public service areas, with promotion and incremental progression linked in all cases to performance; that performance management systems will be introduced in all areas of the public service where none currently exists. Each of these measures should incentivise public servants to achieve performance targets and improve their accountability for same.

Deputy Richard Bruton: We have seen in recent times appalling failure in public service, in terms of the regulator’s office and FÁS, which has been rewarded by golden handshakes. What type of signal does this send out in terms of accountability? The Government consistently states in respect of this disaster into which we have plunged, economically, that it acted at all times on the best advice available. Is this not a cop-out when all this so-called best advice remains anonymous? Did the Minister read the article by a well respected commentator on public service reform which described the track record in execution of major policy strategies as suffering from implementation deficit disorder. It is also stated in that article that the Department of Finance is incapable of leading reform in the public service and that it, more than any Department, needs radical reform. What is the Minister’s response to that level of critique?

Deputy Brian Lenihan: Deputy Bruton has ranged far and wide in terms of the questions he asked. In response to his final question, I did read the articles on the performance of my Department. The senior officials of my Department have in recent years worked extremely hard and diligently in difficult circumstances. That has been my personal direct experience of the Department. I am sure Deputies Bruton and Burton would share that perception. The best way therefore to read the article in question is in terms of identifying what deeper structural issues arise in the criticism made of all Departments, including the Department of Finance,

672 Other 28 April 2010. Questions which require to be addressed. I agree with the article in one respect, namely, that the cult of the generalist has been glorified in our public services to an extent that the development of specialised knowledge and information is an important issue in Departments. For example, I had to go outside conventional recruitment procedures to recruit a bank analyst for my Department. The question of the ongoing development of suitable skills in different Departments that pertain to the core activities of those Departments is equally important.

An Leas-Cheann Comhairle: I do not wish to rush the Minister but a number of Deputies are offering.

Deputy Brian Lenihan: A number of Departments take the view that a person employed therein as an accountant should act as an accountant, a person designated an economist should act as an economist and a lawyer should act as lawyer. In my view, these skills should be more widely defused throughout the public service in the general grades as distinct from the specialised grades. This matter is under examination in my Department. On the other criticism made in the article to which Deputy Bruton referred, there appears to be a suggestion that one can confuse the responsibility of the Minister and that of the civil servant to the extent that the civil servant must warn the Minister every time he or she makes a decision that he or she may be wrong. I do not believe that is possible under our system.

An Leas-Cheann Comhairle: I call Deputy Burton on a brief supplementary.

Deputy Joan Burton: Does the Minister agree that under our system leadership is crucial in motivating people? In the foreseeable future, senior managers and the rest of us will have to manage our resources better with less; this is the critical challenge. In that context, there seems to be virtually no accountants or qualified economists with commercial experience or a range of other qualifications, with the exception of information technology qualifications, employed directly in the Minister’s Department. At the time of the banking crisis, I had dealings with the Minister’s Department officials. Their incapacity to analyse information about the banks was terrifyingly restrictive. What impact is the industrial relations dispute having? For example, I understand the flow of information about costs and estimates is extensively limited in the health services. Have the management in the health services and other Departments taken any action to deal with the drying up of the flow of information?

Deputy Brian Lenihan: While agreeing with the general direction of what Deputy Burton suggested, there is a high level of economic expertise within the Department of Finance and a broad range of qualifications throughout the general grades as well as in any technical positions the Department may have.

Deputy Joan Burton: There are very few accountants.

Deputy Brian Lenihan: This was gone through in a previous parliamentary question. There is a substantial amount of qualified economic expertise in the Department.

Deputy Joan Burton: There are no accountancy experts.

Deputy Brian Lenihan: No, but I accepted that. I was simply making a correction to what the Deputy stated for the record because it was dealt with previously in a parliamentary question. I refer to the question of the impact of the limited industrial action. This has had an impact on

673 Other 28 April 2010. Questions

[Deputy Brian Lenihan.] the flow of information from the HSE because the industrial action has taken place at a very high level within the service, including at a level just below the highest grade. This had inhibited the flow of information to the Government from the HSE.

Deputy Arthur Morgan: Does the Minister intend to prioritise any area for change in the public sector? Is there any specific sector which should be prioritised for management change, for example, the HSE, which was cited by Deputy Burton just now? We are aware the Taoiseach once characterised the Department of Health and Children as Angola. Should the Minister, therefore, prioritise the HSE for change?

Deputy Brian Lenihan: I take the view that in respect of the HSE, education, the Prison Service, the Garda Síochána or the Defence Forces, line Departments are responsible for the implementation of the public service reform agenda whereas my Department is responsible for public service change in the line Departments, including that which the Deputy compared to a certain west African State.

Deputy Arthur Morgan: It was the Taoiseach, not me.

Deputy Brian Lenihan: He made the comparison in a former incarnation, but I accept the point. That is the focus of my Department and myself. The quality of decision making and performance can be enhanced and improved from top to bottom in that organisation. This is one of the reasons the Croke Park agreement is so important.

Deputy Richard Bruton: Solid proposals were put forward. Does the Minister support the establishment of a Department of public service reform to cut through this problem? Does he support accountability with consequences, which does not mean golden handshakes? Does the Minister support publishing advice such that people can determine what advice was tendered and acted upon and such that there can be genuine accountability?

Deputy Brian Lenihan: When I refer to acting on advice I do not do so to justify my decision. I arrive at decisions as a Minister. When I refer to advice I do so to rebut any suggestion of corruption, impropriety or listening to wrong representations.

Deputy Richard Bruton: The Minister has defended decisions on the basis of acting on the best available advice.

Deputy Brian Lenihan: These allegations have been flung around the House.

Deputy Richard Bruton: I am not flinging anything around the House.

Deputy Brian Lenihan: No. I have no wish to go there but they must be rebutted at every opportunity. I refer to the question of publishing advice. I made the point that the Minister is politically responsible for decisions and the Minister must take political responsibility in this House for decisions. Civil servants advise on these decisions but Ministers make them. I do not believe the endless publication of advice will improve matters. The Freedom of Information Act has seen a very good improvement in public administration and has thrown a wealth of information into the public domain already in respect of decision making processes. When it comes to the point of a decision, the exemptions provided for in the Freedom of Information Act are wise.

674 Other 28 April 2010. Questions

Personal Debt. 46. Deputy Michael D’Arcy asked the Minister for Finance the progress that has been made in developing a policy to assist persons who are experiencing difficulty in meeting debt repayment. [17146/10]

Deputy Brian Lenihan: The renewed programme for Government sets out the Government’s commitments to introduce new measures to protect families having difficulties with their mortgage repayments and personal indebtedness under the headings Protecting the Family Home and Helping Those in Debt. In February of this year, I informed the Government of my proposals regarding expanding the membership of the interdepartmental mortgage arrears group, under the chairmanship of Mr. Hugh Cooney. The terms of reference of the group, which I have approved, reflect the commitments made by the Government both in the renewed programme for Government and in subsequent Government decisions relating to the issues of mortgage arrears and personal debt. The revamped mortgage arrears and personal debt group has commenced its work and is meeting regularly. I understand that initially the emphasis will be on exploring the feasibility of a range of possible options for improving the level of mortgage support to homeowners in difficulty and will later address the personal debt issue. Proposals will be based on factual information gathered by the group and will take into account the findings of existing reports and mortgage support schemes in operation in other jurisdictions. I expect that these recommendations will be made to me on a rolling basis as the group progresses with its findings and that a final report on this phase of the review will be ready by end June 2010. The Deputy will be aware of the other supports available to mortgage holders including the code of conduct on mortgage arrears, the mortgage interest subsidy scheme and the services provided by the Money Advice and Budgeting Service, all of which I have spoken extensively about in the House on many occasions. In addition, the Law Reform Commission’s consultation paper on personal debt management and debt enforcement, published in September 2009, contains an extensive list of provisional recommendations for reform of the law on personal debt. I understand the commission is aims to have its final report available by the end of August this year. The group will be taking account of these recommendations as it proceeds to address the personal debt aspects of its terms of reference. The Enforcement of Court Orders (Amendment) Act 2009, provides that certain safeguards will apply to the provisions under which a court may hear an application or grant an imprisonment order against a debtor who has failed to comply with an instalment order. The Act ensures that the court will not imprison the debtor unless it is satisfied that he has the means to pay and may also postpone the execution of an imprisonment order until such time as it believes just. In addition, the court will inform a debtor of the risk of imprisonment and of his entitlement to apply for legal aid. The Act gives the court a clear power to vary the terms of an order to pay by instalments or alternatively to refer the parties for mediation.

Deputy Michael D’Arcy: I thank the Minister for the reply but it does not say much about anything. In respect of the code of conduct, is the Minister aware that the banks have already lodged thousands of cases with the courts? They are ready to go and when NAMA is substantially complete they will be able to go after the citizens of the country to ensure the bank figures are okay. However, the people will not be okay. I refer to those who have done it properly, who bought the average semi-detached house, who did not buy a big four-wheel drive

675 Other 28 April 2010. Questions

[Deputy Michael D’Arcy.] or spend a fortune on a holiday. Those who are caught in that demographic profile, who bought at the peak and who did it properly should be given some further support from the State.

An Leas-Cheann Comhairle: What is the question, Deputy?

Deputy Michael D’Arcy: The Minister has ignored questions on this matter. Will he not consider some form or small version of NAMA to ensure relief for the people who have done it properly and who have been fair and correct but who got caught at the wrong time?

Deputy Brian Lenihan: The Deputy’s questions betrays a misunderstanding about NAMA which I had hoped would have been cleared up by now, given Mr. McDonagh’s recent presentation to the committee. When someone goes into NAMA, they continue to owe all the money, not part of it. If they are not prepared to pay the money, their assets are taken. This is what NAMA does. If the assets are unviable, apparently they will be bull-dozed in some circumstances. I appreciate this does not arise with a home owner. There is no equation between NAMA and the position of struggling homeowners. We do not propose that an agency should be set up which could in some sense insist they would pay all their money or be put out of their houses. This is not what is proposed.

Deputy Michael D’Arcy: What about the banks?

Deputy Brian Lenihan: Realistic measures to ease the burden of the very group mentioned by the Deputy will be proposed by the commission that has been established to examine this issue. I took my first step in that direction in this year’s Finance Act, when I ensured that mortgage interest relief was continued for this group beyond the seven-year period. Represen- tatives of the Irish Banking Federation are on the working group. It is very important that arrangements are devised, as mentioned in the programme for Government, for longer repayment terms, interest-only repayments and delays, where appropriate, in repossession proceedings. All of this must be factored in. That is on what the commission is working.

An Leas-Cheann Comhairle: I am keen to facilitate a number of Deputies.

Deputy Brian Lenihan: That is in addition to the existing State investment, which takes place through the social welfare mortgage interest subsidy.

Deputy Kieran O’Donnell: Does the Minister envisage that the proposals involving a resolution-type scheme, which would enable people to reduce their burden in terms of equity, will be accepted? Many young couples who bought houses at inflated prices during the Celtic tiger years are now in negative equity. Some of them, having lost their jobs, are losing the facility to make repayments through no fault of their own. Will a resolution scheme be included in the proposals to be brought forward by the Minister?

Deputy Brian Lenihan: I will certainly ask the group to examine such a scheme. It seems to me that these difficulties are particularly acute for those who purchased in 2005 and 2006. I have drawn the commission’s attention to that already.

Deputy Joan Burton: I would like to ask the Minister about a proposal that has been consistently advocated by the Labour Party, from way back? We have suggested that a two-year framework be permitted so that people who have difficulties with mortgage debt can work through those difficulties. The banks have consistently refused to permit such a framework — they will allow only a year. Many banks commence legal proceedings almost as soon as mort-

676 Other 28 April 2010. Questions gages enter into arrears. Will the Minister insist that the financial institutions accept part- payments? A regime of fines and penalties continues to be applied when people fall behind with their mortgage payments in any way. Some institutions will not accept part-payments, which is pushing people over the edge into complete default. That is what we are asking about.

Deputy Brian Lenihan: I presume the reference to part-payments relates to sub-prime lenders, rather than to the main banks.

Deputy Joan Burton: It relates to a variety of lenders.

Deputy Michael D’Arcy: It relates to all of them.

Deputy Joan Burton: It includes notable lenders like Mr. Fingleton, who was the master in this regard. He went off with €27 million.

Deputy Brian Lenihan: He was a sub-prime lender, as we know.

Deputy Joan Burton: He was the master of penalties in his building society.

Deputy Brian Lenihan: If the Deputy has particular details, she should forward them to the Financial Regulator so it can attend to them. As regards the extension of time, after last year’s emergency budget I asked that consideration be given to extending the moratorium from six months to 12 months.

Deputy Joan Burton: It is not enough.

Deputy Michael D’Arcy: It is irrelevant.

Deputy Brian Lenihan: Following consultation, the regulator decided it would be possible to extend the moratorium in line with my request. The new limit of 12 months now applies to all regulated lenders and is reflected in the updated code, which came into effect on 17 February last.

Deputy Joan Burton: Perhaps it can be extended to two years.

Deputy Brian Lenihan: There is a balance to be struck when one is deciding on the amount of time that can be provided immediately.

Deputy Arthur Morgan: Does the Minister accept that it seems to be the case that almost all of those who find themselves in mortgage arrears would like to reach agreements with the financial institutions involved? I hope any scheme that is proposed will take cognisance of that fact and try to facilitate those involved. In some areas of my constituency, there is a three- month waiting list to meet the Money Advice and Budgeting Service. I appreciate that the Minister is not directly responsible for the service. It is a serious matter for those who find themselves in trouble.

Deputy Michael D’Arcy: I would like to remind the Minister that placing representatives of the Irish Banking Federation on the oversight committee is like putting a fox in charge of a hen house.

Deputy Brian Lenihan: I missed the Deputy’s question.

An Leas-Cheann Comhairle: I think it was more of a statement.

677 Other 28 April 2010. Questions

Deputy Brian Lenihan: His throatiness sometimes brings his voice very low.

Deputy Arthur Morgan: The Minister knows the rest.

Deputy Brian Lenihan: I will bring the various submissions that have been made to date to the attention of the committee that has been established to examine this issue. The committee will bring a series of recommendations to me on an ongoing basis.

Deputy Michael D’Arcy: The Minister should not forget the fox in the hen house.

National Asset Management Agency. 47. Deputy Joanna Tuffy asked the Minister for Finance the number of National Assets Management Agency bonds that have been issued to date; the terms and the maturity; the proportion of these NAMA bonds that are subordinated; the number of NAMA bonds that are envisaged for issue by year end and in total; and if he will make a statement on the matter. [17226/10]

Deputy Brian Lenihan: In accordance with the NAMA legislation, 95% of the total acquisition value of the acquired portfolio of each participating institution will be in the form of Government guaranteed bonds and 5% will be in the form of subordinated bonds. The interest rate on the Government guaranteed bonds is the six-month EURIBOR, as reset on 1 March and 1 September of each year. The value of the total bond securities issued to date by NAMA is €3.538 billion of which €3.361 billion, or 95%, is Government guaranteed bonds and €177 million, or 5%, is subordinated bonds. That information is available on the NAMA website. On the basis of the assessment of applications from the five participating institutions, loans worth approximately €80 billion have been identified as eligible for transfer to NAMA. The consideration to be paid for these loans will depend on valuations, determined by the application of the valuation methodology approved by the EU Commission, of each of the eligible loans. Furthermore, section 50 of the NAMA legislation places a limit of €54 billion on the consideration to be paid for the loans regardless of the nominal amounts involved. This limit can be amended only by a positive resolution by the Dáil. I have no intention of adjusting this figure at this time.

Deputy Joan Burton: The figure mentioned — €3.538 billion — is quite a small amount of transfers, in the context of the draft business plan the Minister presented to the Dáil at the time of the NAMA legislation. According to the Minister’s plan, more than half of all the loans should have been dealt with by now, as we come into May. However, just a tiny proportion of them have been dealt with. What is the reason for the delay? How many Anglo Irish Bank loans are included in the €3.538 billion figure? How much of Anglo Irish Bank does it represent? To what extent has the long-term economic valuation been used? Has a new NAMA business plan been drawn up yet? If so, has it gone to the board or to the Minister? If not, where is it? How can one deal with €80 billion of loans and up to €55 billion of NAMA bonds without having a business plan? It does not seem to make sense.

Deputy Brian Lenihan: The Deputy will be delighted to learn that none of her supplementary questions was anticipated. I refer to her question on the extent to which the economic value was taken into account in the assessment of the total value, for example. I will have to forward some of the information she sought to her at a later date. The business plan is a matter for the board of NAMA, which is responsible for its preparation. There was an interim plan, but it was revised.

678 Other 28 April 2010. Questions

Deputy Joan Burton: That was the Minister’s plan.

Deputy Brian Lenihan: It required revision in light of the subsequent valuations.

Deputy Joan Burton: It was off the rails.

Deputy Brian Lenihan: I am sorry, but it was not my plan.

Deputy Joan Burton: The Minister brought it in here.

Deputy Brian Lenihan: Yes, but it was prepared by the interim chief executive of NAMA at the time. I did not interfere in the formulation of the plan.

Deputy Joan Burton: The Minister presented it to the House as his plan.

Deputy Brian Lenihan: I laid it before the House to help, assist and inform Members and to show that NAMA’s work in progress was advanced. I certainly did not present it as a plan of my Department or of myself. It was prepared by the interim chief executive of NAMA on that basis, for the assistance of the House.

Deputy Joan Burton: Is the Minister disowning NAMA now?

Deputy Brian Lenihan: No, I am not disowning NAMA. I am simply explaining the basis on which I presented the document to the House. The Deputy has misrepresented the basis on which I handed the document into the House. I understand the board is engaged in the preparation of a revised business plan, to be published in June.

Deputy Kieran O’Donnell: The Minister is contradicting himself regarding the draft business plan. He said earlier that Ministers are there to make decisions on the basis of the advice provided. He took a plan that was provided and presented it as Government policy. That plan was based on figures that were provided by the banks but were not examined by the Depart- ment in any way. When will the business plan be forthcoming? Will the Minister stand over that plan? Will he present it as a plan produced by someone else? What will be the eventual haircut in Anglo Irish Bank? We are hearing various reports of 50%, etc. What will be the eventual haircut? What does the Minister expect will be the final amount of NAMA bonds and subordinated bonds to be issued in respect of the whole NAMA process?

Deputy Brian Lenihan: The valuation to date involves a discount of 47%, on an industry- wide basis. We should be aware that the figures vary between different institutions. We have a duty in this House to stop talking about the banks collectively, and to start talking about particular banks.

Deputy Kieran O’Donnell: Is the Minister referring to Anglo Irish Bank?

Deputy Brian Lenihan: I am not lecturing the Deputy or Deputy Burton.

Deputy Kieran O’Donnell: I just want the question answered.

An Leas-Cheann Comhairle: Allow the Minister to reply.

Deputy Brian Lenihan: She is very scrupulous in that regard. There is still a tendency in that regard. On the question of the business plan, I understand from the board, which is responsible for the operation of NAMA, that it will approve a business plan by June of this year.

679 Other 28 April 2010. Questions

Deputy Joan Burton: June?

Deputy Kieran O’Donnell: June?

Deputy Brian Lenihan: I mentioned that to the Deputy a moment ago.

Deputy Kieran O’Donnell: We were expecting it at the end of May.

Deputy Brian Lenihan: On the question of the total amount, it is clear it will be substantially less than the statutory limit of €54 billion, but I am not in a position to say until the valuation methodology is complete. The best estimate which can be given at this stage is that the final valuation will be broadly in line with the initial valuation of the initial tranche.

Deputy Kieran O’Donnell: The Minister referred to the haircut for Anglo Irish Bank.

Deputy Brian Lenihan: No final estimate can be given until the bottom-up valuation is done. What was the Deputy’s question on Anglo Irish Bank?

Deputy Kieran O’Donnell: What eventual haircut on the first tranche does the Minister expect? It still has not gone into NAMA.

An Leas-Cheann Comhairle: Allow the Minister to reply.

Deputy Brian Lenihan: As I understood it, a figure of 53% was the latest stage it had reached.

Deputy Kieran O’Donnell: The Minister obviously has more up-to-date information.

Deputy Brian Lenihan: Again, that figure remains to be finalised.

An Leas-Cheann Comhairle: We can have one final question.

Deputy Kieran O’Donnell: It is getting worse. It was 28%

An Leas-Cheann Comhairle: Please, Deputy. Allow me to call the Deputy.

Deputy Joan Burton: Can the Minister supply the information to us?

An Leas-Cheann Comhairle: The Deputy will allow me to call her without shouting people down.

Deputy Kieran O’Donnell: There are a lot of personal guarantees there.

Deputy Joan Burton: Can the Minister undertake to supply to us in writing, as soon as possible, with the breakdown of the transfers which have taken place for each of the covered institutions, the amount of the discount to date and the total amounts? Everybody in the country is stunned by what has happened regarding Irish Nationwide, Mr. Fingleton’s institution. As with Anglo Irish Bank, we would like the figures for it.

An Leas-Cheann Comhairle: The Minister can make a final brief reply.

Deputy Brian Lenihan: I will arrange for NAMA to forward the information to the Deputy. It is information which she should have at her disposal. On Irish Nationwide, there was a particular problem, namely, the failure to take security out on particular assets.

680 Other 28 April 2010. Questions

Fiscal Policy. 48. Deputy Martin Ferris asked the Minister for Finance his views on the Mazars review of lending to small and medium-sized enterprise in the final quarter of 2009 which showed that SME lending was down by 3.6% in the year; when Bank of Ireland is required to submit its SME lending plan to his Department, as required under the terms of recapitalisation of the institution; if this lending plan will be presented to the Houses of the Oireachtas; when AIB and Bank of Ireland plan to start making the €3 billion in credit facilities, as required under the recapitalisation plan, available to small and medium-sized enterprises; and if he will make a statement on the matter. [17098/10]

75. Deputy Seán Sherlock asked the Minister for Finance if he will comment on the most recent Mazars review of lending to small and medium-sized enterprise; and if he will make a statement on the matter. [17219/10]

Deputy Brian Lenihan: I propose to take Questions Nos. 48 and 75 together. I consider it important to examine the overall picture in regard to credit for small and medium-sized enterprises, including positive aspects, and not to focus solely on negative aspects of the report. The third Mazars report on lending to small and medium-sized enterprises, which covers the period from October to December 2009, showed that credit applications in number and value terms rose slightly in the last quarter of 2009 over the previous quarter, which is encouraging. The level of applications for credit appear to be stabilising and Mazars also reported a small improvement in the overall credit approval rate. However, the reduction in the stock of credit, as repayments exceed new credit, and in credit quality reported by the banks remains a concern for the Government. To address this concern, I announced earlier this month that AIB and Bank of Ireland are to make available a minimum of €3 billion each for new or increased credit facilities, including working capital targeted at small and medium-sized enterprises, in the real economy in each of the next two years. A letter was sent to Bank of Ireland and AIB on 7 April requiring them to prepare a small and medium- sized enterprise lending plan, broken down by sector and geography, for submission to my Department by 12 May. Both banks are expected to make the credit available immediately and should not wait until the plans are submitted. The recently established credit review office is available to review banks’ decisions to refuse credit to businesses. It will provide an independent opinion of the banks’ decisions on whether the credit should have been granted or not. It is possible that the existence of the office could have an effect on the banks’ behaviour in regard to credit. Businesses can also seek a review of a decision to reduce or withdraw credit. This should resolve the contentious issue of whether the banks are willing to lend to viable businesses. I have taken a number of other actions to assist the credit situation regarding small and medium-sized enterprises. The two largest banks are required to provide €20 million each for seed capital to Enterprise Ireland supported projects. They must each set up a €100 million fund for environmental, clean energy and innovation projects. In addition, the banks are required to commit to working with Enterprise Ireland and the IBF to develop sectoral expertise in the modern growth sectors, to explore with Enterprise Ireland and the IBF how best to develop the range of banking services that Irish small and medium-sized enterprises trading internationally will need. They are also required to develop expertise and credit products in areas where cashflow rather than assets is the basis for lending.

An Leas-Cheann Comhairle: We will roll the questions together, if people will agree to that.

Deputy Arthur Morgan: I thank the Minister for his reply. How rigorously will the banks’ lending practices be scrutinised by Government to ensure that they are meeting their obli-

681 Adjournment 28 April 2010. Debate Matters

[Deputy Arthur Morgan.] gations and commitments? Is the Minister aware of another problem which is about to occur regarding lending by banks? The chief executive officer of Bank of Ireland, Mr. Richie Boucher, pronounced earlier this week that Bank of Ireland will raise interest rates for mortgage and business lending. Does the Minister share my concern that some of these banks may be prohibitively expensive in terms of their lending and that we are back to square one?

Deputy Joan Burton: On the €3 billion, what is the situation regarding banks which are refusing to renew guarantees or rolling over existing lending facilities and describing that as new? How will that be identified and assessed?

Deputy Kieran O’Donnell: Is the Minister aware that none of the three Mazars reports gives a breakdown? They are inadequate because they give no breakdown between new and existing lending, and between overdrafts and long-term loans. It is incredible that the banks are unable to provide that level of breakdown. It is clear there is a cover up because they are not willing to provide that level of breakdown.

Deputy Richard Bruton: Did the Minister note the figure in the Mazars report that lending to performing loans for small businesses was down by 25%? It an extraordinary squeeze on performing businesses which are the lifeblood of recovery. Has the Minister done any preparation on how he might frame credit directives, a power which he took in the legislation, if that becomes necessary?

An Leas-Cheann Comhairle: I apologise for rolling all the questions together.

Deputy Brian Lenihan: I thank the Leas-Cheann Comhairle. In a sense, Mazars has been superseded by the appointment of Mr. John Trethowan and the focus of the discussion was on Mazars. He is now engaged in his work and will be in a position to advise me on drawing up the type of regulation to which Deputy Bruton referred. On the rolling over of arrangements and guarantees, I made it very clear in my statement on banking before Easter that the €3 billion is expected to relate predominantly to working capital and it is not excluded. It is not a matter of new lending. One of the difficulties has been that the banks have suggested, as Mazars has identified, that they are willing to give new lending. One of the core difficulties has been working capital, as the Deputy has consistently identified, and Mr. Trethowan is well aware of that. I apologise to Deputy Morgan; the question is in the name of Deputy Ferris. What was the question?

Deputy Arthur Morgan: My question was on the concerns regarding the banks increasing their lending rates to business to such an extent that it would be unaffordable. Can or will the Minister do anything about that in the event that it occurs?

Deputy Brian Lenihan: There is very little we can do about that because the markets determine the rate at which we buy and sell money. I am confident that the measures begin taken at the European Central Bank will stabilise interest rates and prevent their undue increase.

Written Answers follow Adjournment Debate.

Adjournment Debate Matters. An Leas-Cheann Comhairle: I wish to advise the House of the following matters in respect of which notice has been given under Standing Order 21 and the name of the Member in each case: (1) Deputy James Bannon — the need for the Minister for Health and Children to clarify the position in regard to the Midlands Regional Hospital in Mullingar and whether the with-

682 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) drawal of services from the hospital and the refusal of scan and x-rays to public patients is indicative of a closure by stealth of this valuable health facility for the midlands; (2) Deputy Noel J. Coonan — the assistance available to former miners who are no longer capable of working; (3) Deputy Seán Sherlock — to ask that Kildorrery national school, roll number 19526T, in County Cork be added to the list of recipients under the summer works scheme 2010; (4) Deputy Mattie McGrath — the legislative framework for combating litter pollution and the need to motivate and energise anti-litter responses; (5) Deputy Joe McHugh — the importance of outlining a timeframe for the delivery of promised new school buildings to St. Eunan’s College, Letterkenny, Co. Donegal; (6) Deputy Jim O’Keeffe — the continuing problem in regard to adoptions in the Russian Federation arising from the failure of the Irish authorities to forward post-placement reports of Russian children already adopted in this country and the steps that need to be taken to correct the situation so that Irish adoptive parents can again complete the adoption process for new adoptions which are currently blacklisted by the Russian authorities; (7) Deputies Thomas Byrne, James Reilly, Jan O’Sullivan and Caoimhghín Ó Caoláin — the need for the Minister for Health and Children either to extend the Lourdes hospital redress scheme by ministerial order to cover the some 35 women victims of Michael Neary who have been heretofore excluded under its terms or that she instruct the State Claims Agency to agree a suitable non-adversarial process that will cater to the just claims of this cohort of profoundly damaged women; (8) Deputy Trevor Sargent — the need for a new social welfare office at Balbriggan, County Dublin; (9) Deputy David Stanton — to ask the Minister for Health and Children to address concerns about the future of Cobh community hospital by clarifying the position regarding future funding for the hospital and if she will make a statement on the matter; (10) Deputy Mary Upton — the need for clarification on the future of the home help services in the Ballyfermot-Inchicore area; and (11) Deputy Thomas P. Broughan — the urgent need for the Minister for the Environment, Heritage and Local Government to establish a commission of investigation to examine all aspects of planning, construction and building control and building repairs in the north fringe district of Dublin city and Fingal county. The matters raised by Deputies Thomas Byrne, James Reilly, Jan O’Sullivan, Caoimhghín Ó Caoláin, Trevor Sargent and Mattie McGrath have been selected for discussion.

Central Bank Reform Bill 2010: Second Stage (Resumed).

The following motion was moved by the Minister for Finance, Deputy Brian Lenihan, on Tuesday, 20 April 2010: That the Bill be now read a Second Time.

683 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

III. It preserves the system of appointment of Directors to the new Central Bank Commission exclusively to Government with no proper scrutiny by the Oireachtas or any other external body. IV. It does not give the new Commission the necessary ‘bank resolution’ powers needed to put failed banks safely into a managed administration when that is the most appropriate policy outcome.”. —(Deputy Richard Bruton.) Deputy Ulick Burke: I welcome the opportunity to contribute to the debate. I compliment the staff of the Oireachtas Library & Research Service on the comprehensive supporting material they have provided for all Members. An editorial in the latest edition of The Sunday Business Post stated: “The more we learn about the behaviour of those who have led our financial institutions in recent years, the more obscene the lavish way in which they have rewarded themselves appears.” Members and the public are no longer shocked by revelations about financial institutions which are emerging day after day, week after week. This learning curve started for most in 2008 and it has continued to the present day. Only last week in the most recent chapter we learned of the Taoiseach’s endorsement of a €1.5 million pension top-up for Bank of Ireland’s Richie Boucher, which he subsequently relinquished. Prior to this, a €1 million bonus was paid to Michael Fingleton, former chief executive officer of Irish Nationwide Building Society, INBS, which has not been returned, despite many promises. That list is lengthy and it is likely to continue. Will the legislation bring an end to the obscene rewarding by the banks of their own executives? Will we ever find out the true level of self-rewarding within the banks? The Minister for Finance capped the pay of new executives appointed to the lending institutions but too many of the old brigade are still in place. Many of them sat idly by while irregularities were perpetrated. If they are forced to leave, they will not go empty handed, given the pattern to date. It seems few knew what was happening while others were in denial. Even when the Taoiseach referred to his tenure as Minister for Finance in the House last week, he declared it was not his duty to monitor the activities of the banks or to inquire when the signs of failure were apparent to the public. There were serious problems in the banking world. During his term as Minister for Finance between 2004 and 2008, most of the banks’ reckless lending to developers took place and, at the same time, the economy went from boom to bust. He became part of the cause, despite his repeated denials. Only last week when addressing this legislation, he stated, “We should forget about looking back at the past”. We were told that prior to the start of the financial crisis in 2008 that financial institutions were preparing regulations for the Government. This was raised by Deputy Gilmore this morning and no answers were forthcoming from the Taoiseach in response to the Deputy’s questions. Is it not a pity that a regulator such as Mr. Elderfield was not in place at the time? Surely he would have directed that many of the bosses in place then who were responsible for reckless lending take a walk and rather than receive a bonus and he would not have allowed related top-ups. He needs to be complimented on his approach. The regulator needs competent personnel and he stated he is taking steps to address “the critical absence of intellectual firepower within his staff and will appoint experienced and effective staff who will preform their duties properly”. When one sees the deceit that sections of banks engaged in during the years leading up to the crisis and during it, is it any wonder future generations of taxpayers will be burdened for their lives? I refer to INBS and Anglo Irish Bank, which the Minister for Finance alluded to during Question Time. The wreckage left behind by Mr. Fingleton only came to light recently when the annual accounts of the society highlighted losses of €2.5 billion. This was a traditional home loan institution but, unfortunately, its supposed success in the commercial world was a

684 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) major factor in its downfall. The new chief executive officer of INBS, Mr. Gerry McGinn, said, “What happened at Nationwide is an outrage.” The Government had to put €2.7 billion into the bank to shore it up and to avoid its collapse. The shock for those who examined the procedures adopted at INBS was the lack of written documentary evidence, as would be the normal practice if proper procedures and paperwork were followed for commercial developers. There is no evidence of security and more than €8.3 billion in loans will be transferred from the institution to NAMA. It is hoped the purpose of the Bill is to create a single and fully integrated Central Bank board and commission and to rid the system of the failed regulatory institutions. If, as intended, the heads of the Central Bank and the Financial Regulator’s office can control and regulate all financial institutions, the Bill will be worthwhile. The new fully integrated Central Bank will replace the boards of the Central Bank and the Irish Financial Services Regulatory Authority. Their past failure merits this action. One of the main provisions of the Bill is to enhance financial regulations and controls, particularly in the area of enforcement. The new role of the Central Bank, as anticipated by the Minister for Finance’s reforms, will be to place itself at the centre of financial supervision, stability and oversight. The Minister informed us that the new structures will ensure Ireland is regulated to the best EU and international standards as a result of this legislation. The Central Bank of Ireland in its early years did not carry out functions generally regarded as characteristic of a central bank and it did not take responsibility for licensing and supervising banks until 1971. In July 1998 a report by the Oireachtas Joint Committee on Finance and the Public Service warned that the fragmented regulatory structure had allowed many irregularities to emerge, including overcharging. Following the recommendation of the committee, the Government announced a single regulatory authority. Part 3 is the most important element of the legislation in that it sets out the powers of the Central Bank in regard to key officeholders and the main financial institutions and, in particular, it has the power to intervene in sensitive and influential appointments. The Central Bank commission will comprise the Governor, the chairperson of the commission, 4o’clock the head of the Central Bank, the head of financial regulation and the Secretary General of the Department of Finance. These will be ex officio appointments but between six and eight additional appointments to the commission will be made by the Minister and it is important that each of them be properly scrutinised in order that he or she will be fit for purpose. Will the Minister have a watchdog role or will the Secretary General of the Depart- ment take on that responsibility? In the past, many of the appointments made to bodies were of friends or acquaintances of Ministers and others. We hope that on this occasion such practices will not be repeated. We are told that when the provisions of the Bill are enacted that they will restore confidence in the management of financial institutions. We hope that will be the case. That will be welcomed in this country and internationally. Hardly a day went by in the past two years without headlines in the media revealing another scandal — another banker discredited or another link to a developer — caused by the reckless action of the executives of those lending institutions which brought about the failure and crisis in the banking system. It was a great pity that the bank leadership retreated into denial rather than tackling the problem at the first sign of the crisis becoming serious. Had that happened, much of the subsequent hardships to be inflicted on taxpayers would have been avoided. The failure of proper Government attention to the financial crisis also contributed to the problems. People who highlighted the oncoming problems were criticised for talking down the economy and doing the country a disservice. It must be seen therefore that the current crisis occurred as a result of neglect of duty and recklessness by bankers, the regulators and the failure of the Department of Finance to ensure proper procedures were followed.

685 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Ulick Burke.]

One would have thought that the people charged with responsibility, namely, the management of the banks, would be removed from their positions because of their failure and in many cases, irregularities, in their work. The Minister has declared that he will pursue each of them vigorously but the inquiries currently taking place have as yet yielded little result. No confidence will ever be restored into the banking system by the public despite this legislation until some of those people are brought through the courts and put behind bars, as has happened in other jurisdictions. The defiance of some banks in the face of change has led to promotions in some cases of those who were at the centre of their failure. If we are serious about restoring confidence in the banking system, which is essential for the recovery of the economy, then we must follow the example shown by other countries who have dispatched those who were to blame. There is no shortage of experienced and well-qualified persons who could ensure the proper governance of the banks, which is the job that is required. Given that the State is currently a large shareholder and owner of the banks — at such a high cost to the taxpayer — surely the Minister can demand change and oversee the proper working of the financial institutions? It is essential that the Bill is capable of bringing about the necessary reform of the banking sector. It is important that Mr. Elderfield and Professor Honohan are given the necessary legislative support to do their work effectively. They have the expertise to do what is necessary. Let us hope that no obstacles will be put in their way either by the Government or bank personnel. One assurance that is giving hope to the public is the stated intention and determination of Mr. Brendan McDonagh, the chief executive of NAMA, who appeared before an Oireachtas committee last week. He insisted that NAMA will pursue the borrowers to recover what they owe. He said his role was to protect the interests of the taxpayer. I welcome the section dealing with credit unions, which have remained the friend of the small borrower in the past two years in particular, and the fact that they will now be allowed to reconstruct their lending procedures and the underpayments that have been made by various people who have loans from them. I support the Bill. I hope the legislation will ensure the work is carried out as intended and that confidence can be restored in the banking system.

Deputy John McGuinness: I welcome the Bill and the promise of further legislation in this area in the course of the year. It is essential that we continue to strengthen the banking and financial sectors from a legislative perspective as things change in this country and as we are influenced in the context of that change by outside markets and other countries. Having listened to what was said in the debate by both Opposition and Government speakers, if we want to be convinced about whether we are influenced or affected by what happens elsewhere in the world we need only look to what happened in Greece yesterday and see how the markets were affected. Trade in Greek banking shares fell by 12% while Bank of Ireland shares fell by 10%. That shows we are in the grip of a global situation and that we are affected by it. As a small country we need to be in a position to respond to the challenge in a way that is dramatic and radical in order to protect our interests both at home and abroad. In that regard I compliment the Minister for the manner in which he has dedicated himself to the task of ensuring that the necessary change is effected as quickly and efficiently as possible and that it is underpinned by appropriate, strong legislation with the aid of appropriately qualified people such as Professor Patrick Honohan, Mr. Matthew Elderfield and others to ensure that the legislation and regulations are followed. What happened yesterday in terms of the junk status accorded to Greek shares is having an impact around the world especially on Portugal, Spain

686 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) and this country. In contrast, it was good to hear Mr. John Corrigan outline the fact that while we have to raise €20 billion this year, some €12 billion has already been raised and that there is a cash balance to our credit of €20 billion to give us the time, if necessary, to deal with issues that might arise in the short term. Yesterday’s events also underline the importance of the ratings agencies Standard and Poor’s and Moody’s and it puts into stark contrast the action we have taken compared with the inaction of other countries. That action has stood to us in terms of our public sector pay bill, the need for reform and the outlining of that reform in the Croke Park deal. It puts at centre stage the efforts of the Government to ensure we have a deal in place and that we are willing to take the necessary measures to reform our financial institutions and the public sector and for the Government to react speedily and do what is required because we are being watched by other economies and those within the European Union. The eurozone is central to everything we do and the protection offered by it through Germany and other larger countries is essential to future job creation, our markets and trade abroad. It was with some reluctance that I supported NAMA. It came at a time when we were in turmoil. We were looking back at a marketplace that had performed well, created jobs, and given us the appropriate level of taxes to spread equally across society and to help those who were marginalised or dispossessed and needed help and assistance. It was with some disbelief that we considered the activities of the banking sector and how the country, through the activities of one bank in particular, was brought to its knees, and how the tax take, which was affected because of reduced economic activity, dropped to almost €30 billion. That is a lesson for this and future Governments. I do not mind saying to the public that a certain amount of sorrow and an apology are needed in so far as any of us in this House or in politics generally added in any way to the confusion, lack of regulation or poor decisions. The Minister for Finance has already said this. Having reflected on what happened, there is an onus on Members of Parliament to learn from the past and decide what needs to be done. There is a lot we can learn from the past. We must examine all that happened in the banking sector. As new figures emerge in the banks, as new appointments are made and as we move the taxpayer to the fore in terms of saving the economy and restructuring and recapitalising the banks, there is a definite need for an open public inquiry into the what happened in the banking system. The Minister for Finance has put in place all the measures necessary to gather independently and analyse all the required information. Committees in the House may examine the reports when compiled. Much more needs to be done, however, particularly because of what we have discovered in Anglo Irish Bank and Irish Nationwide. The public wants to understand, in layman’s language, what happened and to see those who were central to the wrongdoing in the banking institutions brought to court or at least made answerable for what they did. Whatever is necessary to strengthen the bank report, make it public and ensure it is debated by this House or an Oireachtas committee should be done. We must review our projects and the commitments we make. As we introduce new legislation to improve regulation, we must reach out to and try to explain developments to the public, who are quite cynical and sceptical about what we are doing in the House regarding the banks. As this Bill is debated in the House, there is a need for the Department of Finance to reach beyond the House and explain in layman’s language exactly what it is about and what the Oireachtas is attempting to do to ensure the existence of a proper banking structure that is regulated and transparent and which serves the public as it should. The onus is on the Govern- ment, Department of Finance and Members of the Oireachtas to ensure the deficit of ordinary information is addressed such that legislation such as this Bill can be understood. That is why

687 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy John McGuinness.] it was so important to stop the paying of bonuses to bank officials. It is important that there be a cap on salaries and no further payments of the kind made in Irish Nationwide or Bank of Ireland. In respect of the latter institution, it is important that the money due to the State, €1 million, be seen to be returned to the State rather than anywhere else. With regard to the boards of the banks, we can report the actions taken by the Minister to ensure board members are appointed in the public interest. It must be said directly to them that they are not appointed just to fill a position but that they have a role to play in the interest of the public. Irrespective of what happens in a bank, be it in terms of salaries, pensions or other actions, it is up to the board members to give voice to the public’s opinion such that the public interest will be protected at all times. If board members’ positions are to be credible and if the moneys they are being paid to do their job are to represent value for money for the taxpayer, they must be seen to be taking the appropriate action and scrutinising each transaction within the banks to ensure we are on the right track in terms of regulation and accountancy. We must also consider the need to convince the public, particularly the business sector, that as we legislate in this area, but not just in this Bill, the banks will be open for ordinary business. The Minister addressed this during Question Time. It is essential that the banks be open for ordinary business if public confidence is to be inspired and if we are to convince people outside this House that we are acting in their interest. This Bill and what is being achieved will strengthen the whole banking sector. It will show people abroad involved with markets that affect this country that we are going about our business and determined to get it right, regardless of the pain. This is essential. There is a need to convince businesses in this country, which remain unconvinced, that the banking sector will be open for business and available to assist with the establishment and growth of businesses. The sector must ensure businesses, some of which are customers of the major banks, that if they, the businesses, are in trouble, there will be a way out for them. Just as we are seen to use taxpayers’ money to bail out the banks, it should be seen that money will be readily available in the banks for businesses, including small businesses and farms, that need assistance. There is no evidence of this yet. We need to use some of the existing agencies. The Minister for Finance mentioned Enterprise Ireland. I have great respect for the work it does with Irish companies at home and abroad to ensure we can gain access to the various markets that will be so necessary to achieving essential export-led growth. There is a fund to help the export sector. Instead of decreasing the money allocated to county enterprise boards, we should not only be increasing it but also ensuring, perhaps through the National Treasury Management Agency, that €0.5 billion or €1 billion will be made available to the boards so they will be in a position to offer small companies short-term soft loans to help them surmount particular problems, diversity, expand or sustain existing employment levels. This is essential and involves the sensible use of the 35 different boards. We need to consider this. It is fine to focus on the work on the banks, much of which we have done, but we now need to work more with the SME sector throughout the country. The credit unions were mentioned, as was the effort they are making to fund small businesses and ensure they have sufficient working capital. This work needs to be supported by the Government. The other area that concerns me as we finance and recapitalise the banks is the discussion on mortgage holders. A growing number are facing the threat of repossession and court action. We need to ensure that the banks will offer them interest-only loans for a given period and

688 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) extend their overall mortgage repayment periods. We must also consider the repayment of the capital and how the banks respond thereto. We need to ensure the banks are giving the same assistance to the affected individuals as we are giving to the banking sector. In this House, we need to look radically at how we will regulate the sub-prime market. The majority of houses under threat of repossession are associated with the sub-prime market. I will not say that people were encouraged in those years of the boom, but they wanted to be like everybody else, in spite of not having the income, perhaps, to own their own house. The only option for them was the sub-prime market. Many houses are now in negative equity and these people are in the area of sub-prime. We need to do something about them, not to ignore them but to include them in some way as regards how that whole area may be regulated, to ensure they have homes for the future. As they fall into arrears and are not recognised within the banking sector, they have not got any rights if the house is dispossessed, to go back into the local authority sector. Therefore we need to do something for them to ensure that this happens. The last appeal I would make to the Minister is beyond the area of Enterprise Ireland, the county enterprise boards and the credit unions. It is something the Government can do itself in regard, for example, to the hospitality or retail sector. We need to be radical in terms of how we fund local authorities or allow them to fund themselves. We need to reduce the burden of over-stated commercial rates. If a Bill is being considered in the future in regard to the financial area, such as the present legislation, then we should extend our consideration beyond the obstacle of local government funding towards ensuring that commercial rates are dramatically reduced. Only last week I met a group of people who are being subjected to the upward only rent review process, which is a serious problem for properties quite close to Leinster House. I see no reason why the institutions, some of which we are supporting, cannot be influenced into giving a break to their tenants and reduce the rent downwards to where it should be relative to property valuations in the marketplace today. That is essential across the country and in most cases it will be found that while individual landlords will reduce the rent, the institutions and those people who own major properties are simply sticking to the upward only rent review process. That is neither acceptable or sustainable because people who are in these properties will not be able to continue to give the level of employment they do since they do not have the turnover necessary either to pay the bills, expand the business or even sometimes pay the rent. In some cases the rent could be equivalent to 14% of turnover and that is not sustainable. I would ask, through the Department of Finance, because it is dealing with the larger banks that issues such as this should be considered. It should not be afraid to bring the discussion beyond recapitalisation and take it into the other areas, which although peripheral, are essential to the economic development and sustainability of jobs throughout the country. If we had to be convinced by the actions of this Government and what was necessary, yesterday’s happenings in Greece and in the money markets should convince anyone that this is what Ireland needs to do. This is the path we need to be on and we need to take radical steps and not be afraid to overhaul the status quo and ensure we have policies that are fit for purpose in the future.

Deputy Seymour Crawford: I agree with the previous speaker on the issue of Greece and how it puts the Irish situation into context and makes it clear how important it is to get our banking structures right. I am old enough to remember the early 1980s when the interest rate for long-term loans was 10%. Within a year it went to 22%-23% and that caused an enormous amount of damage. Many younger people today do not believe that will happen, but they need

689 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Seymour Crawford.] to be absolutely sure, because the danger is always there. We have become accustomed to relatively low interest charges and we sometimes do not realise how this could happen. The main purpose of this Bill is to create a single fully integrated Central Bank with a unitary board and a Central Bank commission chaired by the Governor. The Irish Financial Statutory Regulatory Authority is involved and most existing functions will merge into the new structure. There is no doubt that the Bill reads very well and there should be sufficient goodwill based on the knowledge that we need proper regulation and a proper structure. However, some of the background information available to us indicates that the McDowell report into financial regulation was instigated in 1998, 12 years ago. There was seen to be a need at that time for something to be done. It appears there was overcharging at National Irish Bank, a committee was set up and so on. After that committee had dealt with the issues and put forward its proposals, the Central Bank and Financial Services Authority of Ireland Act 2003 was put in place. The Financial Regulator was established as an independent office within the Central Bank and Financial Services Authority of Ireland, reporting to both the board of the Central Bank and the Minister for Finance. When one looks back and sees what has happened in recent years, we were, nonetheless, supposed to have the proper degree of regulation in place. The Financial Regulator was to report to the Minister for Finance and one wonders what has happened in the meantime since we find ourselves in such a mess. Was the Financial Regulator doing his job? Was the Minister for Finance paying attention? It must be remembered that the Taoiseach was the Minister for Finance during part of that period. We are told that one of the functions of the Financial Regulator is for him or her to prudently regulate for the safety and soundness of financial institutions; the stability and integrity of the payments system; the prudential supervision of financial institutions; and crisis resolution and issues related to market integrity. I do not believe that the criteria were satisfied in 2003 when one considers that list. I could go on, but we have to deal with the present. The Central Bank may make regulations prescribing control functions and nominees to ensure the fitness and probity of key office holders. That has never seen to be more important than in recent times as far as Anglo Irish Bank and Irish Nationwide are concerned. I am more conscious than most about the need for some type of regulatory service. Only yesterday the house of a constituent was pictured in the paper, where it was being bulldozed away. That was happening because an insured architect had not done his job correctly. The insurance was tied to €300,000 or thereabouts, and it had to cover legal costs. In that case the architect admitted that he was responsible, so one might reasonably believe no legal case was necessary. However, the insured party’s solicitor got €60,000. According to the paper and the figures I have been given, the other company which was supposed to service the client, a local insurance company in Monaghan, is looking for €137,000, so that the client will be left with a figure of around €100,000. That client tried to use the existing legal structures to obtain support, but thus far it has been limited. I raise this issue because we need to be sure the systems work. The system we had in place was a total disaster as far as Anglo Irish Bank was concerned. Mr. FitzPatrick was able to make available more than €100 million in loans to himself and so many other people within the organisation. There were no controls. Money was going from one organisation to another to create fictitious returns. People put all their savings into the bank, having been led to believe it was sound. The then Financial Regulator went before an Oireachtas committee and assured its members that the bank was safe and that there were no problems. He was the regulator in charge of the sector and answerable to the Minister for Finance, yet the country was not made

690 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) aware of what was going on. I am thinking in particular of Seán Quinn and his family, who were led to believe this was a marvellous bank in which to invest — in fact, they borrowed money to invest in it. This was the type of thing that was going on, yet the regulator did not act or advise anybody based on the 2003 Act. We now see the problems that have resulted. The nation is providing €22.5 billion over the next number of years. Who will pay for that? It will not be my children, because I do not have any, but for those who do, it is not only their children but also their grandchildren who will be paying for it. We need only remember what happened with PMPA; that was a small issue compared to this. It is important that the Minister gets this Bill right. As I have said in the House many times, we are great at producing legislation but not so good at making sure it is used in the way it should be. Fine Gael has a number of issues with the Bill, most of which are fairly simple. As yet we have not considered what happened with Anglo Irish Bank and Irish Nationwide Build- ing society or even banks such as AIB and Bank of Ireland, which also got loose and went mad. No proper investigation has been done. There are 40 people in jail in the USA for financial crimes, but not one person is in jail here yet, and there is not even a question of anyone going to jail. We need a proper investigation. We need urgent reform to change the architecture of existing regulating bodies based on facts. There is no point is just doing it on a whim, without proper advice and structures. We also need a system for appointing directors to the new central banking commission which is not exclusive to the Government. The Government should appoint people to such positions with the support of the other parties in the House, having brought them before a committee of the House to ensure they have some knowledge of what they are doing. This is being done elsewhere, including in the United States. The President of the US is directed by law to select a fair representation of financial, agricultural, industrial and commercial interests and geo- graphical divisions of the country. He cannot just appoint political hacks. It should not just be the people from the Galway tent that are appointed to these boards. They should be people of the highest standard and appointments should be carried out with due diligence and proper scrutiny. In the United Kingdom, such directors are appointed by the Crown. Prospective members of the monetary policy committee appear before an appointment hearing of the treasury committee, and the committee presents to Parliament its assessment of the candidates. The committee does not have a veto, but it can at least assess them. We need to be absolutely sure, when these committees are set up, that they are properly scrutinised. The previous speaker spoke about NAMA and the promise of Brendan McDonagh to pursue debtors. That sounds great, but how does one pursue a person with a debt when his or her property is worth one tenth of what it was purchased for? We must be realistic. There are properties out there that are worth only a tenth of what they were purchased for. The banks are realising that some properties are worth only 50% or 60% of what was paid for them, but there are some that are worth much less even than that. There is no point in promising to get money out of a stone. I wish him well, but the whole issue needs to be considered. I do not believe for one second that NAMA will do the job it is supposed to do. For ordinary people, there is still a major problem with the banks. We have introduced many banking regulations and promised that money will become available to business people and industries, but I assure the Minister that as yet that has not happened. Unfortunately, every time I open my office door or hold a clinic, people come to tell me of their desperation.

691 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Seymour Crawford.]

I cannot help returning to an issue that was raised by Deputy McGuinness a few minutes ago, that of commercial rates. Between the banking squeeze, rates, water charges and waste charges, the pressure on small businesses is massive. A small business person from a local town contacted me the other day to say she had paid €84,000 in water charges and could not afford to pay her rates, although she will be brought to court if she does not pay them. She has been told that if she cannot utilise the whole premises in which her business is situated, she could rent out part of it. Anybody who knew the area would know that this would not be possible, in view of the type of product the business is using. This is the difficulty we are in. If some capital was released to this person, she could continue in business, employing 12 people — I know 12 people does not sound like much to some people, but in a small town it is important — and she could also pay her rates. She would love to be able to pay her way. Rates must be dealt with as well, although they are not relevant to this Bill. The issue is important to business people who cannot obtain money from the banks at present. Another issue that must be dealt with quickly is that of mortgage relief. Deputy McGuinness mentioned sub-prime mortgages; this is something on which the Government must take a strong line. I know it has put more pressure on sub-prime mortgage lenders, but it is ludicrous, wrong and immoral that a person can be landed in the High Court because he or she cannot afford one mortgage payment and a charge of €12,000 can be added on to what is already a difficult mortgage. This needs to be addressed. I agree with Deputy McGuinness on the importance of the credit union movement. Without credit unions, many small business people could not keep their doors open. However, even though 98% of credit unions have never been in trouble, they are all coming under desperate regulatory pressure. Some of the regulations they being are asked to obey are unreal. If, for example, a good client becomes ill and fails to make a payment, the credit union is prevented from making other loans. That is ludicrous and cannot be justified. The county enterprise boards and the Leader programme are important but clients are unable to find the matching funds required. A number of worthy projects have been proposed and since the day it was established, Leader has had a reputation in my area of Cavan- Monaghan for being prompt in giving out money and creating employment provided that forms are filled out properly. Its main job has transformed into encouraging people to get involved but its prospective clients are finding it impossible to get money from the banks. I will welcome the Bill if it works but amendments will be required on Committee Stage. Part 3 of the Bill appears to be extremely important. It provides the Central Bank with the power to regulate sensitive or influential appointments in regulated financial service providers, including the power to direct that a person should not be appointed to perform a controlled function or should be removed or suspended from the performance of a controlled function where the bank is satisfied that the person is not a fit and proper person. I have first hand knowledge of the extraordinary pressure the Quinn affair is putting on that company’s workforce. The Quinn company and its employees have built up a tremendous reputation in Ireland and abroad. It is important that regulators or administrators are able to deal with issues swiftly. In the absence of decisions, Quinn Insurance is losing UK and Northern Ireland trade. I do not want to undermine the role of the regulator but the emphasis must be on making decisions swiftly. The administrators were appointed to ensure the company is run in a financially sound manner but this will be an impossible task without the proper tools or the company being able to access 80% to 90% of the UK market. I urge everybody concerned

692 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) about banking issues and the protection of jobs to encourage the regulator to make decisions on Quinn at the earliest opportunity.

Deputy Finian McGrath: I am grateful for the opportunity to speak on the Central Bank Reform Bill 2010. This is an important debate and we should be focused on solving the urgent crisis in our banking system and the economy. The banks and big businesses have disgraced themselves and let down the people of this country. Shame on them for their irresponsible actions and I hope we see justice soon. The purpose of this Bill is to create a fully integrated Central Bank with a unitary board, the Central Bank commission, which will be chaired by the Governor of the bank. The Irish Financial Services Regulatory Authority will be dissolved and most of its existing functions will be merged into the new structure. The Central Bank is responsible and accountable for the prudential supervision of individual financial firms, the conduct of business, including protection of consumer interests, and the stability of the financial system overall. Recent events have undermined consumer interest and destroyed the stability of this great and beautiful country. Once known as the land of saints and scholars, Ireland today is better known as the land of scandals and tribunals. Politics, banking, the church, business, medicine, the law and the Garda have suffered from an erosion of public confidence in the wake of astonishing scandals. Over the past decade, Ireland has undergone rapid social, economic and political changes which have had a profound impact on our value systems. For example, the decline in the Catholic Church’s authority and influence has forced many people to seek other sources of ethical and moral guidance. Ireland was fairly prosperous at the beginning of the 21st century but this created dilemmas in regard to the distribution of resources and the tension between the rights of the individual and the overall good of society. The people to whom we once looked for guidance, namely, the political elite, the church, the medical establishment, bankers and business leaders, have had their credibility tainted by damaging scandals. I have raised these issues on previous occasions both in the Dáil and in wider society. I voted against the budget because I believed it was unfair. People with disabilities and their carers faced cuts of 4%. Recipients of blind pensions suffered a drop in income of €450 per year. This is not social justice. The elite took a 5% pay cut while their office cleaners took a greater cut. Public servants were attacked and vilified by some politicians and sections of the media and attempts were made to divide public and private sector workers. I am trying to end this division. I am also fighting hard for the hard-pressed mortgage holders and I will continue to fight for a better future for us all. Our future must be built on equality and justice. As an Independent Deputy, I am open to the idea of a national Government which would deal with the economic crisis. Such a Government would present an opportunity to select talented Members from various parties who would put their country first. I would be interested in hearing my colleagues’ views on this issue. We have to pick the best people to solve this crisis. Section 11 of the Bill provides that orders and directions of the Irish Financial Services Regulatory Authority which are not yet spent remain in force and that the Central Bank can enforce them. Section 12 provides that inquiries and assessments being undertaken by the Irish Financial Services Regulatory Authority may be completed by the bank. Section 13 provides that where the Irish Financial Services Regulatory Authority was involved in a legal action, including where the authority was undertaking a prosecution, these continue with the Bank substituted for the authority. These provisions bring me to the big issue of light and heavy regulation. We have seen the negative impact of light regulation in this country. We have seen businesses go down the tubes and corrupt bankers, developers and others leading young couples and families astray. We have

693 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Finian McGrath.] also seen politicians failing to give leadership on this issue. People were not doing their jobs — that is the reality, which we must face. If a person is appointed to do a job in the interests of the taxpayer or the State, that person has a statutory duty to do that job. I question some of the past practices in regard to regulation, which is also very relevant to today’s debate. I ask the Minister, the Government and all the political parties, and our new watchdogs over the banks, to keep a very close eye on what is happening. Recent days have again shown that we need to be extremely vigilant in regard to this issue. I welcome the appointment of our new regulator, who is making an effort to do something about this. I strongly support his view in regard to many of the problems we are trying to solve. However, where there is regulation, there must also be common sense and proper process and proper systems in place to deal with the issues. I met the staff of the Quinn Group earlier and I was impressed by their professionalism and commitment. We must ensure we try to protect these jobs. The deadline is on Friday. I say to the staff and those involved in this issue that it is a duty of Members of the Oireachtas. The staff made the point to me earlier today that while they fully support the regulator, they would also like to see proper process and the common sense that is needed to save these jobs. As I said, Friday is D-day for those staff. Part 3 of the Bill provides the bank with the power to regulate sensitive or influential appointments in regulated financial service providers, including the power to direct that a person should not be appointed to perform a controlled function or should be removed or suspended from the performance of a controlled function where the bank is satisfied that the person is not a fit and proper person to perform such a function. I welcome this aspect of the Bill, which is the way forward and the type of measure we need. The bottom line is that we must bring trust and confidence back into the banking system. We cannot move forward or deal with the issue unless there is trust and confidence. Sadly, in the past year and a half, that trust and confidence has gone. The Members of the Oireachtas — I include all Members, including the Independent Deputies — must ensure we play a part in trying to regain the trust and confidence of our people. There is a lot of anger and negativity. We have to show leadership, which is why I again put on the table the question of a national Government. Perhaps we should, for a couple of years, put in the best people in the country to get us out of this mess. We can then go back to party politics. Independent Deputies like myself are always open to new and radical ideas. Of course, I would have certain conditions in a situation like that, namely, that there is a strong commitment to social justice and to the weaker sections of society. With regard to the debate about regulation, I emphasise the need for trust and confidence. At present, many of us are trying to debate how we fix the banking crisis. We do not like what we have seen but we have to fix the mess. I urge all politicians to consider this when debating the issue. Of course, there were many times when it turned my stomach when this issue arose in the House. However, when I looked around honestly and objectively, I saw no credible alternative. As far as I am concerned, bankers, developers and corrupt politicians should be charged or prosecuted for ruining our country, but, as I said, we also have to deal with the mess. There has to be a major clean-out of the top positions in banking. I welcome some recent developments, including the proposal for targeted lending of not less than €3 billion each from Bank of Ireland and AIB for new and increased credit facilities for small businesses in 2010 and 2011, which is a sensible solution. I also welcome that Bank of Ireland and AIB must make available €20 million each for seed capital to be provided by Enterprise Ireland, which is the kind of proposal we need to see on the table. In addition, the two banks will each set up a

694 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) fund of up to €100 million for environmental, clean energy and innovation projects. I welcome the sections dealing with credit review processes for banks as a sensible option. While we are discussing this issue, let us remember the 15,000 families who are helped through the mortgage interest subsidy scheme. It is important to recognise many of these were victims who lost their jobs and find themselves with huge mortgages to pay. Many of them turn up at our clinics on a regular basis. At least we are making some sort of effort to help them in regard to their mortgages. I firmly believe no legal action should be taken against genuine householders and borrowers. The deposit guarantee scheme that covered €100,000 per depositor per institution was a very relevant measure at the time. We have to fix the banking system or we are going nowhere, and those that say otherwise are misleading the people — that is the bottom line. I voted to assist our country even though, at times, some of the decisions turn my stomach. There was no other option. The people are demanding solutions, not cheap political soundbites. That is the sad side of this House. I saw an opportunity for Deputies to unite to try to help each other to solve the financial crisis but I was disappointed when I heard soundbites from many of them. It is up to all Members of the Oireachtas to put our people and our country first, even if it is not popular. With regard to the Bill, the explanatory memorandum notes that item 22 of Schedule 1 inserts a new section 5C into the Principal Act. It provides that the bank will have the power to undertake and publish studies, analyses and surveys into the provision of financial services. In doing so, the bank has the power to compel the provision of information or the attendance before an employee or officer of the bank by a person who is relevant to the undertaking. Failure to co-operate is an offence, which I welcome. In addition, the head of financial regulation may cause an investigation into a relevant person. Failure to co-operate with an investigation is also an offence. Conviction on indictment under this section could result in a maximum fine of €30,000 and-or imprisonment for up to five years. Summary conviction could result in a fine of up to €3,000 and-or a maximum prison term of 12 months, rightly so. Item 22 is an important part of the Bill. We must face up to the reality and deal with white collar crime, which clearly took place in this country in recent years. If a young person in Coolock or Donnycarney was involved in petty crime, he or she would be banged up in Mountjoy Prison for six months. Here is a situation where people were involved in much more serious crimes and we must respond. We must see the justice system kick into action on this issue. Low paid workers come to my clinic who have been turned down for carer’s allowance because of a couple of euro here and there, and it gets up my nose that we see these guys — the senior bankers and white collar criminals — walking away scot free after damaging this State to the tune of hundreds of millions of euro. Where is the justice in that? Where is the social justice if we do not stand up for the decent people of this country? I raise this issue because I have been deeply involved in campaigning on the carer’s allowance issue and with regard to disabilities generally. With regard to the blame game, in my speech today I have referred to many situations, professions and people. However, many more were involved in this game, although one does not often read it in our national newspapers. Many others were involved in housing, in crazy investments and in misleading young people, and they must be challenged. They made a contribution to the downturn. It gets up my nose when I hear people blaming all politicians and saying “You are all the same”. We are not all the same — that is the bottom line. The vast majority of Members of the Oireachtas, across the parties, are trying to do their best for their community and their constituents. Yet, we have the label brigade and the blame game brigade lashing out every

695 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Finian McGrath.] night on the television and in the media. The Deputies in this House want to serve their country and serve the people. My experience in this House is that the vast majority of Deputies are in that direction. Anybody who has another agenda should be rooted out of the Houses of the Oireachtas. I say this because it is very relevant to the banking debate today. With regard to Chapter 2A, dealing with finance and accounting, section 32C provides that each year the bank is to give an estimate of the costs associated with, and the income from, its activities in regulating financial service providers for the coming year to the Minister for Fin- ance. Section 32D sets out the powers of the bank to impose levies to finance its 5o’clock activities with regard to financial supervision. Section 32I requires the bank to prepare and keep accounting records and to transmit to the Comptroller and Auditor General a statement of accounts within six months after the end of each financial year. Section 32J provides for reports to the Minister of operations and returns of the bank within six months after the end of each financial year. Section 32 is about accountability which is crucial. In the past there was no accountability. People were not doing their jobs and other people were ripping off other people. I hope these issues are raised in the debate. Part 7 of the Bill provides for the amendment of the Credit Union Act 1997, to take account of the dissolution of the Irish Financial Services Regulatory Authority and the creation of a unitary structure and to amend the provisions of section 35 of that Act. Section 35 of the Credit Union Act 1997, limits credit unions in the area of longer-term lending. The issue of the credit unions arose during the NAMA debate. The credit unions have made a significant and positive contribution to Irish society. I was a founder member of the INTO credit union. However, some people in the credit union movement acted irresponsibly and did not act in the interests of the members. There must be vigilance at all times. Currently under section 35, a maximum of 20% of a credit union’s loan portfolio may be outstanding for periods in excess of five years and only 10% of the loan portfolio may be outstanding for periods exceeding ten years. It is proposed to relax these limits. Part 10 provides for the amendment of the Insurance Act 1989, to take account of the dissolution of the Irish Financial Services Regulatory Authority and the creation of a unitary structure. The amendments also permit the bank to appoint employees or other suitably qualified persons as authorised officers for the purposes of the Insurance Acts. I emphasise the importance of the Quinn company to the economy of the State and I support the staff. Even though the problem does not directly affect my constituency I see it as a company with potential. I met the staff today and they are making a massive contribution. This is not a party political issue and we should be united in our attitude to the company even if it does not directly affect our communities. I support the staff and I will be willing to help them in any way as an Independent Member of this House Anyone who does not have the bottle to deal with the banking crisis should not be an elected Member of the Dáil. The Irish economy is experiencing one of the worst recessions of any developed country. Unemployment which stood at 5% in 2008 is already forecast to reach 14% by the end of this year. This is a very sad situation for the 435,000 unemployed people. I receive many CVs from young people hoping to find work in my constituency. A total of 100,000 are expected to leave Ireland over the next two years, that is 50,000 a year. We are losing many graduates who are going to England, Australia and America. I refer to some ideas to solve the crisis, such as the idea of a national government. I also support the Labour Party Private Members’ motion for the establishment of a strategic investment bank with the primary objective of investing and lending for national economic develop-

696 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) ment, including investment in infrastructure and the enterprise sector. I will support sensible ideas. I hope that we can all work together to clean up the banking system once and for all and lead this country to a positive future. To those in banking, I say that management is doing things right; leadership is doing the right thing. All Members of the Oireachtas have to show leadership and they should get out of Dáil Éireann if they do not wish to do so.

Deputy Tom Hayes: I am pleased to have the opportunity to contribute to the debate on Second Stage of the Central Bank Reform Bill 2010. Second Stage is the opportunity to expand on our views and this debate gives Members scope to say many things that need to be said about the banks. Never before was Ireland in such a banking crisis. Never before were people as frightened because of such a crisis. The banks are central to all our lives. They are central to our Government, central to private enterprise and central to each one of us as we go about our daily lives, whether we rear our families or look after ourselves in our older years, whether it is to put a roof over our head, to buy our first car or whatever we want. We will always need banks unless we are in a very privileged position and most people are not in that situation. Ordinary folk have to go to the banks to get funding for education and for many other aspects of their lives. We cannot underestimate the essential role the banks play in our daily lives and this is the reason we were so frightened when the banks got into trouble. People were at a loss to know what was going to happen their businesses. Small businesses were in fear because they were being denied simple lines of credit which they had previously received. Family homes were in danger of being repossessed. The terms of loans were being shortened and credit was being called in. The position of credit availability to small businesses was a significant worry. Young people in college who had taken out loans were very worried. The attitudes of the banks will have to change. It is a very simple thing to say those at the top of the banking institutions should be in jail. I have heard this view expressed many times. There was a culture which allowed this crisis to happen. What of the regulators and the people who were in charge? I wonder would this crisis in banking, as we knew it, have happened 20 or 30 years ago? Would it have happened if there had been more say at the local branch level? The local bank manager knew a lot of people in the area. This discretion and responsibility was taken away and given to people up the line. In the past, the local bank manager sanctioned loans for customers who wished to buy land or a house. His word was accepted. However, in the past number of years, the information on an individual is put into a computer and sent to headquarters. The regulator was supposed to be keeping on top of all these transactions. Instead, there was a major crash when things were done differently. Due consideration should be given to looking at the way we do our banking. I am concerned that we are now discussing this Bill before the review has finished. The legislation should not be changed ahead of the results of the review as this might allow for dramatic new ways of addressing the problem. The local bank manager should be central to the system. Just like the local garda or the local teacher, the local bank manager knows his or her people, their capabilities and their track records. He or she knows which are the people who will go through thick and thin to pay off a big loan. Each individual has a different attitude to paying back a loan. Some cannot live with the worry of outstanding loans to banks or building societies and get it paid off in a short period. Again, the local bank manager would be able to deal with this. One reason many people and small businesses are in trouble is because of the non-availability of long-term credit. In the past, when one wanted to buy land, for example, one could get a long-term loan from the Land Commission. Land rent was paid on it over many years until

697 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Tom Hayes.] one eventually owned the property. Such a system should be reintroduced. Instead of businesses being put under pressure to pay back their bank loans in a short period, credit lines should be extended. Yesterday, the Garda Representative Association claimed some gardaí could not pay their mortgages. While not every garda, teacher, nurse or doctor is in such a position, there is small group who paid €300,000 or €400,000 for their houses because that was the going rate and it was sanctioned by the lenders. Deputy Finian McGrath spoke of the responsibilities of Oireachtas Members. Those having problems with large mortgage repayments must be helped. In south Tipperary I know a family, who have had a redundancy and a pay cut, and who, to keep up with their repayments, would have to put nearly all their income into their mortgage while forgetting about paying for day-to-day living. Families in such positions should have their mortgages extended. It is just not good enough to say the banks are not repossessing homes. The banking crisis affects every individual. We need to look after the small and vulnerable people who cannot sleep with the worry over their mortgages and repossession. They need advice and support. Legislation, tied to the Central Bank Reform Bill, must be introduced to help and protect homeowners in such circumstances. This is a small nation which has prospered much in the past 100 years. A roof over one’s head must be made a basic requirement for everyone. Small businesses need to be supported too. Some claim the only way to work our way out of our current economic problems is through creating jobs. Instead, we need to protect the existing jobs we have before we look at creating new jobs. Walking down the main street of any town, one will see a large number of empty retail units. This is not good for the economy. Those with ideas on how to keep such businesses open should be used to support them. I cannot stress the importance of the local bank manager in assisting small and medium- sized enterprises. In the review taking place, a special section should be devoted to giving decision-making powers back to local bank managers. People have spoken about the importance of the credit union, a point with which I wholeheartedly agree. Fortunately, when bank credit has dried up, the credit unions have assisted many people with loans. The role of the credit union should never be underestimated and we must help them in any way we can. Out of all of this banking crisis with the fears and frustrations experienced by people, we need to give hope. People are concerned about the future. We need to send out a signal of hope and the availability of credit is one way of doing so. Young people, those finishing their degrees, building a home, choosing to work in either the public or private sector need hope for the future. They need to know there will be money available to fund education, the health services and other economic activities. Only yesterday, I was informed by my local hospital manager about the number of young qualified health personnel who will leave the country to work elsewhere. Some hospitals, as a result, will have to go on short time. So much of our society, not just economic activity, is taken up by the banking crisis. We must send out a message of hope to our young people so that they will see Ireland as a good place in which to work, live, build a house and rear a family. They should be able to do what our generation did. We were a lucky generation born in relatively good times, receiving a good education and having a good standard of living. We had hope and believed this country was a good place in which to live. This message needs to given to our young people like the young lady I came across the other day. After college, she has spent the past 12 months looking for a job but to no avail. She is now thinking of emigrating to Australia. This lack of hope has to be changed. The Government

698 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) and Opposition needs to bring hope back to the country. We need to be more proud of what we have done. Everyone will condemn some of the shenanigans that went on in the banks and say they should never have happened. The regulators must, however, wake up to the new banking position of centralising all decision-making. The bankers must get up off their cushy soft seats to come up with more proposals for better banking. They must stop this move towards global- isation, making everything big and sending it to the top. Banking must be brought back to local communities with decision-making processes resting with local bank managers. Ireland will be much better if we change our attitude and not make everything big. Making the health service big turned what was once a good health service into a disaster. The same applies to the banking sector. We made it big. We gave all the responsibility to the regulator and let the banks off. We brought in all this regulation but it was not implemented. The small fellows on the ground lost their importance and their role. I am pleased to have my say on what should happen to our country in terms of our banks. For all our sakes, and the sakes of generations to come, it is important to ensure the right measures are taken. In politics the Government puts forward its proposals and the Opposition gives its view but I believe a genuine attempt was made in this House to do what is best for the country. Any comments made by those of us on this side of the House were made sincerely. Likewise, the Government but at the end of the day we want to do what is good for the citizens of Ireland and their future. I am pleased to give my view on what must happen but we must move away from the days of passing the buck to the authorities at head office and bring responsibility down to local level. That would have a positive impact on future issues in this country.

Deputy Fergus O’Dowd: This is an important Bill. I agree with everything said by my colleague, Deputy Tom Hayes. For the past two Sundays a journalist by the name of Eamon Quinn has been writing in the Sunday Tribune about an application which is before the courts. I understand it is an application from a Mr. Seán FitzPatrick to have a hearing in camera in regard to the way he would deal with his creditors. Every citizen of this country, whether it be Seán FitzPatrick or myself, has the right to make whatever application he or she wishes to make before the courts provided the courts agree with it but the key point is that an application from somebody whose house or property is being repossessed and who may be in significant financial difficulties is usually made in public in open court. There is total transparency and accountability in terms of what happens in the court. The key issue in this case is that——

Acting Chairman (Deputy Michael Kennedy): Deputy, it is always a matter for the judge to decide whether the hearing will be held in camera or in public.

Deputy Fergus O’Dowd: I agree with that, and I am sorry the Acting Chairman thinks I might not have said that. In case the Acting Chairman or somebody else thinks I meant anything different I will clearly state what I said at the beginning. Every citizen, whether it be Seán FitzPatrick, the Acting Chairman, me or anybody else is entitled to make an application on any issue before the courts and it is entirely up to the judge to decide the outcome. If the judge agrees with the application the person has won their case and if he does not, they have lost. If I am in financial difficulties and my creditors apply to the High Court to take possession of my home or to get a lien on my properties or my wealth, that is usually done in the courts

699 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Fergus O’Dowd.] in full public view and everybody, whether it be the press or a Member of the Oireachtas who might be sitting in the press gallery, can listen to the proceedings, which is good and proper. If the application for an in camera hearing is made, equally, that is right and proper. I am not being critical of that but what I am saying clearly is that we need transparency and accountability regarding any deal done by Mr. FitzPatrick with his creditors, who would be Anglo Irish Bank, to which I believe he owes the princely sum of approximately €60 million and €70 million, which is a significant amount of money. I asked the Taoiseach in this Chamber this morning, and I repeat now, to ensure we had full transparency and accountability regarding the terms and conditions of any deal reached with Seán FitzPatrick by Anglo Irish Bank and any other State related entity. I asked for that because I understand that any deal done, whether in camera or in public, must be signed off by the Government and Anglo Irish Bank, which is the major creditor in this case. The down side of such a deal, if it is not fully transparent and accountable, will be that we will not know what the assets are and the way they are being divided up. The public has an entitlement to know what is going on. I have every reason to expect that such dealings will be in public and that in regard to ministerial consent, if it is needed, the public would have full knowledge of what is going on because they are entitled to know that. Mr. FitzPatrick and people like him have put the country in the most appalling condition. They have put the taxpayer in debt, which will affect not just this generation but probably the next. Some months ago the Taoiseach, Deputy Cowen, said that this is the first time young people will be worse off than the previous generation. The country is facing a serious crisis and what we want is accountability and transparency regarding any deals to which Government gives its consent. The days of the golden circle have long gone when Mr. FitzPatrick and the other people would attend the functions in the Galway tent with Fianna Fáil. It is the golden circle that brought us to this stage in our society and collapsing around us are the old ideas and ways which have been shown to be rotten to the core, as the banking system has been found to be. I refer to people like Eugene McElearn, who worked in Anglo Irish Bank and who went to the then Financial Regulator some years ago with a complaint about over-charging and was not listened to. Eugene McElearn was the group internal auditor for Allied Irish Bank and he was unhappy with the overcharging going on in his bank. When his bosses refused to listen to him and continued with the over-charging, which was estimated to be in the region of €30 million at that time, he wrote to the then regulator and the regulator did nothing about it. Mr. McElearn was then forced to try the legal route. He also tried the Freedom of Infor- mation Act route, which did not apply. He was put to the pin of his collar but insisted on pushing his case to the very end. When he met with Senator Shane Ross and myself we brought him before the Oireachtas committee and the then chairman, Deputy Michael Moynihan, was very helpful. We had a full and frank debate. Subsequently, when the then chief executive of Allied Irish Bank came before that committee he exonerated Mr. McElearn and restored his good name but it was a bitter, dreadful fight involving one man against a system that was rotten to the core. Eugene McElearn has remained unemployed as a banker for the past six or seven years and the only reason for that is because he stood up to the system. He said it was rotten. He spoke to his bosses in the bank. He spoke to the then Financial Regulator and nothing happened. We need people like Eugene McElearn running our banks, advising our bank boards and getting involved in our financial affairs. It is people like Eugene McElearn who fought the

700 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) system, still suffer as a result of the system and have not worked in banking since because they have been blacklisted, even by current banks. That is not acceptable. It is that mindset which was endemic at the upper levels in our banks, our regulatory regime and our political parties, and particularly in Fianna Fáil, that has brought us to the sorry mess in which we now find ourselves. I am sure our parents, if they had a bank account, may have owed a few pennies, as many did when trying to rear large families in years gone by. On the Chord Road in Drogheda where I lived one would see every Friday a decent man, the bank porter, on the instructions of his bank manager, walk up the street in his uniform and put a letter into the letter-box of whatever poor unfortunate happened to owe the bank a few bob. The whole street would know that Johnny Murphy was in trouble with the bank because the bank porter had delivered a letter to his home. Everybody knew that the bank porter was only doing his job and that he was a decent and honourable man. There was at that time an attitude in the banks towards ordinary people. They were treated as unworthy and beneath the local golden circle. At that time, people worked hard to rear their families, obviously with the help of many banks. The psychology of the relationship between the ordinary person and banking class was I believe, from the banks’ point of view, haughty, unhelpful and discriminatory. I am glad this has changed. I regret what had to happen before many of these bankers were booted out, although some of them remain within our system. There continues to exist the belief that it is often who one knows rather than the validity of one’s case that gets one what one wants at a particular time. I agree with Deputy Tom Hayes on the need for credit, the creation of employment and the need to ensure that people who are seeking moneys to run a good business, as are many people, get the support to which they are entitled. This morning I received a telephone call from an individual who has a good business idea but whose business is not sustainable without a loan from the bank. The banks are not providing credit and thus another opportunity to sustain or create employment will be lost. As shown some years ago in the American economy, at the core of job creation will be small businesses who, if supported, will bring about significant multiples of employment right across the country. The creation of four, five or 20 jobs here and there adds up and will make a significant difference in terms of the creation of employment. The key point is that the creation of employment requires the backing of sensible people with good ideas. If small businesses are not supported we will not get the recovery we so badly need. Every Member of the Oireachtas knows of scores of people in their communities who are in extreme situations because they are not getting finance. To allow businesses to close or to not assist them in the creation of new jobs is, unfortunately, becoming the order of the day. Another issue that arises under our current banking system is the number of people receiving letters in regard to mortgage interest rate increases. Again, ordinary people are suffering. Not alone are they suffering as a result of mortgage interest rate increases but they are suffering job loss, reduced income and may be in negative equity. The expectation that upwards of 300,000 homeowners will be in negative equity by the end of this year is an appalling vista for us to contemplate. Members may have read yesterday about what is happening in Greece, about the increased cost of Irish debt and about, as referred to this morning by Deputy Kenny, the fact that the Irish Government holds a significant number of bonds in relation to Greek investments in our banks that may never be repaid, all of which are serious issues of concern. The actions of this Government and the Administration in place for 18 of the past 20 years has led this country to this appalling abyss. Its policy, actions, closeness, involvement and participation in the golden circle in the banks and with the Seán FitzPatricks have brought about a significant change of public opinion. People are extremely angry about what has happened. I acknowledge the change in the office of the Financial Regulator. This Bill brings about

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[Deputy Fergus O’Dowd.] significant financial reforms which are to be welcomed. It contains many good provisions. However, until there is a change of Government we will not have clarity of thinking or get the changes that are ultimately and totally necessary. There remains serious issues of concern to be addressed. The bubble in terms of home ownership and in respect of the banks has burst. People are losing their jobs and nothing seems to change under current Government policy. The Government is not considering changing the economy through job creation. The Fine Gael spokesperson in this area, Deputy Coveney, has put forward a rigorously thought out and costed programme in regard to job creation. Until we focus on and invest in job creation we will have but more of the same. This Government is failing abysmally in its duty of care towards the unemployed. As Members of the Oireachtas, we all know of families whose members must emigrate. Young people who cannot get employment in this country are travelling the long and distant road to places such as Canada and Australia for work. Another issue of concern is people who have returned from abroad. I am sure many of my colleagues have received representations on the issue of habitual residency and returned emigrants, many of whom may have gone away for one, two or three years and who, having lost their employment abroad and returned to Ireland are being treated like pariahs because they are not considered habitually resident here. The fact that they can prove they are unemployed and have lost their jobs does not necessarily entitle them to social welfare benefit here. This significant issue needs to be addressed. The habitual residence clause in respect of returned emigrants is being applied disproportionately against applicants. I am receiving evidence of this every day. Perhaps the Minister of Social Protection, Deputy Ó Cuív, will address this issue when he has time in the near future. I reiterate that what we want from his Government is transparency and accountability in terms of any dealings or deal reached by it with Mr. Seán FitzPatrick. We need to be assured that in consenting to any such deal the Government will treat Mr. FitzPatrick like any other citizen of this country, the only difference being that he happens to be one of the people responsible for destroying the economy of the country. We are entitled to know what is going on in respect of his affairs, in particular given it is to the Government, through Anglo Irish Bank, he owes this money.

Deputy Jimmy Deenihan: Fine Gael opposed the Second Reading of this Bill because it is not rooted in any proper investigation of what has gone wrong and no any serious attempt has been made to hold key players accountable for the errors committed, both of which are necessary to determine whether this Bill is an appropriate response. Also, it infers that the most urgent reform is to change the architecture of the existing regulatory bodies but there is no verifiable evidence that such architecture was in any significant way responsible for the shortcomings and failure of the regulatory system. It preserves the system of appointment of directors to the new Central Bank commission exclusively by the Government with no proper scrutiny by the Oireachtas or any other external body. It does not give the new commission the necessary bank resolution powers to put failed banks safely into managed administration in cases where that approach may be the most appropriate policy. I listened to several speakers, including Deputy Seymour Crawford. I agree with his comments to the effect that we had a framework in place. There is no doubt the banks could have been regulated within the existing framework, but they were not because it was not encouraged in every way possible by the political structure in the country. The banks were encouraged in this way by others as well. People were encouraged to come to Ireland to invest in such places as the International Financial Services Centre because of light touch regulation. I heard as much in New York,

702 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

Silicon Valley and throughout the world. The reason they were advised to come to Ireland was because they could do more or less what they wished. The view was there was little regulation and no one would bother with them. More than anyone else, the political establishment promoted that ethic and perception. I recall the previous Taoiseach speaking at the Irish Banking Federation some four or five years ago. The event was recorded on television and I watched it on RTE. I recall hearing the then Taoiseach praising the banks for their contribution to the economy. His view was that the banks were responsible for our economic progress in this country and that is on the record. We should balance our overall observations of what took place in this country. Some maintain there was a systemic failure but it was as much a failure of this House — and we may only speak for this House — and especially of the Government during the period when things went wrong. I refer to the bankers that are being maligned on all sides of the House, including the Government side. Certain people promoted Ireland based on light touch regulation. Several people must take responsibility for the failures. Rightly, certain people have been identified and scapegoated. However, others were involved and were complicit in this matter and such people gave others every possible encouragement. At times, these people made critical phone calls in respect of vast amounts of money being made available to people for various projects. We know for a fact that calls were made by people working in establishments such as Anglo Irish Bank. We are all aware of people in that institution. Calls came from the highest echelons of politics in this country to pay out major money in cases where proper feasibility studies were not carried out or business plans were not presented. That was the reality and the way the system worked. Everyone knew each other. I will not refer to the great method used in the west of Ireland. However, such people met in other places, not only that particular place every July in the west of Ireland. It was common- place. I do not play much golf but I play a little and I attended some high profile events. It was very easy to see what was taking place. Very cosy friendships existed between politicians in very prominent positions and bankers, builders and others. They had a great time for several years and that was the reality. Several very good books have been written on the issue. I refer to Senator Shane Ross, who wrote a very good book and to David Murphy who wrote Bank- sters, which I took on holidays last summer. That was one of the first of such books published. The issue has been well analysed but it remains to be analysed further and a major story remains to be told. We are trying to get a message to the international business community that we are in some way dealing with our problems. This evening we are dealing with regulation, which is welcome. Hopefully, this legislation will improve the process. The new regulator is sending out the right signals. However, we have not been saying that there was regulation in place but that it was not being implemented because it was not encouraged. We are sending out the message to bond markets everywhere that we are dealing with the problems. For example, we have dealt with our budget and many people have suffered as a result. However, we are dealing with it because we have a banking crisis. People are suffering in this country because of what happened in our banking system. I was in America for St. Patrick’s Day. I paid my own way and I had my reasons for being over there. The Mayor of Chicago and the Governor and Mayor of New York all referred to Ireland and maintained they were pleased that the Government was facing up to the challenge of the banking collapse. That was great and I was not inclined to say to any of their officials that it is not that simple. If that is the perception which exists, then it is good for the country. However, that perception is very shaky if people examine what is behind it. The New York Times newspaper referred to the Irish banking system as a wild west system of banking. It

703 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Jimmy Deenihan.] identified that we were going the wrong way about it and that what we were doing in Ireland was not sustainable before any other observers, even those here. Nevertheless the message is getting out to the bond markets that we are addressing these issues. To some extent we are so doing and if the message keeps down the interest rate we pay for borrowing, that is good. Last week, it was approximately 4.7% for ten year bonds. As a result of what took place in Greece, I understand it has now gone up to in excess of 5%. Bonds in the eurozone were always regarded as investment bonds. They were seen as a good investment for international buyers. Now, Greek bonds are regarded as junk. When Greece is dealt with and on the floor, where will they turn next? Which country will be next to come under scrutiny? It could be Portugal or Spain but it could be Ireland as well. This is something about which we must be very concerned. Irish Government debt as a percentage of GDP is less than that of Greece at the moment. However, the capital that has been allocated to AIB, Bank of Ireland, Anglo Irish Bank, the Irish Nationwide Building Society and EBS in addition to the capital required to fund NAMA is not part of Government debt. Last week, the European Commission stated that the €4 billion committed to NAMA must be regarded as debt and this has increased our debt to GDP ratio. When everything is added up we will have a serious problem. At the moment, the money is considered an investment and thus recoverable. However, if it is not recoverable, then it will be added to our debt. This has the potential to increase Irish debt as a percentage of GDP to levels greater than those of Greece. Such an occurrence would turn the spotlight back on Ireland in a major way. The cost of our borrowing would increase substantially. In such circumstances, Ireland would have to turn to Europe, just as Greece is doing at present. Another measure of the debt levels of a country is its budget deficit as a percentage of GDP. According to figures announced by the EU last week, Ireland’s budget deficit as a percentage of GDP is increasing faster than previously expected and has now reached 14.3%. This is higher than the Greek budget deficit, which is 13.6%. This relates to the fact that the investment of €4 billion in Anglo Irish Bank is now recorded as a debt. It goes back to Anglo Irish Bank all the time. We have a major problem convincing the people from whom we borrow money that we have a sustainable banking system and that this country is on a sound and sustainable financial footing. I accept that our recent export figures were good. If one examines the very good surplus we have produced, however, one will find that much of it is coming from the pharmaceutical industry rather than from home-grown or indigenous industries. Certain issues are raised when those figures are analysed. A number of speakers have referred to the consequences of personal debt. Some of them thanked the library and research service of the Oireachtas, which has produced a very good document on this issue. I think it became available yesterday. I will refer briefly to some of the interesting figures contained in the document. It states that household debt in Ireland, including mortgage debt, currently stands at €147 billion. All of us are concerned about the potential social consequences of such levels of over-indebtedness, including repossessions, family break- ups, health difficulties, depression and, in some cases, suicide. It is a major issue. The research document identifies the reasons for our over-indebtedness. It states:

In 1995, Ireland had a household debt (including mortgages) to disposable income ratio of 48. By 2008 [just 13 years on], this had risen to a ratio of 176, an increase of almost 270%. This rise is much higher than for four other countries (Spain, UK, Canada and France) where similar comparative data sets exist.

That is quite worrying. The document continues:

704 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

The rapid rise in debt can be linked to changes in access to and use of credit. Over the last decade, financial institutions were increasingly willing to lend, even to those who tra- ditionally found it hard to access mainstream credit. Credit was also generally more affordable as interest rates were lower.

It is clear that the financial institutions gave money to anybody with any type of job, even if the applicant had been in the job for only a year or two. Not only did they provide money for a mortgage, but they also threw in some money for a car for good luck. People bought expensive houses and top of the range cars. I accept that this approach helped the car, house and building industries, which were going well at the time. Many cars were bought with money that was meant for mortgages. I know of some such cases. Reference has been made to competition in the market. When I spoke during the NAMA debate, I mentioned that when competition came into the market, all it did was put pressure on Bank of Ireland and AIB to compete in the market. The more loans one provided, the bigger the commission one received. That was the incentive. People lost all the discipline they had. I know people who were refused loans by Bank of Ireland or AIB, but got what they wanted from Anglo Irish Bank within two hours. They went back to AIB and Bank of Ireland, which had refused them at the beginning, and started again. Those banks forgot the discipline and standards they had and relented to the pressure. That is what got us into the mess we are in. I would like to quote another statistic that is mentioned in the Oireachtas document. It states, “in 1995, the ratio of household debt to disposable income in Ireland stood at 48% (for every €48 borrowed, €100 was being earned); this is in sharp contrast with 2010 where €176 was owed for every €100 earned”. That increase could not continue. The collapse had to come. Many Deputies have spoken about the current availability of credit. I would like to set out my experience with the banks with which I am familiar. There has been an improvement in mortgage lending in recent times. The regulator is having an impact. Under the previous regime, if a commercial or agricultural business was refused credit the bank did not have to give a reason. Now one can appeal and be told why one was refused, at least. That is of benefit to those who have been refused. Good cases are generally being supported at present. The banks will never go back to the reckless lending they were doing. People will not get money if they do not have a good business plan that stands up. Regardless of what we say in this Chamber, it will not happen. We hope the Government will not need to give any more money to Bank of Ireland. I understand that approximately €8 billion will have to be given to AIB. In the future, the banks will not provide money unless it is 6o’clock in support of plans that stand up. People will have more opportunities if buoyancy returns to the economy. As things stand, however, there will not be a massive flow of money from the banks. The banks are being forced to deal with their deposit loan ratios. Banks generally lend approximately €1.50 for every €1 on deposit. It is intended to reduce that figure to €1.25. That will restrict the level of credit that will be available to people. It is obvious that this Bill is very important. Fine Gael has some concerns about it. We are aware that the regulation that existed was not enforced. In the words of Professor Patrick Honohan, although bank regulation in Ireland was compliant with international standards, it “was complacent and permissive” and placed too much reliance on the internal risk models deployed by the regulated entities. People like Professor Honohan, who is now in a good position to do something about it, accept that the system was not working. It was not working because there was no direction or pressure on regulation to work in this country. That is the bottom line and that direction did not come from this Chamber or from the Government.

705 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

Deputy Paul Connaughton: I am delighted to take this opportunity to speak on the Central Bank Reform Bill. Millions of words have been spoken since that fateful night two years ago when the guarantee had to be given to the banks. It forms part of what I want to say. Irrespec- tive of what is said in here, on any side of the House, there are questions to which every Irish person I know of across the country still has not got an answer. How could this disaster happen? Why did it happen? Who was responsible for it? Despite all the things we hear about and the various seminars and reports, nobody has answered those questions to the satisfaction of the Irish public. That is one of the reasons there is so much anger. There are some people in the rarefied atmosphere of Leinster House who must pack their ears with cotton wool when they go outside the gate. The anger across the country at what was allowed to happen to our banking structure is like a forest fire. I do not say this lightly, but our banking failure must be the most abominable disaster to be inflicted on four million Irish people since the Famine. That is some statement. Even during the time of the economic war and all the records of history, I do not believe anything as serious as this was ever inflicted on the Irish people. Nobody seems to know how it arrived or how we will get out of it. The problem with our small, but very proud, nation is that nobody is clear on the actual path on which we are to travel to ensure that we, as a nation, will have the freedom to do what we were used to doing. This is a very serious matter. I have been in the House a long time and have seen all kinds of disasters. Unless a multiplicity of things happen in Ireland and across the world we will have a very serious situation. Like everybody else I hope and pray that the green shoots about which we hear will one day become more than shoots and that the economy will work its way out of its difficulties. In tandem with everything I think we should be doing, about which I will speak in a moment, I wish to refer to the night in September 2008. Many people want to know about the pressure which was put on the Government and on Minister for Finance by the banking fraternity — there is no point in going over it again here today because it has been spoken about a thousand times — as a result of the midnight run to the Department of Finance. If the Taoiseach, the Minister for Finance, Deputy Lenihan, and the Government knew on that night what they now know would they have acted in the same way? That is the important question to be asked. I have no doubt the guarantee which was given for ordinary investors and depositors was one of the reasons there was cross-party support for the measure. It was an extreme measure to have to take but one could see its significance. The question for everybody is, whether on that night, based on the information, if any, which was available, Anglo Irish Bank should have been included in the guarantee. In the days following that decision, I put a question during the debate in this House to the Minister for Finance. He said he thought, based on the best available advice which he had at the time, that it appeared there was a smell of €16 billion in loans. We all know what that means. That is a long way from what has happened. The figure given was for all banks; it is on the Official Report for anybody who wants to read it. It was only a guesstimate but it was wildly off the mark. It brings me back to the question of why nobody was able to identify how great was the black hole in Anglo Irish Bank for a year and a half. That takes some doing when one considers that the Minister for Finance came in here a couple of months ago and said he thought the figure was €12 billion. Lo and behold, a very short time later there was another €10 billion added to it. We are talking in huge figures for a small bank. There is more of a paper trail at a bingo game in bingo halls anywhere in Ireland than there was in that bank. It was pure pocket stuff; there was no paper trail. That is why I could never understand why, when the Government decided to set up a banking inquiry, it finished on the

706 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) night the guarantee was given. Everybody wanted to understand the reasoning behind why the guarantee had to be given and why the bankers were not there on that night or six months before that. What was the cause of everything that happen at that time? Let us get some perspective on the €22 billion — we no longer talk about millions; it is now billions — which has gone into a hole and has vanished. The Minister of State knows as well as I do that there are projects which have been invested in that have showed a very poor return. In other words, a project might take 20 or 30 years to repay an investment. However, one will get it eventually and one would have something physical in its place which would be good for someone. The Government has pumped €22 billion down a hole for which no return is expected, and expects people who are taking the cuts to take this sitting down. The banking institutions in this country were so influential, persuasive and bullying that no matter who was the regulator, no one was more powerful than the chief executives of the various banks and the chairpersons of the various boards. They went out of control; I have no problem saying that outside the House. There were no controls on them. They got it into their heads that because the economy was rising at such a high rate, they were Gods around which everything rotated. Many times over the years I heard people say that I should not criticise the banks because to do so would tarnish the image of Ireland abroad, stop our ability to raise loans on the international money markets and, in general, that I was a very bad Irishman to criticise the banking establishment.

Deputy Michael Ring: That is right.

Deputy Paul Connaughton: I heard it a thousand times over the years.

Deputy Paul Connaughton: The landlords.

Deputy Paul Connaughton: I do not want to get a lecture from any of the banking institutions in the future. I am very impressed with the new regulator, Mr. Elderfield. I hope as the years go by that the golden circle will not try to get to him. I do not think it will as legislation surrounds him, his office and Professor Honohan. At the end of the day, at least manners will be put on the financial institutions for the sake of everybody. Banking facilities and institutions are hugely important in a developed economy, which cannot operate without them. I only hope in the new scenario with all the checks and balances provided for in the legislation that inordinate profits will be no more, greed will be flushed out of the system and we will experience a return to normal, decent, sensible banking. The banking system I want will look after people who have good ideas to employ themselves and others and businesses that must rely on reasonable bank overdrafts and that have projects, which are likely to be successful. During the last election campaign it was the belief of Government economists and everybody associated them that the growth rate would be 4.4% in 2007. I am not an economist but with such a growth rate, a government can do many things with an economy. Three months after the election, the growth rate was almost zero and now we are experiencing negative growth rates of 5% and 10% and that is our big problem. It is only our hope that we have the ability to come back and that we all work towards that. People often refer to green shoots. I was delighted that Mr. Connellan of Dublin Port said on television last night that there had been a 24% increase in exports through the port, although that is coming from a low ebb compared with 2006, for instance. This is a useful signal but given the overhang of billions of euro that must be paid by the people, the green shoots would want to be oak trees today. That indicates how much of an increase in business is needed.

707 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Paul Connaughton.]

There is no question that there was a golden circle. The bankers believed they could do what they liked and they had no bosses, whether they were regulators, Ministers or taoisigh. Against that background, the people who got us in the mess we are in will never be able to get us out, irrespective of what they do, because they will not have the goodwill of the people to pick themselves up,dust themselves down and do what the Americans are doing. The Americans believe they were badly let down but at least somebody is trying to help them now and they are trying to row in. Confidence means that if one thinks something will work out and one works towards it, nine times out of ten it will work out. The negativity surrounding our county is something to behold. I have never witnessed anything like it. While new appointments have been made to regulatory offices and to the boards of banks, I do not believe, no matter how well meaning the Minister is, the Government that caused this has the ability to deliver the final onslaught to lift the economy to where it is entitled to go and will go as time moves on. When the funding goes, everything goes. The Minister of State, Deputy Mansergh, was in the Chamber earlier. I refer to the effect of financial mismanagement on everybody down the line. He drove through east Galway recently to have a look at the aftermath of the flooding prior to Christmas. Naturally, after six months, everyone expected the Government to help those who were hurt most. A man in Ardrahan, County Galway, has two houses, both of which were flooded. He has been told no remedial action can be taken to ensure this does not happen again. The insurance company that covered him will no longer do so and the Minister of State is reported to have told him yesterday that he will be not be relocated. In other words, he has to stay where he is. I refer to this because if we were living in better times, every Minister would try to do what is necessary. If the economy has reached a point where a man, his wife and a few young children are condemned to living on a flood plain, having been granted planning permission by Galway County Council, that will give the House an idea of how bad is everything. I refer to house repossessions. I do not have good news for the banks on this either because there is a perception that the banks have sympathy for people who are unable to meet their repayments. It is beginning to flow around the country that the banks will take it handy if people go in and talk to officials. I guarantee the Minister of State that if the banks were able to sell their houses, they would be auctioned tomorrow morning. The only reason the banks will not repossess houses is they have too many properties that they cannot sell anywhere. I expect the Government to have a big say on this issue. It looks as if the number of people in trouble with their mortgages is increasing every month and almost 500,000 householders will find it difficult to meet their repayments if interest rates increase as we have been told they will. That is when misery will be experienced by the vast majority of young couples throughout the State. However it is organised and whatever deal is done with the banks, NAMA and everybody else along the line, the Government must not put people out of their houses. The houses will be repossessed but they cannot be sold on the market. Worse still, 80,000 families are on local authority housing lists. The number was never higher than this week. There is not a penny available to build a house for them. Given that so many houses are vacant, surely somebody has the imagination to ensure some houses could be reallocated to those who do not have a house. I always expect people to pay what is humanly possible because I do not want a free ride for anyone. We have no free lunches in this country but where couples are doing their level best to pay and continue to do so, how dare the banks or any Government put them out of their homes. That is an outrageous thought. That is why I have serious problems with NAMA.

708 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

It is the law of land, irrespective of whether we like it, but I would not like to have a vote in favour of NAMA on my curriculum vitae like Green Party and Independent Members. I would not like to face the electorate at the next election on the basis that I voted in favour of the agency. I hope it will be successful but too many things are wrong with it. I am terribly afraid that we will see many more house repossessions over the next 12 months. Whatever else the Government parties do, they must not put people out on the road.

Deputy Michael Ring: I wish to continue where Deputy Connaughton finished, namely, on house repossessions. He is correct that the Health Service Executive is already feeling the pressure in terms of mortgage protection and assisting those with mortgages. It is really only a case of keeping the wolf from the door. I agree with Deputy Connaughton. The banks are off- loading their bad debts to NAMA. When they go through their books and find a house they could possibly sell, they will do so. They will take houses off people. I wish to say two things to the Government tonight. A scheme must be introduced to protect people who are under pressure — those who have lost their jobs through no fault of their own, people who always paid their debts, mortgages and other loans. I refer to those people who paid over the odds to the banks and the builders because the property market was being fuelled by the Government which allowed the builders and investors to buy into the market. The Government did nothing about that. The Government is currently paying €500 million for rent allowance. There are enough geniuses in the Department of Finance, or rather there are not, because if there were we would not have found ourselves in the current mess. However, enough people are working in the Civil Service to devise a scheme that would allow for the use of the properties taken over by NAMA so that we would not be still paying €500 million next year for rent allowance. Why should the State pay twice, once to pay NAMA for the builders’ properties and again to pay people to stay in properties that might be going well for them? The Government must find a way to make those properties available to the State for council houses and rent allowance purposes. Deputy Connaughton is correct; 80,000 people are currently on the waiting list for council houses. I hope the Government is considering a mechanism whereby local authorities can take over housing estates that are finished or half-finished because the taxpayer has already paid for them through NAMA. I do not want to hear from the Government, the Civil Service or the banks that this cannot be done. Of course it can be done. We own that property now. The property that was put into NAMA in the past two weeks is the best of the worst. The banks picked the best of the worst. Unlike the song, the worst is yet to come. I spoke to a man the other day whom I know well. I will be careful as I do not wish to identify him. A number of years ago he was in a small job, like myself, when all of a sudden he became a developer. Then he became a super-developer. He told me he had property worth €520 million. He told me that he would be lucky to get €240 million or €250 million for it now. That is his valuation. I would say the banks have a valuation of €100 million on it, if it is even worth that in the current climate. A few years ago he had very little yet he was able to go to the banks and borrow what he liked. They kept throwing out money to him. Was there no accountability at all in the banks? Was nobody taking responsibility? Was everyone full of greed? Everyone was getting paid. Everyone was getting the tip-off. Everyone was getting looked after. However, there was no substance to what they were doing. I wish to return to what is happening currently with the State’s law enforcement agencies. What are they doing and when do we expect to see action on the corrupt bankers? All previous speakers have referred to the anger that exists. I know anger will not get one anywhere, but it will burst somewhere, either outside of this House or some other place. People just have enough. The danger now is that people who are working and who have mortgages will come

709 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Michael Ring.] under increasing pressure because, as the regulator indicated last week, interest rates will increase. I say to the Minister, to the regulator and to the banks that people are just about able to pay their loans at the moment. They are just about able to keep the ship going. People in good jobs must remember that others are on the breadline. Young people who come to my office are under severe pressure. They have young families and big mortgages and they are trying to keep the ship going. Both husbands and wives work. I can understand why public sector workers are angry about the cuts imposed on them. Those young people have commitments and mortgages. They are under pressure. There is one thing about not getting a pay increase; at least one never bargained for that money and one never had it to spend but it is difficult if one had bargained for it and committed it to a mortgage or to the education of one’s children or if it was earmarked for something in the future and it is taken away. The banks and building societies are putting on pressure. Local authorities are to introduce water charges and increase rates for people in business and on young couples trying to make a living. The price of oil has gone up, as has the cost of diesel and petrol. People are under pressure. They are under siege and they are sick and tired of it. I have some questions for the Minister to which I hope he will respond. When do we expect to see prosecutions for the gangsters that told lies to the Minister, the Government and the people? That is the only way to describe them. When will they be behind bars? I say to the officials, the Minister and the Government, there must be law for everyone in the country, not law for the poor. This morning I was trying to sort out a case for a person on low income who was caught using red diesel. That person broke the law and received a penalty of €2,000. If the fine is not paid the person will be sent to prison. A garda contacted me yesterday about a fine. I say to the Judiciary that it would be better to put people in prison than to impose big fines on them. A lady contacted me yesterday whose husband got caught for having no insurance, not for the first time, who received a fine of €900. The person is on social welfare and cannot live as it is. I say to the judges that they should put people in prison and not have mothers and fathers trying to raise money they do not have. The Judiciary should be more careful about how they fine people given that the gangsters in the banks are still being protected and looked after. They are abroad in their holiday villas, tanning themselves in the sun. We see their pictures in the newspapers yet nothing is happening to them. The Judiciary should not attack the poor; they should start at the top. Of course there are two laws in this country. A man said to me one time that whether one is a supporter of Fianna Fáil, Fine Gael, the Labour Party or Sinn Féin, if one is rich one will be protected. We should always remember that. That is what is happening now. We are not allowed to criticise the banks or the bankers. I reiterate what I said on the first day of the crisis, namely, where was the regulator and the Central Bank? Did anyone in the public service lose his or her job for not doing his or her job? The answer is “No”. Will anyone lose his or her job? The answer to that is “No”. What will happen to them? We will give them a big, fat pension. We will say, “Here’s the pension, good luck and thanks very much for getting this country into the mess you have got it into.” That is what happened in this country. We gave people big, fat pensions and we let them out the door. No one lost his or her job. That is why people are angry and sick and tired of what is going on in this country. People are looking for hope and vision. I say to the Minister and to the Government, Anglo Irish Bank is dead. It should be closed down once and for all because before this is all over we will have put up to €60 billion into that bank and we will still have to do the same job. Anglo Irish Bank should be closed down. People’s savings and the good loans that it has must be protected but we should forget about everything else. Allied Irish Banks, AIB, should be also closed down because it was no better.

710 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

It behaved in the same way. The only bank that showed a bit of respectability — it is not my bank so I do not mind praising it — is the Bank of Ireland. It was complaining for years that it could not compete with the interest rates offered by AIB and Anglo Irish Bank and the manner in which loans were given out. At least Bank of Ireland is not in too bad a shape. It is time we closed down the other two banks. Perhaps we should nationalise the Bank of Ireland and have it as the only bank in the country. We should try to bring in a few banks from abroad to do business in this country because what is happening now is that every single penny we have and every single penny we are borrowing is to keep the banks alive. Ultimately, there is a major risk that this objective will not be realised. If so, it will bring down this country and its economy. Anglo Irish Bank should be closed down. In this regard, I do not care what is said by anybody, be he a former leader of Fine Gael or anybody else, because that bank cannot be saved. It will not be saved and all we are doing is putting good money after bad. I want to see the bank go down immediately and I mean that. I hope it happens and that the Minister now realises that what Fine Gael was saying from the very beginning about having a good bank and bad bank was right. Anglo Irish Bank is a disgrace. Businesses are doing their best and there are people who are prepared to take a chance even in these bad times. Three or four billion euro was made available recently for the banks to encourage people to get back into business. Last week, Deputy Michael Noonan made one of the best speeches I have heard in this House for a long time. It concerned the banks, their behaviour and the lies they told the Government and everybody else. I read the speech two or three times and compliment the Deputy thereon because it was excellent. It should be circulated because the Deputy got it right. If the Government does not do something to make money available to small businesses, the country will fold. The only hope we have of getting out of this recession is to operate from the bottom up, that is, from the level of small businesses. Small businesses always comprised the backbone of this economy and they must be encouraged and supported in every way possible to keep them in business. I heard from people at Christmas that they could not buy stock because they could not obtain loans from the bank. In the past, they were always able to obtain loans with which to buy stock. The used to sell their stock at Christmas and repay their loans. This year they had great difficulty obtaining loans. The banks are putting unreasonable pressure on the people who always repaid loans. If this country is to get out of the recession, we must start thinking outside the box again. The Government has got it wrong regarding how it is supporting the banks. By the time the Government is out of office, thus giving another Government a chance to tackle the problems differently, the country will be in disarray. The people will not accept the medicine from the Government. The philosophy of Deputy Harney and the Progressive Democrats was to let the banks and businesses run the country and forget about regulation. High-flying Charlie, former Minister for Finance Mr. Charlie McCreevy, had the same philosophy of letting the builders and investors run their own show without regulation. By God, we have learned that regulation is needed. We need regulation that works and not regulation for the small men. The night I saw the former Financial Regulator — no disrespect to him — being interviewed on RTE by, I believe, Miriam O’Callaghan, who would have tied him up in knots in two seconds, I said it was no wonder the country was in its present state. The following week we gave the former Financial Regulator a big handshake, thanked him very much for bringing the country to where it is and let him out the door instead on holding him to account. If it had happened in America, he would now be in jail along with the Central Bank——

711 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

Acting Chairman (Deputy Jack Wall): The Deputy cannot make that assertion.

Deputy Michael Ring: I do not want to make an assertion but I will——

Acting Chairman (Deputy Jack Wall): I ask the Deputy to withdraw the assertion.

Deputy Michael Ring: Which assertion?

Acting Chairman (Deputy Jack Wall): That the man should be in jail.

Deputy Michael Ring: I withdraw it. Maybe he should be dealt with — I will put it that way. Even though I still feel strongly that he should be in jail, I withdraw my remark. I hope the day will come on which he will be brought to justice in some way to account for himself. There is no accountability at present. The lady who does not pay her fine for not paying her television licence will end up in jail and there will be nobody in the House to say we need protection for her. There is no protection for such a woman but there is protection for the big fellow. The banks have run the country into the ground, not once or twice but three or four times. By God, we have let them away with it. I hope the Acting Chairman, Deputy Wall, will be Ceann Comhairle soon because we need a change and new faces in the House. We need a new Government, new thinking and accountability. There is no accountability in this country. The agencies we put in place and for which we paid a lot of taxpayers’ money failed the people and the banks were a disgrace. I hope I will not have to withdraw my next remark: until I see a few of these fellows in jail, I will not be happy. A few of them have to go to jail to show the people what happened in the tent at the Galway races and other race meetings and what happened behind closed doors. The people must know that responsible individuals will pay a price for putting this country in hock. The latter have let down the people. People who died for this country would turn in their graves today and ask what they died for if they knew they left gangsters behind them that could run the country into the ground.

Deputy Frank Feighan: I welcome the opportunity to speak on this Bill, which introduces a three-stage legislative programme to create a new fully integrated structure for financial regulation. Since Good Friday, most public representatives from the Border area have been working on a cross-Border, cross-party and cross-community basis to try to save up to 5,000 jobs that are threatened on foot of the problems faced by QUINN Insurance. We have met the workers, the administrators, the Financial Regulator, the Governor of the Central Bank and the Minister for Finance. I remember being in the lovely office on the seventh floor of the Central Bank on the Tuesday following Easter Monday and noted there was a lovely view over Dublin. We sat around a lovely table and met Mr. Matthew Elderfield, Mr. Pat Honohan and others. It struck me that it was in that room, with its view over the city, that the former Financial Regulator and Governor of the Central Bank were asleep at the wheel. They must have felt great at one stage that we were building up a huge bubble and a head of steam. Everyone was clapping one another on the back saying “Well done” but the people who were paying the price were those people in the houses they could see in north Dublin city extending into Meath. Those residents are the people who are now paying the price for the lack of action. At the meeting, which I attended with colleagues from my party, Sinn Féin, Fianna Fáil and the Labour Party, I said to Mr. Elderfield and Mr. Honohan that it was a pity they were not in place five years ago. If they had been, the light-touch regulation would not have happened.

712 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

I have no doubt but that Mr. Neary and others were put into a position of trust and influence not because of their experience but because they had been in the Department of Finance for a long time. We all know what happened; over the years, it was a case of jobs for the boys. If one was in the Department of Finance, it was one’s turn to be appointed to a certain position, regardless of one’s ability. One deferred to a Government that was in office for 12 years and did not ask the hard questions. When one was put into a position of power, one did not bite the hand that fed one. If the Minister for Finance, who made the appointments, said, “Let it move on, do not worry about it”, one accepted that. One knew who appointed one. One was appointed not on merit but perhaps because of political affiliations or, more important, because it was one’s turn to be appointed. That is how everything has worked in this country since the foundation of the State. Deputy Ring is correct that, since the foundation of the State, we had two laws in this country, one of which involved light-touch regulation, an Irish solution to an Irish problem. If there was child abuse, the offending priest was moved and one was told not to worry and that the problem would be sorted out. However, most of the people of the country who would have made a difference here were in Kilburn or Cricklewood in the United Kingdom or in New York working on the building sites. That is what happened because the brightest and the best were disgusted at the two-tier system in this country that we pretend we have got rid of. At least when the British were here they did things on merit. Any Irish navy person in the UK could confirm that he was never asked about where he came from, his political affiliations or his family. If he did the job right he earned respect. Unfortunately people could not change the system in Ireland. How could they when they were resident in the UK, Germany, Australia or New York and could not come home to vote? That is why we had the culture we had over the years. Thankfully — while I might fall out with Matthew Elderfield, he is impartial — we now have two people in place who will make a difference. There is a difficulty in that we are trying hard to save jobs. This is all about jobs. We have very tight regulation now, and that is good, but we must look at how to save the jobs of 5,000 Quinn employees around the country. This recession started with jobs and it will end with jobs. We saw the former chief executive of Irish Nationwide getting €1 million and the way people such as this can walk around as if they have done the country a service. Irish Nationwide and Anglo Irish Bank were there for a reason. If one went into Government Buildings and wanted a favour, a little phone call to Michael or Seanie and a walk around the corner to St. Stephen’s Green and one was sorted out. That situation came about not from one’s ability to pay but rather who one knew. Let us be honest about that. If people intend to protest outside the Oireachtas, they should not waste their time outside Leinster House, because that is not where the power lies. The power is not with Opposition Deputies or Senators. The power is in Government Buildings and that is where they should go to protest. They could even forget about Government Buildings altogether and take a walk around the corner to Anglo Irish Bank, because those were the people running the country. They were running it from the Galway tent to include their little cronies and all those in a position of power around the country, and that has to stop. If Fine Gael gets into Government I believe it will stop. I take my politics seriously. When I was elected to the county council in 1999 I was on the VEC. People used to ask me what politicians were doing on interview boards for teachers and so on. I did not believe they should be on interview boards, but the only time I saw political interference within the system was where two inspectors were putting in one of their own; it is a small country. Now we are back to the same situation where we have to go to the United Kingdom to bring in two regulators

713 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Frank Feighan.] to regulate our affairs, because we simply cannot be trusted. We have lost the vocation of honesty and decency in doing the right thing. I welcome what has happened as regards Anglo Irish Bank. I believe it was a rotten bank, as was Irish Nationwide and AIB to a lesser extent. These set a precedent in reckless lending that the other banks followed and there are people who were caught up in the frenzy. I am one of them. I was involved in business and we employed six or seven people. There was easier money to be made, seemingly, outside the core business if one invested in property, stocks or whatever, which everybody was doing apparently. I recall the IFA meeting Department officials in Dublin and talking about exporting and arguing that agriculture was the backbone of the country. In the event, they were told agriculture was dead and the place to be now was financial services. We all fell into it because the people at the top decided that was the way to go, but it was too incestuous. Now we all know what financial services are and we have to start looking again at industries such as Seán Quinn’s group which is selling insurance in the UK, providing jobs in Fermanagh, Cavan, Leitrim, Meath etc. We have to protect those people. We also have to protect Irish farmers. If economic effort is to be export led, we have a brilliant workforce, people whose lives have revolved around working 16 and 17 hours a day seven days a week, for whom there is now no margin. We now have to move to exporting and getting a return. Let us forget about the old bubble, selling houses to one another, and financial services. We have to return to core business. I have to consider setting up the business again, because there is now no such thing as an easy euro. Bertie, Charlie McCreevy et alia espoused the view that there were easier ways to make a few euro and everyone fell for it because it was the thing to do. I heard about the “soft landing” a hundred times before the last election and then there was the former Taoiseach’s absurd comment to the effect that anybody who questioned what was going on should commit suicide, effectively. It just showed how out of touch they were, but unfortunately Deputy Bertie Ahern will get his pension. He will still get paid but not so the people who followed his reckless leadership. We have 450,000 out of work, young people who cannot afford their mortgages and civil servants who, rightly, are very angry because they have been doing the work. They believe they have been undermined in what they have done as well. Regarding Ministers’ pensions, it is about time clarity, commonsense and cop-on came into the equation. How could one get a pension from a job while still working for the Government? This was absurd, but it just shows there was a gravy train and it was there for everyone. Then there was the episode of the 700 civil servants which showed there was one rule for one group of public sector workers and another for the rest. That is not the way to run a democracy. I am sure that most of the politicians who got those pensions did not know what was actually happening. Be assured, however, that the civil servants who drew up the legislation knew the score. A Deputy’s salary is aligned to that of a principal officer. A survey was done, presumably by principal officers, about three years ago, which asked how hard Deputies were working. I did not know about it, although we got a 5% or 6% increase. The survey said, in effect, that Deputies were working very hard, about 80 hours a week, doing this and that, and they got an increase. Those in Opposition did not know about it, but be assured Bertie knew about it. The Deputies got the increase, but so too did the principal officers because everyone was on the gravy train. I believe there are people getting pensions for the jobs they did who are still working for the State, perhaps on a contract basis. This all has to be looked into, but thankfully the pressure

714 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed) was brought to bear on the former Ministers who were getting pensions and they at least have to give them up. That is right, it is leadership and it was what the public demanded. The credit unions have kept businesses going around this country, because there is no money in the banks. The banks are not lending, despite their statements that they are open for business. The banks are not open for business, and have not been for two years. Jobs are going by the wayside. I want to pay tribute to the credit unions. They did not get caught up in the madness and now they are bailing out many people who need money to pay for mortgages or put food on the table. They were not supposed to, but they helped out businesses up to two years ago when things got tight. It is a voluntary service and the Financial Regulator should examine ways to enhance the credit union model around the country. Let us think about the workers in AIB, Bank of Ireland and so on, who have gone through an extremely tough time. People come in, angry because they do not have money to pay to the banks, and they are on the front line. These are ordinary men and women. The banks gave them shares as a productivity incentive, but those shares are worth nothing. They have loans with the banks and they have wives, husbands and families. They are finding it difficult to survive. These people could not believe that those who took over Anglo Irish Bank received a pay increase. They are doing a job for the country — they should be happy to have jobs — and yet they got an increase a few weeks ago. There was anger not only among the public — as was right — but also among those working for the main banks, who felt that although they were doing the same job, those working for Anglo Irish Bank were protected by the Govern- ment. They had nice Civil Service jobs, and now they were to get a little bit extra for working hard. We are in an emergency. It is not about working an extra hour or two in overtime. That is over. There are people in the private sector who are clinging on to their jobs. The days of people working an extra two hours for overtime pay are over. The country cannot afford to pay it. We must now wear the green jersey and get ourselves out of this mess. We are where we are, as everyone says. AIB, Bank of Ireland and so on are in NAMA and we should support them. These banks need money and there is a lot of money out there. There are unions and industries that have money, and many people have deposit accounts. I am asking them to put their money into these banks so it can be put back into the Irish economy. Ulster Bank, Rabobank, National Irish Bank and so on came here when times were good and are now pulling out of the country. They are folding up their tents and pulling out, and they are putting serious pressure on many struggling account holders. All they want to do is to pull out. National Irish Bank had seven banks out of eight and a 60% market share in my own rural area; it now has one bank, and next year it hopes to move to a cashless bank. It sees the Irish economy and it wants to get out. I ask people not to put their money in these banks. I have said this many times. People should not deposit their money in these banks as they will leave the country. They must wear the green jersey and put their money into the banks that are being supported by NAMA, whether I like it or not. Businesses are under serious pressure and some will not survive. If we are to get out of this situation, it starts with jobs and it ends with jobs. I wish Matthew Elderfield and Patrick Hono- han well. When they look out from the seventh floor of the Central Bank on a lovely evening such as this, they have a job to do. I ask them to consider what they can do to protect jobs. When a person is working, he or she can contribute to the State. Unfortunately, there are 450,000 people out there who have no means of contributing to the State, and the State is finding it difficult to support those people. One’s heart goes out to them. I ask the Financial Regulator and the Governor of the Central Bank to temper what they are doing — that is, cleaning up the banking sector and ensuring the regulations are enacted — with efforts to

715 Central Bank Reform Bill 2010: 28 April 2010. Second Stage (Resumed)

[Deputy Frank Feighan.] protect jobs, although I realise they must be impartial. This is what we must do if we are to get out of the recession. As I said, there were two countries before, but I would like to think there will be a united Ireland. I am not talking just about borders but about jobs. People should get jobs based on their ability and merit. The games that went on — the nods and winks, the favouring of those in the Galway tent, going around the corner to Seanie in St. Stephen’s Green or up the canal to Michael — are over. This is where they have got us. Unfortunately, the people who participated in these things will not be arrested, despite the 450,000 or 1 million people who were caught up in the frenzy that was set up by this Government; rather, they will be protected. I would like to see a new Ireland that is open to all, without nods and winks, cliques or gom- beenism. That is over.

Deputy Paul Kehoe: I will not say I welcome the opportunity to speak on this Bill, because it is disappointing that such a Bill is required. The reason we need this Bill is the actions of the people opposite, who were not doing their jobs. I always thought the Financial Regulator would be in constant contact with the Minister for Finance. Maybe the regulator was in contact with the Minister, but the Minister — now the Taoiseach — buried his head in the sand, as he has done since he took over the leadership of the Fianna Fáil Party. He feels that if he ignores what is happening, it may some day go away. Speaker after speaker has mentioned the CEOs and chairpersons of Anglo Irish Bank and Irish Nationwide Building Society. They cannot be too far wrong when the same message is being repeated. On 13 October 2009, while speaking in the House, I called Mr. Fingleton a gangster, and I received correspondence in this regard. The brass neck displayed by Mr. Fingleton in asking me to withdraw my statement amazed me. I have not withdrawn it and I will not do so, or be forced to do so, because I believe in my heart and soul that that is what he is. There are other people also, including Mr. FitzPatrick. Deputy Ring said that some of these people should be jailed. In America, people were handcuffed and removed from the banks, put in the backs of police cars and put in jail. However, because the people about whom we are talking are friends of the Members opposite — that is, Fianna Fáil — they are not being jailed. If the Green Party Members 7o’clock were sitting behind me now, as they were between 2002 and 2007, clever Trevor and poor gormless John would be jumping around the place over what has happened. However, because they are in their cosy cartel, with their State cars, they have decided to shut their mouths. It is a case of “Hear no evil, see no evil.” It is disappointing that the members of a party that I thought had morals have absolutely nothing. They stand for nothing, and people outside the House know this. I will turn now to the former Financial Regulator, Mr. Neary. When Willie McAteer told Mr. Neary——

Acting Chairman (Deputy Jack Wall): As it is 7 p.m., I ask the Deputy to finish.

Deputy Paul Kehoe: May I finish this sentence?

Acting Chairman (Deputy Jack Wall): No. It is after 7 p.m. and we must follow the order of the day.

Deputy Paul Kehoe: I will continue the next day, because what I have to say is very interesting. Perhaps the Minister of State, Deputy Andrews, does not want to hear it.

716 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

Acting Chairman (Deputy Jack Wall): The Minister of State has nothing to do with it. It is the order of the day and we must adhere to it.

Debate adjourned.

Private Members’ Business.

————

Strategic Investment Bank: Motion (Resumed).

The following motion was moved by Deputy Eamon Gilmore on Tuesday, 27 April 2010: “That Dáil Éireann: noting that: — the Irish economy is experiencing one of the worst recessions of any developed country; — unemployment, which stood at less than 5% in 2008, is forecast to reach nearly 14% by the end of 2010, with the live register currently at more than 435,000; — some 100,000 people are expected to leave Ireland in a two year period; — there remains a significant infrastructure deficit which undermines competitiveness, constrains productivity, threatens recovery and puts at risk our ability to continue attracting high value-added inward investment; and — firms must have access to working capital and growth capital, but the banking crisis has seriously impaired the capacity of Irish banks to lend to the SME sector and to start-ups with high-growth potential; deploring the failure of the Government to produce a coherent strategy for jobs and investment or to address the funding and infrastructure gaps; calls for the establishment of a strategic investment bank, SIB, with the primary objective of investing and lending for national economic development, including investment in infrastructure and the enterprise sector and which would be broadly modelled on the German Kreditanstalt fu¨ r Wiederaufbau, KfW, and on the ICC-ACC, Industrial Credit Corporation-Agricultural Credit Corporation, models that previously operated in Ireland and which would be based on the following principles: — SIB will have full operational independence from the Government; — SIB would be capitalised by equity investment from the National Pensions Reserve Fund; — SIB would originate funding for infrastructure projects it deems to be appropriate; — SIB would be tasked with improving the funding environment for SMEs, particularly high-tech start-ups, addressing existing market failures; and — SIB would make no distribution of profits and all profits would be retained to increase the capital base of the bank.”

Debate resumed on amendment No. 1: In paragraph 2, to delete all words after “funding and infrastructure gaps” and substitute the following:

717 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

“calls for the establishment of a strategic investment bank, SIB, and a new residential lending bank under the remit of a fully nationalised AIB. The SIB section of this bank will have a primary function of investing in and loaning to viable business; providing the seed corn for start-ups; and extending credit to viable SMEs. All profits, outside the working capital required, made by the nationalised bank will be paid as dividends into the Exchequer.” —(Deputy Arthur Morgan). Deputy Kieran O’Donnell: I am sharing my time with Deputy Neville. Credit is not flowing to the SME sector and the real economy. The Central Bank has indicated that private sector credit contracted by €12 billion in the 12 months to February 2010. The three Mazars reports have consistently revealed a contraction in the credit supply to the SME sector. Performing SME loans have contracted by 25%, which reveals that the banks are squeezing viable small businesses. The Labour Party proposes the establishment of a strategic investment bank which would provide credit to the real economy. Fine Gael has consistently put forward the parallel approach of a national recovery bank alongside the NewERA strategy to provide vital broadband, energy and water infrastructure. The Government has yet to receive from the two main banks their plans on how to supply €3 billion to the real economy. On today’s Question Time, the Minister for Finance stated that he expects this money to be provided primarily towards working capital. We need to implement a mechanism that ensures credit goes to the SME sector. The credit review office established under Mr. John Trethowen must not allow inordinate delays in getting credit. A jobs strategy is also urgently needed to accompany the flow of credit from banks. The jobs, banking and fiscal crises that we face are interlinked. The markets’ response to Greece sends the message that liquidity issues may be resolved for eurozone countries but questions of solvency continue to arise. In the past week, the Irish bonds spread rose by 100 basis points. Today, the yield was 5.5% and the spread with German bonds was 240 basis points. The Minister needs to give an unequivocal statement on how he intends to maintain fiscal rectitude in 2011. Greek bonds were downgraded yesterday and Spanish bonds followed suit today. We need certainty in this area. I ask the Minister to outline to the House how he will ensure credit flows to the SME sector in return for the €3 billion that has been provided to AIB and Bank of Ireland, in respect of which plans will not be available until 21 May. I would also like to learn the jobs strategy he will put in place to deal with the recession on a positive note. The ESRI and other commentators have stated that more than half of our general government deficit is the result of unemployment but the Government has left that key component out of the equation.

Deputy Dan Neville: I welcome the opportunity to contribute to this debate on the Labour Party’s proposals to deal with the economic crisis. Jobs are among the most important social aspects of this crisis. There has been extensive debate on the economic implications but the social repercussions for those who are unemployed must also be addressed. Reference was made to the statistic that 438,000 people are unemployed but when one speaks to someone who has become unemployed, one understands the emotional and relationship crises that arise and the way that depression can take hold. Every individual has his or her own problems. I speak from experience because I became unemployed in 1988 and spent the following two years visiting my local Garda station and post office. I had a young family and a mortgage and found it extremely difficult to survive. It is only a small exaggeration to compare the experience to the death of a close relative.

718 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

The Government has to restore confidence to the economy by showing leadership. People will not move on until positivity is restored. While it is unacceptable that we have an employment rate of 15%, this means that 85% of people are employed. The latter are the key to restoring confidence in the economy. We have to change the message that viable businesses cannot get support if we are to restore that confidence, however. In the near future, we will need electrical contractors, plumbers and other skilled workers but they are going out of business or emigrating. The Labour Party motion contributes to the goal of getting credit flowing again. We know from research on the period between 1929 and 1940 that suicide levels increase during economic downturns. In the first half of last year, suicides increased by 35%. That is an important aspect of the economic crisis. We have identified the need to increase the social welfare budget and disagree with individual reductions. We must provide the budget to give those who are unemployed some form of financial support to live from day to day. However, there are other needs presenting that must be recognised in the same way, given the whole area of distress caused by unemployment and its financial implications. Much distress is caused by the threat or the fact of losing one’s home, and this creates tensions and difficulties within families, within marriage and for cohabiting couples, and we know there is an increase in divorce during times of crisis. These problems exist but are not recognised. We like debating economics but, while we must debate the economic implications of what is happening and how we are to get out of this situation, we must also recognise there is another aspect that is hurting many people.

Deputy Timmy Dooley: I wish to share time with the Minister of State, Deputy Billy Kelleher, Deputies Thomas Byrne, Darragh O’Brien and Michael McGrath and the Minister, Deputy Eamon Ryan.

An Leas-Cheann Comhairle: Is that agreed? Agreed.

Deputy Timmy Dooley: I welcome the opportunity to contribute to the debate. Yet again, we are discussing an Opposition proposal that purports to somehow resolve our current economic recession and our fractured banking system. This proposal is unique in that it purports to resolve both but, yet again, it is a case of smoke and mirrors. The Labour Party sets out the problem. We all know we are going through one of the most difficult recessions since the 1930s, we know there is a very significant increase in unemployment and we know its magnitude, we know the threat of emigration, we know the infrastructural deficit in our society and we certainly know the impact of the inability of small and medium enterprises to access credit, working capital and funds to keep their businesses going and to continue to employ people — we are all clearly aware of that difficulty. However, the Labour Party proposes some kind of strategic investment bank which, while it sounds great, is big on name but light on detail. One can set up all the quangos one likes to solve a problem but one cannot do so in a dislocated way. This has to be part of the wider economic situation. Until such time as we bring a resolution to the problems that exist within the economy, setting up another institution or quango will add nothing. It has to be part of a holistic approach to managing our way through the problems. It is not just as simple as producing this investment bank. If one wants to invest in infrastructure, the economy or jobs, one needs money to do that. We know that money comes from the markets — it does not grow on trees any more, to the surprise of some of our senior bankers who seemed to act as if it did. To be able to draw money from the markets, there must be

719 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

[Deputy Timmy Dooley.] confidence. In particular, there must be confidence in the ability of the Government to pay back the moneys that are lent to it, and there has to be a return for the investor. In the real world, therefore, this so-called monopoly money that was floating around for years no longer exists. The Labour Party proposal suggests there is monopoly money out there that will fund this bank and somehow resolve the problems without first dealing with the resolution of the crisis we face. The Government has put in place policies which are focused on controlling public spending. A plan is in place to balance the books or at least to bring us within 3% of the borrowing requirement set out in the Stability and Growth Pact. Following this plan gives confidence to the markets and allows us to borrow at reasonable rates to fund the deficit and, more importantly, to fund the capital spending requirements of the State. We have set about resolving the banking situation. NAMA is working well. It is about cleaning up the balance sheet.

Deputy Joan Burton: Tell that to the——

Deputy Timmy Dooley: Deputy Burton might disagree but, with respect, she spent weeks in this House bleating about the fact we were going to overpay for the assets that NAMA would ultimately acquire.

Deputy Joan Burton: The Deputy is talking about——

An Leas-Cheann Comhairle: Allow Deputy Dooley to continue without interruption.

Deputy Timmy Dooley: We did not overpay and Deputy Burton now accepts we did not, yet she claims this causes another problem.

Deputy Joan Burton: No wonder they destroyed the economy.

Deputy Timmy Dooley: We have invested further taxpayers’ money in the banks but that is the right thing to do. One cannot just ignore the banks and the economic situation and create some kind of a magic institution that will resolve the problem. The recapitalisation works towards this and will make the banks fit for purpose. The Government has placed onerous lending requirements on the two main banks, with a requirement to lend €3 billion for each of the next two years to assist companies in getting access to credit. It has set up the credit review process which brings transparency for the constituents of all Members who have explained to us that they have not been able to access credit. The review process that is in place sets about resolving that difficulty. Seed capital is required from the two big banks to work on Enterprise Ireland projects and we have continued to invest a very considerable amount in capital spending on public projects, whether in regard to the western rail corridor, the connection between Gort and Tuam, which Deputy Higgins will welcome, and other projects in that area. We have seen investment in our schools and investment of €560 million this year as part of the building programme in creating, retaining or sustaining 4,400 jobs in rural communities throughout the country. These are all part of a co-ordinated approach, not one individualised solution such as the Labour Party has put forward. That sounds good but, unfortunately, it is not connected to reality.

Minister of State at the Department of Enterprise, Trade and Innovation (Deputy Billy Kelleher): I welcome the opportunity to contribute on this motion. While we welcome any opportunity that gives the Government and Opposition Members an opportunity to speak on

720 Strategic Investment Bank: 28 April 2010. Motion (Resumed) the very serious challenges facing this country and its people, it is important we outline the difficult decisions that have been made and their results, as well as the hopes and aspirations that people have in the context of addressing the budget deficit, addressing the balance sheets of the impaired banks and making sure we have a credit flow to the broader economy which will bear fruit and will see a turn in Ireland’s fortunes. The proposal by the Labour Party with regard to the establishment of a strategic investment bank gives us an opportunity to highlight what the Government has done, where we have come from and what we are trying to achieve in ensuring that credit flows to small and medium size businesses. It is vital we repair the competitiveness of the economy and that we try to turn this corner and get back to what we are good at as a nation, namely, being innovative and entrepreneurial and developing the whole area of exports. If we are to address the huge challenges that face the country, it is important we acknowledge where we have come from. I do not accept we can blandly state that the economy was driven to despair and distraction in recent years given it has expanded hugely in the past ten or 12 years. At one stage, we had an employment level of more than 2 million people and there has been huge investment in infrastructure across all aspects, including roads, rail, water, sewerage, broadband, hospitals and education, including at third level. Every aspect of the economy has increased its capacity and capability to deliver better services. In addition, there was a huge increase in exports in recent years. To suggest the only problems facing Ireland are internal simply does not address the fundamental issue, which is that there is a world recession. Ireland is an open trading economy and we, more than any other country, are vulnerable to the whims of the international economy. To suggest the property bubble inflation was the ill and that by addressing it, we will solve all our problems is simply not a credible argument. We must restore competitiveness. This is very painful for many people in this country and while it means a redressing and re-balancing of our living standards and our expectations, it also means there will be wage deflation in certain parts of the economy more than others. This is simply something that has to be achieved, and anybody who denies it is simply not being honest with themselves, is delusional, does not understand the basics of economics or is just being disingenuous and populist. The motion highlights a number of aspects which the Government is trying to address. I accept there is a difficulty due to a lack of credit flowing to small and medium size businesses. However, the strategic investment bank as proposed by the Labour Party, would have been of critical importance if it had been in government when the bank guarantee was introduced, simply because the Labour Party would not have brought forward a guarantee. We would not even have a banking system that is potentially viable or capable of being salvaged, as is the case now and as a result of the brave decisions of the Government at the time when the country was facing the abyss. We do not have to go too far even within the eurozone to see the difficulties being faced by some countries which are unable to access credit because their credit worthiness is so downgraded and they are unable to borrow. This Government has achieved much. It increased employment to historically high levels and decreased unemployment to historically low levels. It invested significantly in infrastructure, reduced the national debt and invested in the National Pensions Reserve Fund, something which the Labour Party wanted to pillage on many occasions for other populist ideas at the time. Most international commentators have acknowledged that Ireland has achieved a lot in the short time we have faced this crisis and as a result of the decisions made by the Govern- ment. However, we are far from out of the woods and we must be conscious that everybody in this House, on all sides, has an obligation to at least be responsible in his or her comments. They must, at least, acknowledge that the very difficult decisions being taken by the Irish

721 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

[Deputy Billy Kelleher.] people will be of benefit and hopefully will get us to the other side of this recession intact and as a sovereign State with a credit worthiness befitting the Irish people.

Deputy Thomas Byrne: The Labour Party motion states that the strategic investment bank will be “broadly modelled” on the German KfW bank and ICC and ACC banks. Those are the key words in the motion. As usual, it has brought a motion to the House written on the back of an envelope, so to speak, having looked up a few references. KfW bank does good work in Germany but it is, generally speaking, a second tier bank as it does not operate in the retail markets. It operates with the benefit of a government guarantee, the same guarantee the Labour Party so adamantly and vehemently opposed. This guarantee is the means by which KfW finances other banks which operate on a commercial footing by providing them with competitive financing for investment in the market and in business. This is how the KfW bank operates. The one subsidiary of the KfW bank operating at the retail level had to be removed from the state guarantee. It operates independently because it is a commercial operation. This was a decision forced upon it by the European Union. I do not mean to denigrate the KfW bank which is a good bank and a safe bank but it is a second tier bank as it generally operates at a wholesale level. The Labour Party would probably need to do more research. At one point it was called Germany’s dumbest bank, because it transferred a large sum of money to Lehman Brothers on the day it collapsed. This is not to take away from its overall good reputation. The Labour Party refers to the strategic investment bank as having full operational independence from the Government. Does this mean that pay rates and pay scales in the bank will be a matter for that bank and not for the Government or the Labour Party? The Labour Party in all of its dealings with regard to the banks has not advocated the principle of full operational independence. In fact, far from it, it wants to interfere in every decision made by the banks. Every time a bank makes a decision, the Labour Party will criticise the Minister for Finance as if the Minister is responsible for those decisions made by bank boards and executives. The Labour Party motion advocates a new principle of full operational independence for banks. This is an interesting principle which is new for the Labour Party but it is welcome because the banks should be given full operational independence in so far as we are allowing them to have it. This Government has not given the banks full operational independence. The pay scales of the chief executives are subject to review and there are memoranda of understanding as to how the banks operate, including Anglo Irish Bank which is now a State bank. The Minister for Finance has a strong role in the operation of those banks. We are giving new powers to the strategic infrastructure bank which go way beyond what is given to the private banks and to some of the State banks. The Labour Party proposes capitalisation such as equity investment from the National Pen- sions Reserve Fund to be given to the private banks such as Bank of Ireland and AIB. When the Government proposed capitalising those banks, as was advised by all reputable commentary, the Labour Party adamantly opposed that capitalisation. The capitalisation we have provided has generally not been by means of equity investment although there have been some conversions, rather it has been by preference shares with a fixed rate of return. The Labour Party is now supporting capitalisation on a riskier basis than what has been allowed by the Government for AIB and Bank of Ireland and which the Labour Party opposed. The Labour Party proposes the strategic infrastructure Act would originate funding for infrastructure projects it deems to be appropriate. This would mean telling a bank it — rather than the Dáil — could decide which infrastructure projects would go ahead. The Labour Party is

722 Strategic Investment Bank: 28 April 2010. Motion (Resumed) promising voters infrastructure projects — when they are not objecting to them — but it will say that a semi-State body, a bank, will decide whether this project gets the go-ahead. The Labour Party proposal is half-baked, written on the back of an envelope. Deputy Burton usually reacts when I speak but she has not reacted tonight. I rest my case.

Deputy Darragh O’Brien: I am pleased to be given an opportunity to speak in support of the Government amendment to the Private Member’ motion tabled by the Labour Party. This Government has remained focused over the past 18 months to two years on securing the future of the Irish economy. We have been doing this while this country has faced an unprecedented global financial crisis which is affecting all major economies. Some of the decisions we have had to take have not been popular, however, they have been taken in the interest of our country. Unlike others here in the House, we have not shirked our responsibility to the Irish people. We have taken the hard decisions and we have done the heavy lifting, so to speak, on our own. We had to stabilise the banking system, not for the good of the banks as has been argued by the Labour Party many times, but for the good of the economy as a whole. We did this to maintain the existing jobs, to create new opportunities for people who have recently lost their jobs and for our young people. No bank has been given a free lunch, so to speak. All have to pay for the State guarantee provided to them. They have to pay guaranteed returns to the National Pensions Reserve Fund for the recapitalisation and the NAMA transfers. This week’s private sector investment in Bank of Ireland is a significant vote of confidence in the bank, in the wider Irish economy and in the Government banking strategy. This strategy is working. Our challenge now is to ensure that working capital flows back to our business sector and particularly to the small and medium-sized businesses. This is the reason we have insisted that AIB and Bank of Ireland provide €3 billion each in loans. This will be closely monitored on a statutory basis by Mr. Trethowan’s credit review committee. This is crucial and badly needed. It is only then that people on the street will clearly see the need for the NAMA project. We have introduced a new robust regulatory system. We have stabilised the public finances. By doing this we have had to take very unpopular decisions and have inflicted financial pain on citizens. The Labour Party stance of playing to the gallery at every opportunity will get this country nowhere. It agreed we needed to make savings of €4 billion but disagreed at every stage with any measure put forward by the Government. It agreed we needed to tackle the issues in the banking sector but voted against every Government initiative, including the State deposit guarantee that protects people’s savings, pensions and credit union deposits. Its finance spokesperson, Deputy Burton’s many reckless comments have done untold damage to the reputation of this country. Its leader had the audacity to accuse the Taoiseach of economic treason and would not withdraw those remarks. Deputy Gilmore has at no stage supported any constructive Government initiative and he has failed to put forward constructive policies. The Labour Party has told blatant mistruths to the Irish people. It is pushing a populist agenda in the interests of political gain. It has never shown any interest in assisting with making the decisions that need to be made.

Deputy Jan O’Sullivan: What about tonight’s constructive proposals ?

Deputy Darragh O’Brien: That one page motion is probably the only proposal of any significance produced by the Labour Party. It has opposed everything proposed by the Government, such as strategies which have international agreement. The country is on the right path to

723 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

[Deputy Darragh O’Brien.] recovery. We have stabilised our public finances without the support of the Labour Party. We are tackling our banking situation without the support of the Labour Party. We are gaining international support for our measures, without the support of the Labour Party. We are supporting jobs through employment subsidy schemes and creating new opportunities, without the support of the Labour Party. In time, this Government will be seen to have done the right thing, not for political gain, like the Labour Party, but for the good of our fellow citizens.

Deputy Michael McGrath: This debate is timely, particularly against the backdrop of significant volatility on the international markets arising from the uncertainty of the Greek financial crisis. Greece today will pay over 11% on its bonds while Spanish bonds were downgraded by a credit ratings agency. The head of the IMF said the fate of the single currency is at stake because of the cracks in the solidarity of the eurozone system. No one knows where this crisis will lead. Ireland needs to learn the lessons from Greece and the other eurozone countries in serious financial trouble. It underlines once again the overriding requirement for the Government to ensure the public finances are brought to order by 2014, as agreed with the European Commission, and a working banking system is in place which will meet the needs of the economy, particularly for small and medium-sized enterprises, the backbone of this economy. All parties are agreed on the central role the adequate flow of credit plays in the economy. Many of the initiatives and measures undertaken by the Government in the past several months are designed to ensure the adequate flow of credit for businesses. The Minister of State, Deputy Darragh O’Brien referred to the €12 billion lending requirement that Bank of Ireland and AIB must comply with for this and next year under the NAMA legislation. By 12 May 2010, both banks will have to submit detailed proposals, broken down by sector and region, on how they will achieve these lending targets. This will have to be rigorously monitored because the banks have shown form in the past in their ability to reclassify loans from one category to another. The Minister for Finance has said that if he is not satisfied with the evidence of their lending, he will use the power under the NAMA legislation to issue a statutory instrument to ensure credit flows into the economy. The banks are rebuilding their balance sheets by restricting the availability of credit to businesses while competing aggressively for depositors. There is a concern that they will react to the recent banking crisis, which we are not out of yet, by being overly cautious and too con- servative in lending practices. All Members know of cases where banks at loan reviews have doubled, even trebled, the interest applied to the loan. Our economic recovery is inextricably linked to the flow of credit which we must ensure. In that regard I welcome the establishment of the credit review office. I would like to see its decisions binding rather than the banks merely explaining why they will not implement them. However, it is a step in the right direction. The progress made by Bank of Ireland in raising private capital so that it can meet the capital requirements laid out by the Financial Regulator must also be welcomed. AIB will submit its detailed capital plan by the end of April. We need for these banks to be strong with genuine competition in the banking sector. In the interests of public accountability, once the restructuring plan for Anglo Irish Bank has been finalised, the full file should be published. It is important to show the costs of the different options of winding the bank down gradually, immediately or keeping it as a going

724 Strategic Investment Bank: 28 April 2010. Motion (Resumed) concern. This information should be available for all to scrutinise, particularly when we are anticipating an injection of up to €22 billion into the bank. I look forward to discussing this with the bank’s chairman, Mike Aynsley, when he attends the Oireachtas finance committee.

Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan): The banking issue needs to be debated to allow us to check and revise policy. A year and a half ago, my first instinct, when I sensed the scale of the banking problem facing us, was that we should nationalise all the banks. When I informed the Minister for Finance of this he listened but in the end said “No”. In hindsight it was the right decision not to nationalise all the banks at once. A year ago it was clear to me we would end up with the sort of scale of State involvement in the banking sector that we have now, particularly with our larger banks, Bank of Ireland and AIB. It was better not to nationalise all the banks because such an approach ran the risk of being a more expensive approach. By international comparison, the better approach was to find out the nature of the problem, the assets that needed to be managed and then to deal with the capital approach. I would have had no difficulty, however, if we had to fully nationalise Bank of Ireland. It did not happen in the end and international markets gave the signal the other day that it will be able to work itself out of its situation. I hope the State will be able to make a significant profit if the bank returns to profitability. In last Sunday’s The Sunday Business Post, Deputy Richard Bruton argued that to deal with the biggest banking problem, Anglo Irish Bank, the loans should be forgotten while the bondholders should be allowed take the loss. I will admit that was my first instinct too. I would love the bondholders to take the loss rather than the taxpayer. However, when one examines the details one has to question such an approach. Roughly €15 billion is held in bonds in that bank. Some €2 billion of it is short term with a turnover of one week. It is more akin to a deposit rather than a medium or long-term bond. However, the bank’s annual accounts showed that of the other €13 billion of bonds, some €7 billion of them were issued since the bank guarantee in September 2008 and will come to an end by this September. Deputy Richard Bruton’s argument that these bondholders would take on the debts if the bank were let go is not, therefore, correct. I understand several other bondholders in the bank are in a similar position. The proposal of letting the bondholders take the hit after the guarantee expires will not work because the bondholders will not be there. Legal advice also points out they cannot be treated differently to other depositors such as the European Central Bank. After examining the maths of going after the bondholders, I have realised it is not a practical or realisable solution. I welcome these type of debates, and further debates, because they allow us consider the options not in a party political fighting manner but in a genuine way. When we examine the figures and the reality of the position, however, much as I would like to pursue such an approach, I do not see it as realistic or possible. That is the reason I welcome the debate tonight.

Deputy Michael D. Higgins: With the permission of the House, I propose to share time with Deputies Joe Costello, Seán Sherlock and Jan O’Sullivan on a division of ten, seven, seven and six minutes.

An Leas-Cheann Comhairle: That is agreed.

725 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

Deputy Michael D. Higgins: I am sorry Deputy Michael McGrath has left the Chamber because I thought his contribution was a reasonable one from the Government’s point of view. I hope he will not think I am condescending if I say it was fairly well informed in terms of its economics. I want to set out a number of points. Deputy McGrath’s speech contrasted with what one could only call hectoring, abusive speeches directed at the Labour Party. For a start I will deal with one fact, which is that the proposal before the House comes from the Labour Party’s earlier document, Investing in our Future. That document was available for anyone to read. It suggests that the real economy is where the Government must take action, and quickly, and that within the real economy unemployment is the biggest problem. In the ten minutes available to me I do not have the time to go into detail on that but if one looks at the cost of unemployment as it rises past 14%, one will see immediately that the deficit of 40% to 50% is accounted for by the cost of unemployment. I suggest that the Government’s policies are turning a recession into a depression. It is basic economics, given recent economic history, that if the economy is deflated to the extent that is now happening, both in terms of Government action combined with a massive increase in savings, the net effect of shrinking the economy in that way will drive the unemployment rate even higher. As I said, I can only make a few truncated statements about that but what the Government seems to be suggesting, even in the little handbooks it prepares for its backbenchers, is that we are repairing and recapitalising the banks and that we will increase competitiveness, achieve growth and so forth. In the Finnish economy, which went through a similar crisis to ours, there was a return to growth in single figures but the unemployment rate did not drop for a full five years. I want to state clearly our position on this issue. I suggest the Government has not dealt with the real economy and the social disaster that are the unemployment figures within it. Those who are affected by the disaster of unemployment not just in the loss of a job, but the exclusion and the misery we have heard about from many other speakers, cannot wait five years. The other part of it which is very important is the bland way in which the return of immigration is being accepted. A total of 100,000 people over two years have emigrated. Those people have come through an educational system, and have been described by the European Union as among the most flexible, highly talented workforce in Europe, and they are to be exported. I could point to other examples. One either engages with the employment creation problem or one does not. I attended the conference in Farmleigh at which many presentations were made on innovation and research and development. In the Tasc document published recently, Dr. Tom O’Connor points out that we have 10,000 PhD graduates working in Ireland. We have approximately 350 incubator units working in third level institutions and of those 13 have spun out tradeable companies but they were almost immediately bought up by foreign multinationals. In other words, having subsidised the research and development, instead of getting the hundreds of thousands of jobs we allow the taxpayers’ investment in research and development and innovation to be consumed by the sheer power of money. I note our debate has been welcomed by some but people have come out with mantras such as “the response of the markets”. I have stated, and written it elsewhere, that one of the findings of the last crisis, and the more general one in global economics, is that there is no such

726 Strategic Investment Bank: 28 April 2010. Motion (Resumed) thing as market rationality. Speaker after speaker on the Government side spoke about mess- ages from the markets. This is like the fourth secret of Fatima. It is about the same status. There is no market rationality. References were made to Greece. What a pity no one will speak about the sheer speculative, criminal activity of Goldman Sachs not only in regard to the Greek currency, but to all of the housing bubbles in the United States which, to the credit of the United States, it has the capacity to face and examine. I will outline what is involved here for people watching. They have heard about whatever is left in the National Pensions Reserve Fund, and someone was dismissive of the Labour Party’s proposals to use such funds for infrastructural expenditure. The reality is that we must take out our €2 billion now and put into a strategic investment bank that will provide infrastructure. There was a time when schools, clinics and roads could be built at the most competitive price in decades. We have unemployed engineers and architects who account for one in three males involved in the construction industry, yet the Government contracts its capital expenditure. In fact, capital spending will go from 5% of GNP in 2010 to 3.1% in 2016. At a time when we should be reflating the economy by getting good value in social infrastructure and creating jobs, thereby reducing the cost of unemployment, the Government is doing the opposite. It is filling the gap with phrases about making the banks fit for purpose. I ask one question of the public watching this debate. After €22 billion going into the black hole that is Anglo Irish Bank, do they see Anglo coming out in the future and lending one red cent to anyone who will ever work in Ireland? The answer is “it will not”. Everybody knows that, yet at 8.30 p.m. tonight we will vote on using €2 billion from the National Pensions Reserve Fund that would fund infrastructure and capitalise the spin-out companies coming from research and development. It would have been available for the refit in terms of related technology. People are saying we must repeat the Fianna Fáil Party line that we are repairing the banks — by putting €22 billion into a bog hole. That is the test, and people can reasonably compare our proposals in regard to addressing the unemployment core of the real economy, including liquidity and credit to small and medium-sized enterprises, which is important. One might say, would AIB not do this or would Bank of Ireland not be able to do this when it has taken so much of the State’s money? That is simply not the case because the legacy of this is that between 1998 and 2007 bank lending increased by 500%. A total of 67% of that was in property and 14% in institutional lending. What was left for the real economy? They have no record of lending to the real economy. Why should we trust them now and say there has been such a change in culture that they will give up their aul sins and start lending to the real economy. There is not a shred of evidence for that. The Members should not just believe me on this issue. Deputy Gilmore, the leader of the Labour Party, in moving our motion last night, quoted the Governor of the Central Bank who stated:

I think it’s fair to say — and what data we have seem to bear this out — that banks in Ireland reacted to their own difficulties and to the downturn by greatly reducing their risk appetite. Some of this was a necessary adjustment, but the result has been limited availability of credit for start-up firms and SMEs. Indeed, I have the impression that, during the years of property-based lending, the banks have lost their edge in small business lending.

This is the alternative to our motion. The result of what the banks did at that time was to make it impossible for people to put a roof over their heads because, for example, the ratio of the

727 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

[Deputy Michael D. Higgins.] average gross salary to lending had increased to approximately eight or nine to one at a time when most European comparisons state that one has unaffordable housing when that ratio is 3:1. The choice tonight is to address in the short term the unemployment problem directly and immediately by way of the Labour Party proposal of a strategic investment bank or accept that the banks have all converted now and that if we wait long enough they will repair themselves. Such nonsense.

Deputy Joe Costello: I compliment Deputy Burton on tabling this important motion which deals with the establishment of a strategic investment bank, an important policy item for the Labour Party and, I believe, the country. The Minister, Deputy Ryan, appeared in his remarks to be depending largely on the Bank of Ireland getting the country out of the mess it is in. The words proposed to be inserted following the deletion of all words after “Dáil Éireann” are outrageous and seek to commend the Government on its actions to stabilise the financial system and note that its policy has already delivered a cleaner, well capitalised and better funded Bank of Ireland which is now in a position to provide credit to support economic recovery and renew job creation. If the Minister believes that, he is in cloud cuckoo land. All of the banks, including Bank of Ireland, are under-capitalised. It may be the best of a bad lot but that is all it is. If the Minister believes the engine of the Irish economy can be restarted by one bank, which remains in a considerable degree of trouble, he has another thing coming. The reality of the situation is absolutely stark for this country. Unemployment has in the past two years almost trebled from just under 5% to almost 14%. The Live Register stands at 436,000, with 32% youth unemployment. Are we to allow this generation stagnate or emigrate? Some 40,000 people emigrated last year. The ESRI has stated that up to 60,000 people will emigrate this year. This means that 100,000 people will have emigrated from Ireland in the space of two years, which is akin to the 1950s when emigration was at its worst and the lifeblood of this country was being drained away owing to a lack of employment. The current crisis came about because of irresponsible banking and regulation and, most of all, irresponsible Government. All have contributed to the current crisis we are in. The problem is that the only response from Government to get us out of this mess is to bail out the banks. That is its only coherent response. The mantra for the past two years has been, stabilise the banks, capitalise the banks, give the banks a guarantee and all will be hunky dory. The solution is that we give all of this to the private banking sector which was involved in bringing our economy to its knees. We cannot allow the country to slip back into stagnation as happened in the past. Our first priority must be to get the wheels of our economy turning again, to stop the haemorrhaging of jobs and to find new ways of creating employment. The Labour Party has outlined its policy in terms of a stimulus package which would intervene to retain existing jobs, provide training, education and upskilling for those who might lose their jobs and to provide incentives and resources for the creation of new sustainable jobs. Central to job retention and creation is a reliable steady credit flow. This is where the Labour Party proposal comes in. The private banking system cannot provide this. Not alone cannot it not do so now but it did not do so in the past. There is no indication it is capable of doing so. The banks have been reckless, greedy and irresponsible. The citizen in the street and corporate Ireland require that steady flow of credit which is not available anywhere.

728 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

The banks splurged in the past and do not now have money to spend and are too impaired to provide what is needed. We can no longer allow the private banking sector to have total control of the purse strings that will determine the future of our economy. We must provide ourselves with a sufficient flow of capital to our economy, including to our citizens and small and medium-sized enterprises that are crying out for an injection of funds and cannot got them, causing huge problems. The small and medium enterprise sector generates 64% of all employment. More than one million in this country are employed in that sector. Some 50% of the entire working population of this country are in the small and medium enterprise sector. The Government has not been funding them. It has not been putting pressure on the banks which remain under-capitalised to do so. Also, the banks are not drawing down money available to them from the European Investment Bank.

An Leas-Cheann Comhairle: The Deputy has one minute remaining.

Deputy Joe Costello: The banks could use this money to generate new activity in the SME sector. I do not believe we have a choice in this matter. We must look to the ICC and ACC models which for many years provided a good flow of capital to the agricultural and corporate sector in this country. The Labour Party previously considered the establishment of a third banking sector. The proposal before us is the equivalent of this. The Government must assert once and for all that it will be responsible for controlling the supply of money in this country. The only way to do this is to have an independent bank that is capitalised — the strategic investment bank would be capitalised from the pension reserve — the primary function of which will be to ensure the engine of the economy is supplied with a steady flow of funding. This has not been done by the private banking sector which acted recklessly. For the future, we must ensure that this does not happen again.

Deputy Seán Sherlock: The Minister for Finance, Deputy Lenihan, in response to a Parliamentary Question today in regard to the Mazars review of lending to small and medium enterprises stated:

The third Mazars report on lending to small and medium-sized enterprises, which covers the period from October to December 2009, showed that credit applications in number and value terms rose slightly in the last quarter of 2009 over the previous quarter, which is encouraging. The level of applications for credit appear to be stabilising and Mazars also reported a small improvement in the overall credit approval rate. However, the reduction in the stock of credit, as repayments exceed new credit, and in credit quality reported by the banks remains a concern for the Government. To address this concern, I announced earlier this month that AIB and Bank of Ireland are to make available a minimum of €3 billion each for new or increased credit facilities, including working capital targeted at small and medium-sized enterprises, in the real economy in each of the next two years.

The small and medium enterprise group appeared before the Joint Committee on Economic and Regulatory Affairs yesterday. Its members constitute more than 98% of all business entities in Ireland and number more than 240,000 in terms of the number of businesses they represent and employ just under one million people. In response to questions on the Mazars report, Mr. Fielding, the representative, stated that, with regard to access to credit, the Mazars report published last week has been hijacked by the banks.

729 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

[Deputy Seán Sherlock.]

In the first two Mazars reports there was major input from the Department of Finance, the Department of Enterprise, Trade and Employment and small business. We did not even know the third report was coming out and it was launched at a joint press conference by Mazars and the Irish Banking Federation with no Department of Finance, Department of Enterprise, Trade and Employment or small to medium enterprises. It was very disappointing from our point of view. In further deliberations on the difficulties facing small businesses we spoke about the employment subsidy scheme. Mr. Fielding went on to state that last summer the Tánaiste introduced the employment subsidy scheme. Initially, it was for exporters only but it was extended to all companies. I direct the following comment to the Minister, Deputy Ryan. However, Mr. Fielding went on to state that in the small print one saw it was extended to all companies except those employing fewer than ten people, immediately excluding 90% of all businesses. Therefore, Government policy on employment relates to firms employing ten or more employees. It gives an unfair advantage to those employing 11 as against a firm employing nine people. The Government does not have bottomless pockets but one would think more could be done when one sees the amount of money being invested in the banks. These are the words of the person who represents 98% of businesses in the country. These are his views in respect of funding and the role of banks in this society at the moment. There is a vacuum at present. It is the view of ISME that there remains a significant lending deficit which undermines competitiveness, constrains productivity, threatens recovery and puts at risk the ability of SMEs to gain access to working capital and growth capital. That is what this motion is about. The banking crisis has seriously impaired the capacity of Irish banks to lend to the SME sector. I refer to the answer I received to my question on the Mazars report. The Minister stated that a letter was sent to both Bank of Ireland and AIB on 7 April of this year requiring them to prepare an SME lending plan, broken down by sector and geography 8o’clock for submission to the Department by 12 May. What does this tell us about the Government’s response to lending in the SME sector in the first instance and the banks response since the guarantee was put in place in September 2008 in respect of lending in the SME sector? It is non-existent; it is not happening. The evidence of a letter on 7 April this year does not inspire confidence into the process being undertaken in respect of the systemic banks and other banks at present. The Minister also stated both banks were expected to make credit available.

An Leas-Cheann Comhairle: The Deputy has one minute remaining.

Deputy Seán Sherlock: Both banks were expected to make credit available immediately and were not to wait until plans were submitted. The bottom line is we have a viable plan here, one which will facilitate lending to the SME sector. We can do this post haste, which is what needs to be done to effect growth in this economy again.

Deputy Jan O’Sullivan: This proposal from the Labour Party is very practical and responds to real needs in the Irish economy and among small businesses throughout the country. Deputy Seán Sherlock has provided very clear evidence of the difficulties of small businesses. Last night, Deputy Penrose quoted from research carried out by ISME on the real difficulties facing small businesses throughout the country and the lack of funding for infrastructural projects, which are of such importance.

730 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

I refer to some of the points made by Fianna Fáil speakers tonight. Some comments were constructive and invited constructive debate. This motion is put forward in the spirit of a constructive proposal. However, as Deputy Michael D. Higgins stated, other Fianna Fáil Deputies used various types of sloganeering to hide behind the fact that its policy has basically failed and has not delivered the money small businesses need to create and maintain jobs in the economy. They suggested we were playing to the gallery or being populist and used such terms. What we are actually doing is responding to the people who talk to us every day of the week. One may wish to label that as populist or playing to the gallery but it amounts to responding to people outside this Chamber who do not hide behind the slogans that have been put forward by the Fianna Fáil backbench speakers. Anyone who referred to the banks’ ability to respond to these needs spoke in the future tense about aspirations. They suggested that, somehow or other, the banks that are being recapitalised and that have had billions of euro of taxpayers’ money put into them will at some stage in the future hopefully come good. “Hopefully” was a word used, I understand, by Deputy Timmy Dooley. However, we cannot live on hope. We must provide real answers and funding for businesses which exist but which are in trouble. The banks are so preoccupied with retrenching their reserves and putting right their balance sheets that they do not have the will to address the needs of small business. We need a clearly focussed bank the interest of which is publically driven and the purpose of which is clear. Naturally, there must be credible risk management in all lending but what is crucial about our proposal is the ethos and raison d’eˆtre of what this bank would be about. There will always be some risk with lending to business. However, that risk must be informed by a Government policy of giving impetus to new growth and sustainable jobs. The current banks, even those we own or partly own, do not have the capacity to focus on the two crucial areas which require money, namely, infrastructural projects and small and medium sized businesses. These are the two areas requiring help and the Labour Party proposal is focused on this reality. I refer to my own constituency and the family businesses there that are inter-generational. These are the businesses to which Deputy Seán Sherlock referred and which in some cases have less than ten employees and therefore cannot benefit from many of the Government schemes. They are also the businesses that the commercial banks have been told to invest in by Government. Deputy McGrath acknowledged the banks will have to be hounded to invest that money. I cannot envisage the commercial banks undertaking the painstaking work required to support small businesses to get them out of the difficult times in which they find themselves. The bank we propose will have as one of its clear objectives the requirement to address the needs of those small business of which we are all aware in our constituencies. Many of these are businesses that have been in place for generations and which are in difficult times at the moment but which could trade their way out of difficulty if only they could get the credit they need. I refer to some other proposals. For example, a group of tradesmen came to me with a very good, viable proposal in respect of refurbishing houses to make them more energy efficient. However, they simply cannot get the necessary seed capital. These are the businesses the Labour Party proposal for a strategic investment bank seeks to address. Our party leader, Deputy Gilmore stated last night that it is focussed on getting people back to work.

Deputy Michael D. Higgins: Hear, hear.

731 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

Deputy Jan O’Sullivan: This is what we must do, but not man˜ana or at some hopeful time in the future. Government parties hope investment will be forthcoming from the existing banks and that it will go into small businesses. We are aware, as is ISME and everyone who represents small business that this is not happening and it will not happen with the current commercial banks because that is not their focus or concern. The only way to bring the country and its people back to sustainable growth, jobs and confidence in the future is if we have a strategic investment bank such as that proposed by the Labour Party, the absolute focus of which will be on providing capital funding to get businesses up and running and to keep the businesses currently struggling afloat and in order. The proposal will help to build schools, hospitals, roads and houses which are so urgently needed.

Minister for Finance (Deputy Brian Lenihan): I am pleased to have the opportunity to respond to this debate. Before I do so, I refer to Deputy Kenny’s wildly inaccurate claim this morning that Irish banks were exposed to some €7 billion of Greek debt. For the record, the total exposure of the covered banks to Greek sovereign debt is negligible, less than €40 million. It really is not in the interests of this economy — nor does it reflect very well on this House — that grossly inaccurate and perhaps mischievous figures of this nature are thrown around at a time of elevated stress in the international markets. This week, the first of our banks emerged from the banking crisis. Bank of Ireland’s plans to attract money from private investors to meet the stringent capital requirements set out by the Financial Regulator represent concrete evidence of the growing international confidence in Bank of Ireland and our economy. Our policies are delivering a cleaned up, well capitalised and better funded bank. It is in a position to provide the vital credit that, as Deputy Jan O’Sullivan has said, is needed to support economic recovery and job creation. This arrangement will also provide a handsome return to the taxpayer. The State will obtain €540 million from its previous investment in the bank — the warrants that were taken out last year, together with further administrative payments — and will own approximately €1.8 billion of preference shares, which will yield approximately €180 million in cash to the Exchequer each year, at a coupon cleared by Brussels in excess of 10%. The State will own up to 36.5% of this valuable bank, a stake it can sell in the future to the benefit of our pensioners. This outcome is a vindication of the Government’s banking strategy, which involved the pursuit of an institution-by-institution solution. The policy of blanket nationalisation, which was advocated by some parties, would have deprived Bank of Ireland of the considerable private sector funds it is now raising, leaving the taxpayer to foot the entire Bill. The Fine Gael proposal to split the bank into a good bank and a bad bank, and to default on certain bonds after next September, would have destroyed this 200 year old institution. It would also have meant that the institution would not be functioning now. If one takes the most optimistic assumptions about the Fine Gael proposal, it would not begin to function until after the conclusion of the guarantee next September. As a result of this week’s announcement, a bank with a long tradition in this country will be in a position to provide credit to Irish businesses and households as the economic recovery begins to gather pace. Within the next few weeks, the bank will produce its plan to meet the lending targets I have set out. This plan will be monitored by Mr. John Trethowan, who is also leading the credit review process under which small and medium sized companies, sole traders and farmers who have been refused credit, or have had credit withdrawn, can apply for an independent review of the banks’ decisions. The interesting proposal before us tonight involves the establishment of a strategic investment bank. According to the Labour Party leader, it is modelled on the German investment

732 Strategic Investment Bank: 28 April 2010. Motion (Resumed) bank, KfW, which was set up for the purposes of the reconstruction of Germany after the Second World War. It is proposed that the bank will be capitalised by the National Pensions Reserve Fund and that its critical role will be in funding infrastructural projects. Public spending on infrastructure is important in boosting the competitiveness of the economy. The Govern- ment has maintained capital spending at more than 5% of GNP, despite our fiscal difficulties. There has been some reprioritisation in light of the changed economic circumstances. The question that arises is whether we need a State bank to invest in infrastructure. We do not need some type of “funny money” arrangement to disguise the true extent of Government investment in the economy. The Government already has a mechanism available through which infrastructural investment for a return can be channelled in the National Pensions Reserve Fund. The fund has provided funds to major infrastructural projects — Terminal 2 in Dublin Airport is a notable example — and is committed to further investment in public projects that will give a good return on its investment. Potential investment opportunities for the fund are expected to arise later this year. This well-established mechanism is backed by the commercial experience of the National Treasury Management Agency. I have no great confidence that the State bank model would do a better job. On the contrary, there is considerable evidence, including a study by Professor Honohan, who is the current Governor of the Central Bank, that State banks with the best will in the world do not maintain a commercial focus and that political pressures on Governments tend to interfere in the lending decisions of such banks.

Deputy Michael D. Higgins: That is a selective quote.

Deputy Brian Lenihan: I am aware that the Labour Party leader quoted Professor Honohan’s comment that the banks have reacted to their difficulties by reducing their appetite to take risk. Professor Honohan has also said that our banks lost their edge in small business lending some time ago. I agree completely. I made that point in my banking announcement before Easter. The way to tackle this problem is to restore the banks to health and to set targets that will be monitored. A credit review process has been established. I am not persuaded that a State bank can help in this process. A State bank would have to compete with the Exchequer to raise money on the international markets and with our existing banking system for funds to lend. In this global crisis, all countries have sought to repair their existing banks and to reform regulation, in the interests of rectifying the delinquent behaviour that got them into this crisis. That seems a far sounder basis on which to proceed. The Government’s banking strategy is working. It will provide a financial system that will serve the needs of our recovering economy. That is the best way to create and protect jobs.

Deputy Joan Burton: I thank those who have contributed to the debate on the Labour Party’s proposed strategic investment bank. We are not accepting the Sinn Féin amendment. In a recent article in Rolling Stone, the American writer, Matt Taibbi, compared an American bank to a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”. He was talking about Goldman Sachs, but it seems to me that he could have been talking about Fianna Fáil’s own Anglo Irish Bank or, on a minor scale, about Irish Nationwide. In a way, that is from where the need for a strategic investment bank comes. It is something Fianna Fáil does not really understand. I noted the half-praise from the Minister and other Fianna Fáil speakers, which may reflect Fianna Fáil’s distant history. The Labour Party has proposed the establishment of a strategic investment bank to address two critical market failures. I remind the Minister, who is a capitalist, that in capitalism it is permitted to use state initiatives to address clear market failures. Capitalists agree on that. Socialists accept it as a given, of course, because we do not hold the market as

733 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

[Deputy Joan Burton.] a God in the way Fianna Fáil does nowadays. The two market failures to which I refer are the shortage of financing for small and medium sized enterprises and the critical shortage of investment in infrastructure for the future. Having listened to a number of Fianna Fáil contributors this evening and last night, it is clear some of them have never heard of Seán Lemass. They certainly do not have any knowledge of some of the initiatives he took, particularly during the Second World War, when market failure was a critical feature of native Irish capital. A series of initiatives was taken by Fianna Fáil and other parties in government to interest such key market failures. In our proposal for a strategic investment bank, we propose an initial upfront investment of €2 billion from the National Pensions Reserve Fund into a new vehicle which would raise funds to be channelled into Ireland’s small and medium sized enterprise sector and into vital infrastructure. The Minister asked, quite reasonably, why a new vehicle is necessary when the National Pensions Reserve Fund already exists. The reason is that the Minister has given an extraordinary set of responsibilities, in the context of the banking crisis, to the National Treasury Management Agency.

Deputy Brian Lenihan: And to the National Pensions Reserve Fund.

Deputy Joan Burton: As my colleague, Deputy Jan O’Sullivan, has said, we want to concentrate not only on sorting out the disastrous mess that Fianna Fáil created in the banks, but also on the future. That is why we need an institution that will focus on investment in small and medium sized enterprises, for innovation purposes and in public infrastructure. As Deputy Higgins has said, rather than pumping money into a failed banking system, we want some of the National Pensions Reserve Fund to be ring fenced for productive job creation and investment for the future. The strategic investment bank will be a commercially driven business bank and a public project financing powerhouse. It will be a key driver of green energy, microfinance and next generation broadband. This has been already tried elsewhere. In the recent United Kingdom budget the British Chancellor for the Exchequer, Alistair Darling, proposed the establishment of a green investment bank to support investment in the eco-innovation and environmental sector. France last year launched its own strategic investment fund, which is tasked with taking long-term, minority stakes in French companies with a view to catalysing further private sector co-financing. As several of the Minister’s Fianna Fáil colleagues remarked earlier, the Labour Party proposal is modelled on the highly successful German KfW Bank. It was established as part of the Marshall Plan and has played a leading role in supporting investment and development in Germany. The Minister criticised KfW because it was established after the Second World War to help Germany out of a post-war situation. Our economy has just suffered a war from the banks. Like Germany after the war, we need to create new institutions which bring hope to our people and future development. Clement Atlee and the British Labour Party went into government after the war when their country was in ruins. They built the national health service and univer- sal free secondary and primary education. Of course countries which face great challenges can decide to move on, but they require leadership. I am afraid the leadership that Cowen economics had given to this country is sadly lacking in any vision for the future. That is what the Labour Party proposal is about, namely, building this country up again and using our resources, energy and talents.

734 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

Over the past two years, the Labour Party has consistently called for investment in job creation to be put at the top of the agenda, but the Government cannot seem to get past bailing out Anglo Irish Bank and Irish Nationwide. Fianna Fáil’s ad hoc response to the crisis in Irish banking has been characterised by a string of broken promises. We were told that the bank guarantee would be the cheapest bank rescue in the world. This has turned out to be a disas- trously bad call and has led to a seemingly endless series of bailouts and creeping nationalisation. So far, we have seen no upside in the real economy. The credit famine continues. People continue to lose their jobs in record numbers and go on the unemployment rolls or emigrate. That is reality of where we are living in Ireland now. They have seen their hard-earned pension pots go up in smoke. Businesses are going to the wall because of lack of credit and a lack of demand from hard-pressed consumers. Most of all, we are blighted by soaring youth unemployment, in particular young men losing their jobs in the construction sector. In just two short years, unemployment among those aged under 25 has more than doubled, from 28,700 to 66,800, two-thirds of whom are young men. This cohort makes up one in five people on the dole. When the world renowned economist, Professor Danny Blanchflower, spoke at the Dublin economic workshop some months ago, he talked about the devastating long-term effects that persistent youth unemployment can cause in society and for the economy. I know the Minister is an opera buff, but if he ever watched soaps——

Deputy Brian Lenihan: I am not.

Deputy Joan Burton: The Minister told me he was. It must be classical music. I apologise. I was having a David McWilliams moment.

Deputy Brian Lenihan: It happens to us all.

Deputy Joan Burton: If one watches any popular television series based on areas where young people are unemployed, such as “The Wire” in Baltimore or “Boys from the Black Stuff” one can see the effect of long-term male unemployment. It scars young men, not just for a few years but for decades. Professor Blanchflower is a world authority on this and was a member of the Bank of England monetary committee. He is a respected international economist and that is what he said when he came to Dublin. We cannot afford to have all these young men semi-permanently unemployed with nothing to do and nothing to look forward to, except a few bob a week on the dole. That is not a career or life-enhancing path. Cowen economics seems to be all about dishing out pain to individuals and families. Fianna Fáil has destroyed the economy. The Labour Party’s strategic investment bank will help to put people back to work before it is too late. Everyone knows that tough medicine is needed to close Fianna Fáil’s fiscal deficit, but we also need to give people hope by investing in our future, and that is the what the Labour Party’s strategic investment bank is all about. In order to keep my sanity with the deluge of bad news which Fianna Fáil brings every other week to this Chamber and the country about the banks, I make a positive point of going to visit multinationals companies and innovative Irish companies and spend time with time discussing what actually works. I had an opportunity recently to talk to companies like IBM and Microsoft and attended Craig Barrett’s lecture in Dublin on innovation and employment growth in Ireland. All of these companies have one thing in common, namely, they are not credit starved because they can borrow on the international credit markets. They are not dependent on our frozen Irish banks.

735 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

[Deputy Joan Burton.]

That is why Paul Krugman, writing in March, discussed how Ireland should not become an example for the United States. I know the little Fianna Fáil book has many quotes from people who say it is wonderful, but Paul Krugman and Simon Jenkins, the former senior economist for the World Bank, have pointed out that the difficulty with Ireland’s remedies is that while they may rescue the banks they are driving the rest of country down. That is what the Labour Party motion is trying to address tonight. Craig Barrett, in his lecture in the Mansion House a number of months ago, spoke about the talents and skills of young Irish people, in particular well qualified engineers in IT and science. In the United States and India such people are those who establish start-ups, in terms of new business and innovation. Our strategic investment bank would not simply concentrate on public investment in needed infrastructure, but would also concentrate on the gap which people like Craig Barrett, who know a thing or two about this, have identified as a key gap we have compared to other economies which have a lot of bright young people, such as India which is devoted to education. While such countries are providing for start-ups we, because of what is happening with the banks and the Government’s obsession with them, do not have the money to devote to that. The Labour Party proposal is to provide key funds for innovative start-ups to put us back in the game, not just via multinationals but via Irish small and medium enterprises. Over the past 20 years we have built up, mainly through our third level colleges, considerable experience in how to do that. but we need funding and capital for such start-ups. At the Microsoft presentation, which the Taoiseach attended, the key message which many of the young innovators, scientists, engineer and IT people conveyed to me was that they can build the jobs if they can get the capital. All I can say is that if Fianna Fáil, as long as it is in government, some of the Labour Party’s ideas there might be a chance it could return some hope to the country. Instead, to return to what Matt Taibbi, an American writer said, the Government seems to be concentrating exclusively on the great vampire squid that is sucking the lifeblood out of this economy, that is, the failed banks such as Irish Nationwide and Anglo Irish Bank. The Government should move away from that and give hope to our young people. If they cannot do it, they should move over, have a general election and we will do it for them.

Amendment No. 1 put and declared lost.

Minister for Finance (Deputy Brian Lenihan): I move amendment No. 2:

To delete all words after “Dáil Éireann” and substitute the following:

“commends the Government for its actions to stabilise the financial system and notes that its policies have already delivered a cleaner, well-capitalised and better funded Bank of Ireland that is now in a position to provide credit to support economic recovery and new job creation;

commends the Government for its actions to restore the public finances, develop infrastructure and ensure credit for viable business, thereby laying the foundation for Ireland’s emergence from crisis and protecting jobs and living standards for the future and commends it for continuing to invest, with due regard to the economic and budgetary challenges facing Ireland, in those infrastructure priorities that will assist economic recovery;

736 Strategic Investment Bank: 28 April 2010. Motion (Resumed) commends the Government for the actions taken to help viable businesses to obtain the credit they need including:

— the recently introduced requirement for €3 billion lending plans for each of the next two years for each of the two largest banks;

— the setting up of the credit review process;

— the requirement that the two largest banks provide €20 million each for seed capital to Enterprise Ireland supported projects;

— the requirement that the two banks each set up a €100 million fund for environmental, clean energy and innovation projects;

— the introduction of a new statutory code of conduct for SME lending;

— the requirement that the banks commit to working with Enterprise Ireland and the Irish Banking Federation (IBF) to develop sectoral expertise in the modern growth sectors;

— the requirement that they explore with Enterprise Ireland and the IBF how best to develop the range of banking services that Irish SMEs trading internationally will need; and

— the requirement to develop expertise and credit products in areas where cashflow rather than assets is the basis for lending; notes that the National Pensions Reserve Fund already has powers to make strategic investment, where this would yield an appropriate return. Spend on the capital programme amounts to almost 5% of GNP, €6.43 billion in 2010; notes the very substantial investment in infrastructure to date, particularly:

— the Major Inter-Urban routes, which are nearing completion;

— the major enhancement of public transport, regarding both national rail services and commuter services;

— the major investment in water services, which has improved the quality of water;

— the very significant investment in schools; and

— the very substantial development of social infrastructure, including housing and health; notes the substantial investment in job creation including:

— continued provision of substantial funding to Science Foundation Ireland and other enterprise related elements of Science, Technology and Innovation (STI), including €274 million in 2010 alone;

— continued high level of capital investment through the enterprise development agencies to help facilitate a return to enterprise led-growth driven by a vibrant exporting sector;

737 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

[Deputy Brian Lenihan.]

— prioritised investments that will help to develop the national skills base, put in place critical infrastructure for a return to growth and help to make Ireland an attractive place in which to do business; and

notes that unemployment has begun to stabilise since the start of the year.”—

Amendment put.

The Dáil divided: Tá, 74; Níl, 72.

Tá

Ahern, Bertie. Killeen, Tony. Ahern, Dermot. Kitt, Michael P. Ahern, Michael. Kitt, Tom. Ahern, Noel. Lenihan, Brian. Andrews, Barry. Lenihan, Conor. Andrews, Chris. Lowry, Michael. Aylward, Bobby. McEllistrim, Thomas. Blaney, Niall. McGrath, Mattie. Brady, Áine. McGrath, Michael. Brady, Cyprian. McGuinness, John. Brady, Johnny. Mansergh, Martin. Browne, John. Moloney, John. Byrne, Thomas. Moynihan, Michael. Mulcahy, Michael. Calleary, Dara. Nolan, M.J. Carey, Pat. Ó Cuív, Éamon. Collins, Niall. Ó Fearghaíl, Seán. Conlon, Margaret. O’Brien, Darragh. Connick, Seán. O’Connor, Charlie. Coughlan, Mary. O’Dea, Willie. Cregan, John. O’Donoghue, John. Cuffe, Ciarán. O’Flynn, Noel. Curran, John. O’Hanlon, Rory. Devins, Jimmy. O’Keeffe, Batt. Dooley, Timmy. O’Keeffe, Edward. Finneran, Michael. O’Rourke, Mary. Fitzpatrick, Michael. O’Sullivan, Christy. Fleming, Seán. Power, Seán. Flynn, Beverley. Roche, Dick. Gogarty, Paul. Ryan, Eamon. Gormley, John. Sargent, Trevor. Grealish, Noel. Scanlon, Eamon. Haughey, Seán. Smith, Brendan. Healy-Rae, Jackie. Treacy, Noel. Hoctor, Máire. Wallace, Mary. Kelleher, Billy. White, Mary Alexandra. Kenneally, Brendan. Woods, Michael. Kennedy, Michael.

Níl

Allen, Bernard. Carey, Joe. Bannon, James. Clune, Deirdre. Barrett, Seán. Connaughton, Paul. Behan, Joe. Coonan, Noel J. Broughan, Thomas P. Costello, Joe. Bruton, Richard. Coveney, Simon. Burke, Ulick. Crawford, Seymour. Burton, Joan. Creed, Michael. Byrne, Catherine. Creighton, Lucinda. 738 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

Níl—continued

D’Arcy, Michael. Morgan, Arthur. Deasy, John. Neville, Dan. Deenihan, Jimmy. Ó Caoláin, Caoimhghín. Doyle, Andrew. Ó Snodaigh, Aengus. Durkan, Bernard J. O’Donnell, Kieran. English, Damien. O’Dowd, Fergus. Enright, Olwyn. O’Keeffe, Jim. Feighan, Frank. O’Mahony, John. Flanagan, Charles. O’Shea, Brian. O’Sullivan, Jan. Flanagan, Terence. O’Sullivan, Maureen. Gilmore, Eamon. Penrose, Willie. Hayes, Brian. Perry, John. Hayes, Tom. Rabbitte, Pat. Higgins, Michael D. Reilly, James. Hogan, Phil. Ring, Michael. Howlin, Brendan. Shatter, Alan. Kehoe, Paul. Sheahan, Tom. Kenny, Enda. Sheehan, P.J.. Lynch, Ciarán. Sherlock, Seán. Lynch, Kathleen. Shortall, Róisín. McCormack, Pádraic. Stagg, Emmet. McEntee, Shane. Stanton, David. McGinley, Dinny. Timmins, Billy. McGrath, Finian. Tuffy, Joanna. McHugh, Joe. Upton, Mary. McManus, Liz. Wall, Jack. Mitchell, Olivia.

Tellers: Tá, Deputies John Curran and John Cregan; Níl, Deputies Emmet Stagg and Paul Kehoe.

Amendment declared carried.

Question put: “That the motion, as amended, be agreed to.”

The Dáil divided: Tá, 74; Níl, 70.

Tá

Ahern, Bertie. Dooley, Timmy. Ahern, Dermot. Finneran, Michael. Ahern, Michael. Fitzpatrick, Michael. Ahern, Noel. Fleming, Seán. Andrews, Barry. Flynn, Beverley. Andrews, Chris. Gogarty, Paul. Aylward, Bobby. Gormley, John. Blaney, Niall. Grealish, Noel. Brady, Áine. Haughey, Seán. Brady, Cyprian. Healy-Rae, Jackie. Brady, Johnny. Hoctor, Máire. Browne, John. Kelleher, Billy. Byrne, Thomas. Kenneally, Brendan. Calleary, Dara. Kennedy, Michael. Carey, Pat. Killeen, Tony. Collins, Niall. Kitt, Michael P. Conlon, Margaret. Kitt, Tom. Connick, Seán. Lenihan, Brian. Coughlan, Mary. Lenihan, Conor. Cregan, John. Lowry, Michael. Cuffe, Ciarán. McEllistrim, Thomas. Curran, John. McGrath, Mattie. Devins, Jimmy. McGrath, Michael.

739 Strategic Investment Bank: 28 April 2010. Motion (Resumed)

Tá—continued

McGuinness, John. O’Keeffe, Batt. Mansergh, Martin. O’Keeffe, Edward. Moloney, John. O’Rourke, Mary. Moynihan, Michael. O’Sullivan, Christy. Mulcahy, Michael. Power, Seán. Roche, Dick. Nolan, M. J. Ryan, Eamon. Ó Cuív, Éamon. Sargent, Trevor. Ó Fearghaíl, Seán. Scanlon, Eamon. O’Brien, Darragh. Smith, Brendan. O’Connor, Charlie. Treacy, Noel. O’Dea, Willie. Wallace, Mary. O’Donoghue, John. White, Mary Alexandra. O’Flynn, Noel. Woods, Michael. O’Hanlon, Rory.

Níl

Allen, Bernard. Lynch, Kathleen. Bannon, James. McCormack, Pádraic. Barrett, Seán. McEntee, Shane. Behan, Joe. McGinley, Dinny. Broughan, Thomas P. McGrath, Finian. Bruton, Richard. McHugh, Joe. Burke, Ulick. McManus, Liz. Burton, Joan. Mitchell, Olivia. Byrne, Catherine. Morgan, Arthur. Carey, Joe. Neville, Dan. Clune, Deirdre. Ó Caoláin, Caoimhghín. Connaughton, Paul. Ó Snodaigh, Aengus. O’Donnell, Kieran. Coonan, Noel J. O’Dowd, Fergus. Costello, Joe. O’Keeffe, Jim. Coveney, Simon. O’Mahony, John. Crawford, Seymour. O’Shea, Brian. Creed, Michael. O’Sullivan, Jan. Creighton, Lucinda. O’Sullivan, Maureen. Deasy, John. Penrose, Willie. Deenihan, Jimmy. Perry, John. Doyle, Andrew. Rabbitte, Pat. Durkan, Bernard J. Reilly, James. English, Damien. Ring, Michael. Enright, Olwyn. Shatter, Alan. Feighan, Frank. Sheahan, Tom. Flanagan, Charles. Sheehan, P. J. Flanagan, Terence. Sherlock, Seán. Gilmore, Eamon. Shortall, Róisín. Hayes, Tom. Stagg, Emmet. Higgins, Michael D. Stanton, David. Hogan, Phil. Timmins, Billy. Howlin, Brendan. Tuffy, Joanna. Kehoe, Paul. Upton, Mary. Kenny, Enda. Wall, Jack. Lynch, Ciarán.

Tellers: Tá, Deputies John Curran and John Cregan; Níl, Deputies Emmet Stagg and Paul Kehoe.

Question declared carried.

740 Patient Support 28 April 2010. Schemes

Adjournment Debate.

————

Patient Support Schemes. Deputy Thomas Byrne: This a very important matter for the State, the medical profession, the north east and, in particular, the approximately 35 women who are the subject of this matter. I am speaking on behalf of my Fianna Fáil and Government colleagues. I include the Acting Chairman, Deputy Johnny Brady, who was chairperson of the patient focus support group in the Oireachtas. I also include Deputies Sargent, O’Brien and my Fianna Fáil colleagues from the north east who have played a strong role in the group over many years. The issue surrounding the plight of these women is well described at the beginning of the report of Judge Maureen Harding Clark, known as the Lourdes Hospital Inquiry. It states:

1.1 In September 2003 Dr. Michael Neary, a well respected, busy and popular consultant obstetrician and gynaecologist at Our Lady of Lourdes Hospital, Drogheda, was struck off the Medical Register following a lengthy hearing before the Fitness to Practise Committee of the Irish Medical Council.

1.2 This action was the culmination of a series of investigations carried out by the management of the hospital at which Dr. Neary worked, the North Eastern Health Board (the owners of the Lourdes Hospital since 1997, in succession to the Medical Missionaries of Mary (MMMs)), the Institute of Obstetricians and Gynaecologists in Ireland and finally the Fitness to Practise Committee of the Irish Medical Council. The process started in late October 1998. Two midwives working at the Maternity Unit of the Lourdes Hospital reported that it was their perception that Dr. Neary was carrying out an unusual number of Caesarean hysterectomies and that some of his clinical practices were perceived as being out of date. Initial investigations confirmed that there was substance in the allegation that Dr. Neary had carried out a number of Caesarean hysterectomies, some of them on very young women.

A cross-party group of Deputies, the Oireachtas patient focus support group, has met since these events emerged in the late 1990s. It regularly met former patients of Dr. Neary. This was long before I was elected. A redress scheme for the victims of Dr. Neary was brought into operation by the Minister for Health and Children, Deputy Mary Harney, in April 2007. The scheme, by its very terms of reference, sets out the categories of patients who were to be covered by it. The terms of reference state:

Women who had any of the operations hereinafter listed carried out by Dr. Neary at the Hospital may apply to the Board for an ex gratia payment, in respect of such operation, and for payment of certain legal or medical outlays:

A. An unplanned obstetric hysterectomy which in the opinion of a consultant obstetrician was medically unwarranted.

B. In association with an obstetric hysterectomy, an unplanned bilateral oophorectomy or removal of remaining single functioning ovary where such oophorectomy was in the opinion of a consultant obstetrician medically unwarranted.

C. An unplanned obstetric hysterectomy where the woman’s relevant Hospital Records are unobtainable.

741 Patient Support 28 April 2010. Schemes

[Deputy Thomas Byrne.]

D. In association with recent pregnancy, a D&C. (dilatation and curettage) or ERPC (evacuation of retained products of conception) or EUA (examination under anaesthetic) followed, or substituted by, an unplanned hysterectomy where such hysterectomy was in the opinion of a consultant obstetrician medically unwarranted.

E. [Critically] A bilateral oophorectomy or removal of remaining single functioning ovary performed while the Applicant was under 40 years and which has rendered her immediately menopausal and where in the opinion of a consultant gynaecologist such oophorectomy was medically unwarranted.

The redress scheme, therefore, by its terms of reference, excluded many of the former patients of Dr. Neary, who can only be described as victims. I refer to a category of ladies over 40 at the time of their operation and mothers who, tragically, lost babies through the fault of the Dr. Neary. At the announcement of the redress scheme, the Minister stated the women excluded from the terms of reference would be referred to the State Claims Agency. It is out of this commitment from the Minister that our cross-party group had to continue its work after the election of 2007. This commitment was not adhered to. Our cross-party group has followed up on this commitment. We had a meeting the Minister for Health and Children, Deputy Mary Harney, who referred the matter to Judge Harding Clark, who apparently advised that the terms of reference were not to be extended. We then wrote to An Taoiseach, who accepted the Minister’s position. Our group has never sought political advantage for its individual members or generated publicity for itself. It has generally worked for these women, and I want to highlight the support of Members of the Fianna Fáil and Government colleagues for that. I apologise for rushing, but I wanted to put those references on the record.

Deputy James Reilly: Like the previous speaker, I wish to include my party colleagues who have been deeply concerned about this matter, in particular Deputies Fergus O’Dowd, Damien English and Shane McEntee. This is a serious and important issue. By dint of a very arbitrary decision, people just a few days over their fortieth birthday when they had these terrible injuries inflicted unnecessarily on them — very often bringing on early menopause and all the distress that causes — are being excluded from a redress scheme to compensate women for the harm this State did to them through its agents in the Lourdes hospital, in particular by a man I must acknowledge as a colleague who is a disgrace to my profession. I will be very simple and plain tonight. We are here as a cross-party group — I thank the Minister of State for coming in — to ask the Minister to include these women in the scheme. The harm done to them is every bit as great as that done to others a few days younger than them who are entitled to redress. This is wrong and clearly does not serve natural 9o’clock justice; it is something nobody in this House is particularly happy about. I acknowledge the fact that Members on the Government side are nodding their heads in agreement and I thank them for their support in this regard. This has always been a cross-party group seeking justice for this very small group of women who have been so badly harmed and wronged. We do not want it to be a political issue. We have tried to help the Minister in every way possible to overcome any obstacles in the way of including these women.

742 Patient Support 28 April 2010. Schemes

Deputy Jan O’Sullivan: I, too, welcome the opportunity on behalf of the Labour Party to participate in this cross-party motion tonight, which in many ways in unusual, but it is absolutely justified in the case of the women excluded from the Lourdes hospital redress scheme. I also speak on behalf of my colleagues in the Labour Party in the north-east. Basically, there is no justification for excluding these 35 women who suffered just as much as all those included in the scheme. This redress has been a long time coming. The issue was first raised by two nurses in 1998 and Dr. Michael Neary was eventually struck off the medical register in September 2003. Judge Maureen Harding Clark produced the Lourdes hospital inquiry report in January 2006 and the redress scheme was subsequently established. I have no doubt there was no intention, in setting up the scheme, to exclude women who suffered in this way. Given that this is a cross-party motion, I hope we will get a positive result for those women and that they will be included in the scheme. I wish to quote Judge Harding Clark from page 34 of the report:

The story of Dr. Neary’s fall from grace is one of enormous tragedy for the hospital at which he worked for 25 years, for the staff who worked with and supported him, and especially for the women who entered the maternity hospital to face the joy of a new baby and who returned home to recuperate from a hysterectomy.

These are the women we are focusing on tonight. I welcome the work of Patient Focus and those in attendance in the Visitors Gallery to witness this debate. Essentially, it is the same cohort of women. I am thinking of some of the correspondence from women who were outside the age category by literally only a couple of weeks or who were excluded from the scheme for one reason or another. This should not be because they all suffered in the same way. It was a time when practices were tolerated that should never have been and they happened, unfortunately, in this hospital. These women were the victims and the redress scheme should be inclusive and comprehensive. I urge the Minister of State who is responding tonight to take the spirit of this cross-party motion on board as it represents not only the people of that region, but all right thinking citizens in this country.

Deputy Caoimhghín Ó Caoláin: While I welcome the Minister of State, Deputy Andrews, tonight, where is the Minister for Health and Children? On behalf of the Sinn Féin Deputies, including Deputy Arthur Morgan who is present, I join with Deputies and Senators from all parties, not just Opposition parties, who all share in the incredulity and outrage at the exclusion of these 35 cases from the terms of the Lourdes hospital redress scheme. This is an all-party call on the Minister to extend by ministerial order the redress scheme so that these unfortunate victims of Dr. Michael Neary can finally effect closure on this dreadful episode in their lives. This group of profoundly damaged former patients of the discredited and struck off former obstetrician-gynaecologist at Our Lady of Lourdes Hospital in Drogheda includes in the main women who were over 40 — some only days and months beyond their fortieth birthday — who had both their ovaries removed without just cause, leaving them physically, emotionally and psychologically damaged for the rest of their lives. It includes women who had gynaecological hysterectomies and the families of two women who died before the introduction of the redress scheme who had Caesarean hysterectomies. It includes women

743 Patient Support 28 April 2010. Schemes

[Deputy Caoimhghín Ó Caoláin.] who were subjected to the unnecessary removal of a single ovary and it includes the cases of two infants who died as a result of gross negligence. All these cases are fully documented and all of them are supported by substantial medical reports. The women all share a common hurt and purpose and share, too, the further pain inflicted by their exclusion under the terms of a redress scheme recommended by Judge Harding Clark. Is it Judge Harding Clark or the Minister for Health and Children who ultimately decides the terms of this publicly funded scheme? Is it a judge of the High Court or the supposedly democratically accountable Minister who makes the final determination as to who is or is not in the scheme? In this instance, in the unique and unprecedented case of Michael Neary’s butchery, no woman should have been excluded. The Minister, Deputy Harney, at a meeting with Patient Focus and some of the women victims, promised that a parallel scheme would be put in place, but it never happened. The Minister met with four of our number in this Chamber on 12 November 1998 — Deputy Johnny Brady, chairman of the Patient Focus Oireachtas support group, and Deputies James Reilly, Thomas Byrne and I. She issued her response to our appeal on behalf of the 35 cases we again represent here tonight. Her response deserves to be put on the record for its cal- lousness alone, and I shall now read it into the record:

Dear Deputies Brady, Ó Caoláin, Byrne and Reilly,

As agreed at our meeting I have spoken to Judge Clark about extending the Redress Scheme to cover the cases mentioned by you.

Judge Clark feels strongly that there should not be an extension of the Scheme. The Scheme was designed to provide redress for cases where there was medical consensus on their egregious nature. As with all schemes there must be a cut off point.

Mary Harney, TD, Minister for Health and Children.

Judge Harding Clark “feels strongly”, the Minister said. Does she, indeed? These women and their families also feel strongly and they are not alone. Standing with them and feeling just as strongly in our conviction are the combined all-party Deputies and Senators from across all the affected constituencies and beyond. We have campaigned together over several years in support of the women victims of Michael Neary, and we have neither sought, as already stated, nor created any media attention for this issue, believing that we could best serve the women’s cause by quiet but persistent lobbying. We have done that at all levels, and 18 months on from the Minister, Deputy Harney’s outrageous rejection, we have concluded unanimously that our campaigning must come out into the open. Whatever response is delivered here tonight on the Minister’s behalf and in the presence of a number of Michael Neary’s women victims and representatives of their campaign support group, Patient Focus — I acknowledge and appreciate its work — I again call on her to accede to this further cross-party appeal. I acknowledge the excellent work done over the years by this group of Deputies and Senators, who have played an important role in helping to secure the inquiry and then the redress scheme, and who remain united in their determination to bring this tragic episode in our country’s contemporary story to a close. That can be done only if the State acknowledges and then compensates the outstanding cases we represent tonight. To the Minister, Deputy Harney, and the Minister of State, Deputy Andrews, I say that it is time to do the right thing. I ask them to do it now.

744 Patient Support 28 April 2010. Schemes

Minister of State at the Department of Health and Children (Deputy Barry Andrews): I will take this Adjournment matter on behalf of my colleague, the Minister for Health and Children, Deputy Mary Harney. The Lourdes hospital redress scheme was established following an inquiry into peripartum hysterectomies carried out at Our Lady of Lourdes Hospital, Drogheda, which was chaired by Ms Justice Maureen Harding Clark. The inquiry was established by the Government in 2004 following the decision of the Medical Council to remove Michael Neary from the Register of Medical Practitioners after finding him guilty of professional misconduct. Following the publication of the Lourdes inquiry report in February 2006, Ms Justice Clark was requested by the Government to advise on an appropriate scheme of redress arising from the findings of the report. Ms Justice Clark was also requested to advise on a mechanism for ensuring maximum recoupment from wrongdoers and indemnifiers of any moneys payable under an agreed redress scheme, including the estimated cost of the scheme. Having received Ms Justice Clark’s advice, the Minister sought Government approval for the establishment of a non-statutory ex gratia scheme of redress. The Government approved the establishment of the redress scheme and the appointment of Ms Justice Clark on 18 April 2007. The Lourdes hospital inquiry did not extend to a wider examination of Mr. Neary’s general practice or the clinical practice of his colleagues. However, Ms Justice Clark became aware during the course of the inquiry that some patients of Mr. Neary had undergone bilateral oophorectomies — that is, the removal of both ovaries or a single remaining ovary — that may not have been clinically warranted. The inquiry also received medical reports from women who had undergone bilateral oophorectomy with relatively little evidence that the procedures were warranted. Not only did these women lose the ability to reproduce; they also suffered immediate surgical menopause. Ms Justice Clark took advice on a selection of oophorectomy cases involving younger women treated by Mr. Neary. She was advised that while it is sometimes necessary to remove both ovaries in the presence of serious disease, the occasion of such a radical procedure is not common. This led her to conclude that unwarranted oophorectomies performed by Mr. Neary on women aged under 40 be included within the scope of the redress scheme. The scheme was advertised on 14 June 2007. The scheme was intended for former patients of Michael Neary at Our Lady of Lourdes Hospital, Drogheda, who had undergone an unplanned obstetric hysterectomy which in the opinion of a consultant obstetrician was medically unwarranted or an unplanned bilateral oophorectomy which in the opinion of a consultant obstetrician was medically unwarranted. The scheme did not include former patients of Mr. Neary who had been already compensated, those whose operations were medically warranted, or those who had agreed in advance to any of the outlined procedures to be performed on an elective basis. Also excluded were patients aged 40 or over who had undergone an unnecessary bilateral oophorectomy or removal of a remaining single functioning ovary and who were deceased, or their next of kin. The Lourdes hospital redress board, chaired by Ms Justice Clark, concluded its work at the end of 2008, and all awards determined have been notified to successful applicants. The Government has been briefed on the work of the redress board. The Minister considers that the redress scheme, approved by the Government on the advice of Ms Justice Clark, represents a reasonable response to the findings of the Lourdes hospital inquiry in all of the circumstances. The Minister hopes the work of the redress scheme has helped to alleviate the distress for the women involved.

745 Social Welfare 28 April 2010. Offices

[Deputy Barry Andrews.]

In a number of cases, details of former patients of Mr. Neary were forwarded by the Depart- ment to the State Claims Agency for their consideration with the agreement of the Minister. A patient advocacy group which represents a number of former patients of Mr. Neary sought an extension of the scheme to cover other categories of patient treated by Mr. Neary. The Minister gave due consideration to the request and consulted with Ms Justice Clark, who advised against an extension. The Minister decided against an extension of the scheme and this was publicly communicated in November 2008. It is not possible to reopen the scheme at this stage.

Deputy Arthur Morgan: It is possible.

Deputy Barry Andrews: The Minister has considered the issue raised by the Deputies with regard to the State Claims Agency. However, she is not in a position to instruct the agency to become involved in a non-adversarial way. The State Claims Agency’s statutory remit is to manage cases under the present legal system, which is adversarial in nature.

Deputy Damien English: It is disgraceful.

Deputy Arthur Morgan: The Government believes the Lourdes hospital redress scheme addressed the serious and damaging effects of Mr. Neary’s malpractice in as sensitive and timely a manner as possible. It was the Government’s intention that the women who qualified for the scheme would receive adequate recompense, and the Minister is sincerely of the view that has been achieved in a fair and reasonable manner.

Deputy Arthur Morgan: It is possible to re-open the scheme, if they choose to do it.

Social Welfare Offices. Deputy Trevor Sargent: Similar to the previous matter of the travesty at Our Lady of Lourdes Hospital, this issue also has cross-party support, based on the representations that have been made in this House and in the Seanad. I ask the Minister for Social and Family Affairs to facilitate the approximately 5,700 claimants in Balbriggan and north Fingal by opening a new full-service office in Balbriggan. Claimants, rather than travelling a considerable distance on a regular basis to Dublin in order to sign on the live register, should be able to avail of local arrangements whereby postal dockets are issued or a temporary facility established in the town. I welcome the senior Minister, Deputy Ó Cuív, to the House to respond to this matter. As the Minister knows, there are certain ad hoc arrangements in place under which some people do not have to travel to North Cumberland Street to sign on, while others are required to travel. It is bad enough that people are forced to travel for what is essentially a local service, in a very uncharacteristic way. However, the population of Balbriggan, which has grown by around 51% from 2002 to 2006, certainly warrants the range of services that such a large population would normally have, certainly in Dublin city. This office would need to deal not only with the 20,000 or so people in the town of Balbriggan but also with those in the wider area, including Skerries, Rush, Lusk, Garristown, Naul, Oldtown, Ballyboughal and the whole rural hinterland of north Fingal. We are talking about a population of 50,000 to 60,000 who do not have a full service. In addition, across the county border in County Meath but not far from Balbriggan, there is the Mosney centre where many refugees stay. Many of their children are attending school and

746 Social Welfare 28 April 2010. Offices are tied in to the local community. There is already a lack of facilities, as the Minister knows, and this is compounded by inequality of access to the services that do exist. Residents in the north west of the town — which is actually further from Dublin city — must travel to access social welfare services in the city of Dublin, while those in the older part of Balbriggan can access local services in Hampton Street. Perviously, social welfare services were provided at the office in Railway Street. It was a very small facility, even for the numbers availing of it back then, and there were long queues that wound their way out onto the street and around the corner. This was demeaning for those who used the facility. I ask the Minister to explain the priority that is being given to ensuring that this matter is sorted out. There are better facilities in Ballymun and other city areas which serve fewer people than live in Balbriggan and the north Fingal area. The city centre areas also have better facilities than those in Swords. An office and one-stop-shop is to open in Foster Way in 2012, but this must be also dealt with more urgently. Taylor’s hardware store is vacant on Main Street, as are other buildings. Between the OPW and the Department, there must be action. It is ironic to see signs for Balbriggan and Swords in the office in North Cumberland Street. They do not, of course, mention that one must travel for more than 20 miles to see those signs if one is from those areas. I ask the Minister to deal with this matter with great urgency. There is already a lack of facilities in the area, as he should be aware, and a social welfare office is urgently needed.

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): Gabhaim leithscéal i dtos- ach, ach shílmé go raibh seo le bheith sa triúáit tráthnóna agus bhí mé ag faire thuas i m’oifig. Ar aon chaoi, tuigim an tábhacht a bhaineann le seo. The previous office in Balbriggan was a branch office which was operated on an agency basis on behalf of the Department of Social and Family Affairs. The branch manager retired on 28 November 2008. As a result services from the office ceased operation from that date. It had been the Department’s intention to continue the lease of the premises and to operate a limited service on a temporary basis pending the acquisition of permanent premises but this was not possible. Since Monday 1 December 2008, the Department’s local office at Coolock has been dealing with all customers from the Balbriggan catchment area. Monthly signing on requirements have been temporarily suspended for Balbriggan claimants since December 2008. The Office of Public Works has recently acquired temporary premises in Balbriggan. The new office will be a social welfare local office operated by the Department and staffed by civil servants.

Deputy James Reilly: When?

Acting Chairman (Deputy Noel O’Flynn): Allow the Minister to continue. This is not Deputy Reilly’s matter.

Deputy James Reilly: It is a simple question.

Deputy Éamon Ó Cuív: The Deputy must have been an awful child to read children’s stories to long ago. He would have wanted the answer before the end of the story was reached.

Deputy James Reilly: I certainly would not have been standing in the rain for two years.

Deputy Éamon Ó Cuív: The address of the new office is 18 Mill Street, Balbriggan. Staff and a local office manager are in the process of transferring to the new office.

747 Litter 28 April 2010. Pollution

[Deputy Éamon Ó Cuív.]

Work started on alterations to the premises on 6 April 2010 and a ten week period has been allowed for structural work and fitting out. It is expected that the new premises will open at the beginning of July 2010. I may visit it because I have a family connection with that part of the world. Eighteen staff are in the process of being assigned to the new office and staffing will be kept under review. The new office in Balbriggan will provide a full service. New claims for jobseeker’s benefit, jobseeker’s allowance and one-parent family payments will be taken and decided. However, the temporary premises is not adequate to provide for signing and options for this function are being investigated by the Department at present. In preparation for the move to Balbriggan, staff assigned to the new office have moved to the North Cumberland Street local office because there is more room there for staff and claims, as well as better facilities for staff training. New claims for jobseekers payments and the review and maintenance of claims for Balbriggan will continue be processed in Coolock for the immediate future. Once the new premises is available for occupation it will start providing services to Balbriggan customers.

Acting Chairman (Deputy Noel O’Flynn): I thank the Minister. That is good news for somebody.

Litter Pollution. Deputy Mattie McGrath: I am grateful for the opportunity to discuss the legislative framework for combatting litter pollution and the need to motivate and energise the anti-litter response. I hope I will be one quarter as successful as previous speakers and that Deputy Reilly will return to Balbriggan a satisfied man. We all aspire to a glas agus glan Ireland. I am a proud representative of Tipperary South and the little town of Emly, which won the award for Ireland’s tidiest village in 2009. Last Tuesday, I attended a tidy schools presentation at which the town received another award. An Taisce and other community groups organised spring cleans throughout April with the support of FÁS, county councils and volunteers. I am aware that several of my colleagues were involved in these activities. I attended the launch of the initiative with the Minister for the Environment, Heritage and Local Government, Deputy Gormley, along the canal. Many schools in my area have qualified for the green flag award. Education is needed alongside legislation. Irish people will not be told what to do and have to be encouraged to work with agencies to create a cleaner, greener and more pleasant environment. I drive along the motorway between Dublin and Cork at least twice each week. This newly built road cost millions of euro and entailed significant inconvenience to communities along its route, including compulsory purchase orders and land that has not yet been paid for, but the lack of planning on the part of the NRA and county councils for rest facilities is scandalous. The facilities that exist are a joke. People are meant to pull off the road and rest because of the danger of driver fatigue but there is not even a shelter or a place to get out and stretch one’s legs. Worst of all, however, there is a lack of rubbish bins or gadgets for holding cigarette butts. I do not smoke but I have no objections to others smoking. One is not supposed to smoke in one’s company car. It is not good enough that such disregard is shown to the travelling public. I welcome the opening of the new motorway between Abbeyleix and Cullahill but it is not acceptable to drive by these places and see them covered in litter. There was no correspondence

748 Litter 28 April 2010. Pollution from county councils regarding the maintenance of these roads. Nobody was responsible for the grit over Christmas or for repairing damaged barriers. When a lorry sheds a tire or waste falls off a truck, nobody picks it up. It is dangerous to leave such items in the bushes because they could blow across the motorway and cause serious accidents. A co-ordinated effort by county councils and the NRA is needed on our national motorways. We want people to come through the North of Ireland and drive to the South and we need to take pride in our good road infrastructure by keeping it clean. It is a pity that we have become an unclean people. We need to develop imaginative schemes. The Minister for Social and Family Affairs, who has just left the Chamber, is considering imaginative ideas to help the unemployed. There is significant scope for community service. Our prisons are full and people who are serving custodial sentences should be encouraged to do community work. If we ever convict the bankers who destroyed this country, they should be doing this kind of work instead of receiving their choice of menus in prison. We could hoot our horns as we pass them on the motorways and say, “Well done lads for doing something for your country at long last”. Departments, the NRA and local authorities have a lot of work to do in co-ordinating a response to the problem of litter but we cannot allow it to continue damaging tourism and our image abroad.

Deputy Barry Andrews: The Litter Pollution Acts 1997 to 2009 provide the statutory framework to combat the litter problem. Under the Acts, the primary management and enforcement response to littering must come from the local authorities. The role of the Department of the Environment, Heritage and Local Government is to provide the legislative framework within which they can perform this task. It is a matter for each local authority to decide on the most appropriate public awareness, enforcement and clean-up actions in regard to litter, taking account of local circumstances and priorities. Furthermore, while the ultimate legislative responsibility for the clean up of litter on our streets lies with the local authorities, it must be pointed out that the primary responsibility for keeping our country free of litter lies with each citizen of the State. Maximum penalties attaching to littering offences are substantial and include an on-the-spot fine of €150. The Protection of the Environment Act 2003 introduced conviction on indictment for litter offences, with a maximum fine of €130,000, and set the maximum fine for summary conviction at €3,000. The 2003 Act also gave local authorities the power to make by-laws in respect of a range of specific litter issues. However, we recognise that legislative measures alone will not solve the problem. In order to tackle the issue, a multifaceted approach is required, involving all elements of Irish society and incorporating enforcement, public awareness and education. In recent days, the Minister for the Environment, Heritage and Local Government announced the provision of €1.5 million over a three-year period specifically to assist local authorities in keeping key tourist areas free of litter during the peak summer season. This is the start of a focused anti-litter campaign in which his Department will engage with the Environmental Protection Agency, local authorities, the National Roads Authority and the public. In addition, the Minister is continuing to provide local authorities with funding to assist in raising awareness of the environmental and economic consequences of littering and graffiti. A total of €1 million has been allocated to local authorities under the anti-litter and anti-graffiti awareness grant scheme in 2010. The Department of the Environment, Heritage and Local Government also provides significant funding to several anti-litter initiatives currently in oper-

749 The 28 April 2010. Adjournment

[Deputy Barry Andrews.] ation in Ireland, including the national spring clean, the green schools programme, the Irish Business Against Litter litter league, Tidy Towns and the protection of the uplands and rural environments — PURE — project. Much progress has been made in dealing with litter pollution. The 2009 national litter pollution monitoring system report, to be published by the Department shortly, will show a continuing improvement in litter levels across the country. The recent Irish Business against Litter results also point to a steady improvement in litter levels over the period, with 65% of towns surveyed in 2009 deemed to be “clean to European norms”, compared to 14% of towns in 2002. However, there is no room for complacency and the Minister will continue to ensure that targeted, energetic anti-litter responses are developed as required.

The Dáil adjourned at 9.30 p.m. until 10.30 a.m. on Thursday, 29 April 2010.

750 Questions— 28 April 2010. Written Answers

Written Answers.

————————

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

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Questions Nos. 1 to 7, inclusive, answered orally.

Questions Nos. 8 to 39, inclusive, resubmitted.

Questions Nos. 40 to 48, inclusive, answered orally.

Economic and Monetary Union. 49. Deputy Joe Carey asked the Minister for Finance his proposals to develop better tools within the eurozone for dealing with imbalances within member states. [17132/10]

Minister for Finance (Deputy Brian Lenihan): In light of the very significant shock to the global economy the issue of imbalances is one that is foremost in the minds of policymakers generally. The Deputy will be aware that the European Council has asked the President of the European Council to establish, in cooperation with the Commission, a task force with representatives of the Member States, the rotating presidency and the ECB. This task force is to present to the Council, before the end of this year, the measures needed to reach the objective of an improved crisis resolution framework and better budgetary discipline, exploring all options to reinforce the legal framework. I look forward to contributing to this process. Within monetary union, imbalances within individual Member States can potentially have spillover effects for other participants, through for instance higher borrowing costs. It is, therefore, in the interests of all countries to reduce imbalances, such as domestic competitiveness positions. Appropriate income and fiscal policies as well as enhanced flexibility are some of the measures which can reduce imbalances and help to ensure a smoother functioning of monetary union. In Ireland, many of our imbalances are being corrected. Competitiveness is being improved and our overall focus is being rebalanced towards exports rather than to unsustainable domestic demand-driven growth. In addition, the Government has taken and continues to take the necessary steps to maintain the public finances on a sustainable path, which is an important further step in addressing our domestic imbalances. 751 Questions— 28 April 2010. Written Answers

Bank Losses. 50. Deputy Liz McManus asked the Minister for Finance if he will estimate losses over a three year horizon by the guaranteed credit institutions on that portion of their loan books not destined for the National Asset Management Agency; and if he will make a statement on the matter. [17204/10]

Minister for Finance (Deputy Brian Lenihan): It is a matter for the Board of each and Management of each institution to assess and make public as appropriate forecasts for future losses. As Minister, I don’t make such forecasts but I do expect the Financial Regulator will make its own assessment of capital needs of banks, having regard to both expected and potential losses and appropriate capital levels. New capital levels have recently been set by the Financial Regulator to ensure that the banks can maintain appropriate capital levels and withstand future losses, even under very stressed conditions. These are contained in the Prudential Capital Assessment Review published recently. As Minister, I have already indicated the steps that the Government is taking to ensure that the banks can meet their capital requirements. We have already started to put these measures into affect, in relation to Bank of Ireland. The House will agree with me that the fact that this bank can raise significant private capital is a real sign of stabilisation and recovery in the sector. There is much further work to be done to build on this significant step. The Regulator requirement is that a level of 8 per cent of core tier 1 capital is to be attained by the end of the year. This level of capital must be met after taking account of future losses, from both NAMA and non-NAMA portfolios. This capital will be principally in the form of equity — a 7 per cent equity requirement. Equity is the highest quality form of capital, and the emerging international standard. In addition, further amounts, specific to each institution, are to be added on in the calculation of future loan losses. The new requirements also mean that banks cannot go below a level of 4% core tier 1 capital in a severely stressed scenario. The Governor of the Central Bank, Patrick Honohan considers that the actions and announcements at the end of last month create a secure platform on which confidence in the banking sector will be built. The Financial Regulator has accepted that it is important that our banks move to a strong capital position as soon as possible and that we draw a line under the Irish banking crisis. Sufficient capital is an essential ingredient to ensure that banks can withstand future losses. He has applied a robust, realistic and prudent capital standard informed by his own detailed analysis and by emerging best practice internationally. The stress test requirement is based on a severe scenario of hypothetical adverse macroeconomic conditions and therefore involves an element of judgment. The stress test inputs do not represent a forecast of likely economic developments by the Central Bank and Financial Regulator, instead they are much more adverse than what is considered likely.

Banking Sector Regulation. 51. Deputy Thomas P. Broughan asked the Minister for Finance when he plans to introduce legislation providing for a bank resolution mechanism or living will for insolvent banks; and if he will make a statement on the matter. [17196/10]

Minister for Finance (Deputy Brian Lenihan): In the course of the NAMA Bill debate, I indicated I would examine options for the introduction of a legislative regime to deal in a systematic way with distressed financial institutions. My objective is to ensure the State has in place a range of tools to address problem institutions effectively in the interests of maintaining financial stability, minimising reliance on public moneys and ensuring continuity of key banking

752 Questions— 28 April 2010. Written Answers activities. Normal corporate insolvency procedures are not adequate for failing financial institutions as they were not designed with the objective of protecting financial stability. In view of the central role performed by central banks in resolution frameworks for financial institutions, my Department is in consultation with the Central Bank and the Financial Regu- lator with a view to the development of suitable options for progress in this area including draft legislative proposals, which I will consider in due course. Special resolution regimes for the financial sector are increasingly recognised as a key means of reducing the impact of the distress or failure of individual financial institutions. My deliberations in this area are assisted by the work ongoing in a number of international fora. At EU level, the Commission has consulted on a EU framework for cross-border crisis management in the banking sector to allow the relevant authorities to manage financial crisis events at cross-border banks. The Commission is expected to bring forward legislative proposals in 2001. Included in the Commission’s proposal for discussion are additional powers for supervisors to require the preparation by systemically important institutions of firm-specific contingency and resolution plans. These plans sometimes referred to as ‘living wills’ would detail how an institution and its business might be wound up rapidly and in an orderly fashion. Ireland is, of course, participating fully in the work at EU level to examine this and other possible elements of bank resolution tool-kits in a cross-border context.

Public Service Pay. 52. Deputy Richard Bruton asked the Minister for Finance the way it is proposed to measure progress against which refunds of public service pay would be made under the proposed public service agreement with the public service committee of Irish Congress of Trade Unions. [17127/10]

Minister for Finance (Deputy Brian Lenihan): The Financial Emergency Measures in the Public Interest Acts, 2009 under which the pension related deduction and pay reductions were applied to public servants make provision for a review of the operation, effectiveness and impact of both Acts before 30 June 2011. In addition to the criteria set out in the Acts, the draft Public Service Agreement provides that the reviews will take account of sustainable savings generated from the implementation of the Agreement in the public service. Those savings will be independently verified by an Implementation Body which is provided for under the Agreement. A report of the findings of the reviews must be laid before both Houses of the Oireachtas. The Implementation Body provided for under the Agreement will drive the implementation of the agreed transformation measures across the Public Service with a view to achieving early, sustainable and verifiable outcomes to the process. The Body will comprise an independent chair with 3 nominees each from Public Service Management and the Public Services Commit- tee of the Irish Congress of Trade Unions respectively. The sectoral agreements which form part of the overall agreement set out a clear agenda for change within each sector. The measures provided for under the Agreement vary across each sector and it is not possible at this point to be prescriptive as to what measures of progress will be adopted in each case by the Implementation Body. The Government is determined that public service management will be proactive and ambitious in delivering on the full range of productivity and change measures envisaged in the Agreement, and accepted as necessary by all parties to it. Strong oversight by the Implemen- tation Body will be an important factor in this.

753 Questions— 28 April 2010. Written Answers

National Asset Management Agency. 53. Deputy Pat Breen asked the Minister for Finance if he expects the National Asset Man- agement Agency to accommodate social objectives in the course of its work; and the way these objectives will be established and funded. [17126/10]

Minister for Finance (Deputy Brian Lenihan): NAMA has a commercial remit and generating a return for the taxpayer is a key objective. However, within the context of its commercial remit, NAMA will consider proposals aimed at facilitating public bodies in the creation of vibrant sustainable communities. I have previously indicated that such bodies could be given first option on NAMA properties for a limited period. With regard to social and affordable housing, I understand that the Department of Environment, Heritage and Local Government has made contact with NAMA to explore potential options which would enable such housing to be provided on a commercial basis.

Fiscal Policy. 54. Deputy Aengus Ó Snodaigh asked the Minister for Finance if the EU has placed further demands on his Department to provide a renewed timeline for deficit reduction; or if the EU is still content with the projections provided by his Department in December 2009. [17095/10]

Minister for Finance (Deputy Brian Lenihan): As part of the annual process the EU Com- mission recently issued its opinion on Ireland’s Stability Programme Update. This, along with the other Member States programmes, was considered at Ecofin. Our Programme, which sets out our plan to have a General Government deficit below 3% of GDP by 2014, was welcomed. The Ecofin Council welcomed the substantial consolidation measures which we have undertaken and called on us to rigorously implement the budget for 2010. Therefore, the position remains as set out in the Ecofin Council recommendation of 2nd December 2009 which sets a deadline of 2014 to reduce the general government deficit below 3% of GDP in line with the Excessive Deficit Procedure of the Stability and Growth Pact.

55. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his Department have analysed the full and likely impact on the national debt, economic recovery, current and future borrowing requirements and taxation arising from the recent reappraisal by EUROSTAT of Ireland’s debt situation; the impact on borrowing costs; if a supplementary budget is planned arising from the now emerging situation; if any further reappraisal or recalcu- lation of this country’s economic position is likely; the way the likely increased liability on the State is to be met in the short to medium term; and if he will make a statement on the matter. [17272/10]

Minister for Finance (Deputy Brian Lenihan): I take it that the Deputy is referring to the publication last week by Eurostat of Member States fiscal data, including that for Ireland. This publication was based on the most recent Irish fiscal return made to Eurostat. As the Deputy will be aware, all Member States report to Eurostat twice a year in September and March on their fiscal position. In Budget 2010, my Department estimated that the General Government Deficit for 2009 would be 11.7 per cent of GDP. The estimate for the headline deficit for 2009 has now been revised to 14.3 per cent of GDP. The difference between these two estimates is 2.6 per cent of GDP, of which 2.5 per cent of GDP relates to the technical reclassification of the €4 billion transfer to Anglo Irish Bank made in 2009. It is important to note that on foot of this reclassification, no additional borrowing has taken place and the underlying position of a deficit of 11.8 per cent of GDP for 2009 is broadly the same as that published in the Budget last December.

754 Questions— 28 April 2010. Written Answers

This technical reclassification has a once off impact on the headline deficit. As such, it does not affect the Government’s forecasts for the level of debt, or the forecasts for debt servicing costs, as the €4 billion had already been taken account of in the budgetary debt position. Furthermore, the fiscal consolidation plan as set out in the Budget is not impacted by the reclassification. My Department’s also published a forecast for the General Government deficit in 2010 last 1 week. The General Government Deficit is still forecast to be some 112 per cent of GDP in 2010 — this is in line with the forecast published in the Budget. The most recently published fiscal data in relation to 2010, the Exchequer returns for the first quarter of the year, were broadly in line with the projections as set out in the Budget. The Exchequer Deficit at end-March 2010 was €3.9 billion compared to €3.7 billion at end- March 2009. My Department published monthly targets for both tax revenue and net voted expenditure earlier this year. In relation to tax revenue performance, €7.2 billion in tax receipts were collected by the end of March. This was 15 per cent below the same period in 2009 and € 1 was 266 million, or 32 per cent below target. A significant year-on-year decline is expected in the initial months of 2010, with tax revenues forecast to end the year 6 per cent down on 2009. The overall tax revenue target for 2010 is just over €31 billion and based on the information available so far this year, this target remains valid. Total net voted expenditure at end-March 2010 was €10.7 billion, representing a decline of some €1.1 billion or 9.2 per cent on the same period in 2009. This significant year-on-year reduction reflects both the expenditure policy changes which the Government has implemented and also, to a lesser extent, timing issues. The Revised Estimates Volume, published on 18 February, projected a 1.9 per cent reduction in total net voted spending for 2010 as a whole. In overall terms it is clear that the budgetary policy decisions taken by the Government are having the intended impact on the public finances and I have no reason to adjust the budgetary targets and the requirement for a Supplementary budget does not arise.

Banking Sector Regulation. 56. Deputy Richard Bruton asked the Minister for Finance his views on the desirable restructuring of the banking sector here. [17128/10]

66. Deputy Eamon Gilmore asked the Minister for Finance the position regarding prospective realignments within the domestic banking sector; the position regarding the future of building societies (details supplied); and if he will make a statement on the matter. [17211/10]

Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 56 and 66 together. In the first instance it is a matter for independent financial institutions themselves to consider and determine their strategic arrangements, subject of course to necessary regulatory, competition and other relevant requirements. Regarding the State’s role, its primary consideration continues to be to protect, in the public interest, the financial and economic system of the State. Where public support is provided to individual institutions, either in the form of participating in NAMA or by way of the provision of capital, such institutions will be required to prepare and submit restructuring plans to the EU Commission. So far, restructuring plans have been submitted by Anglo Irish Bank, Bank of Ireland and AIB. Following the State’s recent capital investment in INBS and the commencement of NAMA, restructuring plans will also have to be submitted in respect of the two building societies in June. In respect of the INBS, as the new special investment shareholder in the Society, the Government has indicated that its priority,

755 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.] subject to all options being examined as part of the restructuring plan process, is to secure a swift sale of the Society or its integration with another entity. I fully support the idea of a reformed and reinvigorated banking system that can serve our economy in a proper manner and within which there is scope for all credit institutions operating in the Irish market to play their full part. The Central Bank, the Financial Regulator and of course the EU Commission are also significant stakeholders in the future shape of the financial system and their views are important. I will continue to encourage all institutions to examine, separately or jointly, how they can meet their further capital or funding needs and develop business models to support economic development. I will consider all or any options presented to me and, insofar as possible and subject to EU requirements, play a positive role in supporting the delivery of viable plans consistent with competition and State aid requirements. In my view it is better for the institutions to develop plans for the future rather than being in a centrally controlled plan. In any event, EU rules would probably not allow for the State to be directive in making arrangements between market participants. In addition, the State will not have a majority stake in some institutions and, as such, they in particular are free to develop their own long term plans subject to regulatory and shareholder approval and subject to EU and domestic rules.

Public Service Contracts. 57. Deputy Shane McEntee asked the Minister for Finance the extent to which public service contracts are allocated to domestic small and medium enterprises; the way this proportion compares to other EU countries; if he plans policy initiatives to make contracts more accessible to Irish SMEs. [17179/10]

Minister for Finance (Deputy Brian Lenihan): Studies indicate that in smaller Member States, small and medium enterprises tend to win a high percentage of public contracts. Figures, based on EU studies, indicate that about 65% of Ireland’s public contracts, by value, is won by SMEs. This compares to between 30% to 35% for bigger Member States such as the UK, France, Germany and Spain. The figures relate to larger contracts advertised in the Official Journal of the EU (OJEU). These contracts comprise between 25% and 30% of the total public procurement market. Smaller contracts, generally between €50,000 and the OJEU publication threshold, are advertised nationally on the public procurement website www.etenders.gov.ie or, if of lower value, awarded following competition between an adequate number of suitable companies directly invited to tender. Details on categories of companies awarded these contracts are not available. However, indicative figures show a very high proportion of this market segment is won by domestic enterprises. Government recognises the important business opportunities that public service contracts represent for business enterprises in the local and national economy and encourages participation to the greatest extent possible. Significant measures have been introduced which make it easier for small and medium enterprises (SMEs) to bid for public contracts. Among these are

• the wide advertising of public procurement opportunities via the national public procurement website (etenders) which is now the established reference point for all procurement opportunities

• the issue of email “alerts” directly to registered suppliers when contracts that might be of interest to them are advertised

756 Questions— 28 April 2010. Written Answers

• the simplification of the tendering process through the etenders website having a facility to pre-qualify tenderers and to submit tenders online

• the provision of more training for the “professionalisation” of public purchasers.

In recent years, sixty officials from forty organisations have undergone training in spend profi- ling and corporate procurement planning. A two year Masters qualification in Strategic Pro- curement is being offered by Dublin City University since September 2006 and an IPA Course is also available. Such initiatives are providing key public purchasers with the skills to appropriately promote whole of Government objectives and policies through the State’s purchasing power. More recently, the National Procurement Service (NPS) was established within the Office of Public Works. The Service is working closely with all areas of the public sector to promote efficiencies and economies in public procurement expenditure. It is acutely aware of the issues for SMEs and has commenced the process of

• encouraging organisations to advertise low value contracts on etenders in order to promote SME participation

• in association with the Chief State Solicitor’s Office (CSSO), standardising contract and tender documents

• educating SMEs through up-skilling by means of seminars/workshops/website

• in association with the Department of Finance, reviewing appropriate levels of financial capacity required for public contracts

• working with the CSSO and the State Claims Agency in examining the levels of public liability insurance required

• working with Enterprise Ireland to encourage SMEs to tender for as many public contracts as possible

• encouraging SMEs in the use of electronic tendering on etenders which requires no more than a personal computer and Internet access and does not involve the expense of specialist software

• encouraging early advertising upcoming procurement opportunities. Finally, my Department, in consultation with the NPS, the Department of Enterprise, Trade and Employment and other stakeholders in the public procurement market, has developed guidance for contracting authorities on measures to facilitate SME participation in the public procurement market. This will be published shortly.

Public Service Appointments. 58. Deputy Paul Connaughton asked the Minister for Finance if he is satisfied that the top level appointment committee gives reasonable scope for appointment from outside the public service and outside the appointing Departments. [17135/10]

Minister for Finance (Deputy Brian Lenihan): The Top Level Appointments Committee (TLAC) holds competitions for and advises Ministers and the Government on appointments to civil service posts at Secretary General, Deputy Secretary and Assistant Secretary and equivalent levels. Since early 2007 the policy has been that open competitions are held for Assistant

757 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.] Secretary and Deputy Secretary and equivalent posts and more recently this policy has been extended to Secretary General posts, with the exception of a limited number of Secretary General posts which are filled by the Government without a TLAC competition. Where open competitions are held the normal practice is that the Public Appointments Service holds a preliminary competition and selects a shortlist of candidates for interview by the TLAC.

National Asset Management Agency. 59. Deputy Bernard Allen asked the Minister for Finance when he expects to publish the National Asset Management Agency business plan; and if he has discussed the key parameters with the board following the decisions taken on the first tranche of loans. [17119/10]

Minister for Finance (Deputy Brian Lenihan): The draft business plan was produced by the interim NAMA last October before the Board was appointed. Since the appointment of the Board, it has committed to the production of an updated business plan, with its own views, which it will submit to me by the end of June. It will then be published by the Board of NAMA. The business plan is a matter for the Board. However, the CEO of NAMA has stated that the Board when reviewing the business plan will take account of the actual data now available to it arising from the transfer of the first tranche of loans and that the plan will deal with key issues such as the intended use of the €5 billion borrowing facility and the assumptions relating to the recovery of property markets.

Flood Relief. 60. Deputy Denis Naughten asked the Minister for Finance the steps he is taking to address the summer flooding in the Shannon basin; and if he will make a statement on the matter. [17103/10]

Minister of State at the Department of Finance (Deputy Martin Mansergh): As stated in response to the Deputy’s question of 10 March 2010, the Office of Public Works (OPW) has commenced a national programme of catchment Flood Risk Assessment and Management studies, which will lead to the development of comprehensive Flood Risk Assessment and Management plans for areas of significant flood risk. The OPW will initiate the appointment of consultants to undertake the Shannon FRAM in Summer 2010. The summer flooding of the Shannon Callows between Portumna and Athlone will be specifically examined in this study to reflect the social and environmental damage, which it causes to the catchment. In the interim, OPW will engage with key local stakeholders to identify any meaningful interim measures, which would help reduce the incidence or impact of summer flooding. The OPW will engage with Waterways Ireland and the ESB to identify if changes to the management protocols of the major storage areas in the Shannon system, combined with timely use of meteorological and hydrological information, would mitigate seasonal flooding. The OPW will also consider any applications from the relevant Local Authorities for funding from its minor flood mitigation works scheme that meet the criteria of that scheme.

Air Services. 61. Deputy Emmet Stagg asked the Minister for Finance the cost to the economy and to the Exchequer, both directly and indirectly, arising from the grounding of commercial airlines due to the preponderance of dangerous volcanic ash in the atmosphere; and if he will make a statement on the matter. [17223/10]

758 Questions— 28 April 2010. Written Answers

Minister for Finance (Deputy Brian Lenihan): I note that there have been a number of estimates put forward over the last week or so about the financial impact of the disruption to air travel caused by the volcanic eruption in Iceland, but these have not yet been fully substan- tiated. The EU Transport Commissioner Mr Siim Kallas has this week suggested that the week-long disruption could have cost companies across Europe up to 2.5 billion euro. My understanding is that the Commissioner is continuing to work towards a final figure for the economic and financial impact of this unprecedented event and is also considering what can be done at EU level to help the aviation sector, which has been worst affected.

Tax Code. 62. Deputy Seymour Crawford asked the Minister for Finance his views on whether a farmer who puts up a wind turbine to supply power to their own farm and surplus to the grid should be able to claim back VAT refund on that permanent structure the same as on any other permanent structure they build on the farm; if he will ensure that this anomaly is sorted out; and if he will make a statement on the matter. [16702/10]

113. Deputy Seymour Crawford asked the Minister for Finance his views on the situation regarding VAT refunds on wind turbines for use at farm or other levels in view of the fact that VAT is refunded on any other form of fixed equipment; his further views on whether everything possible to encourage such alternatives electricity provision is working; and if he will make a statement on the matter. [17101/10]

Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 62 and 113 together. Farmers who are registered for VAT are accountable persons for VAT in respect of all their taxable activities, whether those activities consist solely of farming or both farming and other activities such as the generation of electricity for provision to the national grid. As accountable persons for VAT, they would be entitled to claim input credit for VAT charged on the installation of an alternative energy generator, such as a wind turbine, for use in their taxable activities. In so far as farmers who are not registered for VAT are concerned, they are not in the normal course entitled to credit for, or repayment of, VAT incurred by them on their business inputs. The Value-Added Tax (Refund of Tax) (No 25) Order, 1993 provides for refunds to unregistered farmers for tax borne on the “construction, extension, alteration or reconstruction of any building or structure which is designed for use solely or mainly for the purposes of a farming business”. However, while the installation of an alternative energy generator, such as a wind turbine, may be the construction of a structure, such a structure is not “designed for use solely or mainly for the purposes of a farming business”. It is designed rather to generate electricity for wherever required. Consequently, the installation of a wind turbine does not come within the scope of the VAT refund order. With regard to encouraging the provision of alternatives electricity, the Programme for Government contains a commitment to examine the current VAT classifications with a view to reducing the rate of VAT applied to certain environmental goods and services from the standard VAT rate to the reduced VAT rate of 13.5%. However, European VAT law does not provide for a reduction or exemption in VAT on the supply of goods or services based on their environmental impact per se. In 2008 the EU Commission undertook a study of the possibility of using reduced VAT rates as a tool to support the climate change agenda. Ireland expressed support for such a study. However, at a Council of Finance Ministers meeting in March 2009

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[Deputy Brian Lenihan.] the Ministers noted that reduced VAT rates as a tool for achieving environmental policy objectives are relevant only to a certain extent. While the scope for reducing VAT is limited, the Finance Act 2008 provided for the VAT rate applicable on the supply of miscanthus rhizomes, seeds, bulbs, roots and similar goods used for the agricultural production of bio-fuels being reduced from the standard VAT rate to the reduced rate of 13.5%. This and other measures under the Programme for Government clearly demonstrate the Government’s commitment to addressing the environmental challenges which we face. In addition, the supply of certain environmental products, such as insulation materials, wind turbine equipment, wood pellet boilers and solar panels, are chargeable at the standard VAT rate which in Ireland is 21.5%. However, the reduced VAT rate of 13.5% may be applied to such products where they are provided under a single supply and install contract where the VAT exclusive cost of the goods does not exceed two-thirds of the total VAT exclusive charge to the customer. Furthermore in the area of corporation tax, companies are entitled to 100% capital allowances on expenditure incurred on qualifying energy-efficient equipment purchased for trade purposes.

Banks Recapitalisation. 63. Deputy Jan O’Sullivan asked the Minister for Finance his plans to exercise or direct the managers of the National Pension Reserve Fund to exercise the warrants attached to the preference shares acquired by the fund in AIB and Bank of Ireland; the terms attached to these warrants; the extent to which these warrants are currently in money; and if he will make a statement on the matter. [17214/10]

Minister for Finance (Deputy Brian Lenihan): As part of the 2009 Recapitalisation of AIB and Bank of Ireland, the State received an option (“Warrants”) to purchase 25% of the existing ordinary shares in each bank (calculated on a post-dilution basis). As disclosed at the time, these warrants are exercisable by the State between the fifth and tenth anniversary of the issuance date of the 2009 Preference Stock. On Monday 26th April, Bank of Ireland, announced a €3.4 billion capital raising exercise. As part of this transaction, the State has agreed to sell its warrants back to the bank for a net €491m in cash. This represents the profit generated on the investment over the past year. In the case of Allied Irish Banks, based on a current share price of €1.45 (closing price 27th April 2010) and the strike prices of €0.975 for the core tranche (equivalent to 15% of the existing ordinary shares) and €0.375 for the remaining warrants, these warrants are also significantly in the money. As regards Allied Irish Banks, it is currently preparing a capital plan for the Financial Regu- lator. Once this plan is complete we will have a better indication of the capital raising options open to the bank. As I have outlined previously the State is willing to convert some or all of its Preference Shares, as required, on terms to be agreed that will provide full value for the taxpayer. Post receipt of this plan we will also be in a better position to assess if a buyback proposal for the warrants will be appropriate.

Financial Institutions Support Scheme. 64. Deputy Róisín Shortall asked the Minister for Finance if he will elaborate on comments attributed to him that he intends to phase out the bank guarantee; and if he will make a statement on the matter. [17222/10]

760 Questions— 28 April 2010. Written Answers

Labour Market Trends. 65. Deputy Jack Wall asked the Minister for Finance if he will comment on recent labour market trends which show declining participation and increasing emigration; the impact that he expects these trends to have on the public finances in 2010 and 2011; and if he will make a statement on the matter. [17217/10]

Minister for Finance (Deputy Brian Lenihan): Labour force participation rates have declined, falling by 1.7 per cent, year-on-year, in the fourth quarter of 2009. The decline was more pronounced for males, declining by 2.7 per cent, reflecting the strong decline in employment in the male-dominated construction sector and the challenges of re-skilling this group. We are working across Government departments to meet this challenge. Nonetheless, Ireland’s overall labour participation rate remains high comparable to other EU member states and, in Q2 2009, was the third highest in the euro area. The numbers of non-Irish nationals in the labour force is estimated to have declined by 33,600, or some ten per cent, in the year to the fourth quarter of 2009. A significant amount of this is due to outward migration. While no firm data are available, it is reasonable to assume, from anecdotal evidence, that there is also some outward migration of Irish nationals. As the Irish economy improves, and employment growth returns, I anticipate much of the short-term outward migration by Irish nationals will be reversed and in the more longer term, it is still reasonable to assume that, given our relatively high standard of living, we will be a source of attraction for non-Irish nationals as well. Significant numbers are likely to leave the labour force this year due to net outward migration, with these numbers moderating in 2011 as the labour market recovers. Clearly this will have an impact on the public finances, with both the revenue and expenditure sides of the Government’s balance sheet being affected. The demand for public services will also be affected by lower population growth. All these impacts have been factored into the fiscal projections of Budget 2010 and the data that has emerged since Budget time do not, at this stage, cause any revisions to the forecasts.

Question No. 66 answered with Question No. 56.

Bank Losses. 67. Deputy Brian O’Shea asked the Minister for Finance if he will estimate the level of loan losses expected to be incurred by Anglo Irish Bank arising from its exposure by a company (details supplied); and if he will make a statement on the matter. [17209/10]

761 Questions— 28 April 2010. Written Answers

96. Deputy Seán Barrett asked the Minister for Finance the discussions he has had with Anglo Irish Bank regarding its relationship with a company (details supplied). [17124/10]

Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 67 and 96 together. At the outset I should state that the relationship between Anglo and the company in question is a commercial one. Under the Relationship Framework put in place under the Anglo Irish Bank Corporation Act, 2009, which governs the relationship between the bank and its shareholder the State, issues relating to the commercial activities at the bank are a matter for the board at the bank in respect of which as Minister for Finance I have no role in day to day management decisions. It has been well publicised that the bank has a large exposure to the company in question. Consequently the losses the bank might make depend to a large degree on future developments in the company and commercial decisions it makes in managing its commercial relationship with the company and any restructuring of the lending that may take place. In addition, the taking of impairments on loans by Anglo and the timing of those decisions is a commercial matter for the bank. As you will appreciate, in my role as Minister for Finance and consistent with the terms of the Relationship Framework, I have no input into such decisions which are a matter for the management and board of Anglo on the basis of the advice of their auditors in line with international accounting standards. In summary, therefore, there are a number of commercial options open to Anglo management which could result in a variety of outcomes, making any accurate estimate of ultimate loan losses very difficult at this stage and subject to very significant uncertainties. However, I would expect Anglo to keep me informed of any significant developments which would affect their capital position including any impact, should it materialise, from its exposure to the Quinn Group.

Financial Services Regulation. 68. Deputy Damien English asked the Minister for Finance his plans to introduce credit directives in respect of financial institutions who have received State capital. [17155/10]

Minister for Finance (Deputy Brian Lenihan): I assume that the Deputy is referring to the potential to issue directives on credit to the recapitalised institutions. To date, I have introduced one credit directive, S.I. No. 127 of 2010 which sets up the Credit Review System on a statutory basis. The Credit Review Office is available to review banks’ decisions to refuse credit to small and medium enterprises (SMEs). It will provide an independent opinion of the banks’ decisions on whether the credit should have been granted or not. SMEs can also seek a review of a decision to reduce or withdraw credit. In addition to dealing with individual cases, the credit review system will examine the credit policies and practices of the banks in respect of SMEs. This will help me to decide what further action might be necessary to secure the flow of credit. I announced earlier this month under the NAMA Act that AIB and Bank of Ireland are to make available a minimum of €3 billion each for new or increased credit facilities, including working capital targeted at SMEs, in the real economy in the next two years. A letter was sent to both Bank of Ireland and AIB on 7 April requiring them to prepare a SME lending plan, broken down by sector and geography for submission to my Department by 12 May. Both banks are expected to make the credit available immediately and should not wait until the plans are submitted. These plans will be reviewed and if it is clear that it is necessary, I will introduce an SI to ensure that lending takes place into the economy.

762 Questions— 28 April 2010. Written Answers

Additionally, I have taken further measures to assist the credit situation in relation to SMEs including the requirement that the two largest banks provide €20 million each for seed capital to Enterprise Ireland supported projects, the requirement that the two banks each set up an additional €100 million fund for Environmental, Clean Energy and Innovation projects, the requirement that the banks commit to working with Enterprise Ireland and the IBF to develop sectoral expertise in the modern growth sectors, the requirement that they explore with Enterprise Ireland and the IBF how best to develop the range of banking services that Irish SMEs trading internationally will need, and the requirement to develop expertise and credit products in areas where cashflow rather than assets is the basis for lending. I have no plans to introduce other credit directives for the recapitalised banks.

Departmental Expenditure. 69. Deputy Jim O’Keeffe asked the Minister for Finance further to Parliamentary Question No. 100 of 31 March 2010, if he will now furnish the details required in respect of the amount of expenditure incurred in the period 1 January 2009 to 31 December 2009 by his Department and also offices, agencies and any other bodies falling within his remit, on the lease, rental or purchase of car parking spaces for use by civil and public servants to this Deputy; and if he will make a statement on the matter. [17100/10]

Minister for Finance (Deputy Brian Lenihan): The Office of Pubic Works (OPW) provides car parking spaces for various Government Departments including the Department of Finance. I have been informed by the OPW that the information requested by the Deputy was not readily accessible and required significant resources to collate the relevant details. The OPW are currently finalising these details and will forward them directly to the Deputy upon completion of this process. In addition to car parking spaces provided by the Office of Public Works, the Office of the Revenue Commissioners has informed me that they spent €1,458 in respect of car parking spaces in 2009. The National Treasury Management Agency paid €147,270 in respect of rented parking spaces in 2009.

Unemployment Levels. 70. Deputy Ruairí Quinn asked the Minister for Finance if he will comment on the most recent quarterly national household survey which showed that the number of persons unemployed added to those outside the labour force, but interested in finding work, increased from 10.8% at end 2008 to 16.5% at end 2009; and if he will make a statement on the matter. [17216/10]

Minister for Finance (Deputy Brian Lenihan): In March, the CSO released the Quarterly National Household Survey for the fourth quarter of 2009. The QNHS’ broadest survey-based labour supply indicator, known as S3, which includes the unemployed and those persons outside the labour force showing some interest in obtaining work, was 16.5 per cent in the fourth quarter. The figure is not a broader measure of unemployment. Rather, it illustrates the current extra potential of the labour market. While the most recent figure reflects the deterioration in the labour market over the past eighteen months and was a significant year-on-year increase, recent evidence from the Live Register suggest that unemployment indicators have stabilised in recent months. The developments in the labour market that we have seen, as evidenced in the latest QNHS and Live Register releases, do not conflict with the current view of my Department as set out in the Budget day projections. My Department is forecasting an average of 460,000 persons on the Live Register for the year as a whole. However, the Live Register does not measure

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[Deputy Brian Lenihan.] unemployment and includes part-time workers. The average number of persons on the Live Register for the year to end-March is 433,000. As such it may turn out that a lower average outturn may materialise.

Small Business Finance. 71. Deputy Mary Upton asked the Minister for Finance the position regarding the establishment and activities to date of the credit review office; and if he will make a statement on the matter. [17228/10]

Minister for Finance (Deputy Brian Lenihan): Following Government approval on 30 March the Credit Review Office (CRO) was launched on 1 April. The Office is independent and will provide an independent opinion of the banks’ decisions on whether the credit should have been granted or not. It commenced operation on 7 April and while it is clearly very early in the process the first applications for review arrived last week. A website, www.creditreview.ie, and a telephone helpline have been set up in conjunction with the launch of the office. By last week the website had received over 1200 hits, while the helpline had received almost 100 calls. Two fulltime staff are working in the Office and further staff will be engaged if required. Mr. John Trethowan, the head of the CRO, has engaged six underwriters with extensive experience in bank lending to assist in the review process on a case by case basis. Again, should the need arise, further underwriters may be contracted. Mr. Trethowan has undertaken a number of media engagements in order to publicise the availability of the Office and advertisements have been placed in the main national newspapers. Both Bank of Ireland and Allied Irish Bank have placed leaflets advertising the Office in their branches. In addition, both banks have agreed to include leaflets in correspondence to a customer where an application for credit has been rejected.

Economic Growth. 72. Deputy Kathleen Lynch asked the Minister for Finance if he will comment on the latest quarterly national accounts which showed a record 11.3% fall in GNP for 2009; if he will provide an estimate for GNP growth for first quarter and for the full year of 2010; and if he will make a statement on the matter. [17198/10]

Minister for Finance (Deputy Brian Lenihan): Preliminary quarterly national accounts data show that the volume of GNP contracted by 11.3% last year. While this was the largest decline on record, and represents a very significant decline in our living standards, it was not unexpected. In the December 2009 budget, my Department had assumed a double-digit contraction for 1 1 GNP last year of the order of 102% and a 72% decline in GDP. The preliminary data show that the decline in GDP last year was 7.1%. The very sharp fall in national income last year was mainly due to a large decline in consumer spending and a contraction of nearly 50 per cent in the level of new house building. In addition, the volume of exports fell last year, although in aggregate terms our export performance was relatively good given the prevailing international climate. My Department does not publish economic forecasts for individual quarters, as these can be volatile and subject to revision, hence the note of caution when analysing GDP on a quarterly basis. That said I would point out that, for the most part, the available data for the first quarter provide tentative evidence that conditions are beginning to stabilise. For this year as a whole, the budget day forecast is for GNP to contract by 1.7% and GDP to contract by 1.3% with positive annual growth anticipated during the second half of the year. This projection has not

764 Questions— 28 April 2010. Written Answers changed. Moreover, I note that most economic commentators now expect a resumption of positive growth from the second half of this year.

Financial Institutions Support Scheme. 73. Deputy Deirdre Clune asked the Minister for Finance the extent of State aid that has been involved in the bank guarantee scheme since it commenced operating; and if there are plans to recoup this aid for the Exchequer. [17134/10]

Minister for Finance (Deputy Brian Lenihan): As the Deputy is aware, since 29 September 2008, the State has guaranteed certain liabilities of credit institutions in Ireland initially under the Credit Institutions (Financial Support) Scheme (the ‘CIFS’ Scheme) but more recently under the Credit Institutions (Eligible Liabilities Guarantee) Scheme (the ‘ELG’ Scheme). The Eligible Liabilities Guarantee (ELG) Scheme, which commenced on 9 December 2009 following Oireachtas and EU State aid approval introduced important changes to the Guarantee for financial institutions bringing it more into line with the mainstream approach to similar guarantees in other EU Member States. The ELG Scheme is intended to facilitate the ability of credit institutions in Ireland to issue debt securities and take term deposits with a maturity post-September 2010 of up to five years, on either a guaranteed or unguaranteed basis. The ECB pricing recommendations on government guarantees for bank debt apply to liabilities guaranteed under the ELG Scheme. This is the standard pricing arrangements which now applies to all Guarantee schemes securing approval of the European Commission in line with the applicable State aid rules. The exact remuneration payable to the State is dependent on a range of factors such as the maturity profile of the liabilities and the extent to which institutions chose to make unguaranteed issu- ances, however the fee will be charged at a higher rate than under CIFS. The average fee for short-term bank debt now stands at 0.5% under the new scheme. The yield to the Exchequer in respect of guarantee fees as remuneration from the institutions for the availability of the State Guarantee is expected to amount to at least €1 billion over two years from September 2008. To date €718m in respect of the CIFS scheme and €90.5m in respect of the ELG scheme has been collected from the institutions. The fees charged to guaranteed institutions have been approved by the European Commission and help ensure the compatibility of the guarantee schemes with EC state aid requirements. Other than in relation to the payment of these fees by the institutions participating in the guarantee schemes the issue of recouping the state aid provided under the schemes does not arise.

National Asset Management Agency. 74. Deputy Ciarán Lynch asked the Minister for Finance the position regarding the preparation of a revised National Asset Management Agency business plan; when he expects the publication of a revised NAMA business plan; and if he will make a statement on the matter. [17202/10]

Question No. 75 answered with Question No. 48.

765 Questions— 28 April 2010. Written Answers

Financial Services Regulation. 76. Deputy Caoimhghín Ó Caoláin asked the Minister for Finance his views on whether the current regulatory process for auditing firms is adequate; if the self-regulatory regime for accountants and auditors should continue; if he has been approached about problems in these auditing firms; and if he has any plans to change the regulation process for these firms. [17094/10]

Minister for Finance (Deputy Brian Lenihan): Policy matters relating to the regulation of auditing and accounting bodies are the responsibility of my colleague, the Minister for Enterprise, Trade and Employment in the first instance. As I stated to the Deputy on 1 April in this House, the questions he raises with regard to the conduct of certain accountancy and auditing firms are legitimate. Notwithstanding the responsibility of the Minister for Enterprise, Trade and Employment in relation to the regulation of audit firms, I am of the view that the banking inquiry could provide a context within which the general matters referred to in the course of that debate can be addressed. I have already drawn the attention of Messrs. Regling and Watson to the issues raised, in the context of their preliminary investigation into the crisis in the banking sector in Ireland. Following my comments in the course of that debate, Chartered Accountants Ireland have written to me to advise me of investigations that the Chartered Accountants Regulatory Board is undertaking in relation to chartered accountants who were directors of financial institutions. I intend to bring this correspondence to the attention of the Minister for Enterprise, Trade and Employment.

77. Deputy Mary Upton asked the Minister for Finance the progress made to date regarding the strategic review of the credit union sector; and if he will make a statement on the matter. [17227/10]

Minister for Finance (Deputy Brian Lenihan): I have requested the Financial Regulator to carry out this Strategic Review of the Credit Union Sector in Ireland. The Project is being managed by the Registrar of Credit Unions and my officials are liaising closely with him in relation to the project. With regard to progress, the Registrar has received expressions of interest and has issued an invitation to tender to a short-list of tenderers. It is anticipated that the selection process will be completed by June 2010 and work will begin shortly thereafter. I expect to have a report on the full project by end-March 2011. The scope of the review has been agreed with my Department. The review will include a financial review and a risk analysis of the credit union sector, an examination of the external support mechanisms required for the protection of members’ savings, governance and com- petency standards and the regulatory and legislative framework. The impact of current and emerging consumer protection requirements, other European Union legislation and services on offer by credit unions will also be included in the review. In relation to the further development of the credit union sector, the outcomes for this project are to develop proposals and make recommendations for a modern operational model for credit unions, supported by an appropriate and enabling legislative and regulatory framework. This framework must reflect the needs of credit unions and of their members. It should be able to support the development of the movement into the future.

National Asset Management Agency. 78. Deputy Bernard J. Durkan asked the Minister for Finance if with the passage of time the assumptions and calculations made by him and his Department in the compilation of the

766 Questions— 28 April 2010. Written Answers

National Asset Management Agency plan with particular reference to projected property discounts and eventual liability on the State were soundly and accurately projected, sourced and based; the extent to which the now emerging situation is likely to impact on the taxpayer; if he and or his Department have carried out any reappraisal or stress testing of the NAMA project with a view to the restoration of confidence in this country’s economy; the nature of such changes; the extent to which economic recovery has been affected or is likely to be affected in one way or another; and if he will make a statement on the matter. [17273/10]

Minister for Finance (Deputy Brian Lenihan): The NAMA draft business plan published in October 2009, was as the title suggests in draft from and was prepared by the interim NAMA team for the purpose of explaining the background to NAMA and the manner in which it will carry out its functions and duties. The figures included in the draft business plan were indicative figures. The NAMA Board is working on analysing the real data now available to it in relation to eligible assets and valuation. Building on this analysis, the Board will produce an updated business plan which it will submit to me by the end of June. It will then be published by the Board of NAMA. The fact that the discount on the first tranche of NAMA loans is expected to be 47% as opposed to the initial estimate of 30% is further proof of the robustness of the overall process. This increase in the discount is a consequence of several factors; the fall in property values, a detailed scrutiny of loan and security documentation and an assessment of the prospects for the underlying property which secures loans. The calculation of the discounts followed detailed loan by loan assessments which included legal due diligence, a detailed valuation process, and internal and external checking processes, including external audit. In my Dáil speech on banking on the 30th March I explained the impact on the taxpayer of the NAMA process and the cost of recapitalising the participating institutions. I also explained that this restructuring and recapitalisation was critical to ensure that the banks can supply the credit necessary to underpin our economic recovery. The wide- spread and continuing positive comment on our handling of the banking crisis reflects the fact that we have dealt with these issues head on have not shirked from the difficult decisions required. This decisive Government action will feed into the economy through increased will- ingness to invest in Ireland. This investment will enhance the growth of our economy.

Tax Code. 79. Deputy Thomas P. Broughan asked the Minister for Finance if he has met or been briefed by airlines (details supplied) on the air travel tax; his views on the recent statements (details further supplied) on the negative impact of the air travel tax on Irish transport and tourism; the cost benefit analysis of the cost per year of abolishing the tax; and if he will make a statement on the matter. [12788/10]

Minister for Finance (Deputy Brian Lenihan): I have received a report commissioned jointly by Aer Lingus, Ryanair and Cityjet from Amsterdam Aviation Economics in relation to the air travel tax. The report and the analysis therein, including those assumptions made by the authors, continue to be examined by my officials. However, I understand the report makes a number of important assumptions, and the data on which they are based, are omitted from the report. It would be useful if that data and indeed the underlying analysis were to be made available. Comments on the air travel tax need a sense of balance. The key reason why we have less people travelling through our airports is that domestic circumstances are influencing travel patterns and this situation is broadly being reflected on an international basis. Some airlines

767 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.] that have expressed dissatisfaction with the air travel tax have seen fit to increase or introduce other charges to passengers who we are repeatedly told are extremely price sensitive. I make this point in order that the debate on this issue can be a more mature one. The air travel tax arising from travel undertaken in any month is payable by airline operators by the 23rd of the following month. The yield from the air travel tax received in the period from May 2009 to March 2010, in respect of travel undertaken during the months April 2009 to February 2010 i.e. eleven months is €105.4 million. I have no plans to abolish the air travel tax.

Financial Services Regulation. 80. Deputy Denis Naughten asked the Minister for Finance the steps which he is taking to address the cost of sub-prime mortgages; the discussions he has had with the Financial Regu- lator on the issue; and if he will make a statement on the matter. [17102/10]

Minister for Finance (Deputy Brian Lenihan): The decision on the interest rate to be charged by lending institutions is a commercial decision for the financial institutions concerned. Individ- ual institutions set rates based on their cost of funds, market conditions and commercial considerations. The Financial Regulator has no statutory role in the setting of interest rates by regulated entities. The Government took steps in October 2007, via an amendment to the Central Bank Act, 1997, to provide for an appropriate system of authorisation and supervision by the Financial Regulator of retail credit firms engaged in specialist or so-called ‘sub-prime lending’. Such lenders were not previously subject to financial regulation in respect of lending activities. The primary purpose of this amendment was to extend, to customers of these firms, the benefit of the consumer protections provided for in the Financial Regulator’s Consumer Protection Code. This regulatory regime has been in place since 1 February 2008 and is being implemented by the Financial Regulator. In addition, I am aware that the Financial Regulator has recently written to all mortgage lenders requesting them to impose charges only where they can be justified, having considered the individual consumer’s circumstances and in line with the requirement of the Financial Regulator’s Code of Conduct on Mortgage Arrears to handle arrears cases sympathetically and positively with the objective of assisting consumers in meeting their obligations.

Banks Recapitalisation. 81. Deputy Bernard Allen asked the Minister for Finance if he will arrange to present full details of the worked costings of keeping Anglo Irish Bank as a going concern, compared to an orderly wind down of that bank. [17120/10]

Minister for Finance (Deputy Brian Lenihan): I have no plans to present full details of the worked costings of the options regarding the future of Anglo Irish Bank at this time. As the Deputy is aware Anglo is currently updating its Restructuring Plan to take account of EU Commission’s feedback on the initial plan submitted by the bank on 30 November last. The plan will examine all options for the bank’s future including: immediate liquidation, wind-down over a longer period of time, a split between a good bank and an asset management company, and maintaining the bank in its current form as a going concern. The revised plan is to be submitted to the EU Commission by the end of May 2010. Significant further work remains to be done by the bank and its advisers on the updated Restructuring Plan to test and verify the assumptions in each scenario for the future of the bank. The Deputy will appreciate that at this critical juncture in the process and having regard

768 Questions— 28 April 2010. Written Answers to the commercial sensitivity of the information and the need to ensure proper protocols are observed in dealing with the EU Commission it is not appropriate for me to publish the details of the plan which is still a draft. The EU Commission in publishing its decision will include all information pertinent to the decision, subject only to an objective assessment on the commercial sensitivity and confidentiality of the information. I can assure the Deputy that my main concern is to ensure that in any plan the interests of the taxpayer are paramount and that my preferred approach to the options presented in the plan will be consistent with that concern. Any plan submitted by the bank will be reviewed by me and my advisors and I will take advice also from the Central Bank, the Financial Regulator and the NTMA.

82. Deputy Ruairí Quinn asked the Minister for Finance if he expects the coupon payable in 2010 on the preference shares acquired by the National Pensions Reserve Fund in a bank (details supplied) to be paid in cash or through the issue of ordinary shares; and if he will make a statement on the matter. [17215/10]

Minister for Finance (Deputy Brian Lenihan): During 2009 the European Commission indicated that, in line with its policy on State Aid and pending its assessment of the named bank’s restructuring plan, it should not make coupon payments on its tier 1 and tier 2 capital instruments unless under a binding legal obligation to do so. The bank agreed to this request by the Commission and resolved not to pay the non-cumulative distribution on a Sterling Security, which is guaranteed and which had been due to be paid on 14 December 2009. The effect of this decision by the bank was to trigger the ‘Dividend Stopper’ provisions of the securities, which precluded it for a period of one calendar year from and including 14 December 2009, from declaring and paying certain distributions or dividends including its ordinary shares and the Irish Government €3.5 billion preference shares. The Bank would be precluded, should the ‘Dividend Stopper’ remain in force, from paying the dividend due on the preference shares on 13 May 2010. Under these circumstances, in accordance with the terms of the preference shares, the National Pensions Reserve Fund Com- mission would become entitled to be issued with, at a date in the future, a number of ordinary shares related to the cash amount of the dividend that would otherwise have been payable. It is not for me to pre-empt the work of the European Commission. It is our preference to receive the dividend so if the prohibition is lifted before that date there is scope for a cash payment. If not, we will take ordinary shares in the bank.

Financial Services Regulation. 83. Deputy James Bannon asked the Minister for Finance his views on whether the credit bureau system where information on credit performance is pooled among participating financial institutions should be put on a proper regulatory footing in order that the terms of access for other users and service providers would be operated in a fair and equitable way. [17121/10]

Minister for Finance (Deputy Brian Lenihan): It is important that there are facilities available which record and give access to credit history information and help credit institutions to be well informed when making decisions on the provision of credit. My Department is currently looking at the credit reporting system in Ireland so as to inform me of any issues that need to be addressed and of what measures are required to be taken. The Department of Finance recognises that consultation with the relevant stakeholders will be required in order to complete a comprehensive analysis of how to achieve effective credit reporting in Ireland.

769 Questions— 28 April 2010. Written Answers

Flood Relief. 84. Deputy Jim O’Keeffe asked the Minister for Finance when the next phase of funding will be made available by the Office of Public Works to local authorities in 2010 for minor works and studies to address localised flood and coastal erosion problems; the amount of funding that will be available; and if he will make a statement on the matter. [17099/10]

Minister of State at the Department of Finance (Deputy Martin Mansergh): I announced in March of this year details of the first phase of funding being made available by the OPW to Local Authorities in 2010 for minor works and studies to address localised flood and coastal erosion problems. OPW had initially allocated the sum of €6m for the Minor Works and Coas- tal Protection Programmes. However, based on assessments completed by OPW of applications received from Local Authorities to date, the sum of €6.7m has already been allocated. The sum of €5.43m was allocated to 12 Local Authorities for measures to address localised flooding problems in 52 inland areas. In addition, allocations totalling €1.27m were made to 6 Local Authorities for minor coastal flooding and erosion measures at 8 locations around the country. These allocations will allow the Local Authorities to proceed with these measures now to reduce the level of risk in the communities involved. The application assessment process is continuing, and OPW are liaising with a number of Local Authorities regarding applications in respect of which additional information is required. Given the level of applications received, OPW are reviewing the funding available to meet demand, and it is open to Local Authorities to submit further applications under this scheme during 2010. All applications that met the relevant eligibility criteria will be considered, having regard to the overall resources available. OPW expect to be in a position to announce details of the availability of further funding in May. The Minor Flood Relief and Coastal Protection Programme introduced last year is an important element in the OPW’s strategy for reducing and mitigating flood risks throughout the country.

Fiscal Policy. 85. Deputy Seán Sherlock asked the Minister for Finance the way it is envisaged that Ireland will fund up to €480 million to lend to Greece under the emergency EU-led lending facility; and if he will make a statement on the matter. [17220/10]

Minister for Finance (Deputy Brian Lenihan): The Government recently approved the participation of Ireland in euro area co-ordinated financial support to Greece via bilateral loans centrally pooled by the European Commission as part of an agreed Euro Area package, to be co-financed by the IMF; and agreed to the preparation of the necessary enabling legislation. Work is progressing in this regard and I anticipate that matters will be before the house shortly. The overall size of distribution of assistance has yet to be finalised but based on a Euro area year one contribution of €30 bn, Ireland’s share of this contribution, which is based on its ECB paid capital, would be 1.64% or approximately €500 million. The cost of this facility would be met by the Greeks, under the terms of the assistance package, and the amount must be considered in the context of the overall funding needs of the State, which this year are estimated to be of the order of €20 billion. The Commission is making solid and rapid progress with the ECB, the IMF and the Greek authorities to finalise the Greek adjustment programme. The Commission expects this work to be finalised in the coming days. On this basis, the Euro area members will take the decision on the activation of the financial support as decided by the Heads of State and Government of the Euro area on 25 March and specified by the Eurogroup on 11 April. All euro-area

770 Questions— 28 April 2010. Written Answers

Member States are finalising the procedures that will allow them to provide financial support to Greece as necessary.

Small Business Finance. 86. Deputy Brian O’Shea asked the Minister for Finance his views on whether the completion of the National Asset Management Agency will not see a significant increase in lending here; his further views on whether private sector credit will continue to contract over the remainder of 2010 and during 2011; and if he will make a statement on the matter. [17212/10]

Minister for Finance (Deputy Brian Lenihan): The third Mazars report on lending to SMEs, which covers the period from October to December 2009, was published last week. The report showed that credit applications in number and value terms rose slightly in the last quarter of 2009 over the previous quarter, which is encouraging. The level of applications for credit would appear to be stabilising and Mazars also reported a small improvement in the overall credit approval rate. However, the reduction in the stock of credit, as repayments exceed new credit, and in credit quality reported by the banks remains a concern for the Government. To address this concern, I announced earlier this month that AIB and Bank of Ireland are to make available a minimum of €3 billion each for new or increased credit facilities, including working capital targeted at SMEs, in the real economy in each of the next two years. The recently established Credit Review Office is available to review banks’ decisions to refuse credit to small and medium enterprises (SMEs). It will provide an independent opinion of the banks’ decisions on whether the credit should have been granted or not. SMEs can also seek a review of a decision to reduce or withdraw credit. In addition to dealing with individual cases, the credit review system will examine the credit policies and practices of the banks in respect of SMEs. This will help me to decide what further action might be necessary to secure the flow of credit. I intend to publish the analysis from the review process so that the performance of the banks participating in NAMA will be clear to all. The Financial Regulator has set down capital requirements for each of the banks. Bank of Ireland has already begun to implement its plan to raise €3.4 billion of capital and it was encouraging that the share placing earlier this week was nearly four times oversubscribed. Allied Irish Bank has announced that it is selling assets to raise capital. As I have outlined previously the State is willing to convert some or all of its preference shares, as required, on terms to be agreed that will provide full value for the taxpayer. The combination of cleansed balance sheets, following the removal of the riskiest loans by NAMA, and recapitalisation will put the banks in a stronger position to access liquidity, secure funding and increase lending.

Job Protection. 87. Deputy Liz McManus asked the Minister for Finance the position regarding the status of a company (details supplied); the number of entities that have expressed an interest in acquiring the insurance part of the company; the steps that are being taken to ensure the greatest possible protection of the employees; and if he will make a statement on the matter. [17203/10]

Minister for Finance (Deputy Brian Lenihan): As the Deputy will be aware, on 15 April, the High Court appointed full time administrators to Quinn Insurance Limited. This follows Quinn Insurance Limited’s (QIL) decision to consent to the appointment made by the High Court on application made by the Financial Regulator. It is the Financial Regulators and QILs opinion that this step is in the best interests of policyholders. It means that the company is able to pay claims and renew policies in the normal way here in Ireland and continues to settle claims in

771 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.] the UK. It also puts the business on a sound commercial and financial footing and this best serves the proper and orderly regulation of QIL and the wider insurance market. I am conscious of the position of employees of Quinn Insurance as a result of the appointment of the joint Administrators to the company. I am aware that a key element in safeguarding employment in Quinn Insurance is the re-opening of its UK business. In this regard, I welcome the decision by the Financial Regulator to allow the company to write motor insurance cover, for provisional driver licence holders in the United Kingdom including Northern Ireland with effect from 22 April. This is an important first step in ensuring that the value of the business is maintained as it enhances the prospect of the Administrators being able to sell the firm as a going concern. The submission of detailed business plans and proposals in relation to re-opening further lines of business in the UK is a matter for the Administrators. The Financial Regulator has informed me that it has been engaged with the Administrators in recent weeks and is giving all proposals full consideration. Before making any decision on this matter the Financial Regu- lator will have to be satisfied that any proposals stand up to scrutiny and are supported by robust and detailed information, actuarial analysis and pricing. The Government remains concerned about the position on employment in QIL generally. That is why the parties involved must continue to work to find a solution that addresses the issues of putting the company back on a sound commercial and financial footing. This is the best way of protecting jobs and the wider interests of the taxpayer. The administrators have said that they will continue to engage constructively with staff and management at the company as they endeavour to secure its future. In that context, I understand they will be meeting with staff representatives on Friday, 30 April to advise them of their decision on what measures are necessary in relation to employment levels as part of the recovery plan for the company. I cannot comment directly on the issue of the number of companies that have expressed an interest in acquiring Quinn Insurance as this is a matter for the Administrators rather than my Department. I am aware however, that the Administrators have indicated that a significant number of companies have expressed an initial interest in the company. A complete analysis of the financial position of the company is still being carried out by the Administrators and this must be completed before there is further progress here. Finally, in relation to the broader Quinn Group, I have been informed by my colleague Mr Batt O’Keeffe, the Minister for Enterprise, Trade and Innovation that the Chairman and Chief Executive of Enterprise Ireland met with the senior management of the Group earlier this month. He has indicated that Enterprise Ireland stands ready to provide all possible support to the company with a view to maintaining the maximum number of jobs when the company’s position is clarified in the period ahead.

Financial Institutions Support Scheme. 88. Deputy Ciarán Lynch asked the Minister for Finance the liabilities currently guaranteed under the credit institutions financial support scheme; the liabilities currently guaranteed under the eligible liabilities guarantee scheme; the liabilities he expects to be guaranteed under ELG guarantee scheme before 30 September 2010; and if he will make a statement on the matter. [17201/10]

Minister for Finance (Deputy Brian Lenihan): The total amount guaranteed under the Eli- gible Liabilities Guarantee Scheme at 31 March 2010 was €140bn. Of this amount, guaranteed deposits amounted to €108bn. The last audited figures for CIFS were at end year 2009 and

772 Questions— 28 April 2010. Written Answers liabilities stood at €280bn. However, liabilities covered under the CIFS Scheme have been decreasing significantly over the course of Q1 as monies migrate to ELG when they roll and audited figures are not available as yet. The scope of coverage under the ELG Scheme is considerably less than that under the CIFS Scheme with dated subordinated debt and asset covered securities no longer guaranteed. The structure of the ELG Scheme allows participating institutions to issue both guaranteed and unguaranteed liabilities, which will help reduce their reliance on State support over time as financial market conditions continue to improve. Thus it is difficult to estimate the sum will be covered by the ELG Scheme come September 2010. However, given that the scope is more restricted than CIFS and that ELG will only apply to fixed term deposits after this date, I expect outstanding guaranteed liabilities to be considerably lower than the €280bn which was guaranteed under CIFS at end 2009.

Tax Collection. 89. Deputy Joan Burton asked the Minister for Finance the progress made to date by the Revenue Commissioners in its investigation into offshore assets and foreign-held bank accounts; and if he will make a statement on the matter. [17229/10]

Minister for Finance (Deputy Brian Lenihan): Since 2004 the Revenue Commissioners have been conducting a comprehensive investigation into the use of offshore accounts by Irish residents as a means to evade tax. Prior to the commencement of the investigation, Revenue launched a voluntary disclosure initiative which resulted in €650m being collected from over 14,000 taxpayers. Subsequent to the voluntary disclosure initiative, Revenue sought and were granted Orders by the High Court which required financial institutions in the State to advise Revenue concerning money transfers to and from this State involving their offshore affiliates. As a result of these Orders, Revenue identified persons who failed to avail of the voluntary disclosure initiative and further significant liabilities were recovered. I am advised that in December 2009 a further series of Orders were made by the High Court which extends the scope of the investigation both to other territories and other offshore financial institutions. To date, in total some €956m has been recovered by the investigation and the additional monies collected arose from taxpayers identified from the High Court Orders and uplifts from the examination of the voluntary disclosures received.

Mortgage Arrears. 90. Deputy Joan Burton asked the Minister for Finance the progress made to date by the interdepartmental mortgage arrears review group; if he envisages a need for legislation to implement the recommendations of the group; and if he will make a statement on the matter. [17195/10]

Minister for Finance (Deputy Brian Lenihan): The Deputy will be aware that in February this year, I informed the Government of my proposals regarding expanding the membership of the Interdepartmental Mortgage Arrears Group, under the Chairmanship of Mr. Hugh Cooney. This revamped Mortgage Arrears and Personal Debt Group’s (the Group) Terms of Reference, which I approved, were incorporated into the supplementary documentation for the Statement on Banking which I delivered to this House on 30 March 2010. The Group, which has met on a number of occasions, is initially exploring the feasibility of a range of possible options for improving the level of mortgage support to homeowners in difficulty. I understand that proposals will be based on factual information gathered by the Group and will take into account the findings of existing reports and mortgage support schemes

773 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.] in operation in other jurisdictions. The Group will report to me with its recommendations on a rolling basis and will submit a final report to me by the end of June of this year. Until the Group reports to me with its recommendations I am not in a position to say if legislation will be required.

Banks Recapitalisation. 91. Deputy Emmet Stagg asked the Minister for Finance the reason, in view of the relationship framework, pursuant to section 3 of the Anglo Irish Bank Corporation Act 2009, any information and documentation which the board or senior executives are aware of and would have required public disclosure if the ordinary shares of Anglo Irish Bank remained listed on the official list of the Irish Stock Exchange, shall promptly be brought to the his attention in writing by Anglo Irish Bank, but are not in fact publicly disclosed; and if he will make a statement on the matter. [17224/10]

Minister for Finance (Deputy Brian Lenihan): As the Deputy is aware the Anglo Irish Bank Corporation Act, 2009 provided for the transfer of all the shares of the Bank to the Minister for Finance. The Bank was re-registered as a private limited company on the day the legislation was enacted. During 2009 the Bank adopted the Code of Practice for the Governance of State Bodies and is working with the Department of Finance towards full compliance, where applicable. The Bank has also adopted, and is in compliance with, the corporate governance and other obligations imposed by the Ethics in Public Office Act, 1995 and the Standards in Public Office Act, 2001. Further, the Combined Code on Corporate Governance issued by the Finan- cial Reporting Council in June 2008 sets out the principles of good governance and a code of best practice. Companies listed on the Irish Stock Exchange are required to report on their compliance with the provisions of the Combined Code. Although the Bank’s shares are no longer listed on the Irish and London Stock Exchanges, the Board supports the principles and provisions of the Combined Code. The corporate governance statement in the bank’s accounts for the 15 month period to the 31 December 2009 describes how the Bank applied the principles of the Combined Code throughout the financial period ended 31 December 2009. The Relationship Framework on the other hand provides the basis on which the relationship between the Minister and the Bank shall be governed. In the interests of facilitating compliance with EU State aid and competition policy the Relationship Framework recognises the separ- ation of Anglo Irish Bank from the Minister and limits intervention by the Minister in the conduct of Anglo Irish Bank’s business to that necessary to protect the public interest. The Relationship Framework may be amended by the Minister as he sees fit, subject to EU consent. There has been regular communication between the Shareholder and the Directors in this regard. It is a matter for the Board of the Bank, in the first instance, as to how the Bank complies with disclosure requirements generally. However, I would expect to be informed of any significant issues for the Bank that would have a bearing on its financial position or on other matters that would be matters of public interest.

General Government Deficits. 92. Deputy Róisín Shortall asked the Minister for Finance if he will comment on the publication by EUROSTAT of 2009 data on deficits and debt burdens of EU Governments which showed Ireland to have had the biggest general government deficit of any EU member state for 2009; and if he will make a statement on the matter. [17221/10]

774 Questions— 28 April 2010. Written Answers

103. Deputy Leo Varadkar asked the Minister for Finance if he will comment on the implications of the EUROSTAT classification of the recapitalisation of Anglo Irish Bank in 2009 for the deficit reduction plans that have been agreed with the European Commission. [17274/10]

116. Deputy Joe Costello asked the Minister for Finance if he will comment on the publication by EUROSTAT of 2009 data on EU government deficits and debt burdens which showed Ireland to have had the biggest general government deficit of any EU member state for 2009; and if he will make a statement on the matter. [17233/10]

Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 92, 103 and 116 together. On April 22nd Eurostat published fiscal data which showed a General Government Deficit of 14.3% of GDP for Ireland in 2009. This figure is a revision of the Budget day estimate of 11.7% of GDP due to a technical reclassification of a €4 billion investment by the government in Anglo Irish Bank. Initially the Irish authorities, with regard to Eurostat guidelines, classified this as a financial transaction and as such it did not affect the general government balance. However, since then the Irish authorities have reviewed the matter in light of later information and concluded that the transaction should now be considered a capital injection rather than a financial transaction. This was reported to Eurostat in the statistical transmission published last week. The result is the deficit has been re-calculated to be 14.3% of GDP. However, there is no additional borrowing as a result of this technical reclassification. The Exchequer Balance, National Debt and General Government Debt had already accounted for this borrowing. The underlying General Government Balance excluding this reclassification is 11.8% of GDP, which is broadly in line with the Budget day estimate. This reclassification is a once-off adjustment that only impacts on 2009 and does not affect the Budget day forecast for a General Government Balance of 11.5% of GDP for 2010. That said, it is important to note that our deficit is very high and this is why we have taken the various series of measures since July 2008 to strengthen the Budgetary position. Furthermore, it points to the need for continued fiscal discipline and further adjustments. In that context, Ireland’s fiscal targets have not changed in light of these statistical returns, and the Govern- ment’s agreed target to reduce the General Government Deficit to below 3% of GDP by 2014 still stands.

Banking Sector Regulation. 93. Deputy Catherine Byrne asked the Minister for Finance his views on whether increases in bank charges and interest rates are consistent with the banking policy; and if he will make a statement on the matter. [17130/10]

Minister for Finance (Deputy Brian Lenihan): Credit institutions are required to notify non- interest bank charges to the Financial Regulator for approval. When approving charges, the Financial Regulator takes the following criteria into consideration:

• promotion of fair competition,

• commercial justification,

• the effect on customers or a group of customers.

Legal fees tend to be imposed by 3rd parties and then passed on directly by the institution to the consumer. In general these do not require approval.

775 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.]

As regards interest rates wholesale interest rates are set by the European Central Bank (ECB). The setting of retail interest rates by banks reflects a number of factors. These factors include the fact that funding comes from different sources. Some of it is provided by the ECB and some of it comes via the inter bank markets at market rates. Individual institutions set rates based on their cost of funds and commercial considerations. Examples of commercial considerations they have to take into account are competition, risk pricing and what level of deposit interest they have to give to attract funds. They also have to generate some level of profit to ensure their commercial viability.

Banks Recapitalisation. 94. Deputy Joanna Tuffy asked the Minister for Finance the mechanism and terms for the conversion of preference shares in banks (details supplied) held by the National Pensions Reserve Fund to ordinary shares; the outcome to the warrants in the case of such a conversion; the steps that would be taken to protect the warrants from devaluation as a result of dilution; and if he will make a statement on the matter. [17225/10]

Minister for Finance (Deputy Brian Lenihan): Outlined in the terms of the 2009 recapitalisation of Bank of Ireland and Allied Irish Banks, was a provision that the State’s Preference shares could be redeemed by the banks from distributable profits and/or the proceeds of an issue of shares constituting core tier 1 capital. Such a transaction would of course be contingent on approval by the Financial Regulator. There is no provision in the preference shares for their conversion into ordinary shares and any arrangement to convert them would have to be negotiated between the State and the relevant bank. This would include the treatment of the warrants in the case of such a conversion. On Monday 26th April, Bank of Ireland announced a €3.4 billion capital raising exercise. As part of this transaction the State has agreed to convert some €1.7 billion of its Preference shares into Ordinary Shares at face value or par. The State has also agreed to sell its warrants back to the bank for a net €491m in cash. This represents the profit generated on the investment over the past year. The coupon on the remaining preference shares is also increasing from 8% to 10.25%. As regards Allied Irish Banks, it is currently preparing a capital plan for the Financial Regu- lator. Once this plan is complete we will have a better indication of the capital raising options open to the bank. As I have outlined previously the State is willing to convert some or all of its Preference Shares, as required, on terms to be agreed that will provide full value for the taxpayer. Post receipt of this plan we will also be in a better position to assess if a buy back proposal for the warrants will be appropriate.

Financial Institutions Support Scheme. 95. Deputy Pat Breen asked the Minister for Finance if he is in a position to identify all of the bond-holders; the size of their exposure; the extent to which their risk has been insured within financial institutions which the State fully controls; and if he plans to publish that information in broad terms that would be consistent with necessary confidentiality. [17125/10]

Minister for Finance (Deputy Brian Lenihan): Detailed information on bondholders of domestic credit institutions senior and subordinated debt is not available. As is the case for credit institutions generally, credit institutions which the State controls, namely Anglo Irish Bank and Irish Nationwide Building Society do not have access to comprehensive information on the holders of their senior and junior, or subordinated, debt, because such debt is publicly

776 Questions— 28 April 2010. Written Answers traded and dealt through clearing house systems. Issuers do not have access to the records of those systems and the issuer has no means of establishing the underlying ownership of its bonds at any given time. Unlike in the case of shares, the holders of credit institutions’ senior and subordinated debt instruments are not subject to a disclosure regime. Information on the debt issuance of Anglo Irish Bank and Irish Nationwide Building Society is published by the institution in their annual accounts and on other occasions as appropriate. Information on the debt issuance under the Eligible Liability Guarantee Scheme is also available on the NTMA website (www.ntma.ie). Details of the amounts guaranteed under the schemes are not published on an institution by institution basis because of the commercial sensitivity of such information.

Question No. 96 answered with Question No. 67.

Banks Recapitalisation. 97. Deputy Willie Penrose asked the Minister for Finance the amount and the terms of promissory notes transferred to date by the Government to Anglo Irish Bank and Irish Nation- wide Building Society; the amount he expects to issue of promissory notes during 2010; when the first payments are due; if the annual payments on these promissory notes will be made from the general fund; and if he will make a statement on the matter. [17200/10]

Minister for Finance (Deputy Brian Lenihan): In line with my statement to the House on 30 March on the banking situation, I subsequently issued Promissory Notes on 31 March to Anglo Irish Bank and Irish Nationwide Building Society. These Notes will ensure that both institutions continue to meet their regulatory capital requirements. The initial principal amount of the Note that issued to Anglo Irish Bank is €8.3bn and to INBS it is €2.6bn. As I indicated in my recent statement, it is likely that Anglo will need further capital in due course but the extent and timing of such further support remains to be determined. The terms of the Promissory Notes that issued to both institutions on 31 March are substan- tively the same and, inter alia, provide that ten per cent of the principal amount will, if demanded by the institution, be paid each year and that the first such payment will fall due for payment from the Central Fund on 31 March 2011. An annual interest coupon, related to Government bond yields, is also payable on the Promissory Notes which the Minister has absolute discretion to pay on the due date or to add to the principal amount. This ensures that the Note meets accounting requirements to be “fair valued” at the principal amount in the annual accounts of each institution, consistent with the regulatory capital requirements. In the event of a winding-up of either institution, the aggregate of the outstanding principal amount and any unpaid interest that has accrued on the institution’s Note falls due for immediate payment. The Deputy may also wish to note that, as indicated in my banking statement of 30 March, the use of Promissory Notes means that the institution’s capital requirements are met in a way which spreads the cash payments over a number of years and thereby reduces the funding burden on the Exchequer that would otherwise arise in the current year.

National Asset Management Agency. 98. Deputy Deirdre Clune asked the Minister for Finance his plans for parliamentary oversight of the National Asset Management Agency. [17133/10]

Minister for Finance (Deputy Brian Lenihan): There are substantial provisions already in the NAMA Act dealing with transparent reporting by NAMA and oversight of NAMA by the

777 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.] Oireachtas. This subject was extensively debated during the course of the NAMA legislation through the Oireachtas. In particular, the Act provides for NAMA to submit to me quarterly reports, which I shall lay before each House of the Oireachtas, as well as sending a copy to a Committee appointed by the Oireachtas to deal with NAMA. The appointment of such a Committee is a matter for the Oireachtas.

National Pensions Reserve Fund. 99. Deputy Michael D. Higgins asked the Minister for Finance if he will indicate the recommendations which his Department has made in terms of ethical foreign policy to the interdepartmental committee which has been established to examine responsible investment policy. [13334/10]

Minister for Finance (Deputy Brian Lenihan): I announced, during the debate on the Invest- ment of the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009 last March, that the preparation of the draft legislation provided an opportunity to consider once again the position regarding ethical investment of the National Pensions Reserve Fund (NPRF) and that I would establish an Interdepartmental Committee to examine the issues further and to report to me. The Committee includes representatives of the Ministers for the Environment, Heritage and Local Government, Enterprise, Trade and Employment and Foreign Affairs, as well as officials from my Department and representatives of the National Treasury Management Agency as Manager of the NPRF. I understand that the Committee’s report is now complete. I will be considering the report while having regard to the role of the NPRF in any measures that may be required to recapitalise the banks, which I announced on 30 March 2010.

National Asset Management Agency. 100. Deputy Caoimhghín Ó Caoláin asked the Minister for Finance the criteria that were applied in the tendering process for auditing firms to the National Asset Management Agency; his views following the questions that are now being asked about some of those auditing firms; if that tendering process served its purpose or if the contracts should be re-advertised. [17093/10]

Minister for Finance (Deputy Brian Lenihan): In accordance with public procurement procedures, the selection of a particular service provider must be advertised in accordance with standard procurement processes through www.etenders.gov.ie, the website for Irish public tenders. I am advised that the process in respect of all service providers for NAMA was fully compliant with public procurement procedures. It is important to note that under public procurement procedures, a firm or company cannot be excluded from the process unless that firm is conflicted or has been convicted of an offence in relation to professional misconduct or otherwise been guilty of proven grave professional misconduct. To exclude any firm on grounds that are not in accord with procurement regulations could result in sanction from the EU Commission or lead to the excluded firm taking legal action on foot of the exclusion. The Deputy raised certain issues in relation to audit during the recent Dáil questions on banking developments. As I agreed, these questions have been brought to the attention of the banking inquiry, in the context of its preliminary investigation into the crisis in the banking sector in Ireland. The views of NAMA have also been sought.

778 Questions— 28 April 2010. Written Answers

Small Business Finance. 101. Deputy Jan O’Sullivan asked the Minister for Finance if he will comment on the current small and medium enterprise lending environment; his views on proposals which would ameli- orate this lending environment; the discussion he has had with the Department of Enterprise, Trade and Employment regarding the possibility of implementing an SME working capital loan guarantee scheme; the level of funding that is to be allocated to any such scheme for 2010 and 2011; and if he will make a statement on the matter. [17213/10]

Minister for Finance (Deputy Brian Lenihan): The third Mazars report on lending to SMEs, which covers the period from October to December 2009, was published last week. The report showed that credit applications in number and value terms rose slightly in the last quarter of 2009 over the previous quarter, which is encouraging. The level of applications for credit would appear to be stabilising and Mazars also reported a small improvement in the overall credit approval rate. However, the reduction in the stock of credit, as repayments exceed new credit, and in credit quality reported by the banks remains a concern for the Government. To address this concern, I announced earlier this month that AIB and Bank of Ireland are to make available a minimum of €3 billion each for new or increased credit facilities, including working capital targeted at SMEs, in the real economy in each of the next two years. The recently established Credit Review Office is available to review banks’ decisions to refuse credit to small and medium enterprises (SMEs). It will provide an independent opinion of the banks’ decisions on whether the credit should have been granted or not. SMEs can also seek a review of a decision to reduce or withdraw credit. In addition to dealing with individual cases, the credit review system will examine the credit policies and practices of the banks in respect of SMEs. This will help me to decide what further action might be necessary to secure the flow of credit. I intend to publish the analysis from the review process so that the performance of the banks participating in NAMA will be clear to all. Work is underway within the Department of Enterprise, Trade and Employment on the examination of a possible scheme of loan guarantees and my officials have held a number of discussions with officials of that Department on the subject. Key concerns being addressed include the extent to which such a scheme would increase lending to SMEs (as against enhancing security for the banks) and the extent of taxpayer exposure and I understand that the work is nearing completion.

Banks Recapitalisation. 102. Deputy James Bannon asked the Minister for Finance the implications of having to find the recapitalisation money for Anglo Irish Bank and a building society (details supplied) from the annual budget over the coming years, as determined by the recent EUROSTAT decision. [17122/10]

Minister for Finance (Deputy Brian Lenihan): On March 31st this year the Government issued promissory notes to Anglo Irish Bank and Irish Nationwide Building Society for €8.3 and €2.6 billion respectively to help meet their capitalisation requirements over the coming years. Although the effect of this is to increase government debt by €10.9 billion in 2010 there will be no actual borrowing associated with these transactions for 2010. The reason the full amount is included in the 2010 figures — despite the fact that the money will not be borrowed in that year — is because accounting rules state that one must recognise a debt in the period in which it arises. From 2011 the Government will begin to borrow the funds in equal tranches over the next ten to fifteen years to meet the requirements of the promissory notes. This will result in

779 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.] increased exchequer borrowing of approximately €1.1 billion for each of these years. The associated borrowing costs have been estimated by the NTMA to be approximately €50 million per each billion borrowed. In the context of the overall Budgetary position such an amount is manageable. The recapitalisation of these institutions have been made pending the agreement of the respective restructuring plans with the EU commission. Until these restructuring plans have been agreed it is not appropriate to include these in any measure of the General Government Deficit; thus the existing Budget Consolidation Plan stands. As such, they have been classified as financial transactions, and this decision can be reviewed when further information is available. The decision to re-capitalise these institutions was taken by the Irish Government and not by Eurostat. This was necessary to ensure that the institutions complied with regulatory capital requirements.

Question No. 103 answered with Question No. 92.

Tax Yield. 104. Deputy Catherine Byrne asked the Minister for Finance if the trends in the Exchequer returns to date in 2010 give confidence that the end of year targets will be achieved; and if he will make a statement on the matter. [17129/10]

112. Deputy Kathleen Lynch asked the Minister for Finance if he will comment on the end- of-March quarterly Exchequer returns which showed a revenue shortfall of more than €1.2 billion compared to the same period last year; and if he will make a statement on the matter. [17197/10]

Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 104 and 112 together. At end-March 2010 the Exchequer deficit was €3.9 billion compared to €3.7 billion at end- March 2009. This was broadly in line with my Department’s expectations for the first quarter of the year. Tax receipts at €7.2 billion, were 15 per cent below the level collected to end- € 1 March of 2009 and 266 million or 32 per cent below the profile for the period. A significant year-on-year decline in tax receipts was expected in the initial months of 2010. This decline is expected to moderate as the year progresses with overall tax revenues forecast to end the year 6 per cent down on 2009. The tax revenue target for 2010 is just over €31 billion. My Depart- ment’s Budget day forecast anticipated that the economy would return to growth in the second half of the year and that this would have a positive impact on tax performance. More recent forecasts from others would support this view of the economy. Net voted expenditure at €10.7 billion was down some €1 billion year-on-year at end-March. This is clear evidence that the expenditure reduction measures introduced by the Government are having the desired effect in controlling public expenditure. Net voted expenditure was down €225 million on profile to end-March, largely due to timing issues. Departments are expected to adhere to the allocations for 2010 as set out in the Revised Estimates Volume. Overall, tax and expenditure performance to date are broadly in line with the budgetary plan as set out in Budget 2010. My Department continues to analyse the emerging trends, however, at this stage of the year I have no reason to change the outlook for the year as a whole.

Banking Sector Regulation. 105. Deputy Joe Costello asked the Minister for Finance the position on talks regarding the

780 Questions— 28 April 2010. Written Answers investment by a private equity firm (details supplied) into an building society; and if he will make a statement on the matter. [17232/10]

Minister for Finance (Deputy Brian Lenihan): I have, as have my officials, on many occasions discussed the issue of private investment in the banks with the senior executives of the covered institutions. I have also had some discussions with representatives of potential investors and I understand that some covered institutions have also engaged in such discussions. I note the recent success of this strategy by the Bank of Ireland’s placing to private institutional investors announced on Monday morning as well as a rights issue underwritten by the private sector. I understand from the building society that they are in talks about a potential investment however these talks are at an early stage. The Deputy will appreciate that much of this information is received in confidence and is market sensitive and is a matter in the first instance for the institutions themselves. Finally the ability of a covered institution to undertake any transaction and the form of that transaction is heavily dependent on the restructuring plan for the institution. This is still at an early stage for this institution.

Tobacco Smuggling. 106. Deputy Pat Rabbitte asked the Minister for Finance if a Garda file has yet been sent to the Director of Public Prosecutions, arising from the seizure of 120 million cigarettes at Greenore, County Louth in October 2009; the estimated value of the cigarettes seized; if the vessel, alleged to have been involved in the incident, is still detained; and if he will make a statement on the matter. [13004/10]

Minister for Finance (Deputy Brian Lenihan): I wish to advise the Deputy that Operation Samhna resulted in the seizure of a consignment of 120.3m cigarettes with an estimated retail value of €46.7 million and revenue at risk of €40.7 million at Greenore Port Co. Louth in October 2009. The Operation was led by the Revenue Customs Service, and supported by An Garda Síochána, the Criminal Assets Bureau, the Irish Naval Service and the Air Corps. Officers from Her Majesty’s Revenue and Customs and the Police Service of Northern Ireland were also present. The investigation of the offence and the completion of the report for the Director of Public Prosecutions are matters that are proper to the Revenue Commissioners who have primary responsibility for tackling cigarette smuggling. In this regard, I am informed by the Revenue Commissioners that the investigation in this case is continuing. The investigation is being carried out by Revenue Investigators and also involves Investigators from the European Anti Fraud Office (OLAF), who are co-ordinating investigations abroad with the relevant authorities in the Philippines, is continuing. In this regard, a team involving officers from Revenue and OLAF have already visited the Philippines where they instigated the gathering of the necessary information. A Mutual Legal Assistance request was sent to the authorities in the Philippines at the early stages of the investigation and a supplementary request has recently followed in relation to the gathering of the additional evidence. A response to both the original and supplementary request is awaited. In this regard, it is envisaged that the Revenue and OLAF team of investigators will again visit the Philippines in the immediate future with a view of expediting the official responses to both requests. I am further informed by the Revenue Commissioners that the vessel, the M/V Anne Scan, that was involved in the conveyance of the cigarettes to Ireland and which was seized under the Customs Acts, was subsequently released on 6 November 2009 on payment of a compro- mise sum after it had been established that neither the owners of the vessel nor the company

781 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.] to whom it had been first leased for chartering purposes had any involvement in the smuggling operation.

National Asset Management Agency. 107. Deputy Michael D. Higgins asked the Minister for Finance the structure and investors in the National Asset Management Agency special purpose vehicle; and if he will make a statement on the matter. [17231/10]

Minister for Finance (Deputy Brian Lenihan): The NAMA SPV structure has a subscribed capital of €100m. As explained to the Dail at the time of the legislation, and subsequently agreed with the EU, 49% of this capital was advanced by NAMA and 51% by private investors. Three private investors, namely, Irish Life Investment Managers, New Ireland Assurance and a group of clients of Allied Irish Banks Investment Managers, have each invested €17m in the vehicle. It is important to note that in each case the beneficial owners of the investment are pension funds or other clients of these investment companies and not the parent credit institution. The SPV has been established in accordance with Eurostat rules. The Board of the SPV is chaired by the CEO of NAMA and has three NAMA nominated directors with the private investors retaining the right to nominate a further three directors. Thus the SPV is structured in such a manner that NAMA representatives will maintain an effective veto over decisions of the SPV Board.

Expenditure Review Group. 108. Deputy Joe Carey asked the Minister for Finance if he plans to request a further report from the Special Group on Public Service Numbers and Expenditure Programmes in 2010. [17131/10]

Minister for Finance (Deputy Brian Lenihan): There are no plans to reconvene the special group in 2010.

Financial Institutions Support Scheme. 109. Deputy Willie Penrose asked the Minister for Finance the progress made to date with respect to the viability and business plans for the credit institutions covered by the bank guarantee submitted to the EU Commission for consideration; when he expects opinions to be issued by the Commission in relation to each of the credit institutions concerned; and if he will make a statement on the matter. [17199/10]

Minister for Finance (Deputy Brian Lenihan): Under EU state aid requirements the financial institutions which were recapitalised by the State, Allied Irish Banks, Anglo Irish Bank and Bank of Ireland, were obliged to submit restructuring plans to the European Commission within six-months of receiving Government assistance. The Bank of Ireland Plan was submitted to the Commission on 30 September 2009, the Allied Irish Banks Plan was submitted on 13 November 2009, and the Anglo Irish Bank Plan was submitted on 30 November 2009. Considerable discussion, dialogue and exchange of information is continuing in respect of the restructuring plans that have already been submitted as the Commission undertake their assessment of the plans in line with the applicable state aid rules. Negotiations in respect of the Bank of Ireland plan are at an advanced stage, and a decision is expected from the European Commission by mid-2010. AIB is adjusting the content of its plan to reflect the new capital

782 Questions— 28 April 2010. Written Answers requirements announced by the Financial Regulator in March, while Anglo Irish Bank has been asked by the Commission to submit a revised plan by 31 May 2010 accounting for the additional State aid of €8.3 billion which was approved by the Commission on 31 March 2010. It is too early to speculate on when final approval of the restructuring plans for these institutions will be granted by the Commission. The Deputy may also wish to note that, as I indicated in my Banking statement of 30 March 2010, two further financial institutions — EBS due to its participation in NAMA and INBS because of the recapitalisation measure of €2.7 billion announced in March — must also submit restructuring plans to the Commission in June.

110. Deputy Pat Rabbitte asked the Minister for Finance the State’s exit strategy from the blanket bank guarantee issued on 30 September 2008; the credit institutions that have issued debt or other liabilities under the extended eligible liabilities guarantee; the amount of liabilities that have been raised to date under the eligible liabilities guarantee, and the maturities; and if he will make a statement on the matter. [17230/10]

Minister for Finance (Deputy Brian Lenihan): In the statement on the banks which I made on 30 March 2010 I announced that I will be seeking the Commission’s agreement for a modi- fied extension of the guarantee consistent with a phasing out over a realistic period of time. In line with the State aid approval granted by the European Commission on 20 November 2009 in respect of the Eligible Liabilities Guarantee Scheme, the Commission is due to undertake its six-monthly review of the Scheme on 1 June next. The timing and exact steps in the phasing out of the guarantee will be dependent on a range of factors, most notably the situation in global financial markets, the funding capacity available to Irish institutions, evolving EU policy on exit strategies for State support to the banking sector generally and from guarantees in particular, and financial stability risks to the Irish banking sector. Following the conclusion of the review process with the Commission I intend to make a firm announcement about the future of the guarantee having regard to all of these important issues. All of the participating institutions, that is Allied Irish Banks, Anglo Irish Bank, Bank of Ireland, EBS, Irish Life and Permanent and Irish Nationwide Building Society, have issued debt or other liabilities under the eligible liabilities guarantee (ELG) scheme. The total amount guaranteed under ELG scheme at 31 March 2010 was €140bn. Of this amount, guaranteed deposits amounted to €108bn. The NTMA provide a comprehensive list on their website of securities which are guaranteed under ELG.

National Solidarity Bond. 111. Deputy Jack Wall asked the Minister for Finance when he expects the national solidarity bonds, as announced in budget 2010, to be available for subscription; and if he will make a statement on the matter. [17218/10]

Minister for Finance (Deputy Brian Lenihan): In Budget 2010, I announced our intention to launch a National Solidarity Bond, the purpose of which is to allow citizens an opportunity to invest and provide money to the State to stimulate economic recovery and to assist in the maintenance and creation of employment. I provided the necessary legislative basis in this year’s Finance Act and I am now happy to inform the House that I will announce details of the National Solidarity Bond tomorrow evening, Thursday 29 April. Brochures, application forms, terms and conditions and Frequently Asked Questions will be available on the internet and there will be a dedicated telephone line where additional infor-

783 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.] mation will be available. After the May Bank Holiday weekend, commencing Tuesday 4 May, the National Solidarity Bond will be available for subscription through the network of 1,200 Post Offices.

Question No. 112 answered with Question No. 104.

Question No. 113 answered with Question No. 62.

Financial Institutions Support Scheme. 114. Deputy Eamon Gilmore asked the Minister for Finance if his attention has been drawn to any recent interest from foreign investors in taking strategic or controlling stakes in any of the credit institutions covered by the banking guarantee; and if he will make a statement on the matter. [17210/10]

Minister for Finance (Deputy Brian Lenihan): I have informed the House previously that I have discussed the issue of private sector investment in the banks with senior executives of the credit institutions covered by the bank guarantee. I have also had discussions with some representatives of proposed investors, as have the NTMA on my behalf. I understand that some institutions have engaged in such discussions with representatives of potential investors. To date, none of these discussions have resulted in any detailed investment proposal. However, the Deputy will appreciate that much of this information is received in confidence and could be a market sensitive issue for the potential investors.

Banking Sector Regulation. 115. Deputy Aengus Ó Snodaigh asked the Minister for Finance his views on the introduction of a bailout tax, as recommended by the International Monetary Fund, to tax financial institutions’ non-deposit liabilities and the sum of profit and compensation to help pay for future bailouts of the banking industry and to prevent the cost from falling on the taxpayer; if he will explore the possibility of introducing an insurance fund for the financial sector, paid for by the financial institutions, to cover future events in the sector; and if he will make a statement on the matter. [17096/10]

Minister for Finance (Deputy Brian Lenihan): The interim IMF report for consideration by G20 Ministers referred to by the Deputy has not been officially published but was widely reported on in the media. The IMF’s work in this area is in response to a request made to it by the G20 in 2009 in the context of discussions on how to ensure the financial sector can make a fair and substantial contribution toward paying for burdens associated with government interventions to repair the banking system. I understand the main proposals in the report are firstly a financial stability contribution to pay for the fiscal cost of any future government support to the financial sector. I understand the proposal involves such a levy being paid by financial institutions initially at a flat rate but eventually refined so that riskier institutions paid more. Secondly the report proposed a financial activities tax which would be levied on the sum of financial institutions’ profits and the remuneration they pay. The question being examined internationally is what taxes or levies can be designed and implemented in an effective manner to ensure that the resources required to deliver future bank resolutions will be available. This is a complex area that is being examined by EU Finance Ministers and in the G20 and I expect the IMF’s work and a forthcoming EU study on the

784 Questions— 28 April 2010. Written Answers subject of bank levies will be useful contributions to that debate. Ireland will of course participate fully in that dialogue.

Question No. 116 answered with Question No. 92.

Financial Services Regulation. 117. Deputy Arthur Morgan asked the Minister for Finance if he will explore the role of credit rating agencies in the financial crisis; if it will be within the remit of the Financial Regu- lator or the Central Bank Commission to ensure the transparency of the credit rating process; if reliance on these ratings will be reduced over time in view of the fact that at the height of the boom these agencies gave high ratings to highly risky products; and if he will make a statement on the matter. [17091/10]

Minister for Finance (Deputy Brian Lenihan): It is generally accepted that Credit Rating Agencies (CRAs) played a significant role in the current financial crisis and that CRAs provided high ratings to complex products which bolstered investors’ confidence in these products. In hindsight, these high ratings were clearly inappropriate. There was also a perception that CRAs were susceptible to conflicts of interest as they also provided advisory services to their clients. At EU level, this issue was the subject of a number of discussions at the Ecofin Council of Ministers as well as at the European Council. In November 2008, the European Commission adopted a proposal for a Regulation to govern the way in which CRAs could operate in the EU which, following negotiations with the European Council and the European Parliament, was adopted in September 2009. The Regulation introduces rules in a number of areas, such as: CRAs must have sufficient knowledge to enable them rate complex instruments; Their rating methodologies must be disclosed; They must appoint at least two independent directors; CRAs will no longer be able to provide advisory services; and the quality of their ratings must be subject to regular review. Each Member State is required to appoint a competent authority by June 7th next and my Department is currently finalising the arrangements for the Central Bank and Financial Services Authority of Ireland to be the competent authority in Ireland. I would like to remind the Deputy that under the package of supervisory reforms in the EU, which emanate from the de Larosière Report, the soon to be established European Securities and Markets Authority (ESMA) will be the competent authority throughout the EU for the supervision of CRAs’ activities. ESMA is expected to assume this role in early 2011. With regard to the reliance on ratings produced by CRAs, I believe that it is fair to say that investors should no longer rely solely on ratings produced by CRAs. In my view, ratings are one of the elements that can be usefully used by investors when considering investment decisions, but they should not be regarded as the most important determining factor for those decisions.

Parliamentary Questions. 118. Deputy Lucinda Creighton asked the Taoiseach the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17264/10]

The Taoiseach: No parliamentary questions have remained unanswered to date due to staff action in 2010.

Redundancy Payments. 119. Deputy Denis Naughten asked the Minister for Enterprise, Trade and Employment the

785 Questions— 28 April 2010. Written Answers

[Deputy Denis Naughten.] reason for the ongoing delay in processing an application to the insolvent fund within his Department from persons who were made redundant from a company (details supplied) in County Roscommon; when the outstanding moneys will be awarded; and if he will make a statement on the matter. [17053/10]

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): My Department administers the Social Insurance Fund (SIF) in relation to redundancy matters on behalf of the Department of Social and Family Affairs. There are two types of payment made from the SIF — rebates to those employers who have paid statutory redundancy to eligible employees, and statutory lump sums to employees whose employers are insolvent and/or in receivership/liquidation. I can confirm that my Department received a number of redundancy claims from the company concerned over the period December 2008 and early 2009, including a lump sum claim for the individual concerned. Additional information was requested in relation to this claim in terms of whether the employee met the eligibility criteria of being in insurable employment with the employer for the requisite period. It appears that the former employee does not have the required number of social welfare contributions with the company and on this basis the applicant’s claim cannot be processed for payment. My Department has recently written to the individual to advise him of this decision. Issues relating to the insurability of employees under the Social Welfare Acts must be decided in accordance with the decisions and appeals procedures provided for in the Social Welfare Acts, as administered by the Department of Social and Family Affairs. Where an employee is dissatisfied with a decision as to insurability under these Acts, he or she may appeal this decision to the Social Welfare Appeals Office. The contact address is: The Chief Appeals Officer, Social Welfare Appeals Office, D’Olier House, D’Olier Street, Dublin 2. Notice of Appeal forms are available from the Social Welfare Appeals Office or from local offices of the Dept of Social and Family Affairs.

Work Permits. 120. Deputy Denis Naughten asked the Minister for Enterprise, Trade and Employment his plans to reform the work permit system; if he will review the conditions on the right to change employer; and if he will make a statement on the matter. [17107/10]

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): Since 2004, Irish labour market policy has been to ensure that general labour and skills needs are met from within the workforce of the European Union. For strategic skills and labour shortages it is Government policy to issue employment permits for the employment of non-EEA nationals for specific vacancies and in response to employer demand. The various schemes that give effect to such policies were introduced under the Employment Permits Act, 2006. The new schemes constituted a major overhaul of previous arrangements and put the employment permits system on a statutory footing. A particular focus in developing these schemes was on increasing the rights and protections afforded to migrant workers and the means to ensure redress in the event of exploitative practices. The Act’s provisions gave immigrants greater freedom, autonomy and control over their own employment choices by enabling workers for the first time to apply and re-apply for their own permit and allowing workers to change their employer after a period of a year and move to another employment in order to take advantage of better conditions or career options.

786 Questions— 28 April 2010. Written Answers

Last year, my Department issued almost 1,500 employment permits in respect of employees changing to new employers. The Employment Permits Act 2006 provides for regular review of Ireland’s economic migration policies and my Department keeps these policies under review on an on-going basis. My Department condemns any practices by employers that may result in non-compliance with employment rights entitlements or any other mistreatment of employees including those on employment permits. Ireland’s Employment Rights Legislation establishes the minimum statutory rights applicable to all people working in Ireland whether they are Irish citizens or otherwise. I would urge all whose employment rights are being breached by an employer or those who know of such exploitation, to contact the National Employment Rights Authority (NERA).

Employment Support Services. 121. Deputy Martin Ferris asked the Minister for Enterprise, Trade and Employment the numbers of persons who have been placed in jobs through the work placement programme over the past three years. [17238/10]

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Dara Calleary): The Work Placement Programme was launched on 27th May 2009 and it provides work experience opportunities of up to nine months duration to the unemployed. As of 19th April 2010, 767 people had commenced their placement on the Work Placement Programme and there are a further 1,255 placements currently available.

Parliamentary Questions. 122. Deputy Lucinda Creighton asked the Minister for Enterprise, Trade and Employment the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17257/10]

Minister for Enterprise, Trade and Employment (Deputy Batt O’Keeffe): Given its wide remit, Ministers in my Department answer well in excess of a thousand Parliamentary Ques- tions (PQs) each year. Indeed, in 2009 we answered over 2,000 PQs. In that regard, my officials accord a high priority to responding to Oireachtas scrutiny including in their contributions to ministerial responses to PQs. All Parliamentary Questions are answered by Ministers on the due date, although in some situations, given the nature of the Question posed, it may not always be possible to provide detailed statistical data in the time available to answer the Question. In such situations, unless the collation of the material requested requires a disproportionate amount of resources, my Department issues a follow up reply to the Deputy concerned. My Department has processed over 400 Parliamentary Questions since the industrial action by some Civil Service unions took effect on 4th February, of which we were unable to fully answer 28 in the detail required.

Public Service Appointments. 123. Deputy Richard Bruton asked the Minister for Finance the appointments made by the top level appointments committee in each of the past five years; the number of applicants; the number of applicants from outside the public service in each year; the number of those selected who came from outside the public service; the number that came from outside the Department filling the post distinguishing by the grade post being filled. [17111/10]

787 Questions— 28 April 2010. Written Answers

Minister for Finance (Deputy Brian Lenihan): The following table shows the information requested by the Deputy.

2005 2006 2007 2008 2009

No. of TLAC competitions held 19 13 24 17 9 No. of applicants 248 220 448 539 186 No. of applicants from outside public 7 18 106 150 33 service No. selected from outside public 00100 service No. selected from outside Department 70332 (2 Sec Gen, (1 Sec Gen, (3 Asst Sec) (1 Sec Gen, 5 Asst sec) 1 Dep Sec, 1 1 Asst Sec) Asst Sec)

It should be noted that the Top Level Appointments Committee (TLAC) deals with appointments to the civil service and not the wider public service. In addition to those selected from outside the public service, 3 applicants from the wider public service were selected for civil service posts in the period. The Top Level Appointments Committee (TLAC) hold competitions for and advises Mini- sters and the Government on appointments to civil service posts at Secretary General, Deputy Secretary and Assistant Secretary and equivalent levels. Since early 2007 the policy has been that open competitions are held for Assistant Secretary and Deputy Secretary and equivalent posts and more recently this policy has been extended to Secretary General posts, with the exception of a limited number of Secretary General posts which are filled by the Government without a TLAC competition.

Flood Relief. 124. Deputy Ciarán Lynch asked the Minister for Finance the terms of reference of the Lee Valley catchment area review of flooding; the person who will conduct the review; when same will report; and if he will make a statement on the matter. [17207/10]

Minister of State at the Department of Finance (Deputy Martin Mansergh): The draft Catch- ment Flood Risk Management Plan (CFRMP) for the River Lee is at public consultation stage. The consultants, Halcrow Group Ireland Ltd., have been appointed to undertake a review of the November 2009 floods for the Rivers Lee and Owenboy. This is a hydrological and hydraulic review, examining, inter alia, rainfall depths and return periods, flood flow paths, extents and probabilities. The terms of reference reflect the following aspects: Review and catalogue data, and understand the event; Create model boundaries; Run model for validation event; Post process modelling; Event comparison; and reporting and review. The initial review of the modelling is due to take place in mid-Summer. The outputs from this review will be included in the CFRMP for the River Lee.

Tax Code. 125. Deputy Ciarán Lynch asked the Minister for Finance the taxation applicable to the gratuity paid on retirement to retained firefighters; and if he will make a statement on the matter. [17052/10] 788 Questions— 28 April 2010. Written Answers

Minister for Finance (Deputy Brian Lenihan): The position is that Section 201 of the Taxes Consolidation Act 1997 and Schedule 3 to that Act set out the legislation in relation to the exemptions that apply to retirement gratuities, and the taxation of any balance after applying these exemptions. The same rules apply to all employees and office holders. Statutory redundancy payments are exempt from income tax. In addition, ex-gratia redundancy payments in excess of the statutory redundancy amount are exempt from income tax up to certain limits namely: a basic exemption of €10,160 plus €765 per complete year of actual service in excess of the statutory redundancy; or standard Capital Superannuation Benefit i.e. 1/15th of the person’s annual income (average of the last three years) for each year of employment less any tax-free lump sum which is received or receivable under any approved or statutory pension scheme. It is open to the taxpayer to choose whichever relief is of most benefit. The basic exemption from income tax as outlined above can be further increased by up to €10,000 if the person is not a member of an occupational pension scheme. This can only be claimed if the person has not made any claims in respect of a lump sum received in the previous 10 tax years. Any amount of redundancy payment in excess of whichever exemption applies, is liable to income tax. The Revenue Commissioners publication IT21 is a comprehensive guide to understanding how these reliefs apply.

Parliamentary Questions. 126. Deputy Lucinda Creighton asked the Minister for Finance the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17259/10]

Minister for Finance (Deputy Brian Lenihan): In response to the Deputy’s question there are no Parliamentary Questions in my Department which remain unanswered due to staff action to date in 2010. I have been informed by the Office of the Revenue Commissioners that in the same period, seven Parliamentary Questions were asked in relation to individual tax queries which were unanswered due to staff action. The replies stated that due to staff action an answer could not be supplied to the question and no undertaking was given to supply the data requested at a future date.

Fiscal Policy. 127. Deputy Richard Bruton asked the Minister for Finance the desired breakdown between spending and taxation of the proposed €2 billion reduction in the current Exchequer deficit in view of the draft public service agreement. [17311/10]

Minister for Finance (Deputy Brian Lenihan): Budget 2010 sets out a consolidation path for the public finances aimed at reducing the General Government Balance to below -3% of GDP by end-2014. The required adjustment in each year over the period is set out in the budgetary documentation. Based on the overall macroeconomic and budgetary forecasts an adjustment of €2 billion relating to current expenditure and/or tax revenue adjustments will be needed in 2011. The precise breakdown of this adjustment is a matter for ongoing determination in the context of my formulation of Budget 2011. While at this stage of the year, I do not intend to comment on the specifics of the 2011 budgetary policy, I did, in Budget 2010, outline a number of areas for consideration in this context. Furthermore, the report of the Special Group on Public Sector Numbers and Expenditure Programmes, the work currently underway regarding Local Authorities and the report of the Commission on Taxation will also have a role to play in the determination of future budgetary policy.

789 Questions— 28 April 2010. Written Answers

[Deputy Brian Lenihan.]

The draft Public Service Agreement provides certainty and stability for public service workers in terms of pay and conditions over the period of the Agreement while providing a sustainable framework to the Government for the agreed delivery and cost of public services over the medium term which will assist in the restructuring and planning of the public finances. Adoption of the Agreement will itself give a measure of certainty about policy and spending that will assist in the process of economic recovery.

Public Sector Pay. 128. Deputy Richard Bruton asked the Minister for Finance the conditions that constitute an unforeseen budgetary deterioration in the context of the draft public service agreement. [17312/10]

130. Deputy Richard Bruton asked the Minister for Finance if he has committed to the payment of annual pay increments as part of the draft public service agreement. [17314/10]

131. Deputy Richard Bruton asked the Minister for Finance if he has committed not to cut the pensions of existing public service pensioners as part of the draft public service agreement. [17315/10]

Minister for Finance (Deputy Brian Lenihan): I propose to take Questions Nos. 128, 130 and 131 together. Under a process of engagement and discussion between public service employers and the Public Services Committee of the Irish Congress of Trade Unions, facilitated by the Labour Relations Commission, a draft agreement has been reached between the parties which provides for the settlement of the industrial relations dispute in the public service. It is now a matter for individual union members to consider the draft Agreement in the context of the balloting process. The Agreement provides there will be no further reductions in the pay rates of serving public servants for the lifetime of the Agreement. Increments will continue to be payable. This guarantee is subject to compliance with the terms of the Agreement. In relation to existing public service pensioners, Section 3 of the Financial Emergency Measures in the Public Interest (No. 2) Act, 2009, provides that the pay reductions introduced in that Act do not apply to the entitlements of existing public service pensioners or to any person who retires from the public service in 2010. Under the draft Agreement the period of exemption to persons who may retire would be extended by a year. The Agreement also provides that discussions will take place on the method of determining pension increases for existing public service pensioners and current public servants in the context of a review of pay policy in Spring 2011. The Government has reaffirmed that, if agreed, it will implement the Agreement in absolute good faith. The provision within the Agreement which specifies that the Agreement is subject to no currently unforeseen budgetary deterioration was inserted as a prudent measure and would only be raised in the context of a significant deterioration in the budgetary and economic outlook which would require further corrective action to ensure fiscal sustainability. Adoption of the Agreement will itself give a measure of certainty about policy and spending and help to avoid any such significant deterioration. Under the circumstances, speculation on a specific set of circumstances which is unlikely to arise would be neither helpful nor warranted.

129. Deputy Richard Bruton asked the Minister for Finance the reduction in public sector numbers targeted in the draft public service agreement, in total and by sector. [17313/10]

790 Questions— 28 April 2010. Written Answers

Minister for Finance (Deputy Brian Lenihan): The draft Public Service Agreement, which is subject to ratification by the relevant public service trade unions, notes that reductions in public service staff numbers, along with a range of other initiatives in the area of revised work practices, redeployment etc., could contribute to a more efficient public service, and facilitate the Government’s core objective of restoring the public finances to a sustainable position. This approach is fully in line with the Government’s multi-year fiscal consolidation strategy as set out in Budget 2010. In that context, and in particular in the Stability Programme Update of December 2009, the Government indicated the move to a new, more rigorous approach to controlling public service numbers, centring upon the establishment of an agreed annual numbers ceilings, to be managed in accordance with Employment Control Frameworks for each Ministerial Vote Group. Specifically, the Government intends that overall Public Service numbers should be brought down by approximately 13,000 over the period 2009-2012 broken down as indicated on a sectoral basis in the following table.

Functional Classification Projected End-March 2009 Projected End 2012 — Difference Ceilings

Total Staff 319,235 306,191 −13,044 Civil Service 39,121 36,595 −2,526 Health Sector 111,800 106,060 −5,740 Education 94,757 94,754 −3 Justice 15,677 14,746 −931 Defence 11,169 10,706 −463 Local Authorities 34,178 32,150 −2,028 NCSSBs 12,533 11,179 −1,354 Note: Staff numbers are whole-time equivalents.

The precise ceilings in each area are subject to further Government consideration in certain cases and are, as always, subject to any future Government policy decisions and priorities in regard to public service provision.

Questions Nos. 130 and 131 answered with Question No. 128.

Tax Collection. 132. Deputy Jack Wall asked the Minister for Finance the reason a person (details supplied) in County Kildare is taxed at the higher tax band; and if he will make a statement on the matter. [17317/10]

Minister for Finance (Deputy Brian Lenihan): I have been advised by the Revenue Commis- sioners that the person’s new employer was notified of the tax credits and standard rate cut- off point applicable to the person concerned on 26 February 2010. In addition, a certificate of tax credits and standard rate cut-off point issued to the person concerned on 26 February 2010. This certificate provides for the person’s entitlement to the lower rate band and any tax over- paid by the person concerned since he commenced employment with his employer will be refunded by his employer.

Health Services. 133. Deputy Deirdre Clune asked the Minister for Health and Children if students at a primary school (details supplied) in County Cork will receive an eye examination and a hearing 791 Questions— 28 April 2010. Written Answers

[Deputy Deirdre Clune.] examination during the current school year; and if she will make a statement on the matter. [17051/10]

Minister for Health and Children (Deputy Mary Harney): I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Execu- tive to supply the information requested. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Pension Provisions. 134. Deputy Bernard J. Durkan asked the Minister for Health and Children if a person (details supplied) in County Meath can avail of early retirement on ill health grounds if offered at present without loss of benefits; and if she will make a statement on the matter. [17280/10]

Minister for Health and Children (Deputy Mary Harney): The employee referred to is a member of the Voluntary Hospital Superannuation Scheme. Subject to certain conditions early retirement on the ground of ill health is permitted under the scheme rules. A pension and lump sum, calculated in the same way as retirement on age grounds will be paid immediately at retirement provided the member has a minimum of 5 years reckonable service. In addition, where the employee is required to retire on grounds of ill health, a period of notional service may be added. This added service is calculated by reference to the length of actual service and age at retirement. The following table outlines the notional added years available in cases of retirement on grounds of ill health under the scheme rules.

Service (Years) Award of added years in cases of retirement on grounds of ill health

05 – 10 Actual service subject to limit of potential service to age 65

10 – 20 the better of: Total service not exceeding 20 years, subject to limit of potential service to age 65 or 2 63 years, subject to potential service to age 60

+ 2 20 63 years, subject to potential service to age 60

I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Executive to supply the information requested in relation to the particular person in question. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Medical Cards. 135. Deputy Seán Sherlock asked the Minister for Health and Children the position regarding a medical card in respect of a person (details supplied) in County Cork; and if she will make a statement on the matter. [17056/10]

Minister for Health and Children (Deputy Mary Harney): I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Execu- tive to supply the information requested. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Misuse of Drugs. 136. Deputy Enda Kenny asked the Minister for Health and Children her plans to ban a 792 Questions— 28 April 2010. Written Answers substance (details supplied) on sale in head shops; the full list of head shop products that she proposes to ban; and if she will make a statement on the matter. [17066/10]

Minister for Health and Children (Deputy Mary Harney): The substances currently being sold in head shops which are due to be declared controlled substances under the Misuse of Drugs Act 1977 include:

• synthetic cannabinoids (SPICE products)

• benzylpiperazine (BZP) derivatives

• mephedrone, methylone and related cathinones

• GBL and 1,4 BD

The substance mentioned by the Deputy is not among the list of substances that are to be placed under control. However, the matter will be kept under review.

Nursing Home Services. 137. Deputy Richard Bruton asked the Minister for Health and Children when the 100 bed community nursing unit at Raheny, Dublin 5, will open; the reasons for the delay; if the delay is due to funding cutbacks; and if she will make a statement on the matter. [17071/10]

Minister of State at the Department of the Health and Children (Deputy Áine Brady): I regret that due to industrial action I am not in a position to provide a substantive response to your Parliamentary Question. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Nursing Homes Support Scheme. 138. Deputy Michael Creed asked the Minister for Health and Children if she has received a fair deal application from a person (details supplied) in County Cork; when the application will be activated; and if she will make a statement on the matter. [17073/10]

Minister of State at the Department of the Health and Children (Deputy Áine Brady): I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Executive to supply the information requested. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Long-Term Illness Scheme. 139. Deputy Thomas Byrne asked the Minister for Health and Children if a person who suffers from a condition (details supplied) is entitled to be considered under the long-term illness scheme for free medication. [17109/10]

Minister for Health and Children (Deputy Mary Harney): Under the 1970 Health Act, the Health Service Executive may arrange for the supply, without charge, of medicines and medical and surgical appliances to people with specified conditions, for the treatment of that condition, through the Long Term Illness Scheme (LTI). The LTI does not cover GP fees or hospital co- payments. The conditions are: mental handicap, mental illness (for people under 16 only), phenylketonuria, cystic fibrosis, spina bifida, hydrocephalus, diabetes mellitus, diabetes insipidus, haemophilia, cerebral palsy, epilepsy, multiple sclerosis, muscular dystrophies, park- insonism, conditions arising from thalidomide and acute leukaemia. There are currently no plans to extend the list of eligible conditions covered by the LTI.

793 Questions— 28 April 2010. Written Answers

[Deputy Mary Harney.]

Under the Drugs Payment Scheme, which was introduced in 1999, no individual or family unit pays more than €120 per calendar month towards the cost of approved prescribed medicines. The scheme is easy to use and significantly reduces the cost burden for families and individuals incurring ongoing expenditure on medicines. In addition, people who cannot, without undue hardship, arrange for the provision of medical services for themselves and their dependants may be entitled to a medical card. In the assessment process, the Health Service Executive can take into account medical costs incurred by an individual or a family. Those who are not eligible for a medical card may still be able to avail of a GP visit card, which covers the cost of general practice consultations.

Hospital Staff. 140. Deputy Ciarán Lynch asked the Minister for Health and Children the plans that are in place to continue the existing services and to implement improvements in view of the imminent retirement of the only consultant paediatrician in Cork University Hospital dealing with approximately 300 children living with Type 1 diabetes; and if she will make a statement on the matter. [17206/10]

Minister for Health and Children (Deputy Mary Harney): I regret that due to industrial action I am not in a position to provide a substantive response to your Parliamentary Question. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Health Services. 141. Deputy Finian McGrath asked the Minister for Health and Children if she will support the case of a person (details supplied) in Dublin 9. [17235/10]

Minister for Health and Children (Deputy Mary Harney): I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Execu- tive to supply the information requested. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Hospital Waiting Lists. 142. Deputy Pat Breen asked the Minister for Health and Children if a person (details supplied) in County Clare will be facilitated; and if she will make a statement on the matter. [17241/10]

Minister for Health and Children (Deputy Mary Harney): I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Execu- tive to supply the information requested. However, I would like to advise the Deputy that the scheduling of patients for hospital treatment is a matter for the consultant concerned in each case and is determined on the basis of clinical need. Should the patient’s general practitioner consider that the patient’s condition warrants an earlier appointment, he/she would be in the best position to take the matter up with the consultant involved.

Parliamentary Questions. 143. Deputy Lucinda Creighton asked the Minister for Health and Children the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if she will make a statement on the matter. [17261/10]

794 Questions— 28 April 2010. Written Answers

Minister for Health and Children (Deputy Mary Harney): A total of 747 Parliamentary Ques- tions were taken by my Department during the period from 3rd March 2010 to 22nd April 2010. Of these, 534 (71.5%) have not been answered due to industrial action by certain staff both within my Department and the Health Service Executive.

Health Services. 144. Deputy Bernard J. Durkan asked the Minister for Health and Children if a person (details supplied) in County Kildare will be offered services; and if she will make a statement on the matter. [17283/10]

Minister of State at the Department of Health and Children (Deputy John Moloney): I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Executive to supply the information requested. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Medical Cards. 145. Deputy Bernard J. Durkan asked the Minister for Health and Children when a medical card will be renewed in the case of a person (detail supplied) in County Kildare; and if she will make a statement on the matter. [17284/10]

Minister for Health and Children (Deputy Mary Harney): I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Execu- tive to supply the information requested. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Hospital Services. 146. Deputy Bernard J. Durkan asked the Minister for Health and Children when a procedure will be offered in respect of a person (details supplied) in County Kildare; and if she will make a statement on the matter. [17285/10]

Minister for Health and Children (Deputy Mary Harney): I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Execu- tive to supply the information requested. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Health Services. 147. Deputy Bernard J. Durkan asked the Minister for Health and Children if home help can be offered to a person (details supplied) in County Kildare; and if she will make a statement on the matter. [17286/10]

Medical Cards. 148. Deputy Bernard J. Durkan asked the Minister for Health and Children when a medical

795 Questions— 28 April 2010. Written Answers

[Deputy Bernard J. Durkan.] card will issue in the case of a person (details supplied) in County Kildare; and if she will make a statement on the matter. [17287/10]

Minister for Health and Children (Deputy Mary Harney): I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Execu- tive to supply the information requested. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Health Services. 149. Deputy Caoimhghín Ó Caoláin asked the Minister for Health and Children, further to Parliamentary Question No. 166 of 10 February 2010, when a reply will issue from the Health Service Executive. [17319/10]

Minister for Health and Children (Deputy Mary Harney): I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Execu- tive to supply the information requested. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Accident and Emergency Services. 150. Deputy Emmet Stagg asked the Minister for Health and Children if her attention has been drawn to the concerns expressed by the Irish Association for Medicine regarding the recruitment of non-consultant hospital doctors at Naas General Hospital and the provision of 24-hour, seven-day a week accident and emergency cover and if she will give a commitment that accident and emergency services will not be curtailed at Naas General Hospital. [17326/10]

Minister for Health and Children (Deputy Mary Harney): Subject to overall parameters set by Government, the Health Service Executive (HSE) has responsibility for determining the composition of its staffing complement. In that regard, it is a matter for the Executive to manage and deploy its human resources to best meet the requirements of its Annual Service Plan for the delivery of health and personal social services to the public. I wish to advise the Deputy that due to industrial action affecting the Health Service Executive it is not possible for the Executive to supply information in relation to services at Naas General Hospital. If this matter remains of continuing concern to you, however, I would invite you to raise it with me again in due course.

Parliamentary Questions. 151. Deputy Lucinda Creighton asked the Minister for Transport the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17266/10]

Minister for Transport (Deputy Noel Dempsey): There are 23 Parliamentary Questions which have remained unanswered in the Department of Transport, due to industrial action by staff.

Departmental Agencies. 152. Deputy Bernard J. Durkan asked the Minister for Transport if the National Roads Authority raises and provides its own funding independently of Government and his budget; and if he will make a statement on the matter. [17279/10]

796 Questions— 28 April 2010. Written Answers

Minister for Transport (Deputy Noel Dempsey): Under Section 24 of the Roads Act 1993, as amended, the Government provides Exchequer funding to the National Roads Authority (NRA) to discharge its functions under that Act. In addition the NRA generates some additional funding from toll revenue and other sources of income. Information on these is available in its Annual Report & Accounts. The Accounts for 2008 have been placed in the Oireachtas Library. Once the Controller & Auditor General signs off the 2009 Annual Report & Accounts, I will arrange for these to be placed in the Oireachtas Library. The NRA has also been given a mandate under Transport 21 to raise private funding for investment in national roads through PPPs. To date it has raised over €2 billion in private investment for nine toll-based PPP projects and has been authorised to raise a further €1 billion through unitary payment — based PPPs.

Citizenship Applications. 153. Deputy Michael Ring asked the Minister for Justice, Equality and Law Reform when a person (details supplied) in County Mayo will be approved Irish citizenship. [17054/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): A valid application for a certificate of naturalisation from the person referred to in the Deputy’s Question was received in the Citizenship Division of my Department in September 2007. All valid applications are dealt with in chronological order as this is deemed to be the fairest to all applicants. The average processing time from application to decision is now at 26 months. More complicated cases can at times take more than the current average, while an element of straight forward cases can be dealt with in less than that timescale. Officials in the Citizenship Division inform me that processing of the application is at an advanced stage and the file will be submitted to me for a decision in due course. The length of time taken to process each application should not be classified as a delay, as the length of time taken for any application to be decided is purely a function of the time taken to carry out necessary checks. There is a limit to the reduction in the processing time that can be achieved as applications for naturalisation must be processed in a way which preserves the necessary checks and balances to ensure that it is not undervalued and is only given to persons who genuinely satisfy the necessary qualifying criteria.

Detention Centres. 154. Deputy Joe Carey asked the Minister for Justice, Equality and Law Reform if he will clarify his commitment to develop a new national children detention facility at Oberstown near Lusk, County Dublin; and if he will make a statement on the matter. [17062/10]

Minister of State at the Department of Justice, Equality and Law Reform (Deputy Barry Andrews): Significant progress has already been made in the development of the new national children detention facilities. Concept designs and sketch designs completed by the Office of Public Works (OPW) have been approved by the Steering Committee established to oversee progress on the project. At its meeting on 1st April 2010, the Steering Committee considered the planning requirements for the project and consultation is now underway with the Office of the Chief State Solicitor and the Office of the Attorney General with a view to identifying the most appropriate planning process for the project. Work is due to start shortly on developing detailed designs in consultation with the various stakeholders so that Request for Tenders documentation for the construction phase of the

797 Questions— 28 April 2010. Written Answers

[Deputy Barry Andrews.] project can be prepared. Sufficient capital funding has been provided this year to progress the planning and design of the facilities. The completion date for the new facilities will be subject to the planning process to be followed but it is hoped, subject to any requirements that the planning authorities may have, that Phase 1 of the project could be completed by mid-2013. Funding for the project has been earmarked in the National Development Plan. As with all capital projects of this nature, expenditure will be reviewed on an ongoing basis to ensure value for money and tendering for the construction of the new facilities will be subject to Government approval and to the necessary funding being made available.

Crime Levels. 155. Deputy Joe Carey asked the Minister for Justice, Equality and Law Reform the number of crimes committed by persons awaiting trial and granted bail by the courts between 2007 and 2009, inclusive; and if he will make a statement on the matter. [17063/10]

156. Deputy Joe Carey asked the Minister for Justice, Equality and Law Reform the type of crimes committed by criminals on bail from 2007 to 2009, inclusive; and if he will make a statement on the matter. [17064/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I propose to take Questions Nos. 155 and 156 together. The Garda Síochána Act 2005 makes provision for the compilation and publication of crime statistics by the Central Statistics Office, as the national statistical agency, and the CSO has established a dedicated unit for this purpose. I have requested the CSO to provide statistics directly to the Deputy.

Garda Training. 157. Deputy Thomas P. Broughan asked the Minister for Justice, Equality and Law Reform the number of training places and courses available to gardaí at the Training Centre, Templemore, County Tipperary and at Garda Headquarters, Dublin; the number who attended such courses; the capacity for each year from 2001 to date in 2010; the Garda budget allocated to fund ongoing training courses for gardaí for each of the years from 2002 to date in 2010; the duration of each course; and if he will make a statement on the matter. [17074/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I have requested the information sought by the Deputy from the Garda Commissioner. I will write to the Deputy directly when this information is to hand.

Garda Recruitment. 158. Deputy Thomas P. Broughan asked the Minister for Justice, Equality and Law Reform, further to Parliamentary Questions Nos. 409, 417 and 418 of 23 March 2010, the cost of training each garda recruit including their pay; and if he will make a statement on the matter. [17077/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I am informed by the Garda authorities that it is not possible to provide the individual cost of each Garda recruit. However, the annual cost of running the Garda College, which has responsibility for the training requirements of An Garda Síochána, is approximately €27m (2009).

798 Questions— 28 April 2010. Written Answers

159. Deputy Thomas P. Broughan asked the Minister for Justice, Equality and Law Reform, further to Parliamentary Questions Nos. 409, 417, 418 and 419 of 23 March 2010, the scientific criteria on which the age limit for recruitment to an Garda Síochána was set at 35 years on physical requirements; and if he will make a statement on the matter. [17078/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): As I explained in my answer to the earlier Questions referred to by the Deputy, recruitment in An Garda Síoch- ána is governed under the Garda Síochána (Admission & Appointments) Regulations 1988/2005. The recruitment age was considered in 2004 when, on the recommendation of the Garda Commissioner, the maximum recruitment age was increased from 26 to 35 years. This upper age limit of 35 was set having regard to equality legislation and also took into account the following criteria:

(1) The cost of training.

(2) The need for recruits to serve for a sufficient period of time as full members of the service to recoup this cost.

(3) The operational requirements of the service in terms of having an age profile appropriate to the physical demands placed on members in the course of their duty.

160. Deputy Thomas P. Broughan asked the Minister for Justice, Equality and Law Reform, further to Parliamentary Questions Nos. 409, 417, 418 and 419 of 23 March 2010, if he will stand over the age limits set for retirement and recruitment in An Garda Síochána and assure Dáil Éireann that these regulations do not contravene Article 40 of the Constitution; and if he will make a statement on the matter. [17079/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The current recruitment and retirement ages for the Garda Síochána are intended to reflect the characteristics and requirements of the Force, and it is of course the case that these ages have been set at a level which is understood to be consistent with national and EU law.

161. Deputy Thomas P. Broughan asked the Minister for Justice, Equality and Law Reform, further to Parliamentary Questions Nos. 409, 417, 418 and 419 of 23 March 2010, when the case referred to will be brought before the Supreme Court; and if he will make a statement on the matter. [17080/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The appeal referred to by the Deputy was taken by the Equality Tribunal, an independent statutory agency, and it is up to that body to progress the appeal through the courts.

Legal Fees. 162. Deputy Thomas P. Broughan asked the Minister for Justice, Equality and Law Reform the cost in legal fees to the taxpayer in the case of a person (details supplied) v the Garda Commissioner and the Minister for Justice, Equality and Law Reform over their forced retirement on age grounds at 60 years of age; and if he will make a statement on the matter. [17081/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The Chief State Solicitor Office (CSSO) acts on my behalf in civil actions involving my Department and all

799 Questions— 28 April 2010. Written Answers

[Deputy Dermot Ahern.] costs in relation to legal advice or assistance given to my Department are borne by the vote of the CSSO.

Maintenance Payments. 163. Deputy Willie O’Dea asked the Minister for Justice, Equality and Law Reform when he will sign the new regulations to enable arrears of maintenance payment to be enforced; if he is satisfied that these regulations are sufficient to enable arrears to be enforced; and if not, if he has any contingency plan. [17089/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): There are a number of provisions in the law for ensuring that payments continue to be made by spouses in support of their dependent spouses and children. They include enabling powers for the courts to order attachment of the earnings of a debtor spouse, to order the securing of payments to the maintenance creditor, to order the payment of lump sums and to order arrears of maintenance to be paid by instalments. While the law generally operates effectively in this area, I am aware of difficulties in some cases because of the effect of a judgment of the High Court last year relating to the Enforce- ment of Court Orders Act 1940. The Enforcement of Court Orders (Amendment) Act 2009 made changes to sections 6 (imprisonment in the case of non-payment of debt) and 8 (imprisonment relating to non-payment of maintenance) of the 1940 Act consequent on that judgment in accordance with legal advice. I can advise the Deputy that I am currently in consultation with the Attorney General with a view to developing early proposals for amendments in respect of maintenance enforcement.

Garda Stations. 164. Deputy Michael Creed asked the Minister for Justice, Equality and Law Reform if his attention has been drawn to the substandard Garda accommodation at a location (details supplied) in County Cork; if it is proposed to rent additional accommodation to address this issue; and if he will make a statement on the matter. [17112/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I regret that the information requested by the Deputy is not readily to hand. I will write to the Deputy as soon as it is available.

Parliamentary Questions. 165. Deputy Lucinda Creighton asked the Minister for Justice, Equality and Law Reform the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17262/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): All Parliamentary Questions received were answered. I presume the Deputy is referring to Parliamentary Ques- tions which, due to the recent industrial action, were responded to by way of an interim reply. I can inform the Deputy that to date in 2010, a total of 1,842 Parliamentary Questions have been answered by me. Approximately 370 of these require further information to be compiled, which my Department is in the process of doing.

800 Questions— 28 April 2010. Written Answers

Asylum Applications. 166. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform his views on extending residency in the case of a person (details supplied) in County Galway; and if he will make a statement on the matter. [17275/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The person concerned applied for asylum on 24 October 2008. In accordance with Section 9 of the Refugee Act 1996 (as amended), the person concerned was entitled to remain in the State until her application for asylum was decided. Her asylum application was refused following consideration of her case by the Office of the Refugee Applications Commissioner and, on appeal, by the Refugee Appeals Tribunal. Arising from the refusal of her asylum application, and in accordance with the provisions of Section 3 of the Immigration Act 1999 (as amended), the person concerned was notified, by letter dated 13 January 2010, that the Minister proposed to make a Deportation Order in respect of her. She was given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of a Deportation Order or of making representations to the Minister setting out the reasons why a Deportation Order should not be made against her. In addition, she was notified of her entitlement to apply for Subsidiary Protection in the State in accordance with the European Communities (Eligibility for Protection) Regulations 2006 (S.I. No. 518 of 2006). Representations were received on behalf of the person concerned. The case file of the person concerned, including all representations submitted, will now be considered under Section 3(6) of the Immigration Act 1999 (as amended) and Section 5 of the Refugee Act 1996 (as amended) on the prohibition of refoulement. When this consideration has been completed, the case file of the person concerned will be passed to me for decision. Once a decision has been made, this decision and the consequences of the decision will be conveyed in writing to the person concerned.

Residency Permits. 167. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position regarding an application for residency in the case of a person (details supplied) in County Meath; and if he will make a statement on the matter. [17276/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I wish to inform the Deputy that I am having enquiries made on the current status in the State of the person in question. I will write directly to the Deputy in this regard in the very near future.

Visa Applications. 168. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform if a holiday visa will be extended in the case of a person (details supplied) in County Kildare on health grounds; and if he will make a statement on the matter. [17277/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): I have been informed by the Irish Naturalisation and Immigration Service (INIS) that the person mentioned by the Deputy has not contacted my Department in relation to an extension of their permission to remain in the State. In accordance with the immigration laws of the State the person mentioned is required to leave the State on expiry of their visitors condition. However, once outside

801 Questions— 28 April 2010. Written Answers

[Deputy Dermot Ahern.] the State there is nothing to prevent them from re-entering the State. It is the policy of my Department not to extend a permission to remain to persons who are admitted for a period of 90 days or less on a short stay visit, save in very exceptional and unforeseen circumstances.

Residency Permits. 169. Deputy Bernard J. Durkan asked the Minister for Justice, Equality and Law Reform the position regarding an application for residency in the case of a person (details supplied) in County Meath; and if he will make a statement on the matter. [17278/10]

Crime Levels. 170. Deputy Emmet Stagg asked the Minister for Justice, Equality and Law Reform the crime detection rate by Garda division in each of the years 2007 to 2009. [17325/10]

Minister for Justice, Equality and Law Reform (Deputy Dermot Ahern): The Garda Síoch- ána Act 2005 makes provision for the compilation and publication of crime statistics by the Central Statistics Office, as the national statistical agency, and the CSO has established a dedicated unit for this purpose. I have requested the CSO to provide statistics directly to the Deputy.

Consular Services. 171. Deputy Fergus O’Dowd asked the Minister for Foreign Affairs the response by each Irish embassy or consulate by location regarding the manning of out of hours service provided to the public by each such embassy or mission during the recent aviation crisis; the number of calls received; if emergency funding was requested and provided; the policy regarding the way medical queries were dealt with; and if he will make a statement on the matter. [17068/10]

Minister for Foreign Affairs (Deputy Micheál Martin): The disruption to international aviation which resulted from the emission of volcanic ash from the Icelandic volcano Eyjafjalla- jo¨ kull was unprecedented. As the Deputy is aware, airlines are legally responsible for the provision of accommodation and subsistence for stranded passengers under EU Regulation 261/2004. However, it rapidly became clear that because of the shutdown of European airspace and the huge numbers of stranded passengers affected that many of the airlines simply could not cope with the situation and that the State would have to intervene. It is not possible to give an accurate figure on the number of Irish citizen stranded, however, following discussions with the Irish Travel Agents Association (ITAA) and based on media reports it is estimated that the figure was somewhere between 15,000 to 30,000. My Department provides a full time consular emergency service both in Dublin and in all our missions abroad. This service can be accessed abroad after normal office hours by phoning the local Embassy/Consulate and obtaining the mission duty officer number or alternatively by leaving a message on the answer machine which is checked regularly. I am satisfied that this service was fully operational during the recent disruption in aviation transport, including at the Embassy in Madrid, which operated a full 24-hours duty service, logged all contacts made throughout the weekend and, I am assured, responded promptly to all calls received. In

802 Questions— 28 April 2010. Written Answers addition to this regular service, I decided on Sunday 18 April, in response to the growing disruption and increasing number of citizens stranded abroad, to activate the Department’s Consular Crisis Centre, based in Dublin. Staff in the Crisis Centre and our overseas Missions went to considerable effort over the period of the disruption to assist our citizens affected by the travel disruption. It is estimated that our Missions, which were in the front line of dealing with the huge numbers of distressed Irish people on the ground and who worked around the clock, received in excess of 4,000 telephone contacts over the period of the disruption. Our Embassy and Consulates in Spain alone are believed to have received about 1,500 calls. In Dublin, the Consular Crisis Centre received 2,637 calls. Our offices provided practical advice and information on accommodation, on over-land transport options, including international train and bus and ferry connections and car rental options, and, where possible, information on availability. The travel advice on the Department’s website was regularly updated late into the evenings and was widely regarded as providing the most comprehensive and authoritative information for Irish travellers seeking to return home. Our Embassies also assisted Irish citizens to get access to medicines, replenishing supplies of prescription drugs and medical treatment for those with specific health needs and the advice given concerning the faxing of Irish prescriptions to local practitioners appeared to work well. My Department provided limited emergency funding to a number of citizens who were in dire financial and medical need subject to the usual strict conditions relating to the advance of State funds. I would like to take this opportunity to pay tribute to the efforts of all those in my Depart- ment at home and abroad and to our Honorary Consuls and their staff who did so much to provide support, reassurance and advice to those trying to get home during the recent travel disruption. Their performance was representative of the public service at its best.

Parliamentary Questions. 172. Deputy Lucinda Creighton asked the Minister for Foreign Affairs the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17260/10]

Minister for Foreign Affairs (Deputy Micheál Martin): There are two parliamentary questions outstanding. PQ 6455/10 (relating to portable electrical equipment) and part of PQ12976/10 (a list of people who have participated in election monitoring missions since 2003) remain unanswered as a consequence of industrial action to date in 2010. Replies to the Deputies concerned are currently being finalised by my Department, and will be forwarded at the earliest opportunity.

173. Deputy Lucinda Creighton asked the Minister for Art, Sports and Tourism the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if she will make a statement on the matter. [17265/10]

Minister for Arts, Sport and Tourism (Deputy Mary Hanafin): No parliamentary questions have remained unanswered due to staff action to date in 2010.

National Drugs Strategy. 174. Deputy Thomas P. Broughan asked the Minister for Community, Rural and Gaeltacht

803 Questions— 28 April 2010. Written Answers

[Deputy Thomas P. Broughan.] Affairs the names of all community organisations based in Dublin 5, 13 and 17 receiving funding under the national drugs strategy; the funding received by these organisations in 2008 and 2009; the funding allocated for 2010; the source of this funding; and if he will make a statement on the matter. [17075/10]

Minister for Community, Rural and Gaeltacht Affairs (Deputy Pat Carey): Details of funding for community-based projects supported by my Department through the Dublin North East Local Drugs Task Force — and which operate in the areas of Dublin 5, 13 and 17 — are set out in the table.

Name of Organisation Project Name 2008 2009 2010 funding funding funding received received allocated

€€€

Darndale Belcamp Resource Centre MIC Project 199,517 131,512 172,738 Ana Wim Kilmore Drugs Awareness Ana Wim Outreach Service 86,351 85,057 80,805 Project Bonnybrook/Fairfield/Riverside Parent Support Group 36,275 71,462 67,889 Parent Support Group TravAct Traveller Support Group 48,648 24,324 46,216 Howth Peninsula Drugs Awareness Howth Peninsula DA Group 71,375 70,306 62,221 Group KCCP Kilbarrack Coast Community Project 0 20,000 45,879 The DALES Centre Darndale Drug Awareness Group (2 21,979 10,835 70,685 projects) Donnycarney Youth Project Donnycarney Youth Project 37,500 0 70,361 Howth Peninsula Drugs Awareness Howth Peninsula DA Group (EN) 49,904 58,700 46,574 Group St Monica’s Community Council/ Edenmore Youth & Family Support 79,500 60,098 74,393 Edenmore Drugs Intervention Team

Parliamentary Questions. 175. Deputy Lucinda Creighton asked the Minister for Community, Rural and Gaeltacht Affairs the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17254/10]

Minister for Community, Rural and Gaeltacht Affairs (Deputy Pat Carey): As of 23 April 2010, there were no Parliamentary Questions remaining unanswered due to the circumstances referred to by the Deputy. For the sake of completeness, it should be noted that some of the information requested in 4 Parliamentary Questions for reply on 20 April 2010 could not be supplied due to ongoing industrial action in the Western Development Commission, an agency funded from my Department’s Vote Group.

Registration of Deaths. 176. Deputy Charles Flanagan asked the Minister for Social and Family Affairs if his attention has been drawn to a recent report suggesting that the provisions of the Civil Registration Act 2004 are not being fully complied with, in particular the registration of the deceased’s date and place of birth and full parents’ names under sections 37 and 41 of the Act; and if he will make a statement on the matter. [17118/10] 804 Questions— 28 April 2010. Written Answers

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): The provisions and procedures governing the registration of deaths in Ireland are contained in Part 5 of the Civil Registration Act, 2004. Under the provisions of section 37 of the Act, where a death occurs in the State and the deceased dies in a medical institution or was under a general practitioner’s care within a month of the death, a registered medical practitioner must provide a medical certificate of cause of death to a qualified person (normally a relative of the deceased). That person must, within 3 months of the death, register the death by giving to the registrar the particulars required to register the death. Where a death is referred to a coroner, section 41 of the Act provides that the coroner shall give the appropriate registrar a certificate containing the required particulars of the death. The registrar shall register the death based on the information contained in the certificate. The particulars required to register a death are set out in Part 5 of the First Schedule to the Act. The Schedule sets out the maximum information that may be contained in an entry in relation to a death and, on occasion, there may be particulars that are simply not known or available to the qualified informant or to a coroner. In cases where a death has been registered without one or more of the required particulars, it is open to any interested party, who has information relating to any omission from an entry, to apply to the Registrar General to complete the entry, pursuant to an enquiry conducted under the provisions of section 65 of the Act.

Social Welfare Benefits. 177. Deputy Michael Ring asked the Minister for Social and Family Affairs when a person (details supplied) in County Galway will be approved farm assist. [17050/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): The person concerned has not made a claim for farm assist. However, as he is over 66 years of age, he would not have an entitlement to this payment.

Social Welfare Appeals. 178. Deputy Seán Sherlock asked the Minister for Social and Family Affairs the grounds on which an appeal of an application for a carer’s allowance was turned down in respect of a person (details supplied) in County Cork; and if he will make a statement on the matter. [17055/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): I am advised by the Social Welfare Appeals Office that the Appeals Officer, having considered all the available evidence, including that adduced at oral hearing, disallowed the carer’s allowance appeal of the person concerned. The Appeals Officer found that whereas he was satisfied that the appellant provides a high level of care to the care recipient he was not satisfied that it has been established that it constitutes full-time care and attention in accordance with relevant Social Welfare Legis- lation. The Social Welfare Appeals Office functions independently of the Minister for Social and Family Affairs and of the Department and is responsible for determining appeals against decisions on social welfare entitlement.

Pension Provisions. 179. Deputy Olivia Mitchell asked the Minister for Social and Family Affairs the way the pension of a person (details supplied) in Dublin 14 will be calculated under the new national pensions framework in view of the fact that come retirement they will only have worked and contributed 28 years; if it will be calculated on a percentage basis, that is 93.33% being 28 as a

805 Questions— 28 April 2010. Written Answers

[Deputy Olivia Mitchell.] percentage of 30; or if there is another method of calculating same; and if he will make a statement on the matter. [17067/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): The National Pensions Framework which was launched in March of this year provides for significant state pension reform. The framework includes a number of changes to the state pension, including how pension will be calculated in the future, to make it more transparent, simpler and more equitable for those reaching pension age. Currently the standard qualifying conditions, which require a person to enter insurance 10 years before pension age, pay a minimum of 260 contributions at the correct rate and achieve a yearly average of at least 10 contributions at the correct rate and achieve a yearly average of at least 10 contributions on their record from the time they enter insurance until they reach pension age, must be satisfied. Two significant changes to the qualification criteria for state pension will be implemented in 2012. The minimum number of paid contributions required for state pension (contributory) will increase from 260 to 520 and social insurance credits will be introduced for people who take time out of the workforce for caring duties. From 2020 the level of pension paid will be based on the total number of social insurance contributions made by a person over his or her working life. A person will need to make contributions for 30 years to qualify for a maximum pension. Once a person has the minimum number of paid contributions required, he or she will accumulate 1/30th of a pension for each year of contributions up to a maximum 30 years. Upon introduction of the total contributions approach, the maximum number of credits that can be used for pension purposes will be set at 520, equivalent to 10 years. For those with contribution shortfalls at pension age, arrangements will be put in place to allow them to receive additional benefit at a later date if they continue to make paid contributions for pension purposes while remaining in work or self-employment. In addition, for those people who wish to postpone drawing down their state pension, arrangements will be put in place to enable them to receive an actuarially increased benefit when they decide to retire. According to the Department’s records, the person concerned will reach pension age of 66 in 2019 and her eligibility for contributory pension will be based on the current qualifying conditions, i.e. a system of averaging will be used to determine the level of pension payable. My Department is not in a position to forecast the level of pension to which a person may be entitled. This service was formerly available but was discontinued for a number of reasons. For example, it is not possible at a given point in time to indicate with certainty what a person’s future entitlements might be. Entitlements obviously will depend on the accuracy of their record to date, future employment patterns and contributions made to the social insurance system up until retirement. Details of the person’s full history of individual social insurance contributions can be provided to her on request along with the booklet ‘Working It Out’, to assist her in assessing her possible pension entitlement. Alternatively, she may request her contribution record via the Department’s website www.welfare.ie and her record will be issued in hard copy. However, the Department plans to implement secure online access for customers to their PRSI contributions record later this year which will allow them to view their contribution records on-screen. This service will enable them to establish their entitlement to a contributory-based pension using the guidelines and step-by-step calculator provided in the ‘Working it Out’ booklets, taking into consideration the combination of their contribution record at that point and their own projected work pattern prior to reaching pension age.

806 Questions— 28 April 2010. Written Answers

Social Welfare Benefits. 180. Deputy Paul Kehoe asked the Minister for Social and Family Affairs the reason a person (details supplied) has not received their food supplement for diabetes for the past two weeks. [17248/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): Due to staff action currently being taken in the HSE, I regret that I am unable to provide the information sought by the Deputy.

Parliamentary Questions. 181. Deputy Lucinda Creighton asked the Minister for Social and Family Affairs the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17263/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): The number of questions affected in this manner is not readily quantifiable. The establishment of an accurate number would involve significant time and would necessitate the diversion of staff from other work.

Social Welfare Benefits. 182. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs when rent supplement will issue in the case of a person (details supplied) in County Meath. [17282/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): Due to staff action currently being taken in the HSE, I regret that I am unable to provide the information sought by the Deputy.

183. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs if and when supplementary welfare and rent allowance will issue to a person (details supplied) in County Kildare; and if he will make a statement on the matter. [17289/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): Due to staff action currently being taken in the HSE, I regret that I am unable to provide the information sought by the Deputy.

184. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs when rent support will be awarded in the case of a person (details supplied) in County Meath; and if he will make a statement on the matter. [17290/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): Due to staff action currently being taken in the HSE, I regret that I am unable to provide the information sought by the Deputy.

185. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs when one parent family allowance will be paid in the case of a person (details supplied) in County Dublin; and if he will make a statement on the matter. [17292/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): The person concerned is in receipt of one parent family payment since 18 March 2010.

Social Welfare Appeals. 186. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs when

807 Questions— 28 April 2010. Written Answers

[Deputy Bernard J. Durkan.] unemployment assistance or jobseeker’s appeal will be heard in the case of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [17293/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): A claim for jobseeker’s allowance by the person concerned was received on 15 August 2009 and was disallowed by a Deciding Officer of the Department on the grounds that his means from capital and his spouse’s earnings exceeded the statutory limit. He was notified of this decision 18 September 2009. An appeal was opened on 13 October 2009 and I am advised by the Social Welfare Appeals Office, that in accordance with the statutory requirements, the Department was asked for the documentation in the case and the Deciding Officer’s comments on the grounds of appeal. The relevant documentation was received on 22 February 2010 and the appeal from the person concerned will be referred to an Appeals Officer for consideration. The Social Welfare Appeals Office is an office of the Department that is independently responsible for determining appeals against decisions on social welfare entitlements.

Social Welfare Benefits. 187. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs when unemployment assistance will be paid in the case of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [17294/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): The person concerned claimed jobseeker’s allowance from 1 February 2010. The inspector has completed her report and a decision will be made on the claim this week. The person concerned is being paid supplementary welfare allowance at the maximum weekly rate of €196.00.

188. Deputy Bernard J. Durkan asked the Minister for Social and Family Affairs if a person (details supplied) in County Kildare has an entitlement to a transition pension; and if he will make a statement on the matter. [17295/10]

Minister for Social and Family Affairs (Deputy Éamon Ó Cuív): According to the records of my Department, the person concerned has not yet applied for a transition pension. In order to have his entitlement formally examined, he should submit a completed application form to this Department for consideration. On receipt of his application, his entitlement will be formally examined and he will be informed of the outcome without delay.

Parliamentary Questions. 189. Deputy Lucinda Creighton asked the Minister for Defence the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17255/10]

Minister for Defence (Deputy Tony Killeen): Due to staff on industrial action, a total of six parliamentary questions have not been answered with the required information to date. The Deputies concerned were advised that as a consequence of industrial action, the information sought could not be made available.

Social and Affordable Housing. 190. Deputy Mary Upton asked the Minister for the Environment, Heritage and Local Government the conditions for eligibility for house purchase loans from local government; and if he will make a statement on the matter. [17108/10]

808 Questions— 28 April 2010. Written Answers

Minister of State at the Department of the Environment, Heritage and Local Government (Deputy Michael Finneran): Two types of house purchase loan are available from local authorities: standard annuity loans targeted at lower income first time buyers and those under the Home Choice Loan scheme which are available to qualifying middle income first time buyers affected by the credit crunch. The terms and conditions governing the operation, including eligibility terms, of annuity mortgages and the Home Choice Loan are set out under the Hous- ing (Local Authority Loans) Regulations 2009 and the Housing (Home Choice Loan) Regu- lations 2009 respectively. These are available on my Department’s website, www.environ.ie.

Proposed Legislation. 191. Deputy Phil Hogan asked the Minister for the Environment, Heritage and Local Government the recreational activities that will be controlled and the regulations to be introduced to address invasive species by the Wildlife (Amendment) No. 2 Bill, expected to be published in late 2010, as indicated in the recently published legislative agenda; and if he will make a statement on the matter. [17208/10]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): In its ruling in case 418/04, the European Court of Justice found that Ireland had made inadequate legislative provision for the safeguarding of Special Protection Areas and Special Areas of Conservation from pressures arising from recreational activities. Scrambler bikes, quads, off- road vehicles, jet-skis and power boats can, if used inappropriately, result in significant damage to sites and disturbance to birds and protected species. In the context of preparation of the legislation necessary to provide the required protection, my Department is considering the potential and actual threat posed by recreational activities including, but not limited to, those listed above and will make recommendations to me on how best to regulate such activities in order to avoid what is often unintended or inadvertent damage or disturbance. Legislation will also be introduced to control the introduction and spread of invasive species of plants and animals that can threaten native wildlife and have serious detrimental effects on a number of industries including agriculture, forestry, angling and tourism.

Parliamentary Questions. 192. Deputy Lucinda Creighton asked the Minister for the Environment, Heritage and Local Government the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17258/10]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): I, and the Ministers of State at my Department, have replied to some 870 Parliamentary Ques- tions since mid January 2010. Information available or supplied was constrained by the impact of industrial action in fewer than 8 of these replies.

Water Services. 193. Deputy Finian McGrath asked the Minister for the Environment, Heritage and Local Government the position regarding a matter (details supplied). [17270/10]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): A combination of water conservation measures and investment to increase the supply of water are required to meet additional demand from the Greater Dublin water supply area over the coming years. This approach is reflected in the contracts and schemes included in my Depart- ment’s Water Services Investment Programme 2010 — 2012, which I published last week. The new investment programme provides for

809 Questions— 28 April 2010. Written Answers

[Deputy John Gormley.]

• the commencement of a number of contracts to upgrade some existing water supply facilities and to provide for the abstraction and treatment of water from the Barrow;

• the commencement of a number of water conservation contracts focused on mains rehabilitation; and

• the continued consideration of options for a scheme to provide a new long-term source to service growth in demand in the Greater Dublin area. My Department has already provided €2.55 million under the Water Services Investment Prog- ramme to Dublin City Council to fund a study of longer term water supply needs and options to meet the needs of the greater Dublin area. The initial study, which was completed in 2006, estimated that the region will require an extra 300 million litres of water per day from a new source by 2031. It also concluded that only two options, taking water from the Shannon or the provision of a sea-water desalination facility in the region, could meet the capacity requirements in the medium and long term. The City Council have undertaken a Strategic Environmental Assessment Process in relation to these proposals. They have also engaged consultants to prepare a Preliminary Report, which will outline the options for source development, the type of treatment to be provided and how the water should be delivered/distributed, and make recommendations on the optimum solutions. Both the Shannon (with a number of possible options on the location for abstraction) and desalination options will be addressed in this Preliminary Report. It is understood that the Strategic Environmental Assessment Process, which included public consultation, is being brought to a conclusion by the City Council, and it is anticipated that the Preliminary Report will be submitted to my Department in the coming months. In addition to the provision of required treatment capacity, the Water Services Investment Programme 2010 — 2012 places a strong focus on water conservation measures. This builds on work already undertaken by Dublin City Council, as the lead authority in the Dublin area for the water conservation programme. During the period from 1996 to 2002, the City Council implemented active leakage detection and reduction, carried out some mains renewal and installed leakage control infrastructure. This work, which was funded under my Department’s Water Services Investment Programme, resulted in water lost through leakage, and otherwise unaccounted for, being reduced from over 42% to about 28%. My Department is now funding Dublin City Council’s water mains rehabilitation programme, which is designed to build on the work already done and reduce further the level of unaccounted for water. Dublin City Council, as the lead authority in the Dublin region, has to date carried out a suite of five contracts of water main rehabilitation, mainly in the city area, as part of the Dublin Region Water main Rehabilitation Project. The total approved cost of these contracts is almost €16 million. Contract Documents for three further contracts are under examination in my Department and are being dealt with as quickly as possible. In total, the Water Services Investment Programme for 2010-2012 provides for the commencement of contracts under the Dublin Region Water mains Rehabilitation Project to the value of approximately €48 million.

194. Deputy Noel Grealish asked the Minister for the Environment, Heritage and Local Government if planning permission is required to sink a well for domestic use; if planning permission is required to sink a well for commercial use at a hotel; and if he will make a statement on the matter. [17318/10]

810 Questions— 28 April 2010. Written Answers

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): The sinking of a well, drilling of a bore hole, erection of a pump or construction of a pump house, for the purpose of providing a domestic water supply, or a group water supply scheme in accordance with a plan or proposal approved by the Minister or a local authority for the purpose of making a grant towards the cost of such works, is specifically exempted from the requirement to obtain planning permission (Article 6 and Schedule 2, Part 1, Class 44 of the Planning and Development Regulations 2001). In other circumstances, it is matter for the relevant planning authority, in the first instance, to decide whether the sinking of a well constitutes development, and therefore requires planning permission. Under section 5 of the Planning and Development Act 2000, a question in regard to whether works or structures are or are not development may be referred to An Bord Pleanála.

Waste Disposal. 195. Deputy Emmet Stagg asked the Minister for the Environment, Heritage and Local Government if he has received correspondence regarding the stench emanating from a landfill at Kerdiffstown, Naas, County Kildare; if his attention has been drawn to injunctions and other court hearings involving same; his views on whether the Environmental Protection Agency Acts and Waste Management Acts need to be amended to allow the Environmental Protection Agency to move immediately to close down landfills causing such odour pollution in view of the cumbersome legal route required to take action and will he give a commitment to amend the law in this area. [17327/10]

Minister for the Environment, Heritage and Local Government (Deputy John Gormley): I have received correspondence in relation to this particular landfill facility , which is licensed to operate by the EPA, as is required under section 39(1) of the Waste Management Act 1996 (as amended). The monitoring of compliance with the conditions of the licence is solely a matter for the EPA and is not one in which the Minister has a role. Indeed, section 60(3) of the Waste Management Act 1996 precludes the Minister from exercising any power or control in relation to the performance, in particular circumstances, by a local authority or the EPA of a function conferred on it. In this particular case, it is therefore a matter for the EPA to ensure compliance with the waste licence issued, and to decide on the appropriate enforcement action in relation to any non-compliance matters. I am satisfied that the powers available to the Agency are sufficient for it to perform its enforcement role effectively.

Parliamentary Questions. 196. Deputy Lucinda Creighton asked the Minister for Communications, Energy and Natural Resources the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17253/10]

Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan): Aris- ing out of staff action to date in 2010, substantive replies to 42 parliamentary questions remain to be completed. My Department is currently engaged in the process of drafting the substantive replies, which will issue as soon as possible.

Rural Environment Protection Scheme. 197. Deputy Enda Kenny asked the Minister for Agriculture, Fisheries and Food the details of all REP scheme payments made in respect of a land holding and herd number (details supplied) in County Mayo. [17070/10]

811 Questions— 28 April 2010. Written Answers

Minister for Agriculture, Fisheries and Food (Deputy Brendan Smith): The following REPS payments issued to the owner of the Herd number supplied prior to 2002:

Date Amount

€

6-Jan-1998 2,640.90 4-Jul-1998 2,640.89 13-Jan-1998 1,236.19 30-Apr-1999 6,058.80 23-Feb-2000 328.19 7-Apr-2000 6,058.80 28-Feb-2001 246.14 30-Mar-2001 6,058.80

198. Deputy Enda Kenny asked the Minister for Agriculture, Fisheries and Food the reason REP scheme payments have not yet issued in respect of a person (details supplied) in County Mayo; and if he will make a statement on the matter. [17085/10]

Minister for Agriculture, Fisheries and Food (Deputy Brendan Smith): An adjusted plan was requested from the person named in this case. The adjusted plan was received on 12 March 2010, and is currently being processed by my officials.

Parliamentary Questions. 199. Deputy Lucinda Creighton asked the Minister for Agriculture, Fisheries and Food the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if he will make a statement on the matter. [17252/10]

Minister for Agriculture, Fisheries and Food (Deputy Brendan Smith): A review of records indicate it was not possible to answer 66 questions and partial answers could only be provided to 2 other questions.

Higher Education Grants. 200. Deputy Willie Penrose asked the Tánaiste and Minister for Education and Science the education grants that are available to one-parent families who are in receipt of one parent family payment and who wish to continue or commence third level education and in particular if they can avail of the third level maintenance grant scheme where they are in receipt of the payment from her Department; and if she will make a statement on the matter. [17088/10]

Teacher Training. 201. Deputy Phil Hogan asked the Tánaiste and Minister for Education and Science the number of students enrolled for the Bachelor of Education course that commenced in 2009 in St. Patrick’s College, Dublin 9; the number of students enrolled for the 18-month postgraduate course that commenced in February 2010 in this college; the State moneys awarded to this college for the Bachelor of Education course that commenced in 2009; the State moneys awarded to this college for the 18-month postgraduate course that commenced in February 2010; and if she will make a statement on the matter. [17057/10]

202. Deputy Phil Hogan asked the Tánaiste and Minister for Education and Science the number of students enrolled for the Bachelor of Education course that commenced in 2009 in Mary Immaculate College, County Limerick; the number of students enrolled for the 18-month postgraduate course that commenced in February 2010 in this college; the State moneys awarded to this college for the Bachelor of Education course that commenced in 2009; the moneys awarded to this college for the 18-month postgraduate course that commenced February 2010; and if she will make a statement on the matter. [17058/10]

203. Deputy Phil Hogan asked the Tánaiste and Minister for Education and Science the number of students enrolled for the Bachelor of Education course that commenced in 2009 in Froebel College, County Dublin; the number of students enrolled for the 18-month postgraduate course that commenced in February 2010 in this college; the State moneys awarded to this college for the Bachelor of Education course that commenced in 2009; the moneys awarded for the 18-month postgraduate course that commenced February 2010; and if she will make a statement on the matter. [17059/10]

204. Deputy Phil Hogan asked the Tánaiste and Minister for Education and Science the number of students enrolled for the Bachelor of Education course that commenced in 2009 in Coláiste Mhuire, Dublin 3; the number of students enrolled for the 18-month postgraduate course that commenced in February 2010 in this college; the State moneys awarded to this college for the Bachelor of Education course that commenced in 2009; the moneys awarded to this college for the 18-month postgraduate course that commenced February 2010; and if she will make a statement on the matter. [17060/10]

205. Deputy Phil Hogan asked the Tánaiste and Minister for Education and Science the number of students enrolled on the Bachelor of Education course that commenced in 2009 in Church of Ireland College of Education, Dublin 6; the number of students enrolled for the 18- month postgraduate course that commenced in February 2010 in this college; the State moneys awarded to this college for the Bachelor of Education course that commenced in 2009; the moneys awarded to this college for the 18-month postgraduate course that commenced February 2010; and if she will make a statement on the matter. [17061/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): I propose to take Questions Nos. 201, 202, 203, 204 and 205 together. The five state funded Colleges of Education each provide a Bachelor of Education course and, with the exception of the Church of Ireland College of Education, an 18-month postgraduate course. Depending on the College of Education there are various mechanisms for funding the programmes. St Patrick’s College and Mary Immaculate College are funded by the HEA. Froebel College and Coláiste Mhuire, MIE are funded via capitation grants and tuition fee grants and the Church of Ireland College of Education is funded via core budget and tuition fee grants.

813 Questions— 28 April 2010. Written Answers

[Deputy Mary Coughlan.]

The attached table details the number of students currently enrolled on the postgraduate programme which commenced earlier this year and the number of students enrolled in the first year of the Bachelor of Education in each college. The table also details the estimated expenditure by my Department for these students in CICE, Coláiste Mhuire and Froebel College. The budget provision for CICE covers students enrolled over the three year programme of the Bachelor of Education Programme. The estimated expenditure by the HEA for the students enrolled in St Patrick’s College and Mary Immaculate College in 2010 has been requested and will be forwarded to the Deputy as soon as possible.

Number of Students Estimated Funding 2010

B.Ed Post Grad 1st Year B.Ed Post Grad

€€

St Patricks College 411 64 Mary Immaculate College 409 60 Froebel College 70 32 675,420 337,640 Coláiste Mhuire, Marino 108 61 1,159,470 562,730 Church of Ireland College of Education 32 0 2,689,720 n/a Please note that the Church of Ireland College of Education is funded by free fees grants and a direct budget. The direct budget includes payroll costs for academic, administrative and household college staff and the estimated figure for 2010 includes estimated pension and pension lump sum costs of €480,000. The annual budget grant cover students in the three years of the Bachelor of Education course.

Appointments to State Boards. 206. Deputy Thomas P. Broughan asked the Tánaiste and Minister for Education and Science the appointments or nominations made by her to bodies, boards or organisations under the aegis of her Department since 1 January 2009 and to date in 2010; the method used in selecting persons for such appointments; and if she will make a statement on the matter. [17076/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): Since my appointment to the Department in March 2010 I have made a number of appointments to the Governing Bodies of Institutes of Technology. These appointments were made on the nomi- nation of the relevant VECs in accordance with the Institutes of Technology Acts 1992-2006. I will arrange for my Department’s officials to forward a copy of appointments made to bodies under the aegis of my Department from 1 January 2009 to the date of my appointment in March 2010 to the Deputy for his information.

School Transport. 207. Deputy Frank Feighan asked the Tánaiste and Minister for Education and Science if a review of school transport boundaries and a value for money review on school transport has been completed; if such information is publicly available; and if she will make a statement on the matter. [17082/10]

Minister of State at the Department of Education and Science (Deputy Seán Haughey): As the Deputy is aware, School Transport was approved by Government as a topic for inclusion as part of the 2009-2011 round of Value for Money Reviews. This review is looking 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 814 Questions— 28 April 2010. Written Answers is also looking 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 is currently being finalised. When completed, the report will be published and sent to the Oireachtas Select Committee on Education and Science.

Special Educational Needs. 208. Deputy Michael Noonan asked the Tánaiste and Minister for Education and Science, further to Parliamentary Question No. 435 of 30 March 2010, when she will formally write to special schools confirming that her Department is undertaking a review of the decision of the Equality Tribunal that children who are pursuing courses leading to accreditation such as junior certificate and leaving certificate applied should be afforded the same duration of time to complete these courses as their counterparts in mainstream education; when the review will be completed; if her attention has been drawn to the fact that the decision of the tribunal applies to all students, present and future and is not to be implemented on a case-by-case basis; and if she will make a statement on the matter. [17086/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): I wish to advise the Deputy that my Department is currently in communication with special schools whose students are pursuing courses leading to accreditation, such as Junior Certificate/Leaving Cer- tificate Applied. These students will be allowed additional time in special schools to complete these courses. In addition, my Department is currently reviewing its policy concerning school leaving age generally with a view to developing a consistent approach for all students whether they are attending a mainstream post primary school or special school. It would be speculative to indicate a timeframe for completion of this review considering the in-depth process involved.

209. Deputy Finian McGrath asked the Tánaiste and Minister for Education and Science if she will support the case of a person (details supplied) in County Kildare. [17234/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): As I advised the Deputy in my response to Parliamentary Question 193 on 21 April 2010, all primary schools were allocated Learning Support/Resource Teaching support through the General Allocation Model. These teaching resources were provided in order to enable schools provide additional teaching support to pupils who have learning support needs or who have been assessed as having a high incidence disability. Prior to the introduction of the General Allocation Model, schools had to apply for additional teaching support for each pupil with an assessed disability. However, the introduction of the General Allocation Model means that schools no longer have to make applications for additional teaching support for pupils with high incidence of disability as the Learning Support/Resource teachers are already available in the school. The school has advised my Department that the pupil in question is currently receiving 2.5 hours one-to-one support per week from the Learning Support/Resource teacher. In addition, the pupil is also supported in the classroom through the special needs assistant scheme.

Schools Building Projects. 210. Deputy Deirdre Clune asked the Tánaiste and Minister for Education and Science when construction will begin on a school (details supplied) in County Cork which has now been granted planning permission by the local authority; if the construction phase of the new school

815 Questions— 28 April 2010. Written Answers

[Deputy Deirdre Clune.] will be completed by September 2010; if the new building will be available for use by September 2010; and if she will make a statement on the matter. [17236/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): As the Deputy is aware, notification of a decision to grant planning permission issued last week for the project to which she refers. Subject to no appeals, the final grant of planning permission will not issue until 4 weeks after the initial decision to grant. The progression of this project is contingent on the receipt of the necessary statutory approvals and the completion by the school Patron of two parcels of land currently in the ownership of Cork County Council and a private land owner. When these issues have been addressed this project will be given further consideration.

Parliamentary Questions. 211. Deputy Lucinda Creighton asked the Tánaiste and Minister for Education and Science the number of parliamentary questions that have remained unanswered due to staff action to date in 2010; and if she will make a statement on the matter. [17256/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): The vast majority of the approximately 1,100 Parliamentary Questions submitted to my Department to date in 2010 have received a full and comprehensive response. Unfortunately, due to the industrial action undertaken by some civil service grades, it has not been possible to fully address all of the issues raised by Deputies in a small number of Parliamentary Questions. In such instances, my officials have endeavoured to provide as comprehensive a response as is possible under the existing circumstances.

Higher Education Grants. 212. Deputy Seán Sherlock asked the Tánaiste and Minister for Education and Science if a person who already holds a primary degree but cannot secure work due to the fact that their qualification is in architectural drawing would be entitled to grant aid if they return to third level to pursue another qualification; and if she will make a statement on the matter. [17271/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): Financial assistance is available to students under the maintenance grant schemes, which are administered by the local authorities and Vocational Education Committees on behalf of my Department. Students who are entering approved courses for the first time are eligible for grants where they satisfy the relevant conditions as to age, residence, means, nationality and previous academic attainment. Under the terms of the Higher Education Grant Scheme a student is not eligible for grant assistance in respect of a second period of study at the same level, irrespective of whether or not a grant was paid previously. However, financial assistance is available to eligible candidates who already hold a postgraduate qualification and who wish to enter a further postgraduate course, at a higher level, which represents progression from the level at which the first qualification was attained. The progression route at postgraduate level, for grant purposes, is as follows: Higher Diploma/Postgraduate Diploma / Masters / PhD/Doctorate. Candidates who hold a undergraduate qualification and are pursuing a second undergraduate qualification cannot be considered for funding.

Schools Building Projects. 213. Deputy Emmet Stagg asked the Tánaiste and Minister for Education and Science the

816 Questions— 28 April 2010. Written Answers position regarding the appointment of a design team for the required extension to a school (details supplied) in County Kildare. [17329/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): As the Deputy will be aware, on 16 February my predecessor announced details of 51 major school building projects that will appoint design teams this year. I am pleased to inform the deputy that the project in question is scheduled to have a Design Team appointed in the fourth quarter of 2010. My Department will contact the school regarding this matter in due course. Details on all of these projects are available on my Department’s website, www.education.ie.

214. Deputy Emmet Stagg asked the Tánaiste and Minister for Education and Science when a design team will be appointed for the required extension to a school (details supplied) in County Kildare. [17330/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): I can confirm that the school to which the Deputy refers have made applications to my Department for large scale capital funding. The application has been assessed in accordance with the published criteria for large scale capital projects and assigned an appropriate band rating. Information in respect of the current school building programme along with assessed applications for major capital works, including the projects referred to by the Deputy, are now available on my Department’s website at www.education.ie. The progression of all large scale building projects, including the project for the school in question, from initial design 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 my Department, it is not possible to give an indicative timeframe for the progression of the project at this time.

215. Deputy Emmet Stagg asked the Tánaiste and Minister for Education and Science when tenders will be invited for the required extension to a school (details supplied) in County Kildare. [17331/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): The project to which the Deputy refers is currently at an advanced stage of architectural planning. Planning permission has been received and the Design Team is currently working on completing the stage 2(b) submission for this project. Following receipt and review of the Stage 2(b) submission, my Department will revert to the school regarding next steps in the progression of the project towards tender and construction.

School Accommodation. 216. Deputy Emmet Stagg asked the Tánaiste and Minister for Education and Science if the forward planning section of her Department has completed its analysis of secondary school accommodation requirements for the school year 2014 to 2015 and if a gaelcholáiste for north Kildare is deemed necessary. [17332/10]

Tánaiste and Minister for Education and Science (Deputy Mary Coughlan): The Forward Planning Section of the Department is in the process of carrying out detailed analysis of over 40 locations of highest population growth in order to identify the school accommodation requirements up to and including the school year 2014/2015. Given the increase in the birth rate in recent years the initial focus of this analysis is on primary school accommodation

817 Questions— 28 April 2010. Written Answers

[Deputy Mary Coughlan.] requirements and this will be followed by a more detailed analysis of post-primary accommodation requirements. When the required reports have been completed for these initial identified areas the Forward Planning Section will continue to work on preparing reports on a priority basis for the remainder of the country. Overall school accommodation requirements in the North Kildare area, including the case for the provision of a new Irish language post-primary school, will be considered in this regard. In addition to this detailed analysis of accommodation needs currently being carried out by Forward Planning Section, the Department is also currently examining a number of broad policy issues regarding the establishment of new post-primary schools. As part of this, consideration is being given to the setting up of a new framework in relation to the establishment of new second level schools and their patronage.

818