Seanad Éireann

Vol. 204 Tuesday, No. 1 6 July 2010

DÍOSPÓIREACHTAÍ PARLAIMINTE PARLIAMENTARY DEBATES

SEANAD ÉIREANN

TUAIRISC OIFIGIÚIL—Neamhcheartaithe (OFFICIAL REPORT—Unrevised)

Tuesday, 6 July 2010.

Business of Seanad ………………………………1 Order of Business …………………………………2 Social Welfare (Miscellaneous Provisions) Bill 2010: Second Stage ………………18 Health (Miscellaneous Provisions) Bill 2010: Committee and Remaining Stages …………………………40 Motion for Earlier Signature……………………………60 Central Bank Reform Bill 2010: Second Stage …………………………………61 Committee and Remaining Stages …………………………92 Adjournment Matters: Arms Trafficking ………………………………110 Fire Service …………………………………112 Employment Rights ………………………………114 SEANAD ÉIREANN

DÍOSPÓIREACHTAÍ PARLAIMINTE PARLIAMENTARY DEBATES

TUAIRISC OIFIGIÚIL OFFICIAL REPORT

Imleabhar 204 Volume 204

Dé Máirt, 6 Iúil 2010. Tuesday, 6 July 2010.

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Chuaigh an Cathaoirleach i gceannas ar 12.00 p.m.

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Paidir.

Prayer.

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Business of Seanad. An Cathaoirleach: I have received notice from Senator David Norris that, on the motion for the Adjournment of the House this evening, he proposes to raise the following matter:

The need for the Minister for Defence to make a report on a series of stories in Irish and foreign newspapers, including the Sunday World of 27 June and the Sunday Independent of the same date, concerning the activities of Army personnel arms trafficking.

I have also received notice from Senator Mark Daly of the following matter:

The need for the Minister for the Environment, Heritage and Local Government to provide an update on the progress of the Kenmare fire station, County Kerry, for which planning permission was granted in 2007.

I have also received notice from Senator James Carroll of the following matter:

The need for the Minister for Enterprise, Trade and Innovation to reform the notice of redundancy system so employers cannot take advantage of the recent economic downturn to retain employees indefinitely without giving them due notice and to stop employers forcing employees to resign, thus losing their notice which they have rightfully earned.

I have also received notice from Senator Pearse Doherty of the following matter: 1 Order of 6 July 2010. Business.

[An Cathaoirleach.]

The need for the Minister for Enterprise, Trade and Innovation to bring forward legislation which would compel all companies which are awarded State contracts to comply with regis- tered employment agreement rates and pensions schemes.

I have also received notice from Senator Fidelma Healy Eames of the following matter:

The need for the Minister for Health and Children, in order to reverse the situation where front-line and respite Brothers of Charity services for people with intellectual disabilities and/or autism are being cut and facilities closed by the HSE, to ensure that value for money cuts and the public sector moratorium on recruitment for staff replacements will no longer be applied and that services already cut back will be reversed.

I have also received notice from Senator Jerry Buttimer of the following matter:

The need for the Minister for Health and Children to make a statement on the establishment of an advisory board regarding the reconfiguration of acute hospital services in HSE South and to outline the reason there is no public representative or patient advocate on the board.

I regard the matters raised by the Senators as suitable for discussion on the Adjournment and I have selected the matters raised by Senators Norris, Daly and Carroll and they will be taken at the conclusion of business. The other Senators may give notice on another day of the matters they wish to raise.

Order of Business Senator Donie Cassidy: The Order of Business is No. 1, Social Welfare (Miscellaneous Provisions) Bill 2010 — Second Stage; No. 2, Health (Miscellaneous Provisions) Bill 2010 — Committee and Remaining Stages; and No. 3, Central Bank Reform Bill 2010 — Second and Remaining Stages. It is proposed that No. 1 be taken at the conclusion of the Order of Business and conclude not later than 3.45 p.m. Spokespersons may speak for 15 minutes and all other Senators for eight minutes. Senators may share time by agreement of the House and the Mini- ster will be called for concluding comments ten minutes before the conclusion of the debate. It is proposed that No. 2 be taken at 4.30 p.m. No. 3 will be taken at the conclusion of No. 2 but not before 7.30 p.m. Spokespersons may speak for 12 minutes and all other Senators may speak for seven minutes. Senators may share time, by agreement of the House. The Minister will be called on for concluding comments ten minutes before the conclusion of the debate. There will be a sos from 3.45 p.m. until 4.30 p.m.

An Cathaoirleach: There is another item on the order paper, No. 3, motion re earlier signature of the Health (Miscellaneous Provisions) Bill 2010.

Senator Donie Cassidy: I will return to the House on that matter.

An Cathaoirleach: No——

Senator Donie Cassidy: I propose that the earlier signature motion be taken as No. 3.

An Cathaoirleach: What the Leader announced initially as No. 3 will now be taken as No. 4.

Senator Donie Cassidy: That is agreed. My apologies to the House.

An Cathaoirleach: I call Senator Cummins. 2 Order of 6 July 2010. Business.

Senator Maurice Cummins: It seems there is confusion on the Order of Business.

Senator Donie Cassidy: It was not written down; that is all.

Senator Maurice Cummins: For a start, that is a source of confusion.

Senator Donie Cassidy: I have already apologised to the House.

Senator Maurice Cummins: The Health (Miscellaneous Provisions) Bill 2010 is to be taken at 4.30 p.m and will conclude well before 7.30 p.m., when we will be asked to deal with the other matter. Will we begin dealing with the Central Bank Reform Bill at 7.30 p.m.?

Senator Donie Cassidy: It will be taken not earlier than 7.30 p.m.

Senator Maurice Cummins: Therefore, it is possible we will have a break of about two hours between the Health (Miscellaneous Provisions) Bill and the Central Bank Reform Bill. What is the reason for the delay?

Senator Donie Cassidy: Because I want to have the Minister for Finance in the House this evening to allow Members to make their submissions to him personally.

Senator Maurice Cummins: The business should have been ordered in such a way that there would be no gaps.

Senator Donie Cassidy: There will be no gaps.

Senator Maurice Cummins: There is confusion.

Senator Paul Coghlan: It is bad management.

Senator Maurice Cummins: The national development plan seems to be in tatters, going on recent newspaper reports which suggest the level of funding for infrastructural projects up to 2013 will be cut from approximately €40 billion to €23 billion. This means many road and rail projects will be axed. It seems there is no-joined up thinking on the part of the Government and no plan to tackle the scourge of unemployment which is wreaking havoc in every corner of the country. Take, for example, the construction of rest areas on motorways. Three are under construction, but it appears nine other projects will be shelved. Members in this and the other House asked that such areas be provided when the roads were under construction, which would have saved money. We now learn that nine such projects will be shelved. This shows that there is no joined-up thinking and no vision for the future so far as the Government is concerned. On another matter, persons who are unemployed have to wait up to three months to receive jobseeker’s allowance. Balbriggan, the Leader’s town of Mullingar, Navan and Longford are the towns worst hit in this regard. It is a disgrace that people who paid PRSI on a weekly or monthly basis all heir lives must wait up to three months to receive jobseeker’s allowance. This is not the first time we have raised the issue on the Order of Business, on which we have had pious platitudes from various Ministers but no answers. There is no excuse for people not receiving their benefit payments in proper time. I ask that the Minister account for his steward- ship and that immediate steps be taken to ensure people will receive their benefit payments at the right time. Earlier this year the Taoiseach pledged to bring telephone and Internet betting within the tax net by May this year but we still have seen no legislation in this regard. When can we 3 Order of 6 July 2010. Business.

[Senator Maurice Cummins.] expect to see such legislation, as the funding raised would be of paramount importance to the horse racing industry and all those employed within it?

Senator Joe O’Toole: I also believe the House should adjourn to discuss the massive changes to the national development plan being proposed. My concern should be shared on both sides of the House. The changes would have a negative impact on badly needed infrastructural development projects and on the economies of local areas in terms of job creation and certainly would have safety implications, as outlined by Senator Cummins in terms of the provision of rest areas on motorways, an issue on which we had long discussions in the House last year and the previous year. This would be regressive, counterproductive and pessimistic at a time when we want to boost the economy. The metro project proposals in Dublin to the construction of bypasses around towns such as Tralee and road works in Belturbet, Sligo, Tipperary and elsewhere would have an impact on employment throughout the country. These are the projects the Government should be looking to develop. It is what the country needs and should be considered in terms of the impact on employment. This will have more of a potential impact on the economy than the closure of Dell three times over. That is what we are talking about and we need a discussion on it. We should examine the issue so the people who advised Ministers can hear the political, social and infrastructural impact of what they are proposing. It is okay for people sitting in offices to think a couple of million euro can be saved this year or next but the long-term regulatory, safety, infrastructural, employment and economic impact must be seen in context. All these need to be considered and we should discuss what seems to be an anti-employment measure coming from Government sources. We should stop the issue at source and find time to discuss the matter in order to bring our views to Cabinet right now.

Senator Phil Prendergast: I rise to ask the Leader when we will have the debate that is meant to continue on the HSE. Dr. Chris Luke almost had to close his accident and emergency department in the Mercy Hospital, Cork, last week due to a chronic shortage of doctors. This mess has been well flagged and Dr. Luke has indicated there is a problem with the Royal College of Surgeons in Ireland, the Government and the Irish Medical Council that has created the problem. Doctors are working day and night and must be paid enormous sums in overtime. Such doctors could easily make a mistake that would not be in the best interests of the patients. I have spoken on numerous occasions about the moratorium on staff in hospitals and the effect on the delivery of health services, overcrowding in accident and emergency departments, the blocking of beds by patients fit to be discharged and other issues pertaining to the HSE. Will the Leader indicate when the Minister for Health and Children, Deputy Mary Harney, will return to conclude the debate on the HSE? When she was here the last time she was not allowed to answer any questions because the Government speakers kept telling her how wonderful she was to make a speech without any script. The Minister made a speech but answered no questions, although many relevant questions were asked, and we are still interested in answers. It was agreed with the Leader that there would be a resumption of this debate but when will it happen?

Senator Ivana Bacik: Hear, hear.

An Cathaoirleach: Before calling the next speaker I welcome to the Gallery a former Member of this House and the Lower House, Mr. Pat Gallagher, the Offaly county manager. He is welcome to the House.

Senator Maria Corrigan: I rise to bring to the House the issue of cuts within disability services. I appreciate that there may not be time in the remainder of the term to have the 4 Order of 6 July 2010. Business.

Minister before us as a matter of urgency. I ask the Leader to organise a debate for the early days of the next term. I appreciate the Minister of State intends to speak to service providers in the coming days about the implementation of these cuts and I ask the Leader to convey to the Minister of State to also speak with representatives of the HSE. It would appear from the amount of money service providers are being asked to cut that disability services will be the only service to bear the brunt of these cuts. There are other areas within the HSE and we cannot expect, of all sectors, the disability services to carry this burden, particularly as we come to the summer. There are families who have made plans and organised holidays with other children and depend on the provision of respite care. I was absolutely horrified by the statement issued last night indicating there is an intention to seek to move people who are living in community group homes back to institutions. That is unacceptable and it is not Government policy. Under no circumstances can it be allowed to happen.

Senator Paul Coghlan: I am concerned by the issues raised by my colleagues, Senators Cummins and O’Toole. With regard to the Central Bank Reform Bill, would it not be better to use the time more judiciously, with a gap between Second and Remaining Stages? A sos would allow Members to table amendments for Committee Stage. It seems the Leader is seeking to kaleidoscope the whole issue from 7.30 p.m. without a gap. Senator Cummins has indicated there could be a gap to have it earlier. Why not take Second Stage earlier in the day and then have a break before Committee Stage in order that Members might submit amendments? Perhaps the Leader will respond to this proposal. I agree with the comments made in respect of the national development plan. There is no way the plan should be dropped. What is proposed constitutes a major retrograde step. If the plan requires amendment or if the timescale relating to it needs to be reordered, this should be done. In the context of the economy, what is proposed seems to be an anti-jobs measure. That is quite disgraceful, particularly in the context of current circumstances. The proposed Tralee bypass is included in the plan. Tralee is a major county town and is being choked by traffic. There are numerous other examples I could offer but I do not wish to delay the Order of Business by referring to them all. The news that emerged this morning is shocking and the House should use its influence to have the national development plan amended and reordered in the way I have outlined.

Senator John Hanafin: The debate on the Civil Partnership Bill 2009 is due to take place in the House tomorrow and on Thursday. At this late stage, I request that the leader of the Green Party in the House should see to it that a free vote is allowed on the legislation. There is a mood among members of the public to the effect that there has not been full and frank debate on this matter. The lack of such a debate in the Dáil could be compensated for by ensuring the Bill is fully discussed in this Chamber. If this matter had been dealt with properly, a referendum would have taken place. I again call on the leader of the Green Party in the Seanad, who has some significant influence in this area, to seek a free vote on the Bill. I am aware that many of my colleagues would like such a vote to take place. In light of the fact that the economy could recover quite strongly in 2011 and 2012, I again request that consideration be given to the position with regard to jobs. In particular, I am of the opinion that the allowances that were previously provided in respect of property-related developments should be transferred to jobs-related developments.

Senator Ivana Bacik: I support what previous speakers stated in respect of the ordering of Seanad business. I request that the Leader arrange a debate on how we order our business. In the brief time during which I have been a Member, each summer it appears we are affected by 5 Order of 6 July 2010. Business.

[Senator Ivana Bacik.] a chronic condition I term “Julyitis”, which results in a large number of Bills being rushed through the House. A number of important amendments relating to credit unions have been tabled in respect of the Central Bank Reform Bill, all Stages of which are due to be taken tonight. I agree that there is a need to impose a more orderly structure on debates in the House. Another example in this regard is the Health (Miscellaneous Provisions) Bill 2010, which is due to be taken later today and which was only passed by the Dáil last week. Again, there appears to be unseemly haste in the context of having the Bill, which contains an unfortunate provision relating to the closure of St. Luke’s Hospital — a noted centre of excellence for the treatment of cancer patients which is located in Rathgar in Dublin — passed. My party and Fine Gael have each tabled an amendment to this Bill, which should not be rushed through the House because it is worthy of much more detailed consideration. I request that the Leader make time available for a debate on job creation, in light of extremely worrying reports at the weekend with regard to projected job losses in the banks. This is a matter of real concern, particularly in light of the fact the banks are guaranteed by the State. There is a need to maximise the number of jobs that can be created and sustained. There is one key area in this regard in which the Green Party, in particular, should be interested. We must maximise the number of jobs in all sectors. One such sector is tourism. Cycling tourism has grown exponentially in recent years. The inaugural Sky Ride Etape Hiber- nia is due to take place in the Burren and throughout County Clare on 22 August next and thousands of cyclists from abroad are due to travel to Ireland to take part. However, there has been no joined-up thinking in respect of it because Irish Rail will not transport bicycles on trains. This may seem to be a small issue but it is one of enormous importance to cyclists who wish to travel here to participate in cycle races, experience Ireland’s culture, contribute to the economy and assist job creation. These individuals experience enormous difficulties when trying to transport their bicycles throughout the country. Will the Leader ask the Minister for Transport to discover why Irish Rail no longer transports bicycles on its trains? The company used to transport bicycles in the past but it has stopped this practice. That is a real shame because, as a cyclist, I am aware how difficult it is to get from one end of the country to the other in order to take part in a cycle race.

Senator Cecilia Keaveney: On the matter to which Senator Bacik just referred, I accept that it is not so important during the summer months but in winter it is essential that people ensure they use proper lights on their bicycles. People who do not have lights on their bicycles are a cause of danger to themselves and others.

Senator Ivana Bacik: I always have lights on my bicycle.

Senator Fidelma Healy Eames: Fianna Fáil has fallen off its bike.

Senator Jerry Buttimer: The chain has come off the bike.

Senator Cecilia Keaveney: I wish to recognise the significant funding that is being announced today by the Minister for Foreign Affairs for cross-Border co-operation. Some 37 groups will get approximately €457,000 to work on peace and reconciliation projects. I also note that a member of the Opposition who spoke on national radio last Sunday begrudged the receipt by City of Derry Airport of moneys. The person in question could not understand the value of supporting this infrastructure. I emphasise that the infrastructure in question is of great value to the 48% of the airport’s customers who are from County Donegal. It is beneath contempt that an Opposition spokesperson should begrudge those who benefit from all-Ireland co-operation on infrastructural development and peace and reconciliation projects. 6 Order of 6 July 2010. Business.

I ask the Leader to invite the Minister for Foreign Affairs to state when people will be able to view on RTE an advertising campaign that is currently being broadcast on UTV. The advertisement in question involves a cartoon in which two children from the Unionist community are playing with red, white and blue drums and batons. When one of the batons goes up on a roof, two children dressed in Celtic jerseys come along. It looks as if there is going to be a fight, but instead the children in Celtic jerseys use their hurleys to bring the baton down from the roof and they all play together. This good advertising campaign will help young people to reach mutual understanding. It would be as valuable for people down here who do not understand, or do not want to understand, the other community on the island of Ireland.

Senator Fidelma Healy Eames: I would like to propose an amendment to the Order of Business to urgently request the attendance in the House of the Minister of State with responsibility for people with disabilities, Deputy Moloney. Over the weekend and last evening, all Members will have seen devastating reports about families that have been left bereft of services. The HSE in Galway is now asking for a second cut of €2 million this year to be imposed on the services provided by the Brothers of Charity in Galway. I understand that such cuts are likely to spread throughout the country. More than 100 families are bereft because they expect to lose all respite services within two weeks. The Leader and I are both aware that such services represent the only lifeline of those who look after adults and young people who have disabilities. Further cutbacks are coming down the line. It has been suggested that five or six community houses will be closed and multidisciplinary posts in areas such as occupational therapy and speech and language therapy will be lost. I fear that the Minister of State does not know that the HSE in the western area is affecting people with disabilities in this way. I would appreciate it if the Leader would call such a vote today. I would also like to ask the Minister for Transport to say where he stands on the western rail corridor, which offers new hope to the west and north west. The sections of the line that have been opened — most recently that between Ennis and Athenry — have been successful. We received devastating news this morning about the Galway city outer bypass. What are we doing? Are we trying to choke people on the eastern entrance to Galway? I am lost for words. I ask the Minister for Transport to address that matter as well.

Senator Mark Dearey: I support Senator Corrigan’s call for a debate on the decision to move people who need psychiatric care from residential hostels back into psychiatric institutions. The Leader will appreciate that the HSE has been tasked with saving money. While it is important that it should do so, it should not be done on the basis of rolling back progressive policy. That is what is happening in this case, however. If the decision to return to psychiatric hospitals those who have been removed from them in recent years is upheld, A Vision for Change will have been shelved, in effect. I am aware of a specific case in which this is about to happen because of a health and safety issue in a hostel. I acknowledge that the issue in question is a real one. We should not address such issues by moving people back into hostels. We must object to this in the strongest possible terms because this is about the policy which has been agreed. We must insist that the HSE adhere to it. I acknowledge, however, that it must find the necessary savings.

Senator Shane Ross: Yesterday, when the Minister for Finance, Deputy Brian Lenihan, spoke to the Joint Committee on Finance and the Public Service, he made a welcome concession on the banking inquiry. In response to a Labour Party amendment he said he would allow the inquiry to move beyond the September deadline, an issue that had been the source of legitimate contention in all parties for a long time. I worry, however, that if the inquiry lasts for only another month, it will not go far enough. The concession will be an empty gesture if the inquiry 7 Order of 6 July 2010. Business.

[Senator Shane Ross.] is not allowed to examine what has been happening in the banks up to this day. Most Members will be aware that only the other day it suddenly emerged that the top bankers had been lying to NAMA. There is now the extraordinary situation where NAMA which had been projected to make billions of euro will now almost certainly make losses——

Senator Fidelma Healy Eames: Hear, hear.

Senator Shane Ross: ——as a result of the bankers lying about the way the loans had been serviced. If they are to be allowed get away with this, what is the point in having an inquiry, for example, up to the date of nationalisation of Anglo Irish Bank on 15 January 2009? If they continue to do exactly the same things, the inquiry will have no effect. I suggest, therefore, that we look more deeply into this issue and invite the Minister for Finance to come to the House to explain — not merely to the committee but to the Seanad — how far the inquiry will be allowed to look. Putting restrictions on it is protecting the Government and the bankers. That is being done deliberately. We must ensure that if there is an inquiry, it will teach us the lessons of the past in order that we can adapt them for the future. There was a press report today which I believe is accurate that Anglo Irish Bank would have its plan agreed to in principle. However, the bank is indulging in a kind of fantasy world, with the co-operation of the Govern- ment, in stating it will continue as a bank which lends to business. That will not happen. It will not rise from the ashes as a commercial entity.

An Cathaoirleach: I call Senator Walsh.

Senator Shane Ross: We should not tolerate this because, again, the bankers are misleading the politicians.

Senator Jim Walsh: I support the calls for a debate on the national development plan. It is important that we focus on such issues because they impact on the provision of infrastructure and competitiveness in general and, as was said, are significant in terms of employment creation. As someone who has supported the Government on the challenges faced and the difficult decisions it has been brave enought to take, I have said consistently that the manner in which we deal with the difficulties will determine how successfully and quickly we will eradicate them. I know the temptation might be — I do not say this is the case but moving in that direction must be resisted — to cut capital expenditure excessively rather than current expenditure. I was unhappy with the Croke Park agreement simply because I did not see how it was sustainable to maintain salaries at a level well in excess of that in other European economies. A second issue on public sector reform is the number within the service who are not performing and whose rate of productivity is at minimal level. Even good civil servants to whom one speaks recognise this and say such persons are a source of an embarrassment to them. Until we eradicate them from the system and save money, our difficulties will continue. I hope the debate will be broadened beyond the national development plan to include other issues. I ask the Leader to arrange a debate on what constitutes human rights. I refer to a gentleman by the name of Anand Grover, a UN reporter who issued a report on the situation in Poland. Not only did he find against the country on its restrictive abortion laws, he found that freedom of conscience on the issue of abortion was not tolerated. We need to debate these issues, otherwise we are going in a direction to which I believe nobody would subscribe.

Senator Jerry Buttimer: I am amused at the silence and glumness of the Senators opposite. 8 Order of 6 July 2010. Business.

An Cathaoirleach: I am taking questions to the Leader, the Senator should never mind giving his opinions.

Senator Jerry Buttimer: Does the Leader intend to have a sos today to facilitate the meeting of the Fianna Fáil parliamentary party to discuss a motion of confidence in the Taoiseach?

An Cathaoirleach: Is that the question the Senator is putting to the Leader?

Senator Jerry Buttimer: The Senators opposite are gloomy and I know the Taoiseach is under pressure, but the best thing he could do now is to resign and let us all have a general election. If ever we had proof——

An Cathaoirleach: Has the Senator a question? We are on the Order of Business.

Senator Jerry Buttimer: I have asked the Leader one question already. If we ever had proof that this is a failed Government, we had it this morning with the proposed cuts in disability services in terms of respite care. Senator Dearey rightly raised this issue instead of Senator Healy Eames.

Senator Mark Dearey: I did not raise that.

Senator Jerry Buttimer: In regard to the national development plan, which has now been shelved, postponed or halted, there is no jobs stimulus plan, no vision for the future, no reaching out to workers who were employed in the construction industry and there is no sign of hope for people.

An Cathaoirleach: What is the Senator’s question for the Leader?

Senator Jerry Buttimer: My question is — I know the Senators opposite are embarrassed by the Government, I appreciate and understand that——

An Cathaoirleach: What is the Senator’s question for the Leader?

Senator Jerry Buttimer: Can we have a debate on the national development plan before we break for the summer recess? Moving on to the area of health, when the Minister, Deputy Harney, was here last week, the Members opposite were gushing in their praise of her. This morning we heard an eminent accident and emergency consultant talk about patient safety and the welfare of junior doctors when he almost closed an emergency department in Cork city. Is that the kind of health service the Leader wants? There is also the issue of the banking inquiry and Senator Ross was right in what he said; the Minister for Finance is shielding the Taoiseach, his predecessors and other people. Let us have a full, open banking inquiry.

An Cathaoirleach: We will have a debate on that this evening; the banking issue is on the agenda for later.

Senator Jerry Buttimer: I appreciate that and I understand the frustration the Cathaoirleach feels in the Chair. I understand that. I share that.

(Interruptions).

An Cathaoirleach: The Senator should not be questioning my—— 9 Order of 6 July 2010. Business.

Senator Jerry Buttimer: I understand the Cathaoirleach’s job.

An Cathaoirleach: I am fair to everyone.

(Interruptions).

Senator Jerry Buttimer: I ask the Leader, through the Chair——

An Cathaoirleach: I do not like to hear such a comment from anyone.

Senator Jerry Buttimer: I was not impugning the Cathaoirleach’s impartiality. In fairness, I was not.

An Cathaoirleach: The Senator should move a motion if he thinks I am not fair.

Senator Jerry Buttimer: I understand the Cathaoirleach’s frustration.

An Cathaoirleach: I am frustrated with the foolish questions that are being asked. The Senator should get to the point and ask his questions. Everyone here is in the same boat.

Senator Jerry Buttimer: I have asked no foolish question this morning. I have asked very genuine questions——

Senator Cecilia Keaveney: Rambling questions.

Senator Mark Daly: Cathaoirleach, the Senator’s time is up.

Senator Jerry Buttimer: ——on behalf of the people who put me in here.

An Cathaoirleach: We need questions, not a speech.

Senator Jerry Buttimer: I had three questions and my final one is——

An Cathaoirleach: The Senator should be succinct and he should quickly get to the point.

Senator Jerry Buttimer: My final question is——

Senator Cecilia Keaveney: His last question took a few minutes.

Senator Mark Daly: We all get two minutes but Jerry gets——

An Cathaoirleach: No interruptions, please.

Senator Jerry Buttimer: I advise the Senator that empty vessels make the most noise.

Senator Mark Daly: No one knows that more than me.

(Interruptions).

An Cathaoirleach: I call Senator Boyle.

Senator Jerry Buttimer: Can I ask the Leader a final question?

An Cathaoirleach: No, the Senator’s time is up.

Senator Jerry Buttimer: My final question is—— 10 Order of 6 July 2010. Business.

An Cathaoirleach: No, I am not taking the Senator’s question. I will take it tomorrow morning. I call Senator Boyle.

Senator Jerry Buttimer: In terms of the public sector, Senator Walsh——

An Cathaoirleach: No, Senator. The Senator has asked a number of questions and his time is well up. I have called Senator Boyle.

Senator Dan Boyle: I agree there is a need for a debate on the national development plan in this House. It has been well flagged that there will be €1 billion in cuts from the capital programme in the budget to be introduced in December. Members should examine where those cuts can and should happen or whenever a cut is proposed, comment on why it should not be made. Our capital expenditure as of now is one of the highest in Europe as a proportion of gross domestic product and will remain so even after a cut of €1 billion. The area on which we need to have this debate is on getting the balance right in our infrastructure. We have had a great deal of expenditure on our roads in the past ten years. I would like to see greater protection of our rail infrastructure in particular and in regard to negative decisions such as the Rosslare-Waterford line.

Senator Fidelma Healy Eames: The Senator should not forget the west.

Senator Dan Boyle: It is on that area that we need to have the debate. We have advanced the motorway programme to the extent that it is now largely completed. Given the state of our public finances, there are projects that can and should be put on hold. It is on that area that we need to have a debate on the national development plan. In regard to the banking inquiry — we may have an opportunity when dealing with the Central Bank Reform Bill to discuss the wider issues in this respect — it should be pointed out that the Minister has been very co-operative and that the reports that have been produced have been very open and blunt. The Bill coming before us today represents an innovative approach towards regulation that we lacked so badly in this country. There is no doubt that the import of the two reports, particularly Professor Honohan’s report, is that the main culpa- bility for our banking crisis lies with the banks. While we have had some movement, in terms of new chief executives, board members and chairs of boards, there are people who are still in place who have made——

Senator Paul Coghlan: That is correct.

Senator Fidelma Healy Eames: As Deputy Michael Noonan said it is pathetic.

An Cathaoirleach: No interruptions. You have had your opportunity to speak.

Senator Dan Boyle: We are paying for the effects of those. One of the effects of having the commission of inquiry is to identify those people in order that they can be removed from our banking system once and for all.

Senator Rónán Mullen: I look forward to the debate on carers which will take place next week. I ask the Leader to draw to the Government’s attention the need to facilitate Irish carers who are returning home from abroad to provide full time care for family members. The current operation of the habitual residence conditions is affecting many of these very deserving people. We need the Minister for Social Protection, Deputy Ó Cuív, to waive the habitual residence condition in respect of such people. When one considers that there are 160,000 family carers 11 Order of 6 July 2010. Business.

[Senator Rónán Mullen.] in the State, who are probably doing work to the value of €2.5 billion, it should be clear to all of us that such people are perhaps the most efficient and cost-effective arm of our health service. For too long we have treated them with disregard by not catering adequately for their needs, not just in terms of their financial entitlements but also their mental health and the various social supports they need, given the very important work they are doing. They are among the most important components, in terms of social glue, in our society. I hope that during the current difficult financial times this category, in particular, will not be forgotten, given the old adage that a stich in time saves nine. Investment in the work of carers is money saved down the line in our health service. I wanted to put that on the record because I would be grateful if the Leader would draw the attention of the Minister to the topic in order that instead of coming in here next week and listening to what we have to say we could get some commitments from the Minister during the course of the debate on carers.

Senator Paschal Mooney: I share the concern of Senator Ross. I ask the Leader, if there is an opportunity at some point, to bring the Minister for Finance, Deputy Brian Lenihan, before the House, perhaps when we debate the Central Bank Reform Bill, to outline his reaction to what, as Senator Ross correctly said, has been a group of bankers at senior level in this country who have been lying through their teeth, not only to the Government but to the Irish people and NAMA. It is time they were rooted out. It is an extraordinary situation that the loan book was being lied about to such an extent that, as one commentator put it yesterday, in real terms a loan which was taken out on a field at a particular value of many millions of euro three or four years ago is now worth nothing more than the value of a field. There have been no factories, hotels or apartments built on it. A high level of subterfuge and treachery has been going on in the Irish banking sector and it is time it was rooted out once and for all. I also share the concern and anger which has been expressed on both sides of the House regarding respite care. Senator Corrigan initiated it and Senators Deary and Healy Eames also spoke on it. The issue of respite is something that strikes at the very core of a family which is dealing with somebody with a disability. Whatever the budgetary reasons or justifications being given by the HSE, this is an untouchable area. For a HSE official to say it was going to work through the proposal to cut the services of the Brothers of Charity in Galway further is totally unacceptable. It is unfortunate the HSE has been set up legally in such a way that all of us in this House and the other House seem to be impotent. The Minister of the day seems to be impotent regarding decisions being taken the HSE. It is long past time that this scenario was changed and I plead with the Leader to give some opportunity for the House to express its deep anger at what the HSE is doing and the callous unchristian attitude which it seems to be adopting towards those who are suffering from mental ill-health.

Senator Mary M. White: Hear, hear.

Senator John Paul Phelan: I second that. What day next week will we have a debate on carers? I understood it was to take place this week but I would like to confirm we will have it next week. I second Senator Healy Eames’s amendment to the Order of Business to hold a debate today on the issue she and other Senators raised regarding HSE cut backs in respite care. Since I entered politics and public life, notable advances have been made in care in the community for people with mental disabilities and illness and, in some cases, the physical removal of walls 12 Order of 6 July 2010. Business. around the old mental institutions. It is not acceptable that the HSE is discussing the possibility of taking people from their communities and putting them back in to these institutions. I agree with Senator Ross in regard to the banking inquiry and the projections for NAMA. In regard to Senator Mooney’s comments, I am surprised the Government was so naive as to take the word of these bankers, who are largely responsible for the difficulties in which we find ourselves, in respect of the commitments given to NAMA. It would be very useful if we could have a discussion with the Minister for Finance on the latest media revelations on NAMA and the terms of reference of the banking inquiry before we rise for the summer.

Senator Niall Ó Brolcháin: I concur with the Senators who called for a debate on the national development plan. I am particularly interested in hearing what the Minister for Transport has to say on the western rail corridor, which is probably the most viable and cost effective project in the national development plan. I support the calls for a debate on carers. As the father of a child with disabilities, I think it is important we avoid acting in a knee-jerk manner. I am sick of the business of allowing the latest crisis to determine where money is going to be spent. We have to consider care in a holistic sense and it is important that services such as early intervention do not suffer because somebody decides there is a crisis and a pile of money needs to be moved to another area. We must be sensible and rational so all aspects of caring are considered equally and that we provide the best possible services to children and other people who need care. I wish to return to the issue of opinion polls, which I raised on previous occasions. We need a proper debate on opinion polls and legislation around them. An opinion poll recently published in my constituency turned out to be a hoax. It was published on the front page of a local newspaper as if it was factual. The organisation purported to have carried out the opinion poll turned out not to have done so. Bogus opinion polls and polls conducted in a fashion that is not up to scratch can affect public opinion and need to be debated. I believe we need to introduce legislation in this area.

Senator Pearse Doherty: I support the calls for a debate on the national development plan. Since the beginning of the year, we have been hearing that €3 billion in cuts and a €1 billion reduction in capital spending are coming down the line. However, it is only when constituents read today’s newspapers to see where these cuts are being proposed that alarm bells begin to ring in their ears. Of the 40 projects outlined in today’s newspaper reports, five are in Donegal. From my point of view as a representative from that county, this shows it is being singled out in terms of investment being withdrawn. We need to start discussing this issue. I do not concur with Senator Boyle that we are agreed on these €1 billion cuts. If there are alternatives, we should debate them. We must have a real debate on what the cuts will mean in terms of people’s ability to travel along good roads and railways and for the future of our regional airports. Furthermore, tens of thousands if not hundreds of thousands of people in the construction sector want to get back to work on building these roads and rail lines. We must invest in our transport infrastructure to ensure we are competitive when the upturn comes again. The Government’s decisions will make this more difficult. I call for an immediate debate on the issue and ask the Leader to give an assurance before the Seanad rises for the summer recess that the Minister for Transport will come before the House for a full and lengthy discussion on the matter.

Senator Labhrás Ó Murchú: It is important when the House discusses the major issues of the day that we find time to think of the most vulnerable in society. In that regard, I compliment Senator Corrigan who has been proactive in raising important issues. The issue she raised today deserves our attention. We have all observed how people with psychiatric problems have been 13 Order of 6 July 2010. Business.

[Senator Labhrás Ó Murchú.] helped by being given a new life in the community. This gives them new hope and helps their families and communities which have responded by trying to help. Any suggestion this approach may be abandoned and replaced by hospitalisation is wrong and presupposes that the individuals in question would not be aware that they were moving from the community into the hospital setting. To do this would cause deep hurt and increase hopelessness. The House has an opportunity to show that it will act as one on issues of this nature. We must bear in mind that anyone can experience psychiatric problems, particularly in the stressful society in which we live. I call on the Leader to ascertain whether we can produce an all-party motion on the issue, which is not always on the radar. This would show that, notwithstanding the problems we are experiencing, we take a human attitude towards persons who are vulnerable. I ask the Leader to consider doing this in the coming days.

Senator David Norris: In the light of Senator Ó Murchú’s request for an all-party motion on the rights of human beings, I ask the Leader if he will take the all-party agreed motion, No. 14, which I had some role in suggesting, on the position in some African states, including Uganda and Malawi. I gather it has been agreed with the Minister for Foreign Affairs. The Leader gave an indication in conversation with me that he would provide a short period of perhaps 30 minutes or one hour to enable it to be passed through the House and sent to the appropriate authorities. I join colleagues in expressing concern about an article in The Irish Times which indicates that the European Commissioner, Mr. Joaquin Almunia, has expressed grave doubts about Anglo Irish Bank and the National Asset Management Agency, including about the possibility that there will be further exposure in property from the element within the bank that is regarded as the good bank. There was some confusion the first time I expressed my view — it resulted in outraged squawking — that the principal banks should be merged in one bank of Ireland through a clean surgical cut with Anglo Irish Bank which should be taken out into the Atlantic and sunk. I still believe this should be done, as it is not necessary to maintain the bank. The Minister for Finance, Deputy Brian Lenihan, a decent man who has faced with great courage personal health issues and the financial state of the country, indicated that the bank was of systemic importance. What that means is that we are determined to save the system rather than people. We will pour additional billions of euro into Anglo Irish Bank in the next few months, while people in Galway, for example, have respite care services withdrawn. I heard a mother speak about her son who, after ten years, had just settled into a routine. The with- drawal of her respite services will cause a complete disaster for the child in question. This case is being replicated all over the place. I was the first person to argue that we should examine critically the ratings agencies. Let us also examine Goldman Sachs, even though an Irishman was at one stage in charge of the company. At the weekend I read in London that Goldman Sachs had helped to precipitate a famine in Ethiopia in order that it could gamble on world food prices. Let us attack the system and take down these blackguards.

Senator Ned O’Sullivan: I shall try to calm down the atmosphere a small bit. I ask the Leader to arrange a debate on the planning process as soon as possible and in particular the so-called “fast tracking” of planning for major infrastructural development. I ask for this because of our recent experience in the constituency of Kerry North-Limerick West. Members may have read last week that the final go-ahead was given for the LNG gas project at Ballylongford. I was involved in the early stages of that project as a member of Kerry County Council. I was elected to this House three years ago and it took three years for the fast-track planning process to finally click in and give the green light for this very important project which will create 500 14 Order of 6 July 2010. Business. badly needed jobs in the vicinity and ensure that the country has energy security for many years to come. Side by side with that we had another application for major infrastructural development by Endesa, the Spanish-based power company to construct a new gas power station in Tarbert, which is only three miles from Ballylongford. We were expecting the all-clear on that last week when An Bord Pleanála decided to announce that it would take at least three or four more months to pontificate on it. Some 500 jobs are at risk. We are very fortunate that both these entities seem to be recession-proof in terms of their capital and there is no danger of the projects not proceeding. However, there is a salutary lesson to be learned. If this fast-track process is working, we do not know about it in Kerry. I ask the Leader to expedite a debate on it as soon as possible.

Senator Nicky McFadden: I ask the Leader to accommodate a debate on how we treat asylum seekers. I understand we are in very challenging times and we need to be conscious of how we spend every single euro. However, some asylum seekers are not being processed for five years and some may have been here for as long as ten years. They are in concentration-like camps. We need to review how we are treating people. The Government has stated the people are being moved from Mosney for economic reasons. Like Senator Ó Murchú I ask that we talk about human rights, how we treat people and the value we give to human life. These people are being treated really shabbily. Their claims should be processed immediately and if they are to be deported, they should be deported immediately and not forced to hang on for up to ten years.

Senator Camillus Glynn: I strongly support Senator Corrigan and others who have rightly objected to the concept of people who have a psychiatric aspect to their illness being returned to psychiatric hospitals. Many good people in the psychiatric services give an enormous amount of their time and significant resources are put into preparing for return to the community people who had been institutionalised. It is hard to credit that anybody would put forward such a suggestion. This is not alone turning back the clock, it is going back to the ice age. This is a daft proposal and whoever conceived it does not deserve to be in the position he or she holds. This is one of the most negative proposals ever. It would turn the psychiatric services back to where they were in the 1940s or even earlier. It is a crazy suggestion. The Minister of State, Deputy Moloney, has done tremendous work since he took over responsibility for the psychiatric services. I hope that time can be found in the near future for him to come to the House to debate the matter. I know this crazy proposal is not of his making. Whoever made it does not deserve to be in the position he or she holds.

Senator Donie Cassidy: I join the Cathaoirleach in welcoming back the former Senator and Deputy, Pat Gallagher, the county manager in Offaly. It is nice to see him again. Senators Cummins, O’Toole, Coghlan, Hanafin, Bacik, Walsh, Buttimer, Boyle, Ó Brolcháin, Doherty and Ó Murchú expressed concerns regarding the national development plan. I welcome the Taoiseach’s commitment to continue to spend 5% of GDP on capital projects. I also welcome the creation of hundreds of jobs announced yesterday in the areas outlined by Senator Cummins, including the provision of service stations on motorways, inlcuding, I am pleased to say, on the M4 and M6. I look forward to the day when they will 1o’clock provided on all motorways. The Minister for Finance will be in the House this evening to take the Central Bank Reform Bill 2010 and all issues relating to the banks and the national development plan should be raised when he is here when we will be able to get the up-to-date position. 15 Order of 6 July 2010. Business.

[Senator Donie Cassidy.]

It is completely unacceptable that those seeking jobseeker’s allowance, in particular in the areas mentioned by Senator Cummins, including my area and that of other colleagues, Mullingar, must wait for more than three months. How anyone expects them to survive is beyond one’s imagination. I will pass on the strong views expressed in the House on this serious problem to the Minister after the Order of Business. Senator Cummins also raised the issue of telephone and Internet betting. I will make inquiries in this regard. When industry representatives were present last week they expressed their serious concerns. I will see what I can do about the matter and come back to the House on it. Senators Prendergast and Buttimer asked when the Minister for Health and Children would come back to the House to resume the debate on health issues and give the up-to-date position on the HSE. The Minister will be back in the House next week when the debate will resume. Senators Corrigan, Healy Eames, Dearey, Buttimer, Mooney, Phelan, Glynn, Norris and Ó Murchú all expressed shock at the articles carried in the newspapers on disability services. They spoke about the great work being carried out, in particular in respite care services. I will endeavour to have the responsible Minister in the House before the summer recess, if at all possible. I join colleagues who spoke about the Brothers of Charity service in Galway. We want to be the champions of those on the margins. Faceless bureaucrats are endeavouring to turn back the clock, as mentioned by Senator Glynn who has considerable expertise, as he has worked in this area all his life. Those of us who were members of health boards worked hard to have people returned to the community. Respite care services are urgently needed. One’s heart goes out to the families affected. We would not be worth our salt if we did not back them up and support their calls. I will endeavour to have the responsible Minister in the House to give us the up-to-date position and, if at all possible, an assurance on what we want to see happen for those who need care and attention. Senator Coghlan asked about the Central Bank Reform Bill 2010. I will allow time to elapse between Second and Committee and Remaining Stages. Senator Hanafin called for a free vote on the Civil Partnership Bill 2009. As we all know, the Whip system is in place and applies to all Bills. It is a Government decision and those on this side of the House must obide by such decisions. Senators Bacik and Keaveney referred to tourism and the need to help those who wished to bring their bicycles here while on holiday. It is unacceptable that Irish Rail will not allow people to transport their bicycles on its trains. Everyone who wants to come here to enjoy what the Emerald Isle has to offer should be allowed to do so, whether they want to walk, use a bicycle or a motor car. I will contact the office of the chairman of CIE, Dr. John Lynch, immediately after the Order of Business to ask him to change this regulation, particularly when the economy is going through such a difficult period. We should do everything possible to do help those involved in the tourism industry in rural areas. There is a wonderful opportunity to do so, as we are having one of the best summers we have had in years. I will do everything I can and come back to the House on the issue later in the week. I join Senator Keaveney in welcoming the provision of €457,000 for peace and reconciliation projects. I also welcome the provision of funding for Derry Airport. This is a godsend for the people of counties Derry and Donegal. I refer to the advertising campaign mentioned by the Senator. Such a campaign would also be ideal for the South. I will pass on her views to the relevant Minister. Senators Healy Eames and Ó Brolcháin referred to the success of the western rail corridor and asked the Minister for Transport to come to the House to update it on his future plans for 16 Order of 6 July 2010. Business. the link. I will have no difficulty in making this request. I understand the Minister will be in the House in the coming days when colleagues may be able to avail of the opportunity to find out the up-to-date position. Senators Ross, Buttimer, Mooney, Phelan and Norris referred to NAMA projects being affected by the information emanating from banks. As I said, the Minister for Finance will be in the House this evening when Senators may avail of the opportunity to ask questions and express serious concern about Anglo Irish Bank and related issues. Senator Walsh called for a debate on human rights. I have already given a commitment that a debate will take place after the summer recess. Senators Phelan and Mullen called for a debate on carers. The debate will take place next week. Given that so many Senators have offered to speak on the issue, I will be in a position to allow the debate to continue, if necessary. As Senator Mullen correctly said, there are 161,000 carers whose work has been valued at €2.5 billion. They are the unsung heroes of our society. Anything the House can do will be done. I congratulate carers who are doing such wonderful work. We will give them whatever support we can. Senator Ó Brolcháin referred to opinion poll results carried in Sunday newspapers and how questions were framed. It is an issue at which we can look closely. The House has excelled in this regard. The last time legislation dealing with the matter was brought forward, Senator Ross brought to our attention in the early hours of the morning the fact there was no provision for an embargo on the production of opinion poll results on election day. I will have no difficulty in the House reviewing the matter. Senator Norris referred to the all-party motion which would be taken this week. Senator O’Sullivan referred to planning regulations in regard to the Ballylongford project that would result in the creation of 500 new jobs, something we wholeheartedly welcome. He also referred to fast-tracking of applications in regard to the Tarbert power station, which project has the potential to create another 500 jobs. I will make inquiries in this regard. The planning legislation will be brought before the House next Tuesday when there will be an opportunity for us to receive an update on what is happening, from Senator O’Sullivan’s point of view, in County Kerry. Senator McFadden referred to the issue of asylum seekers. I understand the immigration, residence and asylum seeker protection Bill will be published shortly. I fully agree with the Senator on the importance of human life and respecting the rights of the people concerned in these difficult and dark times. I will do everyting I can to update the House on when the Bill will be brought before the House for its consideration.

An Cathaoirleach: Second Stage of the Central Bank Reform Bill 2010 is due to conclude at 10 p.m. At what time will the Minister reply to the debate on Second Stage?

Senator Donie Cassidy: He will be called upon to reply ten minutes before the conclusion of the debate.

An Cathaoirleach: At 9.50 p.m.

Senator Donie Cassidy: That is correct.

An Cathaoirleach: Senator Healy Eames has moved the following amendment to the Order of Business: “That a debate on the effects of the reduction in respite services provided by the HSE in the Galway area for persons with disabilities be taken today”. Is the amendment being pressed? 17 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

Senator Fidelma Healy Eames: Yes.

Amendment put:

The Seanad divided: Tá, 20; Níl, 30.

Tá

Bacik, Ivana. McFadden, Nicky. Burke, Paddy. Mullen, Rónán. Buttimer, Jerry. Norris, David. O’Toole, Joe. Cannon, Ciaran. Phelan, John Paul. Coghlan, Paul. Prendergast, Phil. Cummins, Maurice. Quinn, Feargal. Doherty, Pearse. Regan, Eugene. Donohoe, Paschal. Ross, Shane. Fitzgerald, Frances. Ryan, Brendan. Healy Eames, Fidelma.

Níl

Boyle, Dan. Leyden, Terry. Brady, Martin. MacSharry, Marc. Butler, Larry. McDonald, Lisa. Carroll, James. Mooney, Paschal. Carty, John. Ó Brolcháin, Niall. Ó Domhnaill, Brian. Cassidy, Donie. Ó Murchú, Labhrás. Corrigan, Maria. O’Brien, Francis. Daly, Mark. O’Donovan, Denis. Dearey, Mark. O’Malley, Fiona. Ellis, John. O’Sullivan, Ned. Feeney, Geraldine. Ormonde, Ann. Glynn, Camillus. Walsh, Jim. Hanafin, John. White, Mary M. Harris, Eoghan. Wilson, Diarmuid. Keaveney, Cecilia.

Tellers: Tá, Senators Maurice Cummins and Fidelma Healy Eames; Níl, Senators Niall Ó Brolcháin and Diarmuid Wilson.

Amendment declared lost

Order of Business agreed to.

Social Welfare (Miscellaneous Provisions) Bill 2010: Second Stage

Question proposed: “That the Bill be now read a Second Time.” Minister for Social Protection (Deputy Éamon Ó Cuív): Ba mhaith liom a rá ar dtúsbáire go n-aithníom go maith na riachtanais atá ag na daoine atá dífhostaithe faoi láthair. Tuigim go maith freisin go bhfuil go leor dreamanna eile ag brath ar an mbuiséid leasa shóisialaigh — daoine le míchumas, cúramóirí agus pinsinéirí. Ba mhaith liom a dheimhniú don Teach go ndéanfaidh an Rialtas ár seacht ndícheall chun aire a thabhairt do na daoine leochaileacha sa tír. As Minister for Social Protection, I am very conscious of the needs of unemployed people. I also fully understand a wide range of other groups such as people with disabilities, carers and pensioners depend on the welfare budget for vital support. The Government, in a very tough budgetary environment, will continue to do its utmost to protect the most vulnerable in society.

18 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

The requirements of the Department of Social Protection highlight just how important it is to have the finances stable. In the next five years the Department will spend over €100 billion, all of which will have to be raised by taxation or, in the short term, by borrowing. Obviously, any borrowings will have to be repaid by the taxpayer at some time in the future. It is clear that if the Government failed to ensure the finances were sustainable, the Department with the largest Vote and its clients would be the first to suffer. The Government will make sure we will provide this money and support. It is up to other parties to explain how their policies would maintain the same level of commitment to social welfare clients. The Government is proud of its unrivalled record in increasing the level of social welfare payments. Over the past 12 years, we have increased pension rates by about 120%, unemployment benefits by almost 130% and child benefit payments by over 330%. The cost of living has increased by about 40% over the same period. We extended coverage, removed barriers and increased entitlements such that the level and extent of social support payments has been transformed beyond recognition. Continuing to reflect the trend of recent years and reaffirming Government’s commitment to all those in need of support, €20.9 billion will be spent by the Government in 2010 on social welfare provision, some €500 million or 2.45% more than 2009. One of the priorities I have been given in my Department is to place a particular focus on job activation. The new Depart- ment brings a joined-up approach to looking at job activation in its wider context with income support. The biggest concern in many households around the country is the issue of jobs. Job activation and the provision of meaningful work activity for unemployed people are a central part of An Taoiseach’s reasons for setting up the new Department of Social Protection and the amendments involving the work schemes and employment services moving into a single Department form part of our commitment to targeting the day to day needs of unemployed people. In that regard the Bill provides for the transfer of the rural social scheme and the community services programme to me as Minister for Social Protection. It also contains provisions to endow me as Minister for Social Protection with the necessary statutory powers on employment services and community services programme of FÁS, and subsequently to transfer the related funding. There are changes to jobseeker’s allowance, jobseeker’s benefit and supplementary welfare allowance in certain circumstances. Unemployment among the young is a particular concern for the Government. We want to encourage them to stay close to the labour market while at the same time providing a rate of assistance that compares very well with other jurisdictions, particularly with payments in the counties of Northern Ireland and in Great Britain. The Mini- ster for Finance in his Budget Statement announced the introduction of certain targeted changes in jobseeker’s allowance and supplementary welfare allowance. Specifically, he announced that the rate would be reduced to €150 per week where job offers or activation measures have been refused. In order to incentivise participation in training and education programmes and programmes provided under the National Employment Action Plan, referred to as the NEAP, the rates of jobseeker’s allowance, jobseeker’s benefit and supplementary welfare allowance are being reduced where a person, without good cause, refuses to participate in a course of training arranged by this Department or FÁS, or refuses to participate in any NEAP process. When commenced, these measures will work in tandem with the integration of FÁS functions into my Department, and other initiatives such as customer profiling, as part of a strong focus on employment. The Government’s aim is to ensure that, despite the high number currently on 19 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

[Deputy Éamon Ó Cuív.] the live register, long term systemic unemployment and welfare dependency will not be allowed to take hold. Under the measure a penalty of €46 will be applied to the individual’s headline rate of jobseeker’s allowance, jobseeker’s benefit or supplementary welfare allowance if he or she refuses or fails to avail of a suitable activation measure. Penalty rates of €35 and €25, respectively, will apply in the case of younger jobseekers already on reduced rates of €150 and €100 per week. The application of this measure to those under 25 may appear harsh but clear evidence is emerging that the reduced rates have been very successful in incentivising young people to take up training and education. Therefore, I want to ensure the small but significant cohort which refuses these opportunities cannot continue to remain outside the activation process. It is essential that these young people avail of training and employment opportunities and therefore we are increasing the financial incentive for them to do so. In keeping with the focus on activation, I stress these rates will only apply where the primary social welfare payment relates to jobseeking and no other schemes come under the scope of these provisions. In addition, primary payments only are affected and rates for child and adult dependants, where payable, remain unchanged if a claimant is subject to a penalty rate. I am also bringing forward a new provision for full disallowance where a jobseeker has refused an offer of suitable employment. This provision is intended to strengthen the existing legislative provision whereby full disallowance may be imposed if the recipient is not genuinely seeking work. This will not alter the position of the majority of jobseeker’s allowance and jobseeker’s benefit recipients. I am also providing a specific disqualification for receipt of jobseeker’s benefit where the person is attending a full-time day course of study. This mirrors an existing disqualification for receipt of jobseeker’s allowance where a person is attending a full-time day course of study. The Bill also provides for changes to the one-parent family payment. The Government believes that the current arrangements, whereby a lone parent can receive the one-parent family payment until the child is 18, or 22 if in full-time education, without any requirement for them to engage in employment, education or training are not in the best interests of the parent, the children or society. Despite improvements made to the one-parent family payment over the years and significant spending on supports to lone parents, a large proportion of lone parents and their children are still experiencing poverty. The child of a lone parent is four times more likely to be in consistent poverty than the population overall. In general, the best route out of poverty is through employment. We recognise that work, and especially full-time work, may not be an option for parents of young children. However, we believe that supporting parents to participate in the labour market, once their children have reached an appropriate age, will improve both their own economic position and the social well- being of themselves and their families. The Department has undertaken a comprehensive review of the one-parent family payment and developed proposals which are designed to prevent long-term dependence on welfare and facilitate financial independence, recognise parental choice with regard to the care of young children but the expectation that parents will not remain outside the labour force indefinitely and include an expectation of participation in education, training and employment with supports provided. To meet these social policy objectives, I am introducing the changes outlined to the one- parent family payment in section 25 of the Bill. For new customers, from 2011, it is proposed that the one-parent family payment will be made until the youngest child reaches the age of 14. The Bill as published provided that one-parent family payment would be made until the 20 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage. youngest child reached the age of 13 but having given the matter further consideration and having listened to the contribution of Deputies during the course of the debate on the Bill in the Dáil I decided to change the age to 14. The majority of new customers for the one-parent family payment are parents of new born babies; therefore the changes in the payment from next year will not affect them until 2025, when their youngest child reaches his or her 14th birthday. For existing customers there will be a tapered six-year phasing out period to enable them to access education and training to prepare them for their return to the labour market. Therefore, the age 14 cut-off point will only come into effect for existing customers six years from now in 2016. For existing customers, the age 18 cut-off point will remain for 2011 and 2012. In 2013 it will be 17 years, in 2014 it will be 16 years, in 2015 it will be 15 years and in 2016 it will be 14 years. If the child is in full-time education there is also a special provision for existing one-parent family payment recipients. In this case, payment will continue until the end of the 2012-13 academic year or until the child reaches age 22, whichever is the earlier. To encourage participation in education and employment, from the enactment of the Bill up to the end of 2016, existing customers who leave the scheme to take up employment or a course of education will be allowed back on the scheme under the new age conditions of the phasing out six-year period if they subsequently lose their job or their scheme of education finishes. When the youngest child reaches the age of 14 years, if the parent is still in need of income support, he or she could claim jobseeker’s allowance or another appropriate income support payment, or if in employment, family income supplement. Under the reformed scheme, there will be a special provision for families with children, for whom domiciliary care allowance is paid. They will receive one-parent family payments until their children reach 16 years of age, at which point the children can claim disability allowance in their own right. There is also a special provision for married and cohabiting persons who have been recently bereaved and who have children aged 14 years or older. These individuals will receive the payment for up to two years or until their youngest children reach 18 years of age to enable them to come to terms with their changed circumstances. The Government is conscious that many lone parents will need access to education, training and enabling services such as child care provision in order to acquire the skills they will need to gain employment. A wide range of education and training opportunities are available through my Department, the Department of Education and Skills and FÁS to lone parents to strengthen their qualifications and skills base and thus maximise their chances of gaining employment. With regard to child care, the Government invested €1 billion during the past decade in developing a child care infrastructure. As a result, some 65,000 child care places will be available this year. A revised community child care subvention scheme is due to be introduced in September. This scheme will have a labour activation focus and strengthen the child care supports available to lone parents. Importantly for lone parents, after-school services and homework clubs are to be included in the services provided. Internationally, there is a general movement away from long-term and passive income support. In the United Kingdom, for example, lone parents are required to seek work when their youngest child reaches ten years of age. From October, the minimum age will be further reduced to seven years. In Norway, Sweden, Germany and Italy there is a work obligation when the youngest child reaches three years of age. It was initially proposed in the Government discussion paper, Proposals for Supporting Lone Parents, published in 2006, that a parental allowance would continue until the youngest child reached the age of seven years. However, 14 years is considered to be a more appropriate age for this change because the need for child 21 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

[Deputy Éamon Ó Cuív.] care will lessen from that point as a result of children entering secondary school. This change to the one-parent family payment will bring Ireland’s support arrangements for lone parents more into line with international provision. It must be noted that countries which achieve the best outcomes in tackling child poverty are those which combine strategies aimed at facilitating access to employment and enabling services with income support. I will now outline the main provisions of the Bill. Section 3 sets out the rules to determine with whom a child normally resides for the purposes of social welfare payments, with the exception of child benefit. Section 4 provides for an amendment to the definition of spouse to include different sex cohabiting couples as spouse for the purposes of farm assist and pre- retirement allowance. Section 5 provides for the inclusion of health contributions in the definition of contributions for the purposes of the four year limit on the return of contributions. Section 6 confers power to make regulations to provide for the conditions under which a person is regarded as being incapable of work for the purposes of qualification for the payment of illness benefit. Section 7 provides for a specific disqualification for receipt of jobseeker’s benefit where the person is attending a full-time day course of study. This mirrors an existing disqualification for receipt of jobseeker’s allowance where a person is attending a full-time day course of study. Section 8 corrects an omission from the Social Welfare and Pensions (No. 2) Act 2009 and provides for the restoration of the full rate of payment for recipients of incapacity supplement who are aged 66 years and over. Sections 9, 11 and 13 clarify the provisions for the assessment of means where jobseeker’s allowance, pre-retirement allowance and farm assist — dealt with in sections 9, 11 and 13, respectively — are in payment and where the claimant’s spouse or partner is in receipt of family income supplement. Section 10 provides for a number of technical amendments to section 142 of the principal Act to ensure consistency in treatment with regard to the increase payable for a qualified adult. It also provides for the deletion of obsolete provisions. Section 12 provides for a technical amendment to section 211 of the principal Act to delete an obsolete provision in relation to disability allowance. Section 14 amends section 220 of the principal Act and sets out the rules to determine with whom a child normally resides for the purposes of entitlement to child benefit. Section 15 provides for an amendment to section 320 of the principal Act which deals with decisions of appeals officers. Section 16 removes the limitation on the scope of the appeals process and provides that the Minister has the power to appeal a decision of the chief appeals officer to the High Court on a point of law. Section 17 is a technical amendment to Table 2 of Schedule 3 to the Social Welfare Consolidation Act 2005 to remove obsolete references. Sections 18 to 20, inclusive, provide for the payment of a reduced rate of jobseeker’s allowance or jobseeker’s benefit or supplementary welfare allowance where a person refuses to participate in an appropriate course of training or a programme under the national employment action plan. Sections 18 and 19 also provide for a specific disqualification from receipt of jobseeker’s allowance or jobseeker’s benefit where a person refuses an offer of suitable employment. Section 21 clarifies the circumstances in which the reduced rate of jobseeker’s allowance is payable in the case of 18 to 21 year olds. Section 22 allows the Minister to appoint persons other than serving staff to be appeals officers. The section will allow for the employment on a temporary basis of retired appeals officers as appeals officers to clear backlogs in the social welfare appeals office. The section gave rise to some concern on Committee Stage in the Dáil. In that context, I assure Senators 22 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage. that it is being introduced purely to enable me to employ on a temporary basis retired appeals officers to clear backlogs in the social welfare appeals office. There is a significant learning curve for appeals officers, when assigned. They must become familiar with the entire social welfare code and other legislation which may impact on entitlements such as employment law, administrative law, case law and EU law, as it affects social welfare entitlements. Experience shows that it takes up to two years for a new social welfare appeals officer to develop sufficient experience and knowledge to allow them to deal with most cases at full productivity. I am satisfied that the employment of retired appeals officers on a temporary basis is the most effective way to clear backlogs in the social welfare appeals office. Section 23 provides that the chief appeals officer and the deputy chief appeals officer must be officers of the Department. Section 24 provides for a number of miscellaneous amendments to the principal Act, including the deletion of references to early child care supplement where they appear. Early child care supplement ceased to be payable on 1 December 2009. Section 25 provides for the reduction, from 2011, of the qualifying age for receipt of one- parent family payment to when the youngest child reaches 14 years of age. It also provides for various transitional provisions for current recipients of the payment. Section 26 amends the provisions relating to domiciliary care allowance to ensure the operational practice is correctly reflected. Molaim an Bille don Teach agus tá mé ag súil le bhur gcuid tuairimí a chloisteáil maidir leis na míreanna atá ann. I commend the Bill to the House. I look forward to having an informed debate on it and hearing Senators’ views on the measures it contains.

Senator Nicky McFadden: I wish the Minister well in his new portfolio. This is the first occasion on which I have dealt with him face to face since he moved to his new Department. I thank him for the revisions he made in respect of farm women. In making these revisions he displayed both compassion and insight. The Social Welfare (Miscellaneous Provisions) Bill 2010 introduces reduced rates of jobseeker’s benefit, jobseeker’s allowance and supplementary welfare allowance which will apply to claimants who refuse to participate in appropriate courses of training under the national employment action plan. The Bill also provides for a reduction in the qualifying age for receipt of one-parent family payments. Section 18 provides that the rate of jobseeker’s benefit will be reduced in certain circumstances. In such circumstances is it fair and legal that the payments made people who have worked for 20 to 25 years and made social welfare contributions during that period can be reduced? Do the individuals concerned not have an expectation that they will receive their full entitlements? Will people be offered courses that could prove to be unsuitable in the context of their qualifications and interests? Forfás recently published a report on the appropriateness and availability of the courses on offer. Does the Minister accept that FÁS courses must be radically changed to cater for the many talented individuals who are unemployed? Over 450,000 people are unemployed, but the Department only employs 63 facilitators who are responsible for the activation of over 90,000 one-parent families and over 100,000 people in receipt of disability and illness payments. They are involved in various activation measures, including those provided for in the Bill. As the Minister rightly said, work rather than income support is the best route out of poverty. However, the lack of appropriate courses and facilitators does not inspire me with confidence in the Minister’s activation measures. Under sections 18, 19 and 20 of the Bill, it is proposed to reduce the rates of jobseeker’s allowance, jobseeker’s benefit and supplementary welfare allowance paid to those who have “without good cause refused to participate or to agree to participate in a course of training 23 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

[Senator Nicky McFadden.] which is considered appropriate”. As I have said, Fine Gael believes in activation. Research has proved that there is a strong rationale for introducing activation policies which combine positive and negative incentives. A report prepared by Dr. Anne Daguerre and Dr. David Etherington in 2009 found evidence that the most effective activation measures relied on elements of incentive and compulsion — the carrot and the stick. If a person refuses to participate in a course of training, his or her payment will be cut by €46 if he or she is over the age of 24 years. Those between the ages of 22 and 24 years will see their payments cut by €25. The Minister should clearly outline what he means by an “appropriate” training course. There are no data available to support his activation measures. I do not know what courses he is talking about. Nothing has been documented anywhere I have looked to outline the new courses and ways about which we are talking as we try to support those who are unemployed. In the absence of proper investment in the provision of suitable training places, this proposal is nothing but a crude cost-saving measure that will force claimants to depend on social welfare for a longer time. Some stakeholders have expressed concern about the impact the Bill will have on certain groups, especially lone parents. Ms Candy Murphy, a policy and research manager with One Family, has argued that the reduced payments will make it increasingly difficult for lone parents to access employment and training. The new proposals, when taken with the other reductions in welfare rates and the loss of the early childcare supplement announced in budget 2010, will make bigger the already insurmountable poverty traps encountered by lone parents. The Mini- ster rightly referred to such traps. The head of the social and justice policy division of the Society of St. Vincent de Paul has also highlighted the combined effect of the cuts outlined in the budget. Measures such as the cancellation of the Christmas bonus, the cuts in rent supplement and the increases in local authority charges will all have an effect on vulnerable groups. As the Minister said, the children of lone parents are at the highest risk of living in consistent poverty. It has been brought to my attention that some people are no longer entitled to both the back to education allowance and the maintenance grant. I am concerned about how such persons will be able to survive. I understand a person has to sign on for nine months before he or she is entitled to receive the back to education grant. Will the Minister comment on this? I am also aware that the back to education grant is paid on a once-off basis only. It cannot be used for more than one course. Many young highly educated graduates are in need of activation. They need to be able to undertake further courses, but if they do so, they will not qualify for the back to education allowance. One cannot attend an educational course while in receipt of jobseeker’s allowance because one needs to be available for work. As I said, one-parent families are more at risk of living in poverty than any other household. CSO figures for 2009 show that one third of one-parent families are “at risk of poverty”, which means they are living on less than 60% of average income. One fifth of one-parent families are on such low incomes that they are unable to afford basic necessities such as food, clothing, school materials and household goods. In this day and age families should not have to go without such necessities. The greatest challenge faced by the head of a one-parent family is in trying to get back into the workforce. The availability of child care services, a serious issue, hinders this process The reality is that there are very few affordable child care services available. The Minister has mentioned that single parents in Sweden, Germany and Norway are obliged to go back to work when their child reaches the age of three years. I remind him that the best child care services in the world are provided in such countries for free. I ask him to respond to this point. The lack of child care facilities in this country acts as a disincentive for lone parents to go back to work. It is a damning indictment of the Government that lone 24 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage. parents who are willing to go back to work cannot do so because they cannot afford child care. It is no wonder that lone parents comprise 90% of social welfare claimants. This is all due to the inept and ill-conceived policy decisions of the Government. Professor Dan Finn and Ms Rosie Gloster have argued that one of the most significant barriers facing lone parents in many countries is the lack of viable child care options. Matters are complicated by school hours. We all know that FÁS courses start at 8.30 a.m. each day. I wonder if the Minister can comment on this. OECD calculations take into account that, in contrast to couples, lone parents have to rely on one wage to cover their child care costs. Where is the incentive to go back to work? If a mother goes back to work and finds that her child care costs are almost as much as the weekly wage she earns, how can the Government justify her decision to go back to work? It believes she will be able to do so when her child reaches the age of 14 years. The problem is that the practicalities of this approach have not been thought through. What should a mother do until her child reaches that age? Should she idly remain on social welfare in the hope she will be able to get a job on her child’s 14th birthday because she cannot afford to return to work before the child reaches that age? When the child reaches 14 years, will she have to compete with newly qualified graduates? The system, as it stands, gives lone parents no incentive to enter the workforce. I emphasise that the majority of the heads of one-parent families want to work. They are willing to contribute to society and pay their own way. They are hard workers who want to provide adequately and comfortably for their children and give them educational opportunities and 2o’clock career prospects. They sometimes require the assistance of the State to help them find their feet. We all accept that this assistance, in general, does not last forever. Those lone parents able to obtain and secure relatively well paid jobs do not seek to rely on the State or the one-parent family payment. However, it is the duty of the State to activate such persons in the workforce and provide a standard of living that does not see them lve in consistent poverty. Section 25 of the Bill aims to end the entitlement to one-parent family payment when the youngest child reaches the age of 14 years. This will not assist certain families to get out of poverty traps. The transitional arrangements that will be in place until 2016, mentioned by the Minister, do not take into account the practical details of child care and transport which I have mentioned. When a child reaches the age of 14 years, his or her lone parent will no longer receive this payment. Such a parent will be expected to join the workforce with graduates and young professionals. The lack of consultation between the Minister and the bodies responsible for highlighting lone parent issues which would like to contribute to the debate on the Bill is a sad indictment of the approach being adopted. The director of OPEN, Ms Frances Byrne, has said some of the activation proposals can and possibly will stigmatise certain sections of the population. She states there is an unfortunate underlying assumption that the current social welfare system acts as an incentive for the formation of one-parent families. That assumption is wholly unacceptable and is a fallacy. In practice, most one-parent family claims last for much less than the 22 years of a child’s full-time education, while 30% of claims last no longer than three years, 20% last for between four and five years, 25% between six and eight years and only 15% for longer than ten years. This shows the efforts one-parent families are willing to make to stay in the workforce. The Department estimated that more than 60% of one-parent families are working. In 2009 the fraud savings target was €616 million but, sadly, was not met and only €484 million was achieved. At a time when the Exchequer is under so much pressure, the Govern- ment should increase that target and seek to exceed it. Instead, it goes softly on people who 25 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

[Senator Nicky McFadden.] are robbing the State and hits one-parent families, disabled people, carers and blind people. Social welfare fraud is estimated to cost €2 billion. I find it laughable that the Minister plans to introduce a system whereby claimants of social welfare might sign on by text message. Last year a spot check found that up to 10% of dole claims were fraudulent, with most of those claims made by or in the name of people living outside Ireland. At that time, the former Minister, Deputy Hanafin, introduced photo ID, a long overdue measure. The only way in which a person can prove he or she is the person as claimed is by such ID. As Oireachtas Members, it is our challenge to devise legislation that acknowledges the diversity of women’s lives and working patterns while at the same time recognising a woman’s right to work in paid employment and that she should be able to make choices regarding parenting and child care. We must seek to empower society rather than an economy.

Senator Lisa McDonald: I welcome the Minister of State, Deputy Áine Brady, to the House and am glad of the opportunity to speak on this Bill, reforming legislation that emphasises the importance of learning, upskilling and retraining in our social welfare code. When I heard of the formation of the Department of Social Protection, I admit I was a little sceptical, believing it merely gave another name to the Department of Social and Family Affairs. As I see it being rolled out, however, and the action, energy and thought the Minister, Deputy Ó Cuív, brings to his new Department, I believe this is an excellent and far-seeing move on the part of the Taoiseach. It brings a more holistic and joined-up approach to the areas of social welfare payments and benefits, job activation, employment schemes and the national employment action plan. Included under this Bill are measures to transfer the rural social scheme, community service programme and necessary statutory powers in regard to FÁS to the Minister’s new Department. The Department now has a clear, two-pronged approach to protect the vulnerable and needy, pensioners and those who cannot work because of disability, disablement or other personal circumstances, and to support unemployed people who, unfortunately, have lost their job, prepare and incentivise to get back to work those who can and would work if they had a job but who have become used to passive income support. We must acknowledge this is being done in challenging times and, therefore, the resources are not as readily available as they might be in some years’ time when the plan is fully rolled out and working very well. As the Minister outlined, the Bill provides for a number of measures, including specific disqualification for receipt of job seekers’ allowance when a person refuses an offer of suitable employment. There is a reduced rate of jobseeker’s or supplementary welfare allowance for those who refuse to participate in an appropriate course of training or in a programme under the national employment action plan. Some people have questioned who will decide what is an appropriate course of training and concerns exist in that regard, as Senator McFadden highlighted. This is especially the case when many very qualified people are on jobseeker’s allowance. Perhaps we should consider some tie-in with universities to give such people a greater challenge in further study. That step is being considered by the Minister for Education and Skills and some work is being done in that regard. It may be an additional prong for the Department of Social Protection and would assist to challenge people. I spoke to a highly qualified person recently who seeks work in the area of media and public relations. He was very happy to say he had been offered a relevant course in new media training to include Facebook, etc. Older people would not have the same level of expertise and confidence in that area as the emerging generation and those qualities were very important for that type of job. He was delighted to take up the course. 26 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

Another worrying point raised concerns the high level of appeals, with 48.2% of appeals being granted in 2009. This means that almost half of first decisions are overturned at appeal. Such instances do not all relate to appropriate training but the Minister is examining this issue and actively dealing with it. We must provide more diverse training courses, especially in rural Ireland where such choice does not exist. I am reminded that when I was in secondary school, all the girls in my class were told to become teachers or nurses. One cap does not fit all and we need to individualise the way in which we deal with the new unemployed who are highly qualified individuals and who have had a great deal of work and life experience in different strands. They probably never thought they would face unemployment and actively pursue a jobs policy to try to ensure they escape that net as soon as possible. We must individualise the way in which we deal with people. More training may need to be given to social welfare officers to deal appropriately with such people. I acknowledge that officers are under enormous pressure but very many of them have formed certain views of claimants and need further training. I welcome that the Minister is bringing in retired appeals officers who have experience. This is a temporary measure and will help clear the log jam that has developed. One hopes it will reduce the backlog of appeals in future. For too long, the problem of long-term and passive income support has remained unchecked by the Legislature. As we move now to incentivise job activation with supports, we must recognise it is not healthy for any person to become social welfare dependent at a young age without having any incentive to upskill or retrain. We must strive to prevent long-term dependence on welfare and facilitate financial independence. The only way to do that is through work and the best way to obtain employment is to be suitably trained. The penalties for refusing training, up to the ultimate penalty of disqualification for refusing a job, sends out the message that in this country we will take care of our needy but not those who decide there is no incentive to work because they are too well off on the dole, those who thank us but say they would prefer not to take the job on offer. The Government is the custodian of taxpayers’ money and we can no longer stand idly by and condone this passive culture where claimants have no intention of working and have made a career out of claiming for every entitlement. They know more about available entitlements than even the Minister does. These are the very people who, if they have families, will march their child down to the social welfare office the minute they turn 18 years of age. This behaviour cannot be encouraged and it must stop. The other major change in this Bill is the phased changes to the one-parent family allowances. As the Minister stated, it is not in the best interests of the parent, the children or society to allow one-parent families to become so dependent on social welfare. In the Bill the Minister is to limit the lone parent allowance in favour of participation in job seeking or retraining when the youngest child reaches 14 years of age. In the UK the age of disqualification is to be seven years. In Ireland, however, we recognise the right of a mother to care for her young children and to have that choice. For that reason, the Minister has set the age to 14 years, higher than the international norm. This regulation is to be phased in so the existing lone-parent allowance will not cease until 2016, and for new claimants in 2025. I ask opponents of this measure why we should not empower women away from the lone-parent allowance books and back into independence. As a working mother, I believe the measure helps children to see their mothers working. The child care predicament Senator McFadden outlined will only kick in when a child is 14 years of age. The Minister has said that homework clubs and holiday care will be provided as the need arises. It is to be hoped a child of 14 years of age would be involved in various other activities and the one thing he or she does not need is a mother mollycoddling him or her from the age of 14 to the age of 18. 27 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

[Senator Lisa McDonald.]

The reality is that although we have invested substantial resources in this area, one-parent families are four times more likely to be caught in a poverty trap. Enabling services are the key to success and the key to lifting one-parent families out of the poverty trap. The homework clubs and community child care subvention scheme, which will be implemented in September, all have a role to play. However, this needs to be phased in and a balance struck between the right length of time for such support versus unfair disadvantage against families struggling on low incomes. I note the proposal for supporting lone parents by introducing a parental allowance, which would support all low income parents. That is a measure we need to examine and move towards introducing in the future as we move away from the concept of lone parents and one-parent families. Every child has two parents. We will probably discuss this area tomorrow when we deal with the Civil Partnership Bill. We need to be realistic and aware of the prevalence of young girls in certain areas who get pregnant and perceive it to be a path towards having their own house and moving out of the family home.

Senator Nicky McFadden: No, I do not accept that.

Senator Lisa McDonald: Most young girls who get pregnant do not want to be pregnant but some do and if we ignore that, we will not be realistic about the need to tackle such dependency. We also need to examine the lack of accountability of fathers. Various Senators, including myself, have called for debates on the rights of unmarried fathers. We need to consider giving fathers real guardianship rights and responsibilities in respect of their children and, if they are not paying maintenance, we need to seek an attachment of earnings order in respect of them. That will involve an administrative burden for District Court offices but we need to examine that and also to incentivise declarations for mothers. I have seen it happen all too often in the District Court that many people get maintenance which is not declared. Senator McFadden said the Government was going soft on fraud but I do not believe that is the case. If the Senator checks the record of the previous Minister, Deputy Hanafin, and the current Minister, Deputy Ó Cuív, on cracking down on fraud in this area——

Senator Nicky McFadden: I said the targets are not being met.

Senator Lisa McDonald: ——she will note that they have done more than any of their predecessors to introduce measures to deal with it.

Senator Nicky McFadden: Targets are not being met.

An Leas-Chathaoirleach: Allow Senator McDonald to continue without interruption.

Senator Lisa McDonald: I thought the Leas-Chathaoirleach had said I had only one minute remaining.

An Leas-Chathaoirleach: I was trying to keep order in the Chamber.

Senator Lisa McDonald: Go raibh maith agat agus tá bron orm.

Senator Jerry Buttimer: I have not spoken yet.

Senator Lisa McDonald: We need to examine the work the Minister is doing in this regard. It is one thing to crack down on those working and claiming and that is an easier task than cracking down on the not so lone parent whose boyfriend stays over so often that they are a 28 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage. de facto family. We also need to examine the fact that the Supreme Court decided last week that we do not have de facto families in Ireland. We need to bring our laws into line with the reality of the situation. Many families in this country exist outside the family structure provided for in our Constitution. We need to introduce laws to deal with that. If we deal with that properly, I believe the notion of a lone parent would very much dissipate. That is not to say there are not great women, as Senator McFadden outlined in her contribution, who lift themselves out of the poverty trap, pursue further education, etc. They are fantastic women and they should be acknowledged. I was speaking to one such woman last week and this is a point I wish to raise with the Minister of State. Much of what we are talking about in this debate involves the day care of children but many of the meaningful courses one can pursue to obtain a degree or a diploma are run at night time. We need to examine the provision of child care such as babysitting arrangements, etc. for people who wish to pursue such courses who do not have that type of support. Those women exist and that support needs to be given to them because they more than anyone want to get out of the poverty trap. As we all know, the benefit of an education is fantastic. This area needs to be reformed and such reform has started today. I welcome it. In short, we must incentivise learning and working and not a culture of earning while at the same time we must continue to protect the needy and vulnerable in our society. I would be interested to know how the needs of individuals will be met in respect of individuals pursuing a proper training course. Such a person should not be assigned a waitressing job when he or she really wants to be an artist. I know that is an extreme example but I would be interested to know how provision will be made for the needs of individuals. I acknowledge that this will be difficult and this is a delicate balance to strike. The measures in this Bill are a good start . We are following a path that is commendable. I commend the Minister on his energy and I commend this Bill to the House.

Senator Feargal Quinn: I welcome the Minister of State to the House once again. We seem to be seeing her a little more often than we have previously. Senator McDonald made an interesting point regarding the new title of the Department and of the Minister. She doubted whether the new title of the Minister — Social Protection — meant anything rather than merely being a play on words. I believe it is fairly clear that it is a good title and the change of title is good because the new title means so much. The effort to ensure we protect the worst-off in our society is worthy and is something about which we should be happy. We must ensure anything we do in this area does not act as a disincentive to work. An interesting article was written by Andy Pollak from the Centre for Cross Border Studies regarding a seminar that was held on 20 May in the North and in which article Mr. Pollak gave some interesting figures. One speaker at the seminar spoke about the disincentive facing unemployed people in the South who might want to work across the Border. He gave a few examples. He said an unemployed single man in Donegal will automatically get €196 a week versus the minimum wage in the North for a full week which is £231. The gap is such that there is very little incentive for a person to cross the Border to work there. That speaker said that a one- parent family allowance south of the Border is €196 per week plus €29.80 per child while the equivalent allowance in Northern Ireland is almost a third of that. There are measures of which we can be very proud in terms of looking after those who are not well off. That speaker also made the point that a person on a low income in the Republic is better off in the South because he or she has a medical card, free general practitioner visits, free public hospital services and free medication. Mr. Pollak gave a nice quote in his article: 29 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

[Senator Feargal Quinn.]

So the next time you hear somebody like me (until this month!) warning that one reason a united Ireland is off the cards is because the South couldn’t afford to pay the cost of covering the gap in welfare payments, remember these telling financial facts. It’s no coinci- dence that one of the main issues officials in the two government departments dealing with social welfare talk about when they meet on an annual basis to discuss matters of common concern is corss-border ‘welfare tourism’ [a term I had not heard previously] the bulk of it now consisting of Northerners making fraudulent claims [south of the Border].

That interesting point was one that came to mind last week when we read that the number of social welfare claimants reduced dramatically during the recent volcanic ash crisis. It is assumed they were from eastern Europe and that it appears they were not able to return to make their claims for jobseeker’s allowance or whatever social protection allowance they were seeking. Given our financial situation, we cannot afford to pay any more than we have to and this has to be reconsidered. The country has to be run like a business if we are to have any hope of a recovery and a return to prosperity. There are some very legitimate concerns with this Bill related to how payments are structured in terms of parents’ relationships. For instance, those single parents who are bereaved are offered better support for their children than those who have suffered from relationship breakdown or those who have been forced from their homes owing to domestic violence. It is certainly a difficult question but we need to take action in the area of one-parent family payments. Under this legislation, if an individual refuses to take a job or a training course that is deemed appropriate, his or her unemployment assistance will be reduced. This has been criticised as unfair but it is worth noting that evidence, particularly from America, has shown that while many people begin work in minimum wage jobs, they do not stay in them for very long. Once in employment, people move up the earnings ladder rapidly and the spaces below them are filled by newer recruits. Taking up work is still the best route out of poverty. During the week there was a row when Bill Cullen of It’s a Long Way from Penny Apples fame said it was better for somebody to work for no pay than not to work because he or she could prove himself or herself and move up the ladder, something with which I agree entirely, even though he was criticised for saying it. I am aware of a young woman in Limerick who qualified as a solicitor. When she could not get a job, she offered her services free to a solicitor there. She worked two days a week for him and within two months he could not do without her. If it is possible to create confidence, I encourage people to start at the very bottom, even if it means working for no pay because if people believe in themselves, they can prove they can be of value to an employer. This thought process is worthy of consideration. It is thought by some that the natural process of moving out of poverty through employment is hindered by Government policies designed to protect the poor such as tax credits which some say have the effect of subsidising low wages and make people less inclined to move up the earnings scale for fear of losing their entitlement to credits. We have to strike the right balance. Given that the European countries which are achieving the best outcomes in tackling child poverty are the one which are moving away from the provision of passive income support and supporting schemes aiming at facilitating access to employment and services such as child care through the provision of income support, it is appropriate for us to consider moving in that direction. Let me make a comparison between Switzerland and Ireland with regard to child benefit. The rate of child benefit payable in Switzerland is dependent on the region in which one lives but is usually €150 per child per month, roughly the same as the rate payable in Ireland. However, in most regions in Switzerland after two children the payment of child benefit is 30 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage. stopped for the third and subsequent children. I understand there is a similar system in the United States. It may be the case that during the years it has developed a policy of not encouraging people to have more children. In Ireland a parent with eight children could take home €1,422 per month in child benefit, while in Switzerland a parent with the same number of children receives approximately €300. This is the policy which was recommended, accepted and adopted. It might be one which we could consider adopting. Let us be aware of the figures involved. In Switzerland there is an entitlement to receive child benefit if at least one parent is in gainful employment or drawing benefits from the unemployment insurance fund. The benefits are paid by the employer or, in the case of unemployed persons, the unemployment insurance fund. If one works part-time, one may only receive partial benefits or possibly none, depending on the region in which one lives. It is not as if Switzerland cannot afford to pay child benefit, but it seems it has made a conscious decision not to incentivise people to have more children. I am not suggesting we adopt such an approach, rather I am drawing attention to the fact that there are alternatives and that there are different views around the world. We have independence to consider this issue and determine what is the right thing for us to do. The steps we are taking are necessary to make sure the economy is able to provide in the correct manner the social protection needed by those who are worst off. Let us make sure we continue to examine the issue. To keep the economy healthy the Bill is a step in the right direction. There- fore, I support it.

Senator Dan Boyle: We have to understand where we stand on social welfare payments which now account for 40% or more of public expenditure. On whether we are raising the money through tax receipts or borrowing, the amount being spent accounts for more than two thirds of all the taxes collected. There has been some discussion of the fact that the social insurance fund has recently moved into deficit having been in surplus for many years. That has always been a conceit because it has been in deficit for many years and social welfare payments have been largely met from taxation receipts. When the Minister for Finance presents the budget in December and adopts a dual track approach to taxation in amalgamating levies and having a set rate of social insurance, we will begin to see the reality all the more clearly. That said, the proposal to cut the level of social welfare expenditure in last year’s budget was obviously politically unpopular, although necessary in the context of controlling public expenditure. This Bill considers the areas in which we need to make decisions in that regard, how they should be informed by principles and how we can address the effects of the decisions made in the last budget. The issue flagged in the Bill is that of lone-parent payments. When a comparison is made with processes and procedures in other countries, one comes across surprising examples, in particular in the Scandinavian model. In Sweden which has long been identified as having the social welfare model we should consider a lone parent is transferred to a jobseeker’s payment when the child reaches three years. I understand this happens in Norway and Denmark when the child reaches the age of ten years. Under the Bill it is proposed to do this here when the child reaches the age of 14 years. We need to consider the social provision for which we can provide, how it compares with that made in other countries and how it meets the level of social protection which needs to be offered. When we examine the budget for next year, we will need to make a distinction in the general rates of social welfare benefits and the need to restore particular payments at a faster rate. Payments to persons with a disability and or who are blind should be increased ahead of other payments. We should send this signal which I hope will be given active consideration when we come to examine the budget. There is a need for a very clear signal that the rates of 31 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

[Senator Dan Boyle.] all social welfare payments, following the decreases in last year’s budget, will be frozen. If there are savings to be achieved — they would still be unwelcome — they should be made in secondary benefits, through the qualifying criteria for receipt of social welfare payments and merging and amalgamating payments. We cannot send a further signal that social welfare rates are likely to decrease, particularly now when we have started to see signs of economic growth earlier than anticipated. The signal has to be that when the economy grows, the first ones to benefit will be those in society who have least. In the long term we need to consider the social welfare model we should use. It is not good enough that in 2010 we are still using a largely Victorian model of social welfare, in which people have to prove they are living in poverty or have a disability to guarantee receipt of a particular payment. I see hope in the provision included in the programme for Government at the request of the Green Party under which there will be integration of the tax and social welfare systems. One example is the proposal made by Social Justice Ireland regarding tax credits for the working poor and the lower paid. It is a simple idea. It is suggested those who gain maximum benefit from tax credits are those on relatively high incomes. Those on low incomes may not benefit at all. Where this is the case there should be a refund in order that the lower paid would gain to the same extent from tax credits as the higher paid. It is a simple concept that has been unnecessarily opposed by the Department of Finance. It can be easily accommodated within our tax and social welfare systems and I hope it receives active consideration given it is included in the programme for Government. The other side of the integration of the tax and social welfare systems is that a social welfare payment which is part of an overall income should be liable for tax. This is a balancing mechanism and, while it would probably be subject to strong political opinion, it is not unusual in other jurisdictions. In the Swedish system, which is upheld as a model of social protection, all income is taxable. Even though most Irish income earners cannot avail of tax credits, they are not caught by the tax net until a higher level than most other European countries. The tax rate in Britain starts at £10,000, whereas it is €30,000 here. The tax rate starts at zero in Sweden. If we are to integrate the tax and social welfare system, we have to proceed on the basis that all income is taxable and all welfare payments, whether paid directly or in the form of tax credits, apply to everyone equally. We need to have this debate if we are to understand the idea of universality and allowing people to benefit according to their means. These issues arose to a certain extent in last year’s debate on child benefit. The chosen budgetary mechanism of graduated cuts at certain income levels was based on legal advice. I remain convinced that the best way to deal with child benefit would be to make it taxable. The argument has been made that most of the direct beneficiaries are women and many are not in the tax net but I do not see this as a problem if they are issued with tax credits. The likelihood is that the tax return would be small but the benefit to women and children would be more direct. This is a more honest way of dealing with the problem. In considering the measures in this Bill, we need to decide where the debate should proceed.

An Leas-Chathaoirleach: The Senator has one minute remaining.

Senator Dan Boyle: I have one minute to change the social welfare system. I am grateful for that.

Senator Fiona O’Malley: He was doing so well.

Senator Jerry Buttimer: I am glad he only has one minute. 32 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

Senator Dan Boyle: If we are serious about getting the best bang for our public buck or having the greatest degree of social protection, we need to recognise that the present system gives too little protection to the people who need it and too much to those who do not. The mixed messages sent through our tax and social welfare systems need to be addressed. I hope steps towards these goals can be made in budget 2011.

Senator Phil Prendergast: I welcome the Minister of State at the Department of Social Pro- tection. The Minister for Social Protection stated: “It is up to other parties to explain how their policies would maintain the same level of commitment to social welfare clients”. The Labour Party has proposed a PRSI holiday for employers who take long-term unemployed people off the dole and a graduate and apprentice programme which would guarantee relevant work- based training and opportunities to obtain new qualifications for all young people out of work. I also note the proposals for job creation and investment over the next five years. It is estimated the Bill’s provisions for reform of the lone parent’s allowance will add 12,000 people to the live register over the next six years. Under Government activation plans from 2011, the one-parent family payment, which is not currently counted for live register purposes, will cease once the youngest child reaches the age of 14. According to a reply to a recent parliamentary question in the Dáil, the Minister expects this reform to yield Exchequer savings of €1.1 million in 2011, €5.5 million in 2012, €12.3 million in 2013, €20.7 million in 2014 and €26.2 million in 2015. The change will affect 900 parents in 2010 and 12,000 by 2016. What employment creation does the Minister envisage for single parents? We are told that unemployment will remain at 13% for the next 18 months and every person unemployed costs the Exchequer €20,000. The types of jobs which are suitable for single parents include special needs assistants and home carers, areas which have been subject to Government cuts. These people want to return to employment and to make a contribution to the Exchequer. They do not want to be seen as sponging off the State but, with more than 450,000 people on the dole, they are finding it difficult to accept that €22 billion could be thrown away on zombie banks when their allowances are being cut as an incentive to get them back to work. I have met many people in my clinics who provide valuable services as special needs assistants. They make a positive impact on their schools and the children for whom they care. Their role is wider than that of classroom assistant. The loss of 12,000 of these posts does not bear thinking about. The Minister stated the measures in the Bill will work in tandem with the integration of FÁS functions. We have had a jobs crisis for the past two years but it did not take that much time to help bankers and developers. Any savings made through these measures will be paid out by community welfare officers because they too have reached crisis point. Some people I know have had to wait several weeks for a response to their application for unemployment assistance because the system is overloaded. It appears that insufficient staff were allocated to deal with the unemployed. In regard to cutting budgets generally, what jobs are available through the jobs activation programme? What advice can I give someone who presents at my clinic regarding where to seek employment, how they can qualify and how they will be assessed? If they go to work, what arrangements will be put in place to mind their children? Will a subsidised scheme be introduced? How much will the job creation programme cost? The Government is proposing various schemes but for genuine job opportunities people need access to training, education and literacy improvement; drugs rehabilitation; child care; services for people with disability; and mental health services. The proposed reforms disadvantage large sectors of the community. I ask for answers on the issues I have raised.

33 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

Senator Fiona O’Malley: I welcome the Minister of State, Deputy Áine Brady. One of the reasons I am enjoying the debate is that it provides parties with an opportunity to outline their ideas to the House. One of the best reasons to join the Green Party is that it is full of ideas and clearly examining the issue of transformation.

Senator Paddy Burke: The Senator is looking for a new party.

Senator Fiona O’Malley: It is important when criticising a Government to be clear on what one is offering as an alternative. I found Senator Boyle’s contribution inspiring. Clearly the Green Party has thought carefully about what needs to be done. Unlike Senator McDonald, I found the decision to change the name of the Department of Social and Family Affairs to the Department of Social Protection inspiring. It indicates an intention to return to the original purpose of the Department, namely, protecting those most in need. It is often lamented that we blew the benefits of the boom and that we have nothing to show for it. I was tempted to raise a point with Senator Buttimer on the Order of Business but declined to do so. However, I will do so now. This morning the Senator and I spoke about our good road infrastructure. This is one example of how we did not blow the benefits of the boom. As the Senator informed me, one can now travel swiftly between our large urban centres. We also tend to forget the significant increases in social welfare benefits. As the Minister noted, in the past 12 years pension rates, unemployment benefit and child benefit increased by 120%, 130% and more than 330%, respectively. The list continues. We also tend to overlook the fact that, while Anglo Irish Bank received €22 billion, the social welfare budget for 2010 is €20.9 billion. The Minister referred to the obligation to use taxpayers’ money in the most efficient manner possible. This is brave legislation because it is unpopular to reduce allowances. As Senator Boyle noted, it marks the beginning of real social change. I hope the Minister will continue in this vein in the new Department by transforming the way in which social welfare payments are made and the purpose for which they are given. It used to depress me to hear a certain individual from CORI constantly lament that the year-on-year increases granted in the budget were not insufficient. I always thought the person in question did not care about people’s souls. Why should someone on social welfare be allowed to believe he or she is entitled to receive payments indefinitely? More is required of those in receipt of payments. The reason I applaud the Bill is it recognises that people need to be prepared for a lifetime of independent living. Many recipients of social welfare payments, particularly lone parent families, remain in poverty indefinitely. The changes in the Bill ask why this should be the case. We must ask the reason people remain in poverty, despite the comparatively generous supports offered. It is not simply a matter of money but also one of lifestyle, education and expectations. Nothing could be more depressing than preparing people to remain on social welfare indefinitely. A work ethic can be instilled in young people before they become dependent on social welfare. Under this legislation, young people will be encouraged to go to work and taught the value of a euro. As everyone knows, one does not appreciate what one receives for free. When I first started to work, one knew how long it took to earn £1 and one was loth to spend or give it away. One valued what one earned, whereas people do not value what is given to them for free. I welcome the steps being taken to transform our social protection measures. We need to be courageous. The working poor are the most overlooked group in society. These are people who are struggling to raise families on low incomes and do not receive any of the benefits afforded to those on the dole or in receipt of other social welfare payments. It takes a person of strong character with a good work ethic to choose not to enter the social 34 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage. welfare system. As Senator Quinn noted, many of those on low pay will eventually move into higher paid employment. However, many of them will conclude that, having paid for meals and transport to work, they are not much better off than neighbours in receipt of social welfare. We need to be honest about this because if we continue to incentivise people not to work, we will not get the best out of them. This legislation is a step in the right direction. I hope we will all work together on this issue because it is in everyone’s interest to get the best value from our social welfare system. For this reason, we need to integrate the taxation and social welfare systems to ensure all income is taxed. This would be a fair way to expand the tax base at a time when it is necessary to raise money. Those in genuine need of supports will continue to receive them. I am pleased an earlier speaker referred to the ease with which people could fly in and out of the country to collect social welfare payments. This was highlighted at the time of the volcanic ash cloud over Europe when the number of claims declined. We must examine this issue to ensure the money available is targeted at the vulnerable and those most in need.

Senator Jerry Buttimer: Cuirim fáilte roimh an Aire Stáit. This is a necessary and welcome debate. I recognise that the Government has increased pension rates by 120%, unemployment benefit by 130% and child benefit payments by 330%. These are welcome increases which all of us support and salute. The Bill, however, is a savage attack on those in receipt of social welfare payments. What do we mean by the term “social welfare”? While preparing for this debate, one of the definitions I found was “governmental provision of economic assistance to persons in need”. That is the position at one level. I agree with Senator O’Malley in asking why so many people live in poverty. Is it down to Government policy? Is it down to the condition and culture we have allowed to develop? At one level the Social Welfare (Miscellaneous Provisions) Bill would be welcome if the provisions and supports were put in place at the same time. I refer to child care, education, housing and a movement of people away from reliance on social welfare. I fully agree with Senator O’Malley in referring to the working poor as now being possibly the most vulnerable group in society. The Bill is about the most vulnerable. It is about the imposition of a cut, in whatever shape or form one likes, affecting those who are most dependent. I am concerned that we are accentuat- ing the divide in society and creating a new poverty trap that further embeds people in social welfare dependency. I listened to Senator Boyle’s contribution and found it difficult to disagree with much of it. I believe we must put a value on work. As a director of adult education in my previous incar- nation before my election to this House, I understand the importance of education, retraining, upskilling and giving people an avenue, in particular single mothers who have great potential to increase their benefit to society through education. Senator Boyle should clarify the thought process he is going through. At one level he is talking about reversing the social welfare cuts imposed in the last budget which cut social welfare to the people who most need it — the disabled and the blind. What is social welfare about? What are the barriers to creating employment? There does not seem to be consistency in Government policy or a willingness to tackle the issue of putting a value on work and rewarding entrepreneurship by rewarding entrepreneurs in the creation of employment. Last week the Minister announced PRSI changes which have been Fine Gael policy for 18 to 24 months. This year — in 2010 — the former Minister for Social and Family Affairs, Deputy Hanafin, spoke about a range of measures that were envisaged.

35 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

[Senator Jerry Buttimer.]

My difficulty is with the people who are not saved from the cuts. In the past two budgets the Government has targeted the most vulnerable. If we are to have reform of the social welfare system, we need to get people away from welfare and into jobs, and put a value on those jobs. In hundreds of local authority housing estates there are people who are idle, getting money as lone parents or through unemployment benefit, and there is a culture of dependency. They have medical cards, houses and there is a begging bowl mentality. That is the culture in which they have been raised and no attempt has been made to change it over the years. We have not changed the culture and given them a cause for hope, and that spiral continues. When I meet people in my clinics or on the canvass, the same issues arise all the time. We need a complete rethink and revamp on the budget. It behoves the Government in the next budget not to make cuts affecting the poor, who are the most vulnerable. Senator Boyle spoke about the levels of income exemptions across the world. In this country exemptions are applied to public sector workers earning up to €30,000, which is a very fair figure. Senator O’Malley referred to CORI. What is Fr. Seán Healy saying? He is saying we must look after people. In many cases, whether because of the education system or the social welfare policies we have adopted over the years, people do not know any better and cannot find the mechanism to get out of it. If they do, they are being clobbered because there are no jobs. We need a major debate on the role of FÁS, which the Government has hived off to different Departments. We need a major review of the role of FÁS. While I do not completely subscribe to the Michael O’Leary viewpoint, we need an honest debate on how we might make FÁS more effective and how we can retrain and educate people. When out canvassing last Saturday, I met a young man who had completed three years of his apprenticeship. The company that employed him folded. He has one year of his apprenticeship left and he cannot complete it, which does not make sense. Why can the local authority not take him on for the final year of his apprenticeship and allow him to be involved in working on upgrading or fixing houses that are vacant throughout Cork city and county? There are hundreds of such people who have not been able to complete apprenticeships. I believe Bill Cullen is right. I would rather work than not work. I remember my first summer job and I remember how damn hard it was to get that money, a point on which I agree with Senator O’Malley. We must put a value on employment and reward entrepreneurs, otherwise we will find ourselves in a spiral of decline and will not go anywhere in the future. 3o’clock Irrespective of politics, I believe this Bill will have a profound impact on those most affected by it. As the unemployment level has increased, activation, about which Senator McFadden spoke in her fine address, has become the core issue. The problem is that the Government does not have a jobs policy or a back to work programme to get people off the live register and into employment. The courses do not exist and the Government is making it more difficult for people to go on courses. We are not supporting those who are most in need. Senator McDonald spoke about the social welfare culture, but what happens to people if we do not have social welfare? Where do they go? Do we want to become like America? I hope not. Therein lies the problem. We have no supports. In his address the Minister spoke about the new child care provision. What does he mean by the new child care provision? We already had a debate on the community child care subvention scheme, which is to be revised in September. The Minister speaks about labour activation focus. What will it do? He has not spelled it out. He has given us a nice soundbite that sounds well. Where are the after-school service and the homework support clubs? Where is the money for these? Who will roll them out? This is the same Government that is tackling community development programmes and 36 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage. taking their powers away. The Minister, Deputy Pat Carey, will not meet the community development programme umbrella body, yet we are expected to listen to a Minister speak about all this. While I may draw the ire of Senator O’Malley, which I do not really want to do, the Govern- ment has created latchkey children as a matter of policy. I grew up in a house where my mother, God bless her, gave up work to stay at home and rear us. When we went to college she went back to work so that she could help us pay for our fees because it was my parents’ philosophy to look after payment for our education. There are other families that cannot do that. The Government’s policy has not helped. Nothing in what the Minister said today indicates there will be a different mentality from 2011 onwards. I wish to make one final contentious point. I wish people would stop suggesting that single mothers are deliberately getting pregnant. I do not believe the majority of lone parents want to be where they are today.

Acting Chairman (Senator Paul Coghlan): Your time is up, Senator.

Senator Jerry Buttimer: I will conclude. Every week I meet many women who do not want to be in a position of dependency on child benefit or the social welfare system in general. They and others need a Government that takes care of them. Social protection is about protection. It is about looking after, minding and encouraging people to get off welfare, to get a job and to have a society where we reward employment and entrepreneurs and where we treat all our citizens equally. I do not know whether this Bill achieves that, but I would love to have a real debate on social welfare. We should have that debate collectively so that we can do what is best for our citizens.

Senator Fiona O’Malley: That is why the Senator should support the Bill. It does what is best for our citizens.

Senator Jerry Buttimer: I would support the Bill if I saw the colour of the Government’s money in the Bill on child care, community welfare, afterschool care and job clubs. That is not there.

Acting Chairman (Senator Paul Coghlan): Your time is up, Senator.

Senator Jerry Buttimer: I will conclude. This Bill——

Senator Fiona O’Malley: Everything the Senator mentions is included in the Bill, yet he will vote against it.

Acting Chairman (Senator Paul Coghlan): No interruptions, please.

Senator Jerry Buttimer: We have no policy on activation, as the Senator knows well. As someone who has often voted differently from what she should have done, I will not take lectures from Senator O’Malley on how to vote on this Bill.

Minister of State at the Department of the Environment, Heritage and Local Government (Deputy Michael Finneran): The national employment action plan is the main welfare to work measure under which all persons between the ages of 18 and 65 years who are approaching three months on the live register are identified by the Department of Social Protection and referred to FÁS for interview, with a view to helping them re-enter the labour market. The provisions contained in the Social Welfare (Miscellaneous Provisions) Bill 2010 will enhance the operation plan in two key areas. First, to incentivise participation in training and education 37 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage.

[Deputy Michael Finneran.] programmes provided under the plan, rates of jobseeker’s payments and associated rates of supplementary welfare allowance are being reduced where a recipient unreasonably refuses to participate in a course of training arranged by this Department or FÁS or fails to avail of an opportunity to participate in the plan. Second, the one-parent family payment scheme is being amended with a view, inter alia, to providing lone parents with greater access to education, training and enabling services such as child care provision to allow them acquire the skills they will need to gain employment. These measures will work in tandem with the integration of FÁS functions into the Depart- ment of Social Protection and initiatives such as customer profiling as part of a strongly activation focused welfare system. In addition, the existing rural social scheme and community services programme will shortly transfer to my Department. Taken together, these will ensure that long-term systemic unemployment and welfare dependency will not take hold. In providing for these measures, we are determined that reductions in jobseeker’s payment rates will only apply where there is a clear lack of engagement by the welfare recipient with an appropriate activation intervention. Any decision made in this area will be open to the independent appeals process. In light of increased demand, the Government is now providing, through FÁS, a total of 128,000 training and activation places for the unemployed this year. This is a substantial increase on the approximately 66,000 places provided last year. There is a wide range of education and training opportunities available through this Department, the Department of Edu- cation and Skills and FÁS for lone parents and jobseekers to strengthen their qualifications and skills base to maximise their chances of meeting the requirements of the modern labour market and gain employment. When lone parents claim jobseeker’s allowance, they will actively engage with the national employment action plan, with a referral to FÁS and access to the range of employment and training services offered by FÁS. They will be supported in this by the new scheme recently announced by the Minister of State with responsibility for children and youth affairs. This new child care education and training scheme will provide free child care for those attending FÁS and VEC courses. It is not anticipated that these measures in the Bill will lead to significant costs. The Department is fully committed to the timely and accurate processing of customer claims and to delivering the best possible service to its customers. To this end, operational processes and procedures and the organisation of work are reviewed in all areas of the Department. These reviews are supported by modern technology, the potential of which is continually har- nessed. Claims are processed in the most efficient and expeditious way possible, having regard to the eligibility conditions that apply to each scheme. Processing times vary across schemes owing to the volume of applications and the differing qualification criteria. For example, means assessments are required for all social assistance schemes, medical examinations are required for some illness related schemes and customers must also satisfy the habitual residence conditions. In the case of insurance-based schemes, it may be necessary to ascertain details of foreign insurance records. Many factors outside the Department’s control can impact upon claim processing times, such as the supply of relevant information by the customer, employers, other EU countries or other third parties. Plans are in train to begin devolving certain decisions to branch offices on a phased basis. The process will begin in three or four of the larger branch offices and will identify if there are training or other issues that need to be addressed before being rolled out to all branch offices. The process will require some level of training for branch managers. The 38 Social Welfare (Miscellaneous 6 July 2010. Provisions) Bill 2010: Second Stage. branch offices will deal with four categories of claims: jobseeker’s benefit claims with full contribution histories, unlimited payments between 65 and 66 years of age, credit cases, and second or subsequent children where the full or half-rate has already been established. While every effort is made to decide on entitlement for any individual person as close to their eligibility date as possible, there are cases where delays will necessarily be experienced. In situations where customers find themselves suffering financial hardship while awaiting such a decision, the facility to receive supplementary welfare allowance funded by the Department and administered by the Health Service Executive is available. In April 2010, more than 96% of basic supplementary welfare allowance applications were decided on and paid within a week. The national average processing times for jobseeker claims during May was 2.43 weeks for jobseeker’s benefit and 6.58 weeks for jobseeker’s allowance. This compares with processing times of 2.33 weeks and 6.92 weeks, respectively, in April. The total number of jobseekers awaiting a decision on their claim at 29 May was just over 45,000. This is a reduction of more than 3,000 compared with the figures one month earlier on 24 April 2010, and represents 9% of the total jobseeker claims load nationwide. Many speakers have made known their views on this Bill, but we are all of the same opinion that we have a section of society which needs the support of the Government, the reasons for which are often outside the control of that section of society. They are not in a position to gain employment and, therefore, the State has a responsibility to ensure this is provided. It is a well- known fact that the Minister, Deputy Ó Cuív, has always taken an holistic view on issues that are important to communities and to persons. I have no doubt he will develop that inside the Department as he becomes more engaged in the matter. People should not try to misinterpret any statements the Minister made on social welfare. He said there are no plans for any changes and budgetary matters are for the budget and not for earlier announcements. That said, I commend the Bill to the House.

Question put:

The Seanad divided: Tá, 29; Níl, 22.

Tá

Boyle, Dan. MacSharry, Marc. Brady, Martin. McDonald, Lisa. Butler, Larry. Mooney, Paschal. Carroll, James. O’Donovan, Denis. Carty, John. O’Malley, Fiona. Cassidy, Donie. O’Sullivan, Ned. Corrigan, Maria. Ó Brolcháin, Niall. Daly, Mark. Ó Domhnaill, Brian. Dearey, Mark. Ó Murchú, Labhrás. Ellis, John. Ormonde, Ann. Feeney, Geraldine. Quinn, Feargal. Glynn, Camillus. Walsh, Jim. Hanafin, John. White, Mary M. Keaveney, Cecilia. Wilson, Diarmuid. Leyden, Terry.

Níl

Bradford, Paul. Donohoe, Paschal. Burke, Paddy. Fitzgerald, Frances. Buttimer, Jerry. Hannigan, Dominic. Cannon, Ciaran. Healy Eames, Fidelma. Coghlan, Paul. McCarthy, Michael. Cummins, Maurice. McFadden, Nicky. Doherty, Pearse. Mullen, Rónán. 39 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

Níl—continued

Norris, David. Prendergast, Phil. O’Reilly, Joe. Regan, Eugene. O’Toole, Joe. Ross, Shane. Ryan, Brendan. Phelan, John Paul.

Tellers: Tá, Senators Niall Ó Brolcháin and Diarmuid Wilson; Níl, Senators Maurice Cummins and Nicky McFadden

Question declared carried

An Cathaoirleach: Arising from the omission by Senator Doherty to vote, the result of the division as shown on the display board has been amended, with the agreement of the Tellers for both sides. The amended result will appear in the Journal of Proceedings of the Seanad. When is it proposed to take Committee Stage?

Senator Donie Cassidy: On Tuesday, 13 July.

Committee Stage ordered for Tuesday, 13 July 2010.

Sitting suspended at 3.25 p.m. and resumed at 4.30 p.m.

Health (Miscellaneous Provisions) Bill 2010: Committee and Remaining Stages

Sections 1 to 5, inclusive, agreed to.

NEW SECTION. An Leas-Chathaoirleach: Amendments Nos. 1 and 2 are related and may be discussed together, by agreement. Is that agreed? Agreed.

Senator Frances Fitzgerald: I move amendment No. 1:

In page 4, before section 6, to insert the following new section:

“6.—From the commencement of this Act any review of services, including those of any land and buildings, at Saint Luke’s Hospital, must be laid before the Dáil and the Oireachtas Joint Committee on Health and Children by the Minister for approval.”.

We had a long discussion on Second Stage. The key points to emerge from that debate focused on centres of excellence and specialist centres, people’s experience of them and also their experience of St. Luke’s Hospital. It was agreed on all sides of the House that the experience of St. Luke’s Hospital had been very positive. The hospital was described as a gem and an oasis. Various adjectives were used to describe what was for almost everyone a quality experience. There was a concern that this ethos would be lost. The key point to emerged time and again centred how one could ensure the standards of excellence and care and the ethos developed in the hospital could be continued. I raised this issue during our last discussion in the House. My colleague, Deputy James Reilly, tabled an amendment proposing that any changes to be made from the commencement of the Bill, or any review of services, including of lands and buildings, at St. Luke’s hospital should be laid before the Dáil and the Joint Committee on Health and Children for approval. The Minister for Health and Children, Deputy Mary Harney, had said in previous discussions in the Dáil and at the committee that she agreed with this proposal. I asked that she come 40 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages back to the House today to inform us whether there had been a change of opinion or whether she still intended to do this. The value of the amendment would be that we could have a detailed discussion at the Joint Committee on Health and Children about any change of use proposed at the point where it was envisaged this would happen. It is envisaged that this happen in 2014. This debate has particular relevance. While I did not hear the discussion, I understand the question of centres of excellence was discussed on “The Pat Kenny Show” today, arising in particular from a letter from Mrs. Kay Coburn. It is a very sad story. Mrs. Coburn’s sister died from ovarian cancer and she wrote a four-page letter about what her sister had experienced in one of our centres of excellence. This is the very point I was making last week when I suggested we were removing a well proven centre of excellence. There is a page on Facebook which over 2,000 people have signed to support the continuation of the service in the hospital. There have also been numerous e-mails sent to public representatives. One cannot but be moved by their quality and how people speak about their experience of St. Luke’s Hospital. What Mrs. Coburn writes can only be described as disgraceful. If we are talking about moving patients from a proven to an unproven centre of excellence in terms of the quality of the experience, we have a real problem. My plea to the Minister on the last occasion was that if we were intent on removing the service, we should offer an equivalent service elsewhere. That is what all of the people who have contacted us are so concerned about, namely, that such a service will not be available, although it has been for so long in St. Luke’s Hospital. What we are trying to restore with the amendment is control for the Minister in front of her colleagues at the Joint Committee on Health and Children and in the Dáil before further radical changes are made. I want to return to the centres of excellence supposedly available. Mrs. Coburn’s sister was not admitted directly to an oncology ward; in fact, she never reached such a ward. She was on a trolley in the accident and emergency department for 25 hours where she was subjected to various indignities and unacceptable treatment, including a delay in being seen. Mrs. Coburn refers to her sister being on a trolley which was most uncomfortable, narrow and restrictive when she was not well enough to sit in a chair. She goes into further detail in her letter. It is the saddest story one could ever read. She asks why, if we have dedicated oncology wards, there are patients who have been diagnosed with cancer in wards all over the hospital in which, potentially, they are exposed them to infections which in their compromised state could have a serious or fatal outcome. It is a reasonable question to ask, if we say we are providing specialist centres and at the same time doing away with a specialist centre that was providing high quality care. How can we describe these as units specialist units if half of the patients that should be in them are in medical, surgical and geriatric wards around the hospital? Mrs. Coburn asks where is HIQA in all of this. She thought her sister was entering a centre of excellence, but she did not receive excellent treatment. Mrs. Coburn asks why patients who are suffering from cancer have to be readmitted time and again via an accident and emergency department process when the name of the doctor who will be dealing with them is known. Unfortunately, her beautiful sister died on 23 June “at home in the loving care of her family, and I had the privilege of nursing her.” The letter continues: “I have never written to a TD, Minister or anyone else before but I am going to bombard everyone because of what I witnessed and what my sister endured over the past 48 hours and indeed may have to endure again”. That is her experience of a centre of excellence in 2010. This adds weight to the point that so many of those who have contacted us about St. Luke’s Hospital have made. We have a centre which provides excellent care. I absolutely support the provision of high quality and specialist care. However, it is reasonable to ask what standard of 41 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

[Senator Frances Fitzgerald.] care will be provided in the specialist centres of St. James’s and Beaumont hospitals when services are transferred from St. Luke’s Hospital.

Senator Phil Prendergast: I speak to amendment No. 2 in the name of the Labour Party that the HSE “may not dispose of any land (including buildings) vested in it by this section and must continue to use the land (including buildings) vested in it by this section for medical purposes related to the treatment of cancer in public patients in a manner and form determined by the Executive with the consent of the Minister”. Like other Senators on all sides of the House, I have received communications from many people who have themselves, following a diagnosis of cancer, received treatment at this centre of excellence in Rathgar or a family member or close acquaintance. There are so many clichés about St. Luke’s Hospital and its surroundings being such a unique gem in the provision of such excellent care. As someone who has worked in a hospital setting, I know that when people are disagnosed with cancer, it is very difficult for them if the other patients in the ward have not received the same diagnosis. Their psychological, medical and treatment needs are different and often they are very sick. Having a centre dedicated to the treatment of such patients allows staff to become expert in providing treatment. Many people took great comfort from the staff and, in particular, the surroundings. Time and again people were delighted with such surroundings in a centre of excellence, if that was possible when diagnosed with cancer. Each e-mail we received was different and detailed either a personal story or that of a close family member. The nub of the matter is that the HSE is always seen in a negative way but we have an opportunity to keep something truly wonderful.

Senator Nicky McFadden: It is valuable.

Senator Phil Prendergast: There are not many places about which we can say that. I know everybody works very hard in the HSE and some people on the front line suffer extraordinary difficulties at the moment with the moratorium on staff recruitment. It is having a serious impact in the delivery of some services. There has also been a major impact from the way doctors can be employed, and just last week there was a difficulty because there was talk of closing one of the main accident and emergency units in Cork because of a lack of doctors. These are serious issues but the system in St. Luke’s is working very well. We will press our amendment and I hope we will get an opportunity for reasoned debate before the amendment is accepted. We are not looking for the world and the Government’s action will not save money; it will only put people at a disadvantage and make people who are already having a very difficult time in their lives unhappy. Those people with family members who have already passed on having been treated in St. Luke’s will take great solace and comfort if we can retain this facility and keep it for what is good. We cannot say that about many places in the country. I am very interested to see time is being made available this week for a debate on cystic fibrosis, and there is a need for a specialist centre that has not yet materialised. St. Luke’sisa centre of excellence taking in the same old clichés on what is a centre of excellence. Such a centre is where people feel they get all their needs met in a holistic way. This unit and hospital provides for people and I ask that the House accept the amendment.

Senator David Norris: I strongly support this two amendments, which are very important. If the amendments are not agreed I will call for a vote, and if such is granted I will vote against the entire Bill. I will do so because there is something profoundly undemocratic about what would happen today without these amendments. I say this for a number of reasons. There is a clear wish on the part of patients that this service be retained. Those campaigning for St. Luke’s 42 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages are very rational, reasonable and moderate in their demands. The principal demand I have come across is the idea that people should listen to patients, and as a result of the patient’s views, St. Luke’s should at least be retained as a satellite hospital. I know St. James’s Hospital to be excellent as I was a patient there for a while because of medical silliness. An investigative operation went wrong and I was given the benefit of septice- mia. I cannot speak highly enough for the care I received and it is a teaching hospital of Trinity College, where I used to work. I have the highest regard for it and the staff working there. I wonder how appropriate it is to concentrate all the work done historically in St. Luke’s — it has a very special place in the hearts and minds of people not just in Dublin but around the country — in St. James’s Hospital. A new building will be required, which will be fairly tall. People will no doubt have the kind of comfortable accommodation I eventually received in St. James’s Hospital but that is not the same as what one would get in St. Luke’s. If one is considering an holistic approach to medicine, it is interesting to note what so many people have commented on to me. In St. Luke’s, extended families could stay in the facility or visit easily. The patients could enjoy the health-giving surroundings and wonderful gardens. This may sound sentimental but it is not because the state of mind of a cancer patient is extremely important. There is also the risk of cross-infection. Senator Prendergast raised — as I had intended — the question of cystic fibrosis and the moving accounts given by several people in the newspapers recently, particularly Ms Orla Tinsley, on the issue. For five years, Ms Tinsley has been promised the development of a special 24-bed unit but at the moment people like her must endure being placed in a ward with other decent patients — she does not criticise such people — but some of them are in a pretty feeble state, incontinent or with wandering minds. They have different diseases and Ms Tinsley and others have described their experiences as like being forced to sleep in a public lavatory, and there is a serious risk of cross-infection. All of us have been touched in some measure by cancer and we all know that after chemo- therapy or radiation therapy, a significant impact is the reduction in the effectiveness of the immune system, leaving people open to infection. That can be extremely dangerous. Will the Minister of State respect the views of the patients? Will he understand and respect the fact that the patients, their families and supporters have raised €26 million? To a certain extent, the ownership of the hospital, at least morally, is vested in them. Is it the intention to dispose of the land, as this has been happening all over the place and people are being forced from nursing homes on ridiculous and specious arguments about health and safety concerns that involve nothing more than a lick of paint? Such action occurs so land and planned facilities can be sold to realise money for the central Exchequer. My concern is that this will ultimately be a fund-raising exercise so will the Minister of State address what will happen to the money that may be raised from the possible sale of the hospital and its grounds? In addition to the €26 million raised, a petition was handed in at Leinster House last Wednesday containing 150,000 signatures, which is a massive vote by the ordinary people, whose representatives we are, against this unqualified move and in favour of, at the very least, the two amendments put before us. The first amendment is in the name of Senator Frances Fitzgerald and the Fine Gael Party. It deals with the modest requirement that any review of services and alteration in the use of land and buildings should be laid before the Oireachtas. That is accountability, and this Government has quite rightly preached to us about openness, transparency and accountability. The second amendment is in the names of Labour Party Members. It deletes part of the Bill and includes instead a proscription preventing the Minister disposing of any land or buildings except in a manner informed and determined by the executive, with the consent of the Minister, 43 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

[Senator David Norris.] which must contain medical services related to the treatment of cancer. I have no difficulty in strongly supporting these amendments. I will, with regret, be forced to call for a vote if these are not accepted and have to vote against the Bill. I do not like doing so because I like to vote in favour of positive and progressive measures in health and treatment sectors. I do not see this Bill as such without the amendments put down by my colleagues.

Senator Nicky McFadden: I commend Professor Hollywood and the staff at St. Luke’s, and I also commend Fine Gael and Labour for putting down worthwhile amendments. However, as politicians, we are afraid that people who have cancer will not be cared for properly and, as a result, we are also afraid to suggest that there should not be such firm adherence to the policy relating to centres of excellence. What constitutes a centre of excellence? I wholeheartedly agree with Senator Norris’s assertion that it is a place where a person is provided with holistic treatment and care. People can only recover if they are not exposed to infection and are treated in a relaxed atmosphere where they can be loved and cared for in a compassionate manner. That has not been my experience of the new centres of excellence. This is a matter about which I feel strongly. Senator Fitzgerald read into the record a very emotive piece about a lady who is dying from cancer and who was left to wait on a trolley. I assure the Minister of State that a patient would not be treated in that way at St. Luke’s Hospital. That is the bottom line. St. Luke’s Hospital should remain in place as a satellite facility of St. James’s Hospital. The Minister of State has made the point very well that there is a need for intensive care services to support St. Luke’s. That is fine, once it remains in place as a satellite facility of St. James’s Hospital. St. Luke’s should remain in place, in the leafy suburb of Rathgar, as a public facility for people who are ill and who need care. Members of my family and some of my friends were treated at St. Luke’s Hospital. I cannot say enough good things about the place. My constituents have been discussing this matter with me and sending me e-mails. They stated that it would be terrible if the service on offer at the hospital were to disappear. Senator Norris also stated that €26 million has been collected through fund-raising efforts. It has come to my attention that St. Luke’s Hospital was donated to the State. How, therefore, do we have a right to sell it off to pay for the bailout of Anglo Irish Bank and for the various mistakes that have been made? I suggest that for once there should be all-party consensus in the House. In that context, I am aware that some colleagues on the Government side of the House share my view that St. Luke’s should be retained in its present form in order that its staff can care, in a compassionate manner, for people who are sick.

Senator Ivana Bacik: I support both amendments which were tabled by the Labour Party and Fine Gael and which clearly address the major problem with the Bill. We are of the view that amendment No. 2 is critical and we will not be supporting the Bill if it is not accepted. Amendment No. 2 provides, as Deputy Ruairí Quinn stated in the Dáil, that St. Luke’s should be retained as a centre of excellence and should not be sold. It is a simple but critical amendment. We are aware that St. Luke’s is more than just a local institution in what Senator McFadden referred to as a leafy suburb. As the Senator stated, some of her constituents have travelled to St. Luke’s for treatment. People travel from all over the country to be treated there. St. Luke’s is recognised as a national centre of excellence, which is evidenced by the many thousands of people who have argued for its retention. The Minister of State will be aware 44 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages that a petition containing more than 150,000 signatures has been handed in and approximately 5,000 people have signed up to the Facebook page. We have all received e-mails and messages from people in all walks of life in which they related the most heart-rending stories. Senator Fitzgerald, quite rightly, read some very tragic human stories into the record. While their stories may indeed be tragic, the people to whom I refer have been assisted by the calm atmosphere that obtains at St. Luke’s and the excellent treatment they have received there. There are people in the Gallery — many of them with direct personal experience of this matter — who have been arguing for the retention of St. Luke’s. In excess of 71,000 treatments were delivered at St. Luke’s in 2009 and large numbers of patients were provided with care. Those who support the hospital are formidable fund-raisers and I understand a new extension costing €15 million was opened there in the past 18 months. I am very familiar with the hospital, having visited friends there. I have always been impressed by the high levels of care and treatment patients receive there. This is a centre worth retaining. My party’s spokesperson on health in the Dáil, Deputy Jan O’Sullivan, made a very strong case to the effect that we are not arguing for St. Luke’s as some sort of stand-alone centre. Rather, we are arguing that it should be linked to one of the designated centres for the Dublin area. This is because we support the centres of excellence policy that is at the core of the health strategy relating to cancer care. However, we understand that there are facilities such as St. Luke’s which have a unique character and which have been doing work to assist the recovery of cancer patients for many generations. We are of the view that these facilities can be incorpor- ated into the centres of excellence strategy in a way that will allow them to continue the work they have been doing. We are not necessarily suggesting that surgery be available at the hospital. We propose that the hospital be attached to one of the designated centres of excellence. During the debate in the Dáil, there was a great deal of assurance provided that the provision relating to St. Luke’s will not come into effect until 2014. Perhaps the Minister of State can clarify whether that is the case. On Committee Stage in the Dáil, he appeared more sympathetic to the Labour Party’s argument to the effect that a different approach should be taken. However, the current wording contained in the Bill — which was put in place on foot of an amendment the Minister of State introduced in the Dáil — is not satisfactory. It merely provides an empty assurance that there will be a stay of execution for four years. It appears that when this period has elapsed, the sale of the hospital will be carried out. There are a number of other issues which must be addressed. I refer to the consequences to which the Bill will give rise if it is passed in its current form. If the legislation is enacted as it stands, additional pressure will be placed on St. James’s Hospital. It will also lead to further delays being experienced. There are already unacceptable delays in the treatment of cancer patients, especially those in the public system. In addition, issues also arise with regard to inequity in the health service. This is a matter to which the Labour Party has always been opposed, especially in the context of more favourable treatment being given to private patients. These issues must be addressed. If they are not, adverse consequences will arise for patients at St. James’s Hospital. When one considers the extraordinarily high levels of cancer among people in this country, it is obvious that there is a need to be very careful about closing any facility which is recognised as a centre of excellence and where the atmosphere and the positive treatment provided appear to be especially conducive to the recovery of cancer patients.

Senator Geraldine Feeney: As Senator Fitzgerald correctly pointed out, the Second Stage debate on this Bill, which took place last week when the Chamber was not, perhaps, quite so full, was very special. There was a real air of empathy in respect of the staff, board and friends of St. Luke’s. Everyone recognises the wonderful, valued care that is administered to people 45 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

[Senator Geraldine Feeney.] at St. Luke’s, regardless of whether it is likely they will recover or whether their illness is terminal. One could almost have cut the air with a knife during that debate. The atmosphere which obtained in the House last week was very special. The Minister of State at the Department of Health and Children, Deputy Áine Brady, took the Second Stage debate and, as I understood it, she indicated that St. Luke’s will remain operative until 2014 or possibly 2015 and that radiotherapy services will continue to be administered there. On Second Stage, reference was made to the terrible stories that have emerged with regard to misdiagnoses and the fact that by the time some women and men received their diagnoses, it was too late. We all know what happened in these instances. I was of the view that letters such as the one sent to me at my home by Ms Kay Coburn, which I received at the weekend, were a thing of the past. My immediate reaction was to ask how this could happen. I did not hear Ms Coburn this morning on “Today with Pat Kenny”. However, I believe her story about her beautiful young sister was heart-rending. I really do not think it is acceptable that a person in the late stages of cancer should have to go in through an accident and emergency department. I tuned into the final part of the programme, when Dr. David O’Keeffe, a consultant radiologist, was interviewed by Pat Kenny. I was grateful and glad to hear him apologise. He said there are changes afoot and 5o’clock it is not right that cancer patients in centres of excellence, or specialist centres as I prefer them to be called, have to come in through accident and emergency departments. There needs to be some other type of admission process, perhaps through an oncology ward with at least two or three beds for people, like Mrs. Coburn’s sister, who have to be brought in but are not in-stay patients. I do not expect the Minister of State to accept these amendments. I would like to mention a question that has been raised with me about what might happen if St. Luke’s Hospital closes its doors in 2014 or 2015. I am speaking as someone who buys into the whole cancer control programme, as set up by Professor Tom Keane. I support him when he says we cannot have units here, there and everywhere. When I say that, I do not mean to undermine the great work that is done in St. Luke’s Hospital. If the hospital’s lands and buildings are to be sold, both Houses of the Oireachtas should ensure the moneys in question are ring-fenced so they are not used for anything other than the treatment of cancer for public patients.

Senator Nicky McFadden: The horse has bolted.

Senator Geraldine Feeney: Can I also ask about the money that has been raised by the Friends of St. Luke’s Hospital? The Minister of State might not know that €26 million has been raised by the group. The funds in question are probably not with the HSE. I hope they are not, because the HSE would probably spend them on something else. I am sure the Friends of St. Luke’s Hospital have their own bank account. The board of the group might be looking after the money. What will happen to the funds when the doors of St. Luke’s Hospital have closed and the hospital does not exist any more? After reading the letter to which I have referred, I believe it is a shame and an indictment of us all that someone in the late stages of cancer was treated in such a small treatment room. When the light was turned on in the room, it burned the head of the poor lady, who was in her final weeks of her suffering with cancer. I congratulate her brave sister for putting together this letter, which reads like a diary. I am sure it must have been terrible. She tried to comfort her adult nieces and nephews. Although I have not had such an experience, I do not think anyone would be very patient or polite if they had to watch a loved one, particularly their 46 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages mother, dying of cancer after spending 24 hours in a room that is fit for no more than having a corn pared, or some other kind of minor surgery. I should mention that the woman who spoke on radio this morning said she had nothing against the front-line staff who did everything in their power to make her sister comfortable. I ask the Minister of State, Deputy Andrews, to try to shine some light, for everybody’s sake, on the question of whether an undertaking will be given that the moneys which accrue when St. Luke’s Hospital closes in 2014 or 2015 will be ring-fenced and used solely for the treatment of cancer.

Senator Feargal Quinn: The Minister of State is welcome. This Bill presents a great deal of difficulty. On many occasions recently, I visited two relatives in hospital, one in St. James’s Hospital and one in St. Luke’s Hospital, on the same day. The relative in St. Luke’s Hospital did not live; the relative in St. James’s Hospital is alive and well. I was reminded of the contrast between the two hospitals. I am a great believer in centres of excellence. I believe the policy of developing centres of excellence is correct. However, I am not convinced of the merits of bringing patients from St. Luke’s Hospital to the busy hustle and bustle of St. James’s Hospital. Although patient treatment is very good at St. James’s Hospital, there is a difference between the manner in which the requirements of cancer patients are met there and at St. Luke’s Hospital. St. James’s Hospital is a very busy hospital. I am sure the medical care provided there is excellent, but it does not have anything like the calmness and serenity of the 18 acres of St. Luke’s Hospital. While I support the concept of centres of excellence, I also support the view that St. Luke’s Hospital must be allowed to continue, in whatever form is required. An old Irish seanfhocal, éist le fuaim na habhann agus gheobhaidh tú bradán, which means “listen to the sound of the river and you will catch a salmon”, is a great reminder of the importance of listening. In this instance, not only should we listen to the patients in St. Luke’s Hospital, but we should also listen to the experts. I appreciate that the Minister for Health and Children employed experts to examine a number of hospitals. Earlier today, I saw some of the figures they produced after they had engaged in one-off examinations of certain hospitals five years ago. It is amazing that St. Luke’s Hospital did not get what would be regarded as an acceptable recognition from its patients. It runs contrary to my entire understanding of the hospital that it was ranked in a much lower position on the list than it might otherwise have been. I suggest that much has changed in the intervening five years. Much more is required if we are to meet the challenges involved in the treatment of cancer in the years ahead. I have seen figures which predict that the number of cancer patients requiring treatment of this nature will increase by 50%, from 28,000 to 42,000, between now and 2020. Those people will need the services of the 500 staff who are employed in St. Luke’s Hospital at present. We cannot do without the incredible experience and expertise of the staff in question. I take the point that is made in the amendments before the House. Senator Feeney has suggested that we should provide for ring-fencing. We should all accept that the grounds of St. Luke’s Hospital, like the expertise that has been built up at the hospital, must not be lost. These facilities should continue to be used for cancer care. If the hospital is not developed as the centre of excellence — I understand the centre might be required somewhere else — it should be maintained as a centre for the treatment of cancer patients. These 18 acres need to continue to serve as a valuable haven in this city for people who are suffering from cancer. We must not lose them. I have no problem with supporting entirely any amendment that proposes that this hospital should continue to be involved in cancer treatment. Just as it has achieved so much in the past, it can continue to achieve so much in the future alongside the centre of excellence at St. James’s Hospital. It is time to renew our thinking to ascertain whether we 47 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

[Senator Feargal Quinn.] have made the right decision. I urge the Minister of State to accept amendments Nos. 1 and 2, which are worthy of acceptance and represent the correct direction in which to go.

Senator Fidelma Healy Eames: Unfortunately, cancer remains one of the top three killers in this country and, given the figures Senator Quinn recounted, it appears it will remain so for some time. What is the most important thing to consider in cancer care? It is the quality of the care the patient receives, the environment and atmosphere in which that care is delivered, and whether the staff are tense or can genuinely offer care. There is also the ethos in which the care takes place and the quality of outcome. For these reasons, I support the amendments of Fine Gael and the Labour Party and compliment Senator Fitzgerald and the Labour Party team on tabling them. This gives us a chance to think about the matter. In 1990, my father was in St. Luke’s. Thank God he is still alive and very well but he was a difficult man to convince he needed treatment. He had surgery and subsequent treatment but I could not believe I was in a hospital. This man came and went whenever he wanted and spent more time at the bookie’s shop than in the hospital. The staff knew how to manage him. After having major surgery he came and went as he pleased but they were able to manage him. He got exceptional care, thank God, and here I stand 20 years later, speaking of a man who is fit and well, aged 80 years of age. In 1990 I saw St Luke’s had developed into a specialist centre for cancer care long before that term was ever known in this country and I know the same from friends and relatives and thousands of e-mails we have received since. It developed through experience and throughput, namely, the very reasons we want the centres of excellence. Most important, it is because of patient feedback that we know it developed into a centre of excellence. As my colleagues, including Senator Quinn, stated, we must listen to the patient. I believe it will be time to close St. Luke’s only when we receive as much positive feedback from patients regarding the new centres. They are only in transition, learning how to manage, and in many respects are lost at present. I refer to the situation in Galway which greatly saddens me because I live there. It is my constituency and University College Hospital, Galway is my local hospital. Senator Fitzgerald read into the record and Senator Feeney referred to the letter from Kay Coburn. I am shocked and devastated to think that our designated centre in Galway is not yet a centre of excellence. It is so in name but is very much in transition and only learning how to cope. One can consider a few basic matters. I have spoken to people in the centre such as Professor Kerin who told me that dedicated beds were needed in one place. What is a centre, after all, but a dedicated place to which one can go and know it is for the care of the cancer patient? If that dedicated centre exists, why admit patients through accident and emergency departments? Why would Kay Coburn’s lovely sister have to spend 25 hours in the emergency department? We do not yet have that centre. Senator Feeney asked, rightly, why Galway does not have a centre with two, three or four beds instead of having the beds spread throughout the hospital, in geriatric and other wards where patients are at risk of cross-infection. The answer is a policy decision by the Minister for Health and Children, Deputy Harney. When responding on this matter on “Today with Pat Kenny”, Dr. David O’Keeffe said it was because of the moratorium. How can there be beds in a single place when the hospital has neither the beds in the first instance nor the staff to service them? It is only some months since I spoke in this House about the scandal concerning cancer drugs in UCHG, our centre of excellence. A sum of €12 million that had been promised for cancer drugs was not given to the hospital. Did the patients get the drugs? They did but only because 48 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages the money came from 100 hip operations and elective surgeries that were cancelled and from the gynaecological ward. We are living on a shoestring in this country but there is St. Luke’s Hospital, working it out and doing so for generations. I support what other speakers have said. I ask the Minister of State to confirm that the year in question is 2014 because that would give us four years to think about how to turn St. Luke’s into a satellite centre of St. James’s Hospital, as others recommended. Let us not consider closing it until there are centres of excellence in practice and reality throughout the country and not only in policy. The Government’s policies are not working. There is a contradiction here, with St. Luke’s about to close and UCHG struggling without the necessary resources.

Senator Geraldine Feeney: St. Luke’s will remain open until——

Senator Fidelma Healy Eames: I heard that and qualified what I said but my basic point is that we must look at wherever there is good practice that puts the patient first and is a success story. Let us not close such places. Let us look seriously at building St. Luke’s as a satellite centre to support St. James’s, as was suggested in this Chamber. Those are my few words. I ask the Minister of State to comment on the situation in Galway as described by me and others and to explain how he will ensure UCHG, the only centre of excellence that lies above the country’s mid-line, from Galway to Dublin, will become a centre of excellence in practice. Will he support Dr. David O’Keeffe and Professor Kerin to ensure they have a dedicated centre with beds into which they can admit patients directly and that they will get the €12 million worth of drugs this year?

Senator Pearse Doherty: I support both amendments. The Minister of State will be well aware that I opposed this Bill on Second Stage and called a vote on it although that vote was not able to proceed as there was no one else to act as a teller in the time allotted. I welcome the amendments, both of which are important. The first deals with the bringing of any decision before the Houses of the Oireachtas. The second, in the name of the Labour Party, is the crucial one. Ultimately, any Government or whoever has a majority could decide to do whatever it wanted with St. Luke’s after 2014. We should nail that in the legislation by making it clear that St. Luke’s will remain, with its land and buildings, as a treatment centre for cancer patients in the public sector. I oppose the Bill because, fundamentally, it closes St. Luke’s Hospital after 2014 but it also implements a flawed plan in regard to the provision of radiation oncology, as the previous speaker observed. This plan discriminates against people who live in regions north of the line between Galway and Dublin, such as those who live in my county, Donegal. We have passed Second Stage, the Government is hell bent on pursuing this issue and, therefore, the amendments proposed by Senator Fitzgerald and the Labour Party are worthy of being accepted by the Government. I support them wholeheartedly. If this Bill is passed, the least that can be done is to ensure the lands and buildings of St. Luke’s remain in the provision of the health services after 2014. They should be used in the provision of public health services.

Senator David Norris: Hear, hear.

Senator Pearse Doherty: The Government has pursued a policy of health services privatisation and attacked public health service provision. That has been the agenda, particularly of the Minister for Health and Children. Sometimes the Government has been happy to hide behind the Minister and state it is her agenda. The reality is that the privatisation of health services is part of the agenda of Fianna Fáil, the Green Party and the former members of the Progressive Democrats. 49 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

[Senator Pearse Doherty.]

It was signalled last year that after 2014 St. Luke’s Hospital would continue to be used for the benefit of cancer patients. We heard the chairman of the hospital board, Mr. Padraic White, say as much. I ask the Minister of State to confirm if that is still the case, that after 2014 St. Luke’s Hospital will continue to be used for the benefit of cancer patients? Many have spoken about St. Luke’s Hospital. Thank God, I have never been a patient there, but I have visited relatives and friends in the hospital which is rightly regarded as unique in the health service because of its fine setting on its own grounds, its peaceful and tranquil atmosphere and, above all else, its excellent staff, all of which combine to ensure there is a positive health care experience for patients suffering from very serious conditions. That is the reason none of what I have mentioned should be lost. Senator Norris made a point which I also made on Second Stage and was attacked for doing so by the Green Party. The point is that to a certain degree Senators are elected — we are elected by county councillors. We sometimes pass legislation that has life and death implications. If the right treatment is not provided for a patient at the right location and at the right time, it can have life and death implications. Therefore, we have to carefully scrutinise the legislation we pass and weigh up the pros and cons. It would be remiss of us, as legislators, not to listen to the patients who have passed through the system and the staff and others who have had a positive experience of the hospital, the stories of many of whom have been related in the Chamber today and previously on Second Stage. The voices of 180,000 people are very loud. The Government can bring forward any Bill it wants and as long as its members toe the party line, it can change the position in whatever way it wants. However, just because it can do something does not mean it should do so. In this case, it should listen to the 180,000 voices calling for the Bill to be rejected. At the very least, the proposed amendments, particularly amendment No. 2, should be accepted.

Senator Maurice Cummins: As one of the few who spoke on the Bill on Second Stage last week, I felt obliged to come back into the House this evening to speak in support of the two amendments before the House. We spoke last week about the haven of peace, serenity and tranquility within the walls of St. Luke’s Hospital. We have all had family members who suffered from cancer, many of whom attended St. Luke’s Hospital. Senator Healy Eames captured the ethos of the hospital when she spoke about the treatment her father had received 20 years ago. It is something we cannot lose. The care provided with humility cannot be lost to the health system. We all support the concept of having centres of excellence with multidisciplinary teams. During the debate on the Bill last week I argued that until such time as centres of excellence were fully operational we needed to keep places like St. Luke’s Hospital and other specialised services fully operational. Senator Feeney mentioned that the proposed amendments could not be accepted. There are reasonable amendments that could be accepted——

Senator Fidelma Healy Eames: Yes.

Senator Maurice Cummins: ——if the Minister of State had the will to do so. At least, that would provide certainty for the board, the Friends of St. Luke’s and patients. It would also provide certainty that the hospital would be used for cancer treatment services for public patients for many years to come. What people who suffer from cancer want is dignity and respect; that is the least they should be able to expect. They receive them in abundance in St. 50 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

Luke’s Hospital. Until such time as we have fully operational centres of excellence in the places St. Luke’s Hospital should remain open to provide radiation oncology services. To be parochial, I heard last week that the linear accelerators to be put in place in home city of Waterford would not be put in place for a few years, until 2014 or 1015. People in Waterford are reliant on the provision of a public service, with some public patients attending Whitfield Clinic. In the meantime we need to keep places like St. Luke’s Hospital open, perhaps beyond 2014, until all pieces of the jigsaw have been put in place. That is all we are asking, that St. Luke’s Hospital continue to provide cancer treatment services for patients beyond that date.

Senator David Norris: The urgency of this matter is indicated by the fact that I understand there were plans to start moving staff from St. Luke’s Hospital in November this year, at which time there would be reduced services for an increased number of patients. The feeling expressed on this side of the House — I know there is some sympathy on the other side of the House — is echoed by many, including patients and the Friends of St. Luke’s. We have a distinguished group of persons representing the patients and the Friends of St. Luke’sinthe Visitors Gallery. I also recognise the presence of a very distinguished member of the artistic and intellectual community who lives in what has been described as the leafy suburb of Rathgar just across the road from St. Luke’s Hospital, the poet and biographer, Mr. Ulick O’Connor, the biographer of a great doctor and wit, Oliver St. John Gogarty. He has authorised me to say on his behalf that he strongly supports the retention of St. Luke’s Hospital and the proposed amendments and that were he, as Oliver St. John Gogarty was, a Member of this House, he would be voting with us. I would like to follow the example of Senator Fitzgerald because nothing makes the case more clearly than the direct personal experience of patients. I beg the indulgence of the House to read a few paragraphs from a remarkable letter I received from a patient who pays tribute to the services, in much the same way as I pay tribute also to the services provided by ARC, in Eccles Street, which provides care facilities and residential accommodation for families and people from the country who need to come to Dublin to avail of cancer treatment services. I spoke at the opening of that remarkable facility. This is a letter from somebody who is also with us in the Visitors Gallery. He says:

If you are wondering what my involvement with this wonderful hospital is, my father spent his last weeks there. And it was to my great amazement and relief that he and us his family were treated with such care and dignity, and that there was space for us to stay with him, so he was never alone in his last days. I and my family are the lucky ones. I have heard many tragic stories of people who were not lucky enough to end up in St Luke’s. One of the hospitals Minister Harney’s experts have designated as one of the Centres of Excellence is Beaumont Hospital. I brought my father there many times. He hated it there. He was traum- atised by the crowds and the noise there.

Most interestingly, generously and appropriately she goes on to say:

I would point out that the staff were hard-working and wonderful there, apart from the young woman from accounts who handed my (fully VHI-paid up) father a bill for his treatment — this happened the first morning he sat outside his bed in the high-dependency ward after an arduous invasive operation. The anxiety he experienced because of that young woman cost his health dear. Beaumont also forgot to carry out a follow up scan on my father, which meant when his cancer was found to have returned, it was by then impossible for the surgeon to fully remove the tumour. I cite all these incidents, not because I want to knock Beaumont, or the Cancer Control Strategy, but merely to point out that no hospital is perfect 51 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

[Senator David Norris.] — certainly none in Ireland right now, but I will say that St Luke’s, while only able to provide certain kinds of cancer care, is streets ahead of both Beaumont and the Mater in terms of patient comfort as far as my father experienced it.

Some of the other points made in the letter I have already placed before the House and I do not intend to speak again. I hope the Minister of State, after these final interventions from all of us on this side and with what I know is the goodwill if not the vote of Senator Geraldine Feeney, whom I greatly respect, will find it possible to accept these amendments.

Minister of State at the Department of Health and Children (Deputy Barry Andrews): I thank all the Senators for their contributions. This Bill is obviously a matter of serious concern to them. One thing which came across strongly from the comments was the strong ethos of care. Some of the phrases used were that it is “a gem”, “an oasis” and that St. Luke’s has provided a wonderful service to people over the years. The challenge for the HSE is to ensure the service is replicated in St. James’s and Beaumont, a challenge which will not be lightly taken. However, it will be taken by the HSE and will be done in conjunction with the Friends of St. Luke’s to ensure that St. Luke’s radiation network will be of the first order and will try to bring the fantastic service that is provided by its staff to the services provided by St. James’s and Beaumont over the next five years. Senator Fitzgerald said something which was repeated a number of times, namely, that we all support the national cancer control programme which carries with it consequences. Perhaps when people support the generality of it at the beginning one does not anticipate what it will mean, something we all experience from time to time. If we are serious about the cancer control programme and the recommendations made by clinicians, in other words, that we would have co-located radiotherapy services, medical, oncology and surgical services for better outcomes for patients, and buy into that, it will have uncomfortable consequences which we may not have anticipated at the time. They are the recommendations we have had from clinicians. Far from the fear described by Senator Norris that this was some kind of accounting exercise and would save the Exchequer money, the truth is that all the staff are being transferred in a similar manner to the transfer of undertakings, therefore there is no saving. The land cannot be sold or used for any purpose other than the provision of health services and social care services, therefore there is no possibility of realising any savings through the sale of land. In addition, under the national cancer control programme 12 linear accelerators will be available for the provision of radiation oncology in the two new hospitals described in the St. Luke’s radiation network which will begin in late 2010 and early 2011. There will be a 50% expansion in capacity. It is impossible to describe this as an effort to realise money or create savings for the Exchequer. It is clearly informed by clinical advice from 2003. Demographics may have changed since then but we are dealing with an expansion in capacity and retention of the existing staff. On Senator Fitzgerald’s reference to Ms Coburn who spoke on radio today and wrote to a number of Senators, on behalf of the Department of Health and Children I wish to offer our sympathies to her and her extended family. It was obviously an extremely unpleasant experience and she had the courage to share it. We all learn from these things. The hospital has apologised to her and her family for the distress which was caused to her. I wish to bring to the attention of Senators that a new oncology assessment unit will open at Galway University Hospital in the middle of August. It should provide direct access for cancer patients and so will provide appropriate, timely treatment for cancer patients who are referred to it by their consultants. It is correct that there are specific protocols for cancer patients who present at accident and emergency departments. What happened to Ms Coburn’s sister was not appro- 52 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages priate and the hospital put its hands up. The consultant Dr. David O’Keeffe referred to that this morning on radio when he explained some details of the case. Senator Norris referred to an equivalence regarding cystic fibrosis but the truth is that there is a different danger of cross-infection for patients with cystic fibrosis because they can catch infections from each other and have to be kept in separate rooms. While cancer wards are quite acceptable, cystic fibrosis ones are not. There is no equivalence between the two. Although it is a minor point, the phrase “centres of excellence” is a slight misnomer as they are referred to as “designated cancer centres”. The phrase “centres of excellence” tends to suggest that other centres are not excellent or of the highest standard, and that is not acceptable. We want to ensure the highest standards are in place, and also that designated cancer centres can provide the highest possible level of care. Many Senators have personal experience of St. Luke’s. I am not sure if it is any consolation and I am making my comments from a personal point of view, but Crumlin Children’s Hospital is the only paediatric oncology service in the country. Parents never hesitate to bring their children there from all corners of Ireland. It is the only place one can receive the service and one has to go the whole way through the hospital to get to the oncology unit. Everybody talks about it in the warmest possible terms. There is always a fear of change. I do not mean to diminish, qualify or classify it as some kind of psychological frailty but this process will be carried out over five years. The Minister was clear that St. Luke’s would not close before 2014 or early 2015 and that remains the case. There will be a transition period, as requested by Senator Cummins in his comments. Some Senators were afraid that the hospital would be sold. An amendment was tabled by the Minister in the Dáil and section 6(5) now states that:

Subject to subsection (6), the Executive shall use the land vested in it by this section for the purposes of the delivery of health and personal social services within the meaning of the Health Act 2004.

The effect of the Labour Party amendment would be to go further than that and restrict it solely to cancer services. The Minister did not want to be overly prescriptive in the use because in certain circumstances palliative care could be provided to patients other than cancer patients. It may be a suitable use for the hospital. Nothing can change without the intervention of the Minister. It cannot be used for purposes other than health and personal social services. The Fine Gael amendment refers to bringing the issue back to a committee. It is almost like a triple lock, whereby it has to go through the executive, the Government and committee. There is no precedence for that in an operational matter for the HSE. The amendment introduced by the Minister on Second Stage in the Dáil should address the concerns which were anticipated and encapsulate the amendment tabled by Fine Gael and the Labour Party. I hope I have addressed the majority of Senators’ concerns. Senator Healy Eames was correct in regard to quality of care but the outcomes are the crucial issue. She said her father is a difficult man, which I find hard to believe.

Senator Geraldine Feeney: She is clearly not like him.

Senator Maurice Cummins: I can believe it.

Senator Feargal Quinn: It is clearly inherited. 53 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

Deputy Barry Andrews: I am glad he is still hale and hearty after so many years. The Senator can send him my personal best wishes. It is important to remember the transition will last five years until 2014 and perhaps 2015. There are considerable safeguards and reassurances. The Minister heeded the concerns raised by Deputies and Senators and it is a tribute to the staff of the hospital that they will be retained in full. We will try to transfer the ethos to the new centres, which will be informed by clinicians and ensure the best outcomes for their patients. For the reasons I have stated, I oppose the proposed amendments.

Senator Frances Fitzgerald: I thank the Minister of State for his response. The Minister, Deputy Harney, recently addressed the Seanad on her vision for the health service. As I told her then, I agree with her vision but have difficulties with the practicalities of its delivery. It is clear from today’s discussion that we support the principle of designated centres but the timing and state of development of these services present problems. This was dramatically illustrated today in the letter from Mrs. Coburn and the comments of other speakers regarding the experiences of patients in these specialist centres. Senator Healy Eames spoke about the pressures that Galway faces at present. The Minister of State may be correct to note there is no precedent for our amendment but it offers an important triple lock given what we hear about the designated centres and the delays in developing radiation oncology services. This House would have an opportunity to review and evaluate patients’ experiences in the designated centres compared to their experience in St. Luke’s. The Joint Committee on Health and Children would be able to find out what has actually happened as opposed to the theory of what should happen. The theory on designated centres is excellent but the practice lags far behind. This amendment gives a safeguard by allowing the joint committee to determine whether St. Luke’s strong ethos and positive experience for patients are retained. This is why I have proposed amendment No. 1 and the reason we will press it to a vote. I hoped the Minister would, as she originally indicated, accept it. Senator Quinn spoke about listening to patients. The testimony of these patients is striking when it is compared to what we learned about the experience in designated centres. I am disappointed the Government is not accepting the amendment because it would allow us to take the appropriate decisions on the basis of patients’ experiences.

Senator Phil Prendergast: I will be pressing amendment No. 2 for the reasons so eloquently set out by all Senators who contributed. In regard to the fundraising abilities of the Friends of St. Luke’s Hospital, as I noted last week, €26 million is an enormous sum. Everyone in this country must have contributed to a collection for St. Luke’s at one time or another. Nobody can be unaware of the services it offers. My party’s amendment is reasoned and reasonable. I do not see how it could conflict with the provision of palliative care in St. Luke’s to someone who does not have cancer. If the Minister of State agrees to accept the amendment on the basis of widening its remit to allow for palliative care for such patients, I would be perfectly happy to make the appropriate changes. I will be pressing the amendment to a vote.

Deputy Barry Andrews: I do not want to ignore the Senators’ comments. Senator Prendergast is concerned about funding. The Friends of St. Luke’s Hospital is a limited company and, as such, a separate legal entity. Senator Feeney also raised concern about the money it raised. The company will continue to determine how the funds it collects through voluntary contributions are distributed and it has stated that it will continue to support St. Luke’s cancer network over the three hospitals. On Thursday, the Minister will meet representatives from 54 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages the Friends of St. Luke’s Hospital to discuss the transition. The transition until 2014 or early 2015 is a considerable window of time and every opportunity will be afforded to the Joint Committee on Health and Children to examine patients’ experiences during this period.

Amendment put:

The Committee divided: Tá, 24; Níl, 28.

Tá

Bacik, Ivana. McFadden, Nicky. Bradford, Paul. Mullen, Rónán. Burke, Paddy. Norris, David. Buttimer, Jerry. O’Reilly, Joe. O’Toole, Joe. Cannon, Ciaran. Phelan, John Paul. Coghlan, Paul. Prendergast, Phil. Cummins, Maurice. Quinn, Feargal. Donohoe, Paschal. Regan, Eugene. Fitzgerald, Frances. Ross, Shane. Hannigan, Dominic. Ryan, Brendan. Healy Eames, Fidelma. White, Alex. McCarthy, Michael.

Níl

Boyle, Dan. Leyden, Terry. Brady, Martin. MacSharry, Marc. Butler, Larry. McDonald, Lisa. Carroll, James. Mooney, Paschal. Carty, John. O’Donovan, Denis. O’Malley, Fiona. Cassidy, Donie. O’Sullivan, Ned. Corrigan, Maria. Ó Brolcháin, Niall. Daly, Mark. Ó Domhnaill, Brian. Dearey, Mark. Ó Murchú, Labhrás. Ellis, John. Ormonde, Ann. Feeney, Geraldine. Walsh, Jim. Glynn, Camillus. White, Mary M. Hanafin, John. Wilson, Diarmuid. Keaveney, Cecilia.

Tellers: Tá, Senators Maurice Cummins and Fidelma Healy Eames; Níl, Senators Niall Ó Brolcháin and Diarmuid Wilson.

Amendment declared lost

Senator Phil Prendergast: I move amendment No. 2:

In page 4, subsection (6), lines 33 to 35, to delete all words from and including “may” in line 33 down to and including “section” in line 35 and substitute the following:

“may not dispose of any land (including buildings) vested in it by this section and must continue to use the land (including buildings) vested in it by this section for medical purposes related to the treatment of cancer in public patients in a manner and form determined by the Executive with the consent of the Minister”.

Question proposed: “That the words proposed to be deleted stand.”

Question put: 55 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

The Committee divided: Tá, 28; Níl, 24.

Tá

Níl

Tellers: Tá, Senators Niall Ó Brolcháin and Diarmuid Wilson; Níl, Senators Ivana Bacik and Phil Prendergast.

Question declared carried

Amendment declared lost.

SECTION 6.

Question proposed: “That section 6 stand part of the Bill.”

Senator Frances Fitzgerald: I regret that the Minister of State did not accept the amendment. Our amendment would have ensured there was further opportunity to analyse the state of the cancer services by 2014. It would have been a very good safeguard. I welcome today’s announcement on Galway. However, it comes on the back of hearing of the absolutely appalling experiences that Mrs. Coburn and her sister had there. Obviously, as the Minister of State did, I take this opportunity to extend my sympathies to her on the sad loss of her sister. I am very saddened that her sister had such an appalling experience in the final weeks of her life. This is a case about which we have heard; how many more are there? This is the case that we have heard about, but how many more are out there? The quality of the patient experience and the actual outcomes that are occurring in hospitals need to be reviewed regularly in this House. We need monitoring and evaluation of what is happening. It is one thing to have the theory, but it is quite another to examine what is happening in practice. We have heard from 56 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

Susie Long, Rebecca O’Malley, the women in Portlaoise and right across the country that the patient experience is very disturbing at the moment for many people in many areas, in spite of the good work done and the dedication of staff. After ten years of the Celtic tiger, during which €15 billion was put into the health service per annum, surely we should be getting better outcomes. We should have the basic cancer services and the experience of patients should be better than what we have been hearing about today. I regret that the amendments tabled by Fine Gael and the Labour Party have not been accepted by the Minister of State. The Minister for Health and Children indicated strongly to Deputy O’Reilly that she had no problem with the amendment when he tabled it on Report Stage in the Dáil. There are many aspects to this Bill and to the approach to cancer services which I certainly support, but we have to take into account the quality of the patient experience in St. Luke’s Hospital. We have to take note of what is happening in the specialist centres as we speak. I am very disappointed that the amendments have not been accepted because I felt they would provide an opportunity to build in a quality review of the situation when the Minister wants to make those changes. That kind of accountability to the health committee and to the Dáil and Senate is important. The Minister of State, Deputy Andrews, stated that it was unprecedented to have this type of triple lock. These are unprecedented times for patients. There are major challenges. Senator Quinn spoke about the increasing number of patients who will be in need of treatment and the need for more resources and staff in the area of cancer treatment. I regret that our amendment was not accepted. It would have provided a real opportunity to look at the reality of the situation at the appropriate time and if necessary, to change the decision. We must listen to what patients have to say and to examine the experience of patients in designated centres, and action must be taken according to the information provided to the health committee and to the Houses. Our amendment and the Labour Party amendment would have allowed for reflection, for quality information and for a potential review of the decision.

Senator Geraldine Feeney: We all support the cancer control programme. When we get down to the small print, it is important to read it and to support it. We understand that we cannot have the St. Luke’s service operating independently of the other specialist centres. The Minister of State outlined that to us the other day. Before Professor Tom Keane came here to implement the cancer control programme, Ireland was one of the worst countries in Europe for cancer care and administration of cancer services. My understanding from the committee meeting was that the Minister for Health and Chil- dren gave a firm commitment that the lands would not be sold. She went on to state that St. Luke’s Hospital would be used for public health purposes. She could not indicate at this point for what exactly it may be used, but she envisaged a combination of palliative care and long- term care services. I stand corrected on that and maybe the Minister of State might confirm it. That is the best possible way to go forward today. I welcome what the consultant Dr. David O’Keeffe had to say this morning. I did not hear him, but I ask that oncology beds be ring fenced in Galway. People suffering from cancer would no longer have to access treatment through accident and emergency departments. They would be known in the specialist centre and they would now come through this oncology assessment unit which will have a number of beds available. I welcome this, but it is difficult support the eight specialist units while demanding this or that be retained. That is not the way to do things, because it dilutes the services. 57 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

[Senator Geraldine Feeney.]

Following the implementation of the cancer control programme, we will see an end to the discrepancies in the system that we knew existed before it was introduced. Hopefully, we will no longer be reading letters like that penned by Mrs. Kate Coburn about her sister. I sympath- ise with Mrs. Coburn on the death of her sister.

Senator Phil Prendergast: I am very disappointed that our amendment was not accepted. I sometimes wonder if I am hearing the same things as Senators on the other side of the House. I cannot see any difficulty whatsoever with this amendment. It would bring a degree of comfort to the people who have received an excellent service. I have a family member who received treatment in St. Luke’s Hospital and she also had treatment in St. James’s Hospital for two separate cancers, and I have to say that St. Luke’s was the most wonderful place to visit. I worked in the health profession and I often saw the deficiencies of the service first hand. People did not get treatment in the fullest sense, but the area in Rathgar where people were being nursed was the ideal location for them. It would not have harmed Fianna Fáil or the Green Party to have voted this in. I feel very disappointed that this has not happened. People are so irate in this country. Some people now have to pay prescription charges, while others have suffered social welfare cuts. We have seen €22 billion given over to Anglo Irish Bank, even though it is useless, yet the Government would not accept this provision for the hospital in Rathgar. When it was indicated in the Dáil that the Minister would accept an amendment, it allowed us to focus on some of the positive aspects of this Bill. Like Senator Fitzgerald, I am positive about many aspects of it. However, our amendments were reasonable and balanced. They would provide a degree of comfort. The Minister for Health and Children has often said things in the past and denied them later. People’s fears are quite real. The Minister does not seem to be able to take on board perfectly reasonable amendments. We are not opposing for the sake of it. This is a genuine debate and the people who made the representations to all Senators across all parties had very valid points. They were genuine stories about the care and comfort that people received in St. Luke’s Hospital, and I regret that this House could vote against perfectly good amendments.

Senator Ivana Bacik: I regret that the Labour Party and Fine Gael amendments have not been accepted by the Minister who made sympathetic noises in the other House, such that there was some hope there might have been a reprieve in the Bill. It is a real shame the Minister cannot accept the amendments, in particular having heard the genuine words of sympathy from the other side of the House. They would have provided some comfort. There is a contradiction in what the Government is doing. It is rushing the Bill through with what some would describe as unseeming haste, given that it was taken in the Dáil in the middle of last week and brought straight to the Seanad. We are rushing through Committee and Remaining Stages today, yet the Government gave an assurance that St. Luke’s Hospital would remain in operation until 2014, or early 2015, according to the Minister of State, Deputy Barry Andrews. It is an odd or an irrational approach to take to what has been described as a hospital with an excellent reputation and which provides an excellent standard of service and treatment for patients. All we have managed to get is a respite for the hospital, rather than any proper assurance in respect of its prolonged existence. As I said, this is just a stay of execution and is simply not good enough. In the other House Labour Party and Fine Gael Deputies thought that there might be some further movement on the part of the Minister on Report Stage or possibly in this House. However, we have not seen any movement. Unfortunately, this leaves us in a position where we will have to vote against the Bill, given that the amendments have not been accepted. As 58 Health (Miscellaneous Provisions) Bill 6 July 2010. 2010: Committee and Remaining Stages

Senator Prendergast said, they were reasonable. Ours would have allowed for the retention of St. Luke’s Hospital. The Minister could have come back and tried to persuade the House otherwise. It is a reasonable amendment and it is unfortunate that it has not been accepted. It leaves us in a difficult position. We are not opposing the Bill for the sake of it because we very much support the national cancer strategy and the concept of having centres of excellence, but St. Luke’s Hospital could be retained as part of a network of centres of excellence. The Govern- ment accepts that it should continue in operation for a number of years. The Bill is hasty in the extreme and not rational. We have to oppose it on that basis.

Senator Frances Fitzgerald: On 12 June 2009 the HSE insisted that cost cutting measures would not impact on cancer treatment services, yet the general manager of UCHG warned it that enforced cutbacks would prevent the hospital from functioning as one of the eight cancer care centres of excellence. Again, there is a contradiction. The HSE makes a point about quality of care, yet the person charged with the responsibility for delivering services states the cut backs are impacting and preventing the hospital from becoming a centre of excellence. The necessary resources are not being provided and the enforced cutbacks are preventing the hospital from functioning to that end. That is a very serious statement from the general manager of UCHG which highlights the points we have been making on the transition, how it will be managed and its timeframe.

Minister of State at the Department of Health and Children (Deputy Áine Brady): I extend my sympathy to the family of Mrs. Coburn. I reiterate what the Minister said that the management of the case was unacceptable and the hospital has apologised. When addressing the media this morning, the clinical director said the hospital was working to reduce delays in admission times through the emergency department and also noted that the new oncology assessment unit to open in UCHG in mid-August would provide direct access for cancer patients and appropriate and timely treatment for patients referred to the hospital by other consultants. On section 6 which addresses concerns about the future use of the site by explicitly requiring the consent of the Minister for any disposal of the land, on Committee Stage in the Dáil the Minister stated she would reflect on the concerns raised about the use of the St. Luke’s Hospital site for the provision of public health facilities. Accordingly, she proposed an amendment which was accepted. As a result, the Bill provides that the site must be used by the HSE for health care purposes. It is the Minister’s view that amendment No. 1 tabled by Senator Fitzgerald would not be an appropriate way to address the concerns expressed or provide any guarantees about the future use of the St. Luke’s Hospital site. It would lead to an unwieldy decision-making process and not provide certainty about the future use of the hospital site. On amendment No. 2, the Minister does not consider it appropriate that the use of the site be restricted to a specific aspect of health care such as cancer care services, as proposed. The board of the hospital, in conjunction with the Friends of St. Luke’s, has commissioned a report on the best use of the facility. Until the report is received and there is an opportunity to engage with the various parties involved, the Minister does not believe it would be appropriate to be prescriptive in the legislation.

Question put and declared carried.

Sections 7 to 11, inclusive, agreed to.

Question, “That section 12 stand part of the Bill,” put and declared carried. 59 Health (Miscellaneous Provisions) 6 July 2010. Bill 2010: Motion for Earlier Signature

Question, “That section 13 stand part of the Bill,” put and declared carried.

Sections 14 to 17, inclusive, agreed to.

Title agreed to.

Bill reported without amendment and received for final consideration.

Question proposed: “That the Bill do now pass.”

Question put:

The Seanad divided: Tá, 28; Níl, 23.

Tá

Níl

Bacik, Ivana. McFadden, Nicky. Bradford, Paul. Mullen, Rónán. Burke, Paddy. Norris, David. Buttimer, Jerry. O’Reilly, Joe. Cannon, Ciaran. O’Toole, Joe. Coghlan, Paul. Phelan, John Paul. Cummins, Maurice. Prendergast, Phil. Donohoe, Paschal. Regan, Eugene. Fitzgerald, Frances. Ross, Shane. Hannigan, Dominic. Ryan, Brendan. Healy Eames, Fidelma. White, Alex. McCarthy, Michael.

Tellers: Tá, Senators Niall Ó Brolcháin and Diarmuid Wilson; Níl, Senators Maurice Cummins and Phil Prendergast.

Question declared carried

Health (Miscellaneous Provisions) Bill 2010: Motion for Earlier Signature Senator Donie Cassidy: I move:

That pursuant to subsection 2° of section 2 of Article 25 of the Constitution, Seanad Éireann concurs with the Government in a request to the President to sign the Health (Miscellaneous Provisions) Bill 2010 on a date which is earlier than the fifth day after the date on which the Bill shall have been presented to her.

60 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

Question put and agreed to.

Sitting suspended at 6.40 p.m. and resumed at 7.30 p.m.

Central Bank Reform Bill 2010: Second Stage

Question proposed: “That the Bill be now read a Second Time.” Minister for Finance (Deputy Brian Lenihan): The Central Bank Reform Bill 2010 is the latest part of our legislative response to this most serious economic and financial crisis in which regulatory failures played no small part. There are indications that the economy may be over the worst and the latest data provide grounds for optimism about our short-term economic prospects. As the international recovery gains momentum, we should see a full year of economic growth in 2011. In that context, I welcome international recognition of the credibility gained by this country in both addressing the fiscal crisis and in stabilising the banking sector. Just last week I heard Ms Gillian Tett, the respected commentator from the Financial Times, refer to Ireland as the country that has acted most decisively in dealing not only with our fiscal difficulties but also in addressing our financial crisis by measuring the extent of the problems in our banks and moving decisively to recapitalise them. Last week’s CSO national accounts figures for the first quarter of 2010 show that gross domestic product expanded by 2.7% between the final quarter of last year and the first quarter of this year. This provides concrete evidence that the co-ordinated measures taken by Government to address competitiveness, the public finances and the banking system are paying off, with improved confidence and clear evidence of a return to growth in output. The latter is an essential prerequisite for employment growth. The CSO figures suggest the prospects for growth this year are somewhat better than previously assumed. They also show that exports are performing strongly while consumer spending has stabilised. This, coupled with the figures for consumer confidence since April, bodes well for the remainder of the year. Unemployment is unacceptably high. The best way to create and protect jobs is to return to growth in output. Every measure the Government has taken in the past two years was aimed at getting those who have lost their jobs back to work. The CSO figures show that the policies we have been pursuing are the right ones and that we must continue with our plan. In the period 2011 to 2014, it is expected that growth will return to the economy on an annual basis and that sustainable growth in tax revenues will resume. The Government is keen to ensure this momentum is maintained by the reform and recon- struction of the financial system. The reform of financial regulation is on the agenda of political leaders worldwide and has dominated political discourse in the United States and the United Kingdom as well as at multilateral forums such as the EU and the G20. The Central Bank Reform Bill 2010 is a crucial step in a comprehensive programme to put in place a domestic regulatory framework for financial services that meets the Government’s objective of maintaining the stability of the financial system, provides for the effective and efficient supervision of financial institutions and markets, and safeguards the interests of consumers and investors. This is the first step in a three-stage legislative process to create a new, fully integrated structure for financial regulation. It provides a statutory basis for the new structure that will replace the existing Central Bank and Financial Services Authority of Ireland, CBFSAI. A second Bill, to be published in the autumn, will enhance the powers and functions of the restructured Central Bank in regard to the prudential supervision of individual financial institutions, the conduct of business, including the protection of consumer interests, and the overall stability of the financial system. A third Bill will consolidate the existing statutory arrangements for the Central Bank and in respect of financial regulation in the State. 61 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Deputy Brian Lenihan.]

The Central Bank Reform Bill underwent an extensive examination in Dáil Éireann during nine days of debate. I thank Deputies on all sides for their contributions to that debate. I look forward to constructive engagement with Senators on the Bill in this House. We know from the two preliminary reports into our banking crisis that the regulatory system was wholly inadequate and badly in need of reform. A good start was made to the reform process by the appointment of Professor Patrick Honohan as Governor of the Central Bank and Mr. Matthew Elderfield as Financial Regulator. Both of these appointments have boosted public confidence in the system. The bank has also moved to bring high calibre expertise into its organisation through recent senior appointments in the areas of market supervision, enforcement and risk assessment. The Central Bank Reform Bill 2010 provides the job specification for these important positions. It sets out a fit-for-purpose, unified Central Bank which will ensure problems do not develop in the cracks between organisations. As the Governor of the Central Bank observed in his recent report, the complex structure which obtained in the CBFSAI “could have exposed the system to the risk of some ambiguity in the assignment of responsibilities”. He also stated that “few would now defend the institutional structure invented for the organisation in 2003”. The Central Bank recently published an ambitious new approach to banking supervision under a four-part plan to institutionalise the lessons from the financial crisis. This plan is predicated on the changes to the supervisory structures brought about by the Bill. The Financial Regulator recently completed a consultation process on a new code of practice for corporate governance which proposes new standards for Irish boardrooms and which will be implemented from October. Once the Bill is enacted, the way will also be clear for the introduction of a new fitness and probity regime to ensure those in positions of responsibility meet the high standards expected of them. The head of financial regulation has also announced a review of the approach to how overcharging is dealt with under the consumer protection code. He has stated that it is clear from recent cases that change is needed in respect of how firms deal with charging and pricing issues and he is conducting a review to resolve overcharging problems and to strengthen the grounds for enforcement action. It is clear we need to put legislation in place without delay to ensure the reconstituted Central Bank will have the legislative backing it requires to deliver on this ambitious programme of reform. We must emphasise to the industry that the old way of doing business is over and that all has changed in the world of financial regulation. The two preliminary reports on the banking crisis by Professor Honohan and Messrs. Regling and Watson present an expert analysis and assessment of the issues. The Government welcomes the reports and commends the analysis of the issues undertaken by their authors. Their findings provide the basis for the preparation of terms of reference for a statutory commission of investigation. The reports have drawn attention to a number of significant issues that require further consideration, including bank practices, risk management and governance failings in the covered institutions, the performance of the Central Bank and the Financial Regulator, and the role of fiscal policy and the macroeconomic management of the economy overall. The Government has accepted the findings of the reports and has referred them to the Oireachtas Joint Commit- tee on Finance and the Public Service. I attended meetings of the committee on two occasions, most recently yesterday, and have had very constructive discussions with its members on the scope of the terms of reference for the commission of investigation. The Government decided 62 Central Bank Reform 6 July 2010. Bill 2010: Second Stage upon those terms of reference this morning. A motion providing for the establishment of the commission of investigation will be tabled in the House in the days ahead. I have also agreed with the joint committee the scope of the motion of referral on policy lessons on macroeconomic management to be referred to it. These policy lessons arise from the conclusions of the Regling and Watson report and the committee has agreed to consider these issues and to report back to both Houses by 30 October next. On the basis of the committee’s agreement to both of the these issues, the Government proposes to table before the end of the current session in both Houses a motion to approve the draft order to establish the commission of investigation and a motion of referral of the policy issues to the committee. I propose to set out the issues in more detail when tabling those motions. Senators will be aware that there is to be an independent review of the Department of Finance by a small group of experts with relevant international and domestic experience. The purpose of the review is to evaluate the systems, structures and processes used by the Depart- ment of Finance during the past ten years in providing economic advice to successive Ministers for Finance and the Government. The Central Bank Reform Bill 2010 is necessarily complex but its central aim is to put in place a unified and integrated structure for the bank. The changes to the current arrangements are the creation of a new Central Bank commission, the dissolution of the Irish Financial Services Regulatory Authority, IFSRA, the establishment of a new management structure within the bank, and the introduction of new accountability measures, particularly those which will ensure enhanced accountability to the Oireachtas. Sections 5 and 6 carry over the terms and conditions of employment of existing Central Bank employees and set out the arrangements whereby staff of the bank may be seconded or transferred to the National Consumer Agency to carry out functions now being transferred there. Sections 7 to 12 set out the continuity provisions that enable the Central Bank to carry on various activities it is inheriting from the previous regulatory structure. These include the continuation of legal instruments, superannuation arrangements, applications for licences and per- missions and regulatory actions. Part 3, covering sections 18 to 44, inclusive, provides for a fitness and probity regime to be applied by the Central Bank. The Bill provides new powers for the bank to ensure the fitness and probity of nominees to key positions within financial service providers and of key officeholders within those providers. It was my view that rather than waiting for the next Bill, which will enhance regulatory functions, these powers should be brought forward in this legislation because of their importance in helping to set the tone of the new regulatory arrangements. These new powers for the bank will help to restore confidence in the management of financial institutions, both domestically and in international markets. Schedule 1 contains the key reforms to the structures of the bank. Items 1 to 19, inclusive, set out various changes to definitions and interpretation provisions. Items 20 to 27, inclusive, relate to the establishment of the Central Bank of Ireland, its functions and objectives and other related matters. The bank’s primary objective is to maintain price stability. Among its other objectives and functions are the stability of the financial system overall, the proper and effective regulation of financial institutions and markets, the provision of analysis and comment to support national economic policy development, and monitoring of the provision of financial services having regard to the public interest and the interest of consumers. Importantly, item 23 inserts a new provision which puts beyond all doubt the independence of the bank, the Governor and the Central Bank commission in matters relating to the Treaty of Rome and the Statute of the European System of Central Banks. I welcome the recent opinions of the European Central Bank on the Bill. As I have indicated, I am keen to work 63 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Deputy Brian Lenihan.] closely with the ECB to ensure the best possible reform of the structures of the Central Bank of Ireland. The ECB’s opinions are an important part of that process. The Department of Finance has been examining the opinions in conjunction with the Office of the Attorney General. Two amendments were introduced on Report Stage in the Dáil to take on board some of the main independence issues raised in the opinion. One of them is intended specifically to reinforce the Governor’s sole responsibility for the performance of the bank’s objectives regarding ESCB related tasks. I will consider any further legislative changes that might be appropriate, and how they might be implemented, in the context of the second Bill in the autumn. Item 28 substitutes new sections into the Central Bank Act 1942 relating to the new board room arrangements for the Central Bank commission. The commission will consist of the Gov- ernor, who is the chairman of the commission, the two heads of function, the Secretary General of the Department of Finance and between six and eight other members to be appointed by the Minister for Finance. The Bill provides new powers to enable the commission to establish advisory groups with a specific requirement that groups be established on consumer functions and credit unions. I will return to the issue of credit unions later in this speech. Items 30 to 34, inclusive, deal with the Governor. To underpin the independence of the Central Bank, they provide that the Governor has sole right to determine budgetary or funding issues in respect of the bank. The Central Bank Act 1942 is being amended to remove the requirement for a unanimous resolution of the board of the bank to request the removal of the Governor for specified grounds of serious misconduct. This requirement was an anomaly in the original legislation that did not make sense. In removing it, there is no diminution of the security of the Governor in his post but merely a more logical procedure for an admittedly unlikely scenario. The Minister for Finance may appoint members of the commission if he or she is satisfied that the nominees have knowledge in a relevant field of expertise, such as financial regulation, banking, insurance or consumer interests. Members are ordinarily appointed for a term of five years, except for the Governor, the heads of function and the Secretary General of the Department of Finance, who serve as members for as long as they hold their respective offices. There are exclusions for Members of the Houses of the Oireachtas, the European Parliament and local authorities, as well as people who consent to be nominated to become members of those bodies. They are not eligible to hold the office of head of function or to become a member of the Central Bank commission. Item 39 sets out the management, finance and accountability provisions for the Central Bank. I am pleased to be able to enhance the role of the Oireachtas in overseeing the performance of the bank. This was a major consideration for the Government when deciding on the crucial elements of the reform package. The bank is required to submit a strategic plan every three years to the Oireachtas, through the Minister for Finance, specifying the bank’s objectives and its plans to achieve them. An annual regulatory performance statement must be prepared and presented to the Minister for Finance which will include details of the activities of the Registrar of Credit Unions. This performance statement will form the basis of an examination by the relevant Oireachtas committee which may require the Governor, the head of financial regulation or the head of central banking to appear before it to be examined on the contents of the statement. This will ensure regular parliamentary consideration of the state of financial regulation in Ireland and help to ensure there is no repetition of the mistakes of the past. A feature in the Bill relating to the performance statement is that it gives the Minister for Finance the power to require the bank to report on any matter in the statement. This important oversight provision will add to the accountability of the institution. 64 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

The bank will also undergo an international peer review of its performance by another national central bank or other suitably qualified person at least every four years. Part 5 of Schedule 2 provides for the transfer to the National Consumer Agency of certain functions formerly performed by the consumer director, such as the provision of information to consumers in respect of financial services, the promotion of the development of financial education. The supervision and regulation of products, markets and institutions from a consumer perspective will remain with the Central Bank. The consultative consumer panel and the consultative industry panel are being abolished and replaced by new and better arrangements through which the bank will have the power to establish expert groups to advise it on the exercise of its functions. Specifically, it must establish a group to advise on consumer functions. Amendments that were introduced on Committee Stage in Dáil Éireann have further strengthened these arrangements. Consumer functions will have to be planned and reported on in the regulatory performance statement. The bank’s performance in this area will be subject to Oireachtas scrutiny and oversight. The bank will be required to report on all advisory groups in its annual report. I am aware that Senators are interested in the credit union provisions of the Bill. I am a strong supporter of credit unions. I recognise their special place in communities throughout this country and their civic-minded nature. The Government is aware that banks have let us all down very badly, whereas throughout the same period the credit union movement has continued to meet its mandate and provide a valuable community-based service to its members. I reiterate that credit unions are and will remain an important part of the financial sector in Ireland. The credit union movement continues to play a critical role in meeting the financial needs of our communities. The Government is fully committed to a financial and regulatory system in which credit unions can develop and expand their activities. The Government is seeking to copperfasten the place of credit unions in Irish life and their central role in local communities. The shock waves of the financial crisis do not necessarily respect distinctions between banks and not-for-profit and voluntary institutions like credit unions. Mistakes within the mainstream financial sector are wont to rebound without discrimi- nation. Credit unions are seeing this in their client base and are feeling the reverberations within their own organisations. Naturally, credit unions wish to show flexibility towards those who need to reschedule loans. The Bill makes important changes to allow for this. The lifeguard also needs protection from the current, however. The Bill provides counterbalancing measures to ensure credit unions can offer assistance from a position of strength. As with any counter- weight, calibration is the key to striking the right balance. The changes introduced since the publication of the Bill achieve this balance by ensuring that any additional regulatory requirements are proportionate to the flexibility being introduced and the associated risks. This Bill is not about pitching banks against credit unions. It is about fashioning a space for credit unions to help those in need without exposing the system to destabilising forces that would weaken the ability of the credit union movement to continue its valuable work. As this is an issue on which Senators may wish to focus, it is worthwhile to take a moment to outline in more detail how the changes being put before the House evolved. There have been extensive and detailed consultations with the credit union representative bodies on the measures being introduced. Following general discussions in early 2009, the detailed views of credit union representative groups on the section 35 issue were sought and obtained last summer. The provisions to be included in the requirements to be made by the registrar have undergone considerable adjustment following discussions between the registrar of credit unions and both credit union representative bodies. More recently, following the publication of the Bill, I engaged in detailed discussions on the Bill with the credit union representative bodies, 65 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Deputy Brian Lenihan.] ILCU and CUDA. I met each body on two separate occasions in May and June of this year. I have also met members of the Joint Committee on Economic Regulatory Affairs on this issue. Having reflected on the views expressed, I introduced eight measures on Report Stage in the Dáil to amend significantly the section 35 proposals in the Bill as published. I will set out the eight measures for the House. The proposed sections 35A and 35B in the Bill as published are deleted. The easing of section 35 lending limits is now linked directly with the necessary balancing provisions in a cohesive framework within section 35. A specific statement is introduced in section 35(2C) to provide that the Central Bank may give notice to credit unions with regard to lending requirements only where it considers it necessary for the adequate protection of members’ savings. A further new provision means that in applying requirements in respect of lending by credit unions, the Central Bank must have regard to the lending framework provided for in section 35. Wider powers originally intended for the Central Bank in relation to loans, or specified classes or types of loans, under section 35A(1) as published have been dropped. Wider powers to enable the Central Bank to impose requirements other than by making rules under section 35A(3) as published have also been dropped. The systems, controls and reporting requirements originally provided for in section 35A(1)(f) are now specifically tied into the lending requirements in the section. The Central Bank must establish an advisory group on the exercise of its powers and functions relating to credit unions. I wish to make it clear that I have gone a long way, having listened to the concerns that were expressed, but I am limited in what I can do. Credit unions cannot be entirely free of financial regulation. The regulator has written to me about his concerns in these matters. As Minister, I have a duty to act on his concerns. I am only prepared to act on them in the context of maintaining a vibrant and viable credit union movement. Taken together, the eight measures represent a significant change which will establish a lending framework through which the Registrar of Credit Unions can give notice of requirements arising from the relaxation of lending limits in section 35 in a prudent, balanced and proportionate manner, but no more than that. Reasonable conditions and generous transitional arrangements will also apply. The new advisory group will provide a forum through which the bank will access the views of credit unions in a more effective and direct way. These changes go a considerable way towards meeting the concerns of credit unions. At the same time, there is an irreducible minimal level of protection which depositors, credit union members and the public are entitled to expect. Overall, the measures contained in this Bill provide for this level of protection. This Bill is urgent and essential. I am confident the approach we are taking is the correct one8o’clock and that the new structures we are putting in place will help to ensure a robust regulatory system which will win confidence at home and internationally. I look forward to hearing the views of Senators and commend the Bill to the House.

Senator Paschal Donohoe: I welcome the Minister to the House to discuss this important Bill. The Minister enjoys reading and also, when possible, putting forward a very strong defence of his Government. Given those two factors, I recommend a recently published book to him that covers both those levels, What Did We Do Right? by Michael O’Sullivan and Rory Miller. It makes for very good reading in the present environment because with regard to all the factors we are reviewing — the difficulties we face, the challenges, the things that went wrong and those for which this Government was responsible — the book details the different things that went right in Ireland during the past 20 to 30 years and that played a role in delivering economic security and prosperity for a period to our country. We want to see that situation return and because we do, it is incumbent on us at times to reflect on what went well and why. 66 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

The book introduces an idea I had not come across before and which came to mind when I was preparing to discuss this Bill. It is the idea of “intangible infrastructure”. This is an interesting concept given that today is also the day that cutbacks in the more tangible end of infrastructure have become apparent. The work defines intangible infrastructure as meaning successive factors that develop human capability and permit an easy and effective growth of business activity. This can cover a great variety of things, for example, faith in law, faith in the institutions that are meant to govern us, concepts such as intellectual property and ensuring such concepts are implemented and done well. Most pertinent to this Bill and our discussion is the focus on the role of our banking institutions and banking regulators in creating an environment within which people can have trust and faith that our banking institutions are working and, more specifically, that these are being well regulated. Within that area people are given the confidence to spend and businesses the confidence to invest. That is why in any legislation or move by any Government that seeks to deal with the difficulties our banks and regulatory structure have faced, there must be factors we welcome. There are many important parts to this Bill, which, having considered and reviewed them, I believe merit welcome. They will make a difference. Sadly, I also have some grave concerns about the operation of this Bill which make me question whether the lessons we spoke about have truly been learned and whether the intent exists to learn from what happened and ensure it does not happen again. The Bill is very important legislation. It proposes one of the most important changes in our regulatory architecture since 2003 and the legislation that put in place the Central Bank and Financial Services Authority for Ireland. This moves away from such a structure to creating one in which the Central Bank commission will have a far more central and co-ordinating role to play and to which some of the agencies in question will report. I welcome some aspects of this Bill. Those items that are worth welcoming are the role the Bill gives to allowing the regulated capture of individuals not doing their role properly or in line with the expectations of the regulator. The phrase used in the Bill is “probity and fitness”. We can see how this would be defined and how it allows the new regulator to understand whether people are performing in line with that standard. There are a number of different powers detailed in this Bill which I believe will make a difference but that difference will relate to individuals. These are the powers in regard to pre- approved controlled functions where the new system will nominate particular roles across the banks it regulates and will play a role in ensuring the people in those roles are displaying probity and fitness, as outlined. The Bill also makes clear what will happen if those qualities are not displayed. The ability of this system to deliver a suspension is mentioned, as are its powers to investigate and ensure the right powers are in place to understand whether an individual is doing his or her job well. Some items in the Bill represent improvements and a step forward but I am very concerned that in two areas there is what I consider to be a step backwards. There is also what I see as a missed opportunity. I refer to the credit union movement and the points the Minister made in that regard. What disturbs me most about the legislation is the structure laid out in regard to the appointment of the commission which will have considerable power in terms of guiding this new body and ensuring it does the job intended. I am not sure whether the Minister’s speech laid out what that structure will be. If it did, I apologise for missing it. However, it specifies the three different groups or kinds of people who will play a role in it. First are the chairman of the commission, those who will play a role in financial regulation and the person who will play a role in central banking functions. Second is the Secretary General of the Department of Finance. The third group are those members of the commission who will be nominated by the Minister and the 67 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Senator Paschal Donohoe.] Department of Finance, and this is where my concerns are reservations become apparent, and in two areas. Why is it necessary and why does the Minister believe it important that the Secretary General of the Department of Finance sits on this body? The Minister has acted very well by bringing outsiders into very important roles within our regulatory system. Mr. Elderfield and Professor Honohan are people who bring experience beyond that they would have picked up within the Department of Finance or in business in Ireland. One reason I welcome that action so much is that it allows an escape from the culture that would be created for someone who works for a long time within a particular Department or area of Government. Given the work the Mini- ster has done in this regard, I question why it is important the Secretary General of the Depart- ment of Finance be on this body. Does it not provide a mechanism within which it might be perceived that the views of the Minister would in some way be relayed indirectly to the commission through his Secretary General? The other area, which is perhaps of greater concern, concerns the powers presented by the ability of the Minister for Finance to appoint six to eight members of the board, as specified in the Bill. I have no doubt about the Minister’s good faith or bona fides in this area but I have severe doubt — as history will corroborate — about many of the people who have been appointed to positions of authority within our semi-State and regulatory bodies in the past ten to 15 years. Can we not learn from this experience and put in place a mechanism whereby the people who are to be appointed to this commission, which we trust will ensure this situation never happens again, are appointed without political influence from any Government, whatever its political hue or make-up? We have seen repeatedly that where appointments are made, as influenced by Government or a political party, questions will arise regarding the ability of those appointees to perform their role and regarding the attitude they bring to the role. One of the big lessons we must take on board is that the people who are to be appointed to these roles not only must be free from political influence but, more important, must be seen to be free. Our country should consider putting in place organisations and bodies, on which there is no political influence and which are genuinely independent, that can provide a second opinion on the work that Government and the Department of Finance is doing. In that spirit, putting in place a commission to which political appointments will be made raises the spectre for me of the establishment here of the forces of crony capitalism reasserting themselves at some point in the future. Given the number of Members of this House who have pledged that this will never happen again, why are we putting in place a mechanism that at least provides the potential for this to happen again? This is one of the reasons we will not be able to support this Bill and one of the issues to which I would like the Minister to respond. The second reservation I have about the Bill is that it in many ways represents a missed opportunity. I was here the night the Minister brought in legislation to provide for the bank guarantee scheme and I noted the sweeping powers that were put in place to allow his Depart- ment to examine the structure of our banking system and make decisions in regard to it. As I was preparing for the debate on this Bill, I came across a person who knows a great deal more about banking than I do who summed up very well the situation in which banking globally and in Ireland finds itself. This person’s name is Nouriel Roubini. He was one of those people who appeared to have called well what was going to happen. He wrote we are now in the worst of both worlds where many too-big-to-fail institutions have been bailed out and expect to be bailed out in any number of future crises. He further wrote that they as of yet have faced no sustained regulatory scrutiny and no system has been put in place to put them into insolvency should the need arise. 68 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

In a week where the European Commission has published major reservations in regard to the Government’s plan for Anglo Irish Bank——

Deputy Brian Lenihan: That was last March. That report is inaccurate, but I do not fault the Senator for that in any way. That was a letter written by the Commission in March. There is no question of any problem. A new plan was submitted at the end of May and the Commission is quite supportive of it. It is not the Senator’s fault if he read a report that is not fully accurate.

Senator Paschal Donohoe: I thank the Minister for that information. The point I mentioned was made in that report, which I had the opportunity to see. Does this Bill not represent an opportunity to examine mechanisms that could be introduced to create living wills for banks, to provide that if they do not deliver and if there is a risk of them becoming insolvent, an organisation such as this would have the power to ensure the costs of banks becoming insolvent or not having the ability to carry out their own business would not be sustained by the taxpayer in the future? Does this Bill not also represent an opportunity to use an organisation such as this to ensure that bondholders, the people who invest in these banks, are the people who take more responsibility for the losses sustained by banks in the future rather than only the taxpayer? I appreciate the Minister’s detailed comment on the credit union movement, particularly in regard to sections 35A and 35B and the changes he has made. Notwithstanding that, why does he consider it appropriate to insert in this legislation such detail regarding the percentage of the book value a credit union can lend and the period of time for which this can be done? The level of detail in the Bill regarding the lending activities of an individual credit union, to the best of my knowledge, appears to be ahead of anything we have seen for individual banks. While there are many aspects of this Bill that can be supported, for the reasons I outlined it represents a missed opportunity in two areas. I would appreciate an answer from the Minister to my question on the credit union movement.

Senator Marc MacSharry: I join others in welcoming the Minister, Deputy Brian Lenihan. It is great he is here to take this Bill. I also welcome this opportunity to make a few points on the Bill in the form of a mild rebuttal of the previous speaker’s two main objections to it. The Senator’s second point related to a letter that was written referring to something last March, which was superseded. It was highly irresponsible of the media of cover this in that way and I am sure the Minister will raise it with them. In terms of perception, when boards for semi-State companies or otherwise are being put together and if a nomination is made by the Government, we often hear that it must mean cronyism in the extreme. It is worth noting that David Begg is on the board of the Central Bank and he is hardly the epitome of what one would call cronyism. Apart from that, I have respect for the institutions of the State and whether it was Fine Gael, Fianna Fáil or whatever other party that is in power, I believe in its capability to identify people who have the appropriate expertise, experience and capabilities to do a job. With some 6 million people on the entire island, it is conceivable that one can trace, by six degrees of separation or less, a line of direct lineage to somebody who may have once voted Fine Gael in, say, the local elections of 1967 or otherwise. The old crony capitalism debate does not hold much water with me. If any Government in the history of the State has made more advances in the context of improving the levels of corporate governance and standards in this area, it would have to be the current Administration and, in particular, the current Minister. 69 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Senator Marc MacSharry.]

The Minister has given a detailed outline of the Bill, and other contributions will also be made. Senator Donohoe has been broadly supportive of the Bill. However, before making some brief points on it, it would be remiss of us, having the Minster in the House, if we did not welcome today’s interim report by Hugh Cooney’s interim group on mortgage arrears. The interim group has come up with some thoughtful recommendations which, as the Minister said in his contribution, can be implemented very quickly in terms of the mortgage arrears resolution process that will be established, the changes to the code of conduct in mortgage arrears which the regulator will introduce and the standard financial statements to which it is anticipated the various financial institutions will sign up. I hope they do that and that these measures can be implemented very quickly. In terms of the group I established, the Prevention of Family Home Repossessions Group, the interim group’s recommendations go some way towards incorporating the recommendations we made. We met the Minister, and we are thankful for that meeting and that Mr. Cooney’s group has reflected our recommendations, but we look forward to the final report being issued towards the end of September. As with all the many initiatives in the past number of years from a legislative perspective, I commend the efforts of the Minister and the Government and look forward to more in that line. I welcome this opportunity to make some brief points on this Bill. The financial crisis of the past two years has highlighted the weakness of the financial regulatory systems here and throughout the world and how much they permitted. I refer to the reckless level of lending that took place. We are seeing reform in the financial sector throughout Europe and America, on which I have made points in the House previously. I am not as confident of the international focus on regulatory reform as I am of our Minister in his introduction of the first of three Bills in this area that will be brought forward, not least the other measures. In his concluding remarks the Minister might tell us some more about his views of what is going on in the international sphere to try to ensure we will not have a repetition of the disastrous lending and lax regulatory environment we have seen which led to these crises. The light touch regulatory models have proved to be inadequate to the goal of having sound financial service providers. The Consumer Consultative Panel of the Financial Regulator 2009 stated that complacent and permissive was how Professor Patrick Honohan described the Irish Financial Regulator before becoming Governor of the Central Bank. As the Minister mentioned, the preliminary report of Regling and Watson on the sources of the banking crisis highlighted the main failings of supervision. The supervisory culture was insufficiently intrusive, and staff resources were seriously inadequate for the more hands-on approach that was needed. Governance failures were not addressed sufficiently. Macro-financial vulnerabilities were underestimated. These are all lessons from which we have been happy to learn. Professor Patrick Honohan’s report found three route causes for the lack of financial regulation. The regulatory approach was perceived to be excessively deferential and accommodat- ing, insufficiently challenging and not persistent enough. That was in an environment which placed undue emphasis on fears of upsetting the competitive position of domestic banks and on encouraging the Irish financial services. It also said there is an under-resourced approach to banking supervision and an unwillingness by the regulator to take on board sufficiently the real risk of a looming problem and act with sufficient decision or force to head it off in time. The Minister has gone through in some detail the main provisions of the Bill. I welcome in particular the provision regarding the head of financial regulation. We can clearly see the work Mr. Elderfield has been doing. I also welcome the second position of head of the Central Bank. The Central Bank will have the statutory power to regulate sensitive or influential points in regulated financial services providers, including the power to direct that a person should not be appointed to perform a control function. Those that carry them out must meet and adhere 70 Central Bank Reform 6 July 2010. Bill 2010: Second Stage to standards of fitness and probity. It also includes the power to direct that a person should be removed or suspended from the performance of a control function where the bank is satisfied the person is not a fit and proper person to perform such a function. I very much welcome these additions to the Bill. It may be covered in the Bill, but I wish to refer to the kind of financial advice members of the public require when they wish to procure a pension, savings product or whatever. Senator Ross heard me make this point many times. It is an impossibility to receive objective advice in a sales targeted environment where a bank manager, teller or whatever member of staff in the financial services sector has sales targets for a particular product. There is no question that a member of the public can secure independent advice which is appropriate to his or her needs when targets exist. I do not know what the solution is but we will have to come up with some kind of structure which allows for that. There may be scope for it in future under MABS or another structure but there is a need for it. People go to their accountant, solicitor or estate agent to seek this kind of advice. I remember a number of years ago the joke about a particular insurance product was that it advertised that it would educate one’s children, the joke being that the only children who would be educated by the product were the broker’s children because it was based on commission rather than on what one would manage to save. The Minister understands the point of view and perspective from which I am coming with regard to that. It is something we need to address, perhaps not in this Bill but in another Central Bank Bill. The issue of credit unions was raised and while I appreciate the detailed response of the Minister, clearly they do not share the confidence he has at this point that they will be able to continue the good work they are doing. One general manager of a credit union who worked with me on the prevention of family home repossessions group made the point that when they are potentially at their most valuable in how they can assist families, there are aspects of the Bill which will limit them. While I appreciate that, out of the some 505 credit unions we have nationally a handful were not doing their business in a way which would inspire confidence. I understand those that had difficulties managed to resource them from their own resources and protection funds. That does not in any way suggest they should not be fully regulated; indeed they wish to be regulated. At a time when we are seeing an increased number of families and the public seeking the services of credit unions they have concerns that this may introduce a level of regulation which, in advance of the review announced by Mr. Matthew Elderfield of the Irish League of Credit Unions, may be premature, pending his investigation into what regulation is needed. Following his review he may say more regulation is required. At this moment it has those concerns. While I appreciate the Minister has made the position clear I ask him to reflect a little on it. There has not been much comment in the media, nationally or otherwise, on the Bill in recent days. The ECB, as the Minister said, welcomed the restructuring but called on us to ensure the independence of the Central Bank, the Governor and the new commission in the exercise of the European system. The Minister pointed that out clearly in his contribution. As a further step on the road to the rehabilitation of our financial sector and to complement the balance of our books and our pursuit of bringing our deficit under control I commend this Bill and the Minister’s continuing efforts on our behalf to the House.

Senator Shane Ross: I came into the House with my mind made up about how to vote on this Bill and I am now undecided. It is rare for people to say that in this House. I have listened to the Minister and Senators Donohoe and MacSharry. There are two ways of considering this Bill and I am now considering it both ways. One is to say it is the first of three extremely constructive and very important measures which are being taken to reform the banking and 71 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Senator Shane Ross.] regulatory system. As that sort of measure, it is good and we should support it. The other way is to ask if it goes far enough to clean up the problem of details we have within the system and if it tackles the real problem. The Bill is strong on the structures and attacks the problems we have had with supervision, systems, the lack of inspection and all those areas. What is described as fitness and probity is strong and a great improvement. It lacks strength in that it attacks the fundamental difficulty which was so apparent and which caused or was partially to blame for the Irish banking crisis, namely, the closeness between politicians, the Central Bank or the Financial Regulator and the banks. Politicians are members of that club to a lesser extent than the Central Bank and the Financial Regulator While it passes the test on structures and supervision as the first of three Bills, on the second issue it fails abysmally and Senator Donohoe pointed that out very tellingly. The problem of regulation of the banks before the end of September 2008 was that there was no regulation at all. The reality is that the banks had run amok. The Financial Regulator was allowing them to do pretty well what they liked. There was no supervision. There was what was known loosely as a principles-based form of regulation which meant it was left to the banks to do what they wanted to do, and they did what they wanted to do, namely, ignore and break the rules, doctor the books and conduct themselves in a way which brought this country into a dire financial situation. What is quite apparent from the new attitude and remedies which are proposed is there is at the very least — I do not like talking in terms of principles-based regimes and rules-based regimes — an absolute determination that there will be what is called an intrusive interest in what is going on in the banks. The Financial Regulator will be sitting on the banks, what they are doing and their supervision and systems from now until, it is to be hoped, forever. The next Bills, which will have a more detailed emphasis on these things, will ensure that is enforced. This Bill, which goes into the area of enforcements and appointments of people inside the Central Bank, is very worthy. The Minister must be applauded for several of the appointments he has made, in particular in the State sector. I have no hesitation in saying he has been magnificent in his appointment of the Governor, Mr. Patrick Honohan. The appointment, election or selection of Mr. Matthew Elderfield was one which we have to applaud and it is certainly Government driven, if not Government selected. There have been others, which is undoubtedly a vast improvement. These appointments are already producing a change in culture in the Central Bank, the office of the regulator and other areas. I am on record as stating that in my experience Deputy Lenihan has, without a doubt, been the finest Minister for Finance. I say this in front of him and I have been in the House for 30 years. He has had to deal with hard times, whereas his predecessors had it so much easier and his performance has been absolutely magnificent. It has been almost impeccable. I have never come across a Minister who has performed so well in such difficult times and with such courage, determination and incisive understanding of his brief. However, there is always a “but”. While his appointments to the Central Bank and elsewhere in the State sector have been strong, the appointments made in the banking system have been appalling. It is deeply regrettable that the banks continue to be directed by insiders, even after the events of 30 September 2008. I am particularly distressed by the appointments to Anglo Irish Bank, the State’s bank. I cannot understand why the Minister appointed Mr. Gary Kennedy and Mr. Aidan Eames. I never heard him speak about this issue, but Mr. Kennedy is an insider — I have mentioned him before in the House — and was financial director of AIB when the property boom was at its height between 1997 and 2005. It is the worst appointment I could possibly conceive. On the same day Mr. Kennedy was appointed Mr. Aidan Eames was appointed to the board. Mr. Eames is, undoubtedly, a good solicitor, but he is also a Fianna Fáil fund-raiser, election agent and ex-Senator. 72 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

Deputy Brian Lenihan: He is a former Member of this House.

Senator Shane Ross: That is my point; he is a former Senator from the Fianna Fáil Party. He has a loyalty to a party which we could do without while occupying a crucial position. That is why the appointments were bad. Thousands of people were available and capable, but we had to come up with the ultimate insider in the banking system and an insider in Fianna Fáil. That is why I have problems with the Bill. Whereas the Minister’s appointments to the Central Bank have been excellent, how are we to trust any Government — the tradition in this country is appalling in that regard — to make independent appointments to the board of the office of the regulator? Including the ex officio members mentioned by the Minister, the Bill provides for between six and eight political appointments. I will not discuss the individuals concerned in the Central Bank, but we cannot be proud of the record of any party on political appointments, even the most sensitive ones. I would have thought this Bill, on which the financial credibility of the State rests, would change the record. If we make the wrong appointments and global investors who have a favourable view of Ireland because of the Minister’s record see the Central Bank or the regulator being treated like a quango, their confidence in these bodies will drop, with our credit rating. The proof of the pudding will be in the eating and, while I acknowledge the Minister does not make all the appointments himself, the record of the Government in its appointments is no better than any other’s. I do not trust Fine Gael and the Labour Party to refrain from putting their own people in the Central Bank. Legislation such as this is not made for the incumbent; it is made for successive Governments in the next 30 or 50 years. The Bill creates the potential for abuse in a particularly sensitive area. Even the Green Party is nominating its own people.

Senator Dan Boyle: One per cent of all appointments.

Senator Shane Ross: What percentage of the vote did the Green Party achieve? It is putting its own people in CIE, as well as here, there and everywhere. The people concerned are identifi- ably loyal to the party. This is a pity and a flaw in the system. The Bill offered us an opportunity to part company with that principle. The Minister outlined the protection given by the Joint Committee on Finance and the Public Service to witnesses appearing before it. Several weeks ago I had an experience at the committee, at which a ministerial appointee, the chairman of Anglo Irish Bank, refused point blank to answer perfectly reasonable questions. I asked him about his involvement in the selection of Mr. Kennedy and Mr. Eames and how the process worked. Mr. Dukes refused to answer my questions. If this legislation is to work, the Minister should assure us that non-executives and members of the commission, as well as the Governor and executives, will be required to answer questions before the appropriate Oireachtas committees. They should not be allowed to say, “Sorry, I am not going to answer that question,” unless it would involve giving commer- cially sensitive information. If it concerns a politically sensitive issue, let us hear the replies. My main reservation about the Bill is that the flaw I have identified is so big it will discredit the sincere intentions behind it. I note the consumer functions provided for in the Bill.

An Leas-Chathaoirleach: The Senator has one minute remaining.

Senator Shane Ross: I ought to conclude with the one point I really want to make.

Senator Marc MacSharry: The Senator has covered the board.

Senator Shane Ross: I took rather a long time. 73 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

Deputy Brian Lenihan: It has been well covered.

Senator Shane Ross: The Minister addressed the Anglo Irish Bank issue in his interruptions of Senator Donohoe but perhaps he might expand on the issues regarding NAMA he raised at the meeting of the Joint Committee on Finance and the Public Service yesterday. NAMA’s optimistic profit forecast has suddenly turned into a pessimistic loss forecast. Is he satisfied that the banks have been telling lies about the prospects for their loans and assets? Will he tell us whether rents were being paid or loans serviced? If they have been misleading the National Asset Management Agency, Government and nation, what does it tell us about reform of the banks, other than the central banking system which the Minister is doing very effectively? Are the banks running rings around the Financial Regulator and Government? As each step comes, are they one step ahead? Is it true that they have been misleading us about the state of their assets and, in particular, the servicing of their assets, the rents being paid for them and the manner in which they are being treated?

Senator Dan Boyle: As an Opposition spokesperson in the other House in 2002 and 2003, I debated two Bills on the Central Bank and Irish Financial Services Regulatory Authority. Much of the debate focused on whether the recommendations of the McDowell group, which was chaired by Mr. Michael McDowell before he was appointed Attorney General and subsequently joined the Government, were being followed through and an appropriate balance was being struck between the prudential and consumer protection roles. Much of the debate missed the central point of what was necessary. The disintegration of the Chinese walls between the Central Bank and Irish Financial Services Regulatory Authority appears to have been at the root of many of the problems that arose subsequently. The Central Bank and IFSRA were given strong powers but we have since learned they chose not to use many of them. While the Bill provides for many improvements in the structure of the regulatory system, it also makes changes to the powers that officeholders in the relevant institutions need to exercise. An act of faith is still required, however, in terms of a belief that the individuals who exercise these powers will perform their jobs correctly and diligently. We are lucky to have appointees of the calibre of Professor Patrick Honohan and Mr. Matthew Elderfield, the Governor of the Central Bank and Financial Regulator, respectively. These appointments have created more confidence than there would have been otherwise. The new structure must ensure that such confidence can be maintained when changes in personnel take place in both offices, including changes in board membership. On leaving office, one of the Minister’s predecessors made dozens of appointments to IFSRA committees and made great play of the fact that none of them was politically influenced because all appointees were drawn directly from the financial services industry. I am not sure the same boast would be made today given that one of the flaws of the previous system was that all the internal committees were populated by the financial services industry. This resulted in a low level of self-regulation and caused the malaise we are experiencing. Senator Ross is correct on several points. Maintaining the power to select the right people for the right reasons is at the heart of the Bill and will inspire confidence. The Minister is inspiring such confidence and while subsequent appointments will need to underline this confidence, I expect this objective to be achieved. The improvement in the structure of the regulatory system is the all-embracing approach taken to all financial services, extending from banks to the insurance industry to the financial services provided in the social economy. Much of the debate, especially on Committee Stage, will centre on credit unions. While we have been dealing with bank losses and assets, albeit diminishing assets, of billions of euro, the role of social finance has been put on a back burner. 74 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

This issue will excite more discussion in this debate than the asset base of social finance would lead one to expect. We must ensure that in rescuing financial services as a whole, we do not resuscitate the old banking structure. We must give an enhanced role to credit unions and social finance. For this reason, the debate on section 35 will be important. I am pleased the Minister saw fit, prior to the debate in the other House, to meet representatives of the Irish League of Credit Unions and make appropriate changes to the legislation. While credit unions do not appear to be satisfied with these changes, there is little room for manoeuvre. Given the approach taken by the new Financial Regulator, a message must go out that all financial institutions will be regulated to a particular standard in future. This requires specific rules on reserves. That said, difficulties arise with regard to how one records what is a performing loan in a credit union. For example, a person who repays a loan at €5 per week may miss a couple of weekly repayments and then pay €15 or €20 one month later. Credit union loans are not measured in exactly the same way as loans provided by other institutions. Perhaps the Minister will indicate how he expects the necessary additional diligence and regulation applied to credit unions will be tempered given that they have smaller reserves and tend to offer smaller loans than other financial institutions. It will be necessary to ensure the type of lending provided by credit unions increases because smaller, more localised loans will resuscitate the economy quicker and more effectively than would otherwise be the case. The structure proposed for the Central Bank has generated considerable debate. That it has received favourable comment from international institutions inspires some confidence. Never- theless, structures are only half of what is required. The crisis was caused by the culture that prevailed in the financial sector. The House awaits reports from the commission of investigation and Committee on Finance and the Public Service on developments in the banking sector. These reports must identify which individuals in the sector were directly responsible for the difficulties we are experiencing. There is some truth in the statement that we have had significant changes in the composition of bank boards. It will be necessary to retain institutional memory as we proceed. The commission of investigation and other inquiries will show that certain individuals were culpable for what has taken place. I do not know who these individuals are and I am unable to identify them directly but when the findings are made, the individuals in question must vacate their positions. The Governor of the Central Bank, the Office of the Financial Regulator and the Minister must act on this matter in the timeframe identified. If many answers have not been provided and action taken in the coming six to 12 months, I fear much of the ongoing misrepresentation will continue. We had a further example of such misrepresentation today when most of those who have opposed the concept of asset management chose to concentrate on the worst case scenario of a number of scenarios cited in a report on the National Asset Management Agency. We need to create public confidence that the institutions of the State will be in a position to run the banking system effectively. This Bill is an important piece of the jigsaw in that it gets the structures right. However, much more work needs to be done on the larger part of the equation, namely, the need to correct the culture that gave rise to the current malaise.

Senator Alex White: Listening to Senator Boyle it struck me, as it has often struck me while listening to speakers from the Government side, that if the Government were to be more realistic and less robust about some of the claims it makes on the impact of some of its policies, its expectation that critics would temper what may be exaggerated criticism would be easier to accept. I say to Senator Boyle, that there are problems on all sides of the argument. The Minister might reasonably say with Senator Boyle’s support that the critics always go for the worst case scenario. Even in the economic context, the Minister’s speech tonight contained 75 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Senator Alex White.] claims, which one often hopes are true, about turning corners and other such phrases. Nobody sees these corners or feels that we are turning any corners. However, claims are constantly made that this is the case. I cite the example of the costs for NAMA. I do not have the exact quotes from the Minister. However, I can certainly recall being told in this House that the NAMA project would not cost any money——

Deputy Brian Lenihan: And it will not.

Senator Alex White: ——and would be likely to attract a profit. The Minister does not know that.

Deputy Brian Lenihan: It is still the case today.

Senator Alex White: Of course, the Minister does not know that; he just cannot say.

Deputy Brian Lenihan: The Senator should read what the report——

Senator Alex White: I am reading plenty of things. Of course the Minister does not know definitively——

Senator Larry Butler: The Senator does not know either.

Senator Alex White: ——any more than I do. That is precisely the point I am making.

Senator Paul Coghlan: This could be a lawyers’ argument.

Senator Alex White: The former Fianna Fáil people who are heckling me from beyond do not know either. Let us try to be more realistic. I am urging those on both sides — Iam prepared to take on board some of this myself — that if we are more realistic in the claims we are making and sometimes in some of the criticism, we might make more progress in what we are trying to do with the economy which is in such a serious state. The Minister talks about growth — I hope he is right. If it is growth, the difficulty is that we are likely to face a period of relatively jobless growth. History tells us that is what happens coming out of recession. The other downside is that even if we have growth of 3%, 4%, 6% or 8% — God help us, will we ever see it again — unfortunately we will still be holding a multibillion euro bill for what has had to be done with the banks. That is the true context of what we are dealing with. On Second Stage we are usually urged to look at the general philosophy behind a Bill. Sometimes we forget that is what we are called to do. I am somewhat critical of the Minister’s speech in that regard. Why is that so? I remember in 2003 when the last regime was introduced, it came off the back of considerable debate in Government and more widely as to perceived flaws in the regulatory system including in the Central Bank. These radical changes were introduced in the 2003 legislation. Rather than the Minister simply saying that in order to avoid the mistakes of the past we need to have the legislation, I would have preferred the Minister — not for the purposes of brickbats from my side but for the purpose of us having a genuine and intelligent debate — to outline the mistakes to which he refers. It is not for the purpose of him flagellating himself or anything, but so we can debate the matter and understand what was wrong with the 2003 regulatory system that now needs to be changed. It is not enough for the Minister to say things we do not like have occurred. That is a matter of fact and there is evidence that there was insufficient regulation and that was one of the factors that needs to be addressed — I do not know if it is the gold, silver or bronze medal in Professor Honohan’s sense. Precisely what was wrong with the 2003 regime that needs to be changed now, seven years later? It is almost like an alibi to say that because there have been very unsatisfactory 76 Central Bank Reform 6 July 2010. Bill 2010: Second Stage developments, to put it mildly, poor regulation and breakdown in regulation, we will therefore change the system. What precisely in the system needed to be changed? That would take us into a broader debate. Let us not forget that the light-touch regulation that Senator MacSharry rightly criticises and drew into question in his speech was an absolute article of faith for many people, including many of prominence in his party, one of whom was Minister for Finance. Light touch regulation was not something that happened by accident. In his speech the Minister said these things needed to be done in order to have the sort of Central Bank that would best serve our interest. The entire financial system is based on having an independent central bank, a Government bank that stands aside from the fray and overlooks and supervises the operation of the financial system. That has certainly been the case since the settlement after the Second World War. The philosophy behind central banks is that they should be robust and engage. They should be monitoring and understand. What has happened is a source of amazement to people. Everybody has these anecdotes. When I was buying my first house and when many of us here were looking for loans for the first time, we were told we could not get more than 80% and no more than 2.5 times one’s earnings and perhaps once the earnings of one’s spouse or the person earning less money. Those regulations were always very irritating to us when we wanted to get loans, but those were the rules that were in place. What happened to them? The Minister is not inventing something new in putting in place a robust and proper regulatory system. He is going back to what should have been in place all along and what was in place for many decades — a far more interventionist Central Bank. What happened for it to change? There was a change in political approach and philosophy which won through. It was not just that we drifted into light touch; an actual decision was made to do that. That is why there is political sensitivity on the Government side to these issues being addressed. They are not simply technical mistakes that somebody made at one stage. It was not that somebody did not get up early enough in the morning or did not add up the figures properly. That is not what occurred. An entire edifice of control of financial institutions and the banking system, not just in this country but also in other countries admittedly, was actively changed. It was not just by drift. It was done for a reason. Professor Honohan talks about the system being overly deferential. I will not upset the Minister or anybody else by going back into the crony narrative. However, we should think about what he is talking about there. He may not necessarily be talking about a tent full of people who have an unhealthy relationship, whether across banks, developers and politicians. However, there is certainly a clear statement by him when he talks about a deferential culture of something going on which is entirely different from what one would expect from a regulatory system such as the kind of system we always should have had and did have for a very long time. Only a few months ago — I believe it was at the opening of the Aviva Stadium or something like that — when the former Taoiseach, Deputy Bertie Ahern, was asked about macroeconomic policy, tax incentives and so on, he was quoted in the newspapers as having said that endless pressures were put on him and the Government. Government Members cannot say that the Opposition politicians and critics of the Government are making all this up. This is the relatively recently departed former Taoiseach acknowledging the existence of these endless pressures. I would have preferred the Minister to have elaborated on the elements of the 2003 legislation that needed changing. I would have thought there is much in the Bill before us that is quite acceptable, correct and appropriate. My quibble is that although we had much of this type of approach in the past, we threw it away and now we are just going back to it. It is not 77 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Senator Alex White.] a new invention. That we had a departure from that regime was rooted in a particular political and, if I may say so, ideological philosophy in respect of the proper role of an independent central bank. It might be better to address other issues on Committee Stage that have only been touched on such as the role of credit unions. However, I would like the Minister to address the so-called mistakes of the past. What were the problems with a system only put in place in 2003? What was the mischief he felt he had to address? I would appreciate it if he looked at this in detail.

Senator John Hanafin: I welcome the Minister. In supporting the Bill I am very cognisant of the fact that we will adodpt an integrated approach. I share the views of my colleagues who spoke about light touch regulation and the subsequent events which proved that this was not the correct way to proceed. Now that this has become apparent, we are proceeding on a different line. The purpose of the Bill is to provide for the creation of the Central Bank commission, the dissolution of the Irish Financial Services Regulatory Authority, the establishment of a new management structure within the bank and the introduction of new accountability measures, especially enhanced accountability to the Oireachtas. Each of these measures is to be welcomed. There seems to have been a shared responsibility and there are always difficulties when this occurs. The Central Bank, the paymaster, should have been the body in control at all times. People now think there should not have been light touch regulation. Clearly, we agree that this is the case. However, one cannot look back and say that at all times people knew and had warned that this was not correct. That simply did not happen. In fact, it was the international practice. The policy of Mr. Alan Greenspan, the head of Federal Reserve in the 9o’clock United States, was to increase and decrease interest rates according to need. There was an immediate and severe decline in the US economy after the events of September 11 2001; interest rates were reduced to zero and the economy turned around quickly. Similarly, Mr. Gordon Brown was quoted as saying the United Kingdom had seen the end of boom and bust economics. Therefore, this was not something that just occurred in the Irish economy, it was international best practice. There is another element to the difficulties experienced in the financial sector, the supra- national nature of international funding. It has also become clear that where a foreign institution has a large interest in the economy, this should automatically be regulated by the Central Bank to the extent that it is able to impose conditions to prevent malpractice. I am thinking in particular of hedge funds. The correct action was taken on 29 September 2008. I agree with Senator Ross who has explained at every turn, in every possible way, how we arrived at this difficulty. We would not have started at this point if we had known that this was going to be so difficult. We did not know whether the world economy would survive. Many talk about Lehman Brothers, but it was not just Lehman Brothers; it also involved Goldman Sachs, AIG, Freddie Mac, Fannie Mae, UK banks such Northern Bank, Lloyds TSB and other major funds. The world economy was on the precipice. On the night of 29 September 2008 we started to take the correct road, supported by Fine Gael but not by the Labour Party. At every turn since we have made the correct decision. Having made the correct decisions, one commentator after another has written about how the economy has been managed, including The Wall Street Journal, the Financial Times, the European Union, the OECD and the IMF, and they have all said we are doing it right. The positive sign is that technically we are out of recession. I cannot mention this without mentioning job creation, but I will come back to this. Being out of recession means that we 78 Central Bank Reform 6 July 2010. Bill 2010: Second Stage now have the opportunity to regulate as necessary, whether it is local or international banking. We must implement decisions to ensure we will never face this situation again because financial memories are short. The lessons of the early 1930s were not learned; the warnings given at the time about the extension of credit and the use of merchant banks to extend credit were not heeded in time. The overuse of credit facilities was not and is not an answer to our economic difficulties. We now have a strong handle on the economy. There has been an appreciation in the value of the US dollar by 15% and sterling by about 8%. Given that we export 50% of everything we produce, we have the most open economy in the world, excluding the city states of Singa- pore and Hong Kong. The outlook for the future is positive. It is time we started saying it is possible. When the Americans started from the same position, they believed and said, “Yes we can”. We started to say, “What would you expect?” If we expect all that is best, we will get what is best. We will deal with whatever difficulties we will face in the financial services sector. The Central Bank Reform Bill 2010 is part of that process.

Senator Paul Coghlan: I welcome the Minister and thank him for his detailed overview of the Bill. Nobody doubts his bona fides or his intent. He has done many good things, all of which we welcome, beginning with the appointment of Professor Honohan as Governor of the Central Bank and Mr. Elderfield as Financial Regulator and the provision of the preliminary reports on the banking crisis by the Governor and Mr. Regling and Mr. Watson, both of which he accepted. He also sanctioned an independent review of his own Department, something none of his predecessors would have attempted to do. I welcome the central tenet of the Bill, that we unify the various financial regulatory bodies in an integrated structure. I might be old fashioned, but I never believed in the twin pillar approach, of which Senator White seemed to be very critical. The fitness and probity provisions included in sections 18 to 44 are welcome. I cannot accept that any of those responsible for steering the ship onto the rocks should be left on the bridge. The Minister represents the taxpayer at board level and I am fully behind him, especially in respect of the activities of the two main systemic banks, AIB and Bank of Ireland, in which he has had to take an increasing shareholding. Such persons are members of risk and credit committees and in senior management. Now they are talking about reducing staff numbers, which may be necessary. Staff numbers should not be reduced until all those responsible for the appalling mess in which this country is are removed. Perhaps then, the Minister can examine what is necessary. I earnestly request him to be on guard when dealing with these people. I very much welcome the appointment of John Trethowan, the trusted banker, as the credit reviewer. In the interests of all those in small business and in business generally, it is important they have somebody reliable to whom they can appeal — a prudential banker, not a cowboy. Sadly, this Bill is being rushed through the House with undue haste. It is significant reforming legislation and it needs to be considered carefully. I object to all Stages being railroaded through the House this evening. We have often said that is bad practice and I am sure the Minister agrees. That kind of thing makes for bad law. This is an area which deserves proper and careful consideration. The extent of the regulatory failure we have witnessed in the financial services sector highlights the major structural problems in that sector, which need to be corrected. I hope the structure proposed in this Bill will deliver the changes which are so necessary but I have concerns that what is proposed may not 79 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Senator Paul Coghlan.] go far enough in terms of achieving the level of structural reform required to deliver a dynamic, vibrant and compliant financial services system. The commission should be given every opportunity to up its game and change the regulatory landscape here. It must move quickly to establish its credibility in financial regulation and show that the lax regulatory standards of the past are history. We must never again have the level of regulatory capture and failure which has caused untold damage to our country. We must also ensure the structures for holding regulatory authorities to account are robust and that they cannot hoodwink the public or Members of the Oireachtas with banal assurances that everything is fine and dandy in financial regulation in Ireland. It is important that we distinguish the situation with credit unions from the position involving banks. It would be a travesty if failures in the banking sector led to a disproportionate and burdensome level of regulatory imposition on credit unions. To date, no credit union has failed, no taxpayers’ money has gone into credit unions, no credit union has been nationalised and no credit union assets have been taken over by the banks. The regulation of credit unions has worked. It is vital that we remain vigilant with the protection of members’ savings in credit unions and that they operate to the highest standards of corporate governance. However, it is also vital that we are proportionate in our response to them and recognise that they are completely different from banks, have a strong social and community focus and are run by people on a voluntary basis. Their orientation, purpose and outlook is so different from the grab and greed motive and approach that sadly underpinned so much of Irish banking in the past ten years. They provide a beacon of light in the financial services world as a community-based, socially aware and connected local service. Excessive and disproportionate regulation of credit unions runs the very real risk of wrecking the very strong volunteer ethos that has underpinned the movement since its establishment. Sadly, I fear that some within the Financial Regulator’s office may not have the understanding of the importance and role of the credit union movement in an Irish context. I hope they will become acquainted with the movement here and will not act in a zealous way which undermines its role, purpose and function. It is my strong view that the provisions of this Bill which deal with credit union regulation should be removed and addressed in regulation that is specific to credit unions. Addressing credit unions in the same context as the banks leads to a blurring of issues and a risk of contaminating credit unions with some of the regulator blight which has covered banks in recent years. That is unfair, unnecessary and unjustified in the context of the huge input of the movement nationally and locally. It is also unfair to the thousands of volunteers in credit unions who give willingly of their free time to support their local community’s financial initiative. I do not contend that credit unions should suffer from lax regulation rather that they should be regulated in a proper and considered context. I hope the Minister will look again at the provisions of this legislation as they apply to credit unions and either remove them or put them in abeyance pending a proper consideration of the regulatory issues that relate to credit unions.

Senator Larry Butler: I welcome the Minister and thank him for what he has done in recent years in his finance portfolio. I do not know of anybody who, on coming into office, has had to deal with so many things at the one time. He did us proud internationally and at home. It is important we say that and that we restore confidence in the banking sector. This Bill gives us confidence in that regard.

80 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

It is important the public and those who bank with our banks have confidence in their investments and that they are protected. The Central Bank has a major role to play in that regard. Light touch regulation did not help us but we must acknowledge that it was accepted internationally. Many of our problems were due to the availability of cheap money internationally. The markets have tried to wean the European banks off this cheap money and allow them to provide money for themselves. That has not suited the markets too well either and we saw what happened. The Minister has restored confidence in the banking sector. It is important to consider how we will ensure our economy benefits from what he has done. Our budgetary situation has improved fantastically. Other countries, such as the UK, are only now beginning to do what we did two and a half years ago. That is due to the Minister’s oversight of the economy and ensuring we spent only what we could afford to spend. The Minister must find an additional €3 billion this year, which will be quite difficult. However, he has the courage to ensure we take the steps necessary and that we do not find ourselves in the position in which Portugal, Greece and other countries found themselves. The Minister Enterprise, Trade and Innovation said during the week that we should prioritise a guarantee scheme. The guarantee scheme would underpin the €3 billion provided in respect of NAMA and 160,000 jobs. It is important that our banks release money into the system in order to maintain jobs. The legislation will ensure we do not go back to the old ways of doing things. While the old ways worked for a while, we all know that the provision of 100% of the value of a property could not last. I understand banking to a certain extent but if one gives 100% of anything, the value is gone immediately. That was not a system we should have condoned in the first place. We did and it was light touch regulation. We are addressing the issue in this legislation. It is important that credit unions are regulated. However, there are those who say they should not. We thought the same about the banks. The Minister is correct. We need to bring credit unions within the terms of this legislation. The Minister has suggested how this might be done. We all know that some of the investments made by credit unions were not the best and a number of court cases have been taken. In some cases, when credit unions bought products which were found to be unsuitable, they pleaded that they had not understood them. The purpose of regulation is to ensure organisations such as credit unions do understand investments, that those who are saving money with them and borrowing money from them are protected and that such organisations are properly run. The Bill will deal with that issue. I welcome the interim report of the mortgage arrears and personal debt review group. Some argue in favour of the introduction of a property tax. The people cannot afford a property tax. They are struggling to pay their mortgages. The imposition of a property tax would be a mad idea and an outrageous proposal when we are trying to revive those who are struggling. Fur- thermore, those who invested in property for pension purposes now find they cannot afford to pay the mortgage on their investment property. In that situation a property tax would drive them through the floor. It would not be feasible and is not the way to go at this time. Perhaps when we are a little better off and the property market has recovered, we might look at the introduction of a reasonable property tax. Someone who pays stamp duty on the purchase of a house and then pays taxes should not be made to pay a property tax. I thank the Minister for bringing the Bill before the House. I welcome the new approach taken by him.

Senator Joe O’Reilly: I welcome the Minister. Fine Gael welcomes, in principle, the tightening of regulation and structures that improve it. Our amendments will be proposed in support of the principle of regulation and its improvement. 81 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Senator Joe O’Reilly.]

Not only did we have light touch regulation; for years we had almost no regulation. There is a trail of human misery and people throughout the country are suffering hugely as a con- sequence. They are suffering on an emotional level and, in some instances, children are suffering deprivation. The principle of regulation is, therefore, not at issue. There is a continuing need for the tightening of regulation, both domestically and internationally. The Regling and Watson and Honohan reports underscore the dearth of regulation and the irresponsibility that obtained. The reports indict bankers, the regulatory process and the Government of the time. It is important that we move from that situation. While we welcome, in principle, the concept of a commission controlling the Central Bank and banking, we are concerned about the appointment of eight of its members by the Minister, on whom this is not a reflection. The issue concerns political appointments. Fine Gael proposes an independent, objective, testable and observable process outside party politics. This is a prerequisite to ensure transparency, public confidence and effective ongoing regulation. We feel strongly about the issue and urge the Minister to review this aspect of the Bill. We will make this suggestion on Committee Stage. An objective and transparent process capable of being publicly monitored outside party politics must be established. The history of regulation of banking and the dangerous and sinister interconnection between party politics and banking practices make an unanswerable case for the Fine Gael proposals. In the midst of the recent financial morass, bubble, hubris, greed and all the awful things that happened and which we collectively regret and seek to put right, the great beacon of light and hope and the champion of the people was the credit union movement which made a difference in the social lending sphere and kept the fabric of our small communities and families together. It has been exemplary. There was no light touch regulation. There were the occasional errors, alluded to by the previous speaker, but there will be human error in every endeavour. There was, essentially, a highly principled, socially motivated, consumer oriented, well directed and regulated process within the credit union movement. That needs acknowledgment at all levels. Credit unions hold a separate and distinct position in the financial system and should be regulated differently. They exist to help and serve members who have long been associated with them. Their loans are also stressed, in many cases by virtue of banking practices that have impinged on families. Often, when the mortgage must be paid, the credit union loan for the car, home improvements or holidays becomes stressed. Flexibility must be applied to credit union loans. The Bill allows 30% of credit union loans to be extended for a period greater than five years. That is an improvement on the figure of 20% originally mooted of credit union loans to be allowed to go through this process. However, credit unions should have a greater level of discretion. Those which are dealing with small loans to families and individuals within a community setting should have even greater flexibility. We must not throw out the baby with the bath water. In the rush to correct years of dalliance, laissez faire practices and roguery and clientelism in banking and high finance we must not do down the single institution which is the people’s friend in every village and town. Even the figure of 30% is tight. Moreover, the reserves credit unions are being asked to hold are excessive, to the extent that they will not be in a position to lend adequately. I appeal to the Minister to put the credit union regulatory element of the Bill on hold, to carry out a review of the credit union movement and to look at a separate regulatory process for credit unions. These are very distinct institutions with a very distinct role and societal function. I believe the public would thank us for that. I appeal to the Minister to do it. We cannot paint all with the one brush and we cannot be excessive in our regulation of credit unions. I appeal for reason and for adjustment. 82 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

Senator Mary M. White: I welcome the Minister. For those of our colleagues who were not present when Senator Ross spoke, he said that in all of his time here, Deputy Brian Lenihan was the best Minister for Finance.

Senator David Norris: We were agog listening in our rooms.

Senator Mary M. White: He went on to say that his criticism was that NAMA had been led astray again by the banks. It will be interesting to hear what the Minister has to say in that regard in his summing up. We saw from the reports of Professor Honohan and Regling and Watson that there were serious inadequacies and failures in our banking regulatory system. The whole purpose of this Bill is that we would have credibility at home and internationally with reform of the Central Bank. It represents a significant package of changes which will establish a lending framework to repair and improve the supervision of our financial system. The point is to create a Central Bank that will take on the responsibility of ensuring the stability of the financial system. It is a three-stage legislative programme to create a new, fully integrated framework for financial regulation, meaning everything will come under the Central Bank and its Governor will have ultimate responsibility so no cracks can arise in the system as we progress. There is a fear that the Minister could damage the credit unions in this Bill. It is well worth repeating on the record what he said in this regard earlier in the debate:

I am a strong supporter of credit unions and I recognise their special place in communities all over this country and their civic-minded nature. The Government is all too aware that banks have let us all down very badly whereas, throughout this period, the credit union movement has continued to meet its mandate and to provide a very valuable community- based service to its members. Let me reiterate that credit unions are, and will remain, a very important part of the financial sector in Ireland. The credit union movement continues to play a critical role in meeting the financial needs of our communities. The Government is fully committed to a financial and regulatory system in which credit unions can develop and expand their activities.

The real issue with credit unions is that they would prefer if a decision was not made on section 35 in this Bill but that we would wait until the review process, which I believe is currently out to tender. This makes common sense. Many Members have been approached by representatives of credit unions, who call for the legislation to be deferred until the strategic review, which the Minister requested and is setting up, returns its findings in December 2010, as is expected. The review will have two parts, first, a risk assessment that will determine the appropriate financial management required for credit unions and, second, the strategic options for the future of the credit union movement. It is the belief of the credit union movement that only when the findings of the strategic review are completed should the appropriate powers be directed to the registrar. On behalf of all on both sides of the House, as Senators Ross and Butler said earlier, I wish to state that the Minister has been exemplary in his dedication to cleaning up the financial mess that our little country——

Senator Alex White: Created.

Senator Mary M. White: ——found itself in. It is an international issue, with a banking crisis throughout the world. There is a financial crisis in the United States, the United Kingdom——

Senator Paschal Donohoe: We have an amendment which is suitable for the Senator. 83 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

An Cathaoirleach: There should be no interruptions.

Senator Mary M. White: It is thanks to the Minister for Finance, the Taoiseach and the Government that we are not being lobbed in with Spain, Greece, Portugal and Italy.

Senator David Norris: What of the PIGS? The “I” does not stand for Iceland?

Senator Mary M. White: We are being lauded by the Financial Times and our austerity programmes are being lauded.

Senator Paschal Donohoe: The Senator should support amendment No. 23.

Senator Mary M. White: If the Financial Times and The Wall Street Journal were being critical, Members would be shouting it from the beautiful ceiling here in the Seanad Chamber. Credit unions fear that any new legislation will be a blanket across all individual credit unions, of which there are 1,400. It is only natural there would be a review, to which there is no objection.

Senator Joe O’Reilly: The Senator should support our amendment.

Senator Mary M. White: However, we must listen to——

Deputy Brian Lenihan: We have to listen to the regulator as well. It is a difficult balance.

Senator Mary M. White: I agree. I compliment the regulator, Mr. Elderfield. Every time I hear Mr. Elderfield’s name, I relax.

Senator Paschal Donohoe: I am not sure the Minister does.

Deputy Brian Lenihan: Perhaps Senator White will not relax when she hears what he has to say later.

An Cathaoirleach: There should be no interruptions.

Senator Mary M. White: I know we are in good hands. I knew that the first time I saw the regulator in action, and the same applies to the Central Bank Governor, Professor Honohan. They have been outstanding appointments by the Government. Those on the Opposition side should be appreciative of the great work being done by the Minister for Finance.

Senator Paschal Donohoe: The Senator should consider amendment No. 23.

Senator David Norris: I welcome the Minister and join in the compliments. He is a man of sterling qualities and I hope among them is contained an element of sardonic humour under- neath that impassive ministerial mask because, otherwise, I do not imagine he could have sat here for several hours without feeling the effects. I am very glad to see him back in full health and vigour and able to withstand this. I understand he has had an attack of influenza recently and it is refreshing to see him back in the House. I must respectfully disagree with my colleague, Senator Mary White. Two reports have been referred to, about which I have spoken at some length and I will not reiterate all of that now. These reports indicated very clearly that this was not a vanilla bubble of boom and bust——

Senator Alex White: It was. 84 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

Senator David Norris: ——but a plain vanilla bubble that was caused directly by Government policies. The Minister has been honest enough in addressing these matters and I will leave it at that because he is both a decent and honest man. I agree with him that it is important that we stress the good things that have been happening. Some good indicators have occurred, although it will be quite a long time before we catch up in terms of employment. The economic indicators are to a certain extent academic at this stage, although I welcome some of the measures. I welcome the creation of the Central Bank commission and the dissolution of the Irish Financial Services Regulatory Authority, which is about bloody time. Did it not disastrously let us down? It is one of the most shocking things that the body that was supposed to be independent both of the markets and of political direction should so signally have failed to act as the watchdog. I also welcome the introduction of new accountability measures. The Minister was present, manfully, during the debate on NAMA and he knows perfectly well that Senator Joe O’Toole, seconded by myself, got significant amendments accepted by Government here in the Upper House, giving a degree of Oireachtas supervision to the NAMA legislation. I will probably not take my full time to speak. I noted with some wry entertainment that some of the other speakers appeared to be embarrassed by the amount of time they had and had significant difficulty in using it.

Senator Alex White: There will be plenty of time tomorrow.

Senator David Norris: However, I will say this. The Minster knows perfectly well that I have been concerned about Anglo Irish Bank, and that concern is now clearly shared by the Commissioner responsible, who has indicated these concerns. That does not give me any pleasure but it is a plain fact. I also said this very early on, about January, but there was some confusion because I was interrupted and heckled. I was telephoned afterwards by the parliamentary reporters, who do a superb job, but I am not sure I got it right. However, I will say now what I said then, namely, that I believed it was not a tsunami or an earthquake but a man-made situation; therefore, it was susceptible to a man-made solution. We can consider what worked. In the National Treasury Management Agency I suggested a national property management agency and prior to this I suggested the amalgamation and nationalisation of the principal banks in a clean surgical move. I suggested towing Anglo Irish Bank into the sea and sinking it. The Minister for Finance, Deputy Brian Lenihan, told the House this could not be done because the bank was of systemic importance. I am interested in the language and this tells me the system had to be saved. This was not so. As it is a world problem, we should address the issue on a worldwide basis. I remember Gerry Adams saying “They haven’t gone away, you know”, in reference to the IRA. The money has not gone away either and someone has it. There has been an increase of 25% in the number of billionaires in the United States of America and in the worst of times, the wealth has become more concentrated. We have seen throughout the world and this country the greatest transfer I have ever witnessed from the poor to the wealthy, which is wrong. The system should be examined. I have been attacking Standard & Poor’s, Fitch and Moody’s for 18 months and at last the political establishment has caught up. These types of firms were involved in derivative products and helped to sell them when they either knew or should have known that they contained toxic elements. Despite this they kept pushing such products, precipitating the crisis. They got it wrong about Enron and Iceland and were involved to a certain extent in Greece with partners in the form of Goldman Sachs. 85 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Senator David Norris.]

I am not proud of the fact that an Irishman was sitting on top of that particular cake. It is disgusting. I read an article in one of the leading London newspapers at the weekend and I hope the facts therein are wrong. Facts and figures were provided indicating that Goldman Sachs was knowingly involved in the precipitation of a famine in places like Ethiopia through the use of devices and financial instruments to obtain a position where it could gamble on food futures. That is a disgrace and people died as a result. Such firms should be held to account and I would like a radical examination, not just in Ireland but throughout the globe, in that respect. I have not used my full allocation of seven minutes of speaking time.

Senator John Paul Phelan: It is very difficult to follow Senator Norris in full flourish. I do not know how many minutes I will use but I welcome the Minister, Deputy Brian Lenihan, to the House. I commend him on much of the work he has done in recent years in the financial sector. Although I do not agree with everything and not everything he has done has been right, I trust his judgment and I wish him well in his position.

Senator Marc MacSharry: Come on over.

Deputy Brian Lenihan: There is not a hope at this point.

Senator John Paul Phelan: I am not joining anything yet.

Senator Paschal Donohoe: He is not going. He is staying with us.

Senator John Paul Phelan: In light of the engagement the Minister, Deputy Brian Lenihan, has accepted for August, he might be coming over to this side. I wish to make a couple of points on the Bill, although I do not want to repeat everything that has been said on the financial disaster which the country finds itself in currently, especially our difficulties in banking and bank regulation. I echo the comments of Senator Norris on the recent banking reports which clearly outline that although there was an international dimension to our difficulties, quite a significant proportion of our problems were home grown. I do not blame the Minister for this and I quite clearly state that he was deliberately kept down politically in the Govern- ment for a long time while others were in charge. Other people made the calls on economic matters and more is the pity that he was not in his current position much sooner. Many people in the country would agree with that point. I wish to raise my concerns on the credit union issue as well and ask the Minister, in his concluding remarks, to clarify one of the eight measures which he pointed out would be introduced following discussions in the other House. He referred to a specific statement introduced in section 35(2C) meaning that the Central Bank may give notice to credit unions with regard to lending requirements only where it considers it necessary for the adequate protection of member savings. Will the Minister clarify that statement? I may have missed other points but that goes to the central argument that many people in the credit union movement have with some of the recommendations in this legislation. As Senator O’Reilly has pointed out, the credit union movement has been a shining light in many isolated parts of the country in getting access to credit for ordinary citizens over the years. Crucially, people have been able to get access to credit other than from the moneylender, which is a creature that is reappearing in different parts of the country. The credit unions deserve much recognition for combating this problem. I welcome the appointment of Mr. Elderfield as the regulator, as he is doing what is basically a good job. Most the people involved in the implementation of regulation prior to our banking collapse are still there, although we may have changed some of the top people involved. Most 86 Central Bank Reform 6 July 2010. Bill 2010: Second Stage of the rest of the structure remains and even with this realignment, as proposed in this piece of legislation, of the regulation function, these people will still be in the relevant positions. There is a lack of confidence on behalf of the credit union movement in the people who have been regulating it, and there is certainly a lack of confidence among the public. That is the great strength of the credit union movement, which represents the public. The Government cannot have it both ways with regard to the credit union movement. The central plank of the changes in this legislation for the credit unions as I understand it would be to introduce binding regulations, as opposed to the current guidelines, with regard to lending practices for credit unions. The Government cannot on the one hand accept and endorse the co-operative movement under which the credit union leagues operate while on the other hand removing the autonomy they have to perform their functions. The one-size-fits-all approach will not work for the credit union movement and there is a danger that this piece of legislation will make them more like the banks, which we should be trying to avoid at this juncture. The credit unions have a unique and different function which has been fulfilled very well over the years. As other Senators have pointed out, no credit union in the country has been forced out of business recently and credit unions have not come to the Government looking to cash in bonds. There should be cognisance of that. Reforms are necessary in the credit union movement and although many of the larger credit unions are adopting bank-type lending policies, they do not have the necessary equivalent funding-type policies. We should ensure credit unions do not engage in long-term investments unless they have the same long-term funding to back up those investments. There is a potential for difficulty unless some action is taken in that regard. That is about all I wanted to say on the legislation. I have no difficulty with much of it but I would be interested in the Minister’s clarifications of earlier comments regarding the autonomy that credit unions will have after this legislation is enacted if there is no amendment dealing with lending policies into the future.

Minister for Finance (Deputy Brian Lenihan): I thank Senators for the constructive manner in which they have approached this legislation and for the many kind comments they made about me. Senator Donohoe led the comments on the Bill for the Opposition and made a number of pertinent points. He was concerned about the position of the Secretary General of the Department of Finance and whether that person should be on the board of the Central Bank. It has been traditional to have the Secretary General of the Department on the board and the Secretary General is named in the legislation. The Secretary General is not there as a representative of the Minister for Finance, which is an important point, but is there as the administrative head of a Depart- ment which has a vital bearing on the finances of the State. It is important that there be a sharing of information between the Secretary General of the Department and the Central Bank. The Secretary General is not present to supervise the Governor or hold him to account on behalf of the Government, rather the Secretary General’s job in this regard is to exchange information and reflect on the operation of the bank in the context of its essential function in maintaining monetary stability. I cannot speak for previous Ministers for Finance in this regard, but I am in a position to state that neither of the two Secretaries General with whom I have worked has commented in any detail on the proceedings of the board of the Central Bank. I do not believe it would be normal practice for them to do so. It is valuable to have that linkage to which I refer in place. I accept that Senator Donohoe did not make a major point in respect of this matter and raised it more to seek clarification. The Senator and others, including Senators Ross and O’Reilly in particular, did make a major point in respect of who, under the legislation, should have responsibility for appointing 87 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Deputy Brian Lenihan.] the members of the Central Bank commission. One of the difficulties I have with this aspect of the debate is that it begins with the presumption — I find it extraordinary that such a presumption is made by the seasoned politicians who populate the Opposition benches — that “politics” is a dirty word. It is stated we should not introduce politics to the debate when it comes to the question of making appointments. However, we must introduce politics because we are elected by the people to make decisions on their behalf. That is the function of Members of the Dáil and, on an advisory basis, the Members of this House. There is that mandate from the people, either directly or indirectly, and we are obliged to discharge it. If we commence our consideration of legislation by presuming politics is wrong, the Oireachtas should not really exist as a body. I am not referring solely to Seanad Éireann in this connection; I refer to both Houses. We must have some pride in ourselves as public figures and politicians and account for our decisions. In an interesting contribution Senator O’Reilly stated we should establish a commission to make all public appointments. It is worth considering this proposal to identify what might be its impact. Under the Senator’s proposal, the power the Government exercises in the making of appointments would be removed and vested in a commission. Senator Ross, as is his absolute democratic entitlement, referred to certain appointments made to the board of Anglo Irish Bank and I must account for these appointments. It may not be appropriate to comment on the matter during this debate, particularly as it is not directly relevant to the legislation. However, as Minister, I am accountable in this regard, a fact to which the Senator has referred in various newspaper articles he has published. One issue that occurs to me in respect of Senator O’Reilly’s proposal is how we would question the commission about decisions it might make in making appointments to the board of the Central Bank. I do not understand how the establishment of an appointments commission would be of assistance in addressing the issue of who should take responsibility for the making of appointments. Another suggestion frequently advocated in debates on this matter in the House is that the Oireachtas should have responsibility for making these appointments. The Dáil already has responsibility for forming a Government. If the power to make appointments was vested in the Oireachtas, it is not obvious to me that it would be necessarily responsible to anyone for any appointments it might make. The only exception in this regard is that general elections and Seanad elections take place every four or five years and the Members of the Houses might then be held accountable. The question of appointments is a difficult one and was also raised by Senator Ross. In so far as the Central Bank commission proposed under the legislation is concerned, I will be obliged to make appointments thereto in a very speedy manner. That is, of course, based on the assumption that certain Opposition amendments which have been tabled will not be accepted. This is a matter with which I will be obliged to deal in an extremely serious fashion. It is important that the legislation specifies the qualifications which persons for appointment must possess. However, I do not like the argument that involvement in politics should disqualify people from appointment. Under this argument, it is axiomatic that involvement in politics should disentitle one from being appointed to anything. That seems to be the presumption underlying some of the arguments made. I accept, however, the argument made — in good faith — that some of the appointments made by all parties have been of poor quality. If we are devising a system, the best one to adopt is that of accountability. If a Minister knows that Senator Ross is going to question or criticise him or her in respect of appointments he or she has made, he or she will think twice before making certain appointments. That is the most valuable sanction. I am not convinced that an independent commission would be accountable to anybody. I am also not convinced that the Oireachtas, in respect of a collective decision it 88 Central Bank Reform 6 July 2010. Bill 2010: Second Stage might make, would be more accountable than an individual Minister. However, I am sure this matter will be teased out on Committee Stage. Senator Donohoe referred to living wills — in the context of the banks — and commented on how the banks might be restructured in the future in cases of insolvency. The Central Bank has published a document on this matter and considered the various options. Legislation has been promised in other jurisdictions, but it is far from easy to devise it. The more detail one includes in the living will, the less confidence the investor has in investing in a particular bank. Legislation such as that to which I refer is essential because we must ensure that in the future we will be in a position to deal with banks which are of importance. It is clear from the progress of banks throughout Europe since September 2008 that the option of a classic liquidation was not available to any government. However, there seemed to be no intermediate solution between liquidation and providing unlimited taxpayer support for these institutions and underwriting their losses. When Axel Weber, president of the German Bundesbank, visited Dublin recently, he stated no institution was too small to be saved in September 2008, particularly given the fragility of financial markets at the time. It is extraordinary that few, if any, financial institutions in the eurozone have been allowed to fail during the crisis. One extremely small Dutch building society was liquidated, but that occurred some considerable time after the onset of the crisis in September 2008. The legislation in question is extremely important and the Central Bank has published a document on the area to which it refers. The Government is committed to introducing such legislation. Many Senators referred to the arrangements made for credit unions. I remind the House that the Government has an obligation to ensure those who entrust their savings to credit unions are properly protected. The Government has given legal effect to extending the deposit guarantee scheme which was announced on 20 September 2008 to credit union savers. Since the implementation of the Financial Services (Deposit Guarantee Scheme) Act 2009, the guarantee is now applicable to all savings of up to €100,000 in credit unions. The guarantee covers the vast majority, if not all, of members’ shares in the relevant credit unions. The State will, therefore, be exposed if proper prudential considerations are not observed. It was at the request of the credit union movement that I examined the section 35 requirement. The credit unions wished to be put in a position where the write-off of loans could be extended more easily by them in respect of members who found themselves in difficulty in the current financial circumstances. I was of the view that this was a worthy objective and that we should take action in respect of it. We took such action in the relevant legislation. However, the Government decided to put in place countervailing safeguards in respect of regulation. This was not an arrangement into which it entered lightly. It was, in fact, advised to take this course of action by the Financial Regulator. Since the debate on the legislation in the Dáil, the regulator has written to me welcoming the fact that it was passed and was before the Seanad. He is aware of the continuing opposition on the part of some to the proposed amendment to the Credit Union Act 1977. As head of financial regulation, he has extremely strong views on this matter and is of the opinion that section 35, as drafted, is sensible and prudent. He would have viewed the original version of the section as even more sensible and prudent. I was prepared to meet representatives of the credit unions and did so on two occasions in order that I might, at least, address some of their concerns about this matter. As Members of the Houses, we have certain responsibilities. Those who suggest public figures are somehow captured by the banking interests are very wide of the mark. There is no interest which captures public representatives in this or the Lower House more than that of the credit union movement. However, we are required to make a distinct determination as to what is required in the public 89 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

[Deputy Brian Lenihan.] interest. This requires that there be minimum protection for depositors who are now covered by the guarantee. The Financial Regulator has advised the Government that this is essential. I have tried, in so far as is possible, to meet the concerns of the credit unions. The crucial point with regard to the amendments that have been tabled is that which provides that the exercise of power by the regulator, through the registrar, must be proportionate. This is not a blank cheque that is being given to the regulator — the regulator is being given the power to exercise controls in a prudential and proportionate way. That is very important. Public confidence in the credit union movement has to be sustained. Throughout my discussions with the movement, I have stressed the importance of working together in this regard. It is not the case that banks are being treated more leniently than credit unions. Credit unions are financed by the highly liquid demand deposits of their members, rather than by the mixture of deposits, bonds and equity that is common in other financial institutions. If we are to make provision for arrears and the rescheduling of loans, it is critical that we have a basic prudential framework in place. That is why these provisions were introduced. It is not as if some bureaucrat in the corner decided this should be done — it is the considered view of the regulator, which I have taken into account. I have not gone the entire distance requested by the regulator. After I met the credit unions, I decided to temper some of the regulator’s requirements with the need for proportionality. I agree with Senators who have made the point that one size does not fit all. There is a huge diversity of types of credit union. Some credit unions have embarked on extensive lending, whereas other credit institutions continue to be quite small in scale. I heard some Opposition Senators, including Senators Coghlan and Alex White, argue that this measure should be deferred while a review takes place. We cannot defer issues all the time by organising strategic reviews. When the regulator advises one that a matter needs to be addressed, we have an obligation to heed his views and act on the matter. We cannot simply decide to postpone our consideration of this difficult issue for a year or two while we have another debate and another round of lobbying about it. This matter requires attention now. The guarantee for the credit union movement has been in place and will be in place into the future. I am proud to be the Minister who introduced the guarantee, which is very important. I agree we do not want the credit unions to be assimilated into the banks. The provisions contained in this legislation, which are specific to the credit unions, give the registrar certain powers. We can make progress on these issues if the regulator works with the credit union movement. The credit union sector will be very important in Ireland in the future. It has not been as important in recent years due to the high interest rates that have been offered by some of the financial institutions on the markets. That led to an ageing in the membership profile of many credit unions. In this financial crisis, we have seen how the other traditional mutual model has disintegrated in this country. Our two mutual building societies will not be mutual societies indefinitely into the future. The credit union movement has an important role to play in providing finance in communities. Credit unions provide the type of service that was extolled by many Senators. If we are to learn anything from our experiences of recent times, it should be that such a type of service can only be provided in the context of a definite regulatory framework. The idea that every time one tries to regulate a credit union, a lobby can be mounted to resist it is unrealistic in light of all we have learnt about the financial crisis of recent years. I do not suggest that the credit unions made all the mistakes the banks made. Nobody in the credit union movement would pretend that the movement did not make some mistakes. The regulator has made it clear that we need a regulatory system. I have had to act on that advice. That is the position in relation to the credit unions. It may be difficult for Senators to accept. 90 Central Bank Reform 6 July 2010. Bill 2010: Second Stage

Senator MacSharry spoke about mortgage arrears. He has always been a strong advocate of the protection of those who are in financial distress with their loans. This afternoon’s interim announcement in that regard was made by a group that is working very well. It has prepared a set of recommendations, some of which are being implemented by the regulator and others of which are being implemented by the Minister for Social Protection. There will be a further instalment of change in that regard. Senator Ross made an interesting contribution. I thank him for his kind words. He was careful to criticise certain appointments with which he did not agree. I am not sure whether this debate is the appropriate place for me to reply to the issues he raised. I can say that some of the names were proposed by the bank itself as part of a panel. I wish to say, in response to the comment about the need to appoint someone with legal expertise to the board, that I was not disposed to appoint someone from one of the larger firms, which have excited a degree of criticism among commentators as well.

Senator Shane Ross: The Minister has given them enough already.

Deputy Brian Lenihan: I decided to appoint a commercial solicitor of considerable experience who is a former Member of this House. On the question of NAMA——

An Cathaoirleach: Time is moving on.

Deputy Brian Lenihan: Senator Ross asked a question about the publication by NAMA this afternoon of a number of documents, including its business plan. The original draft business plan was prepared by the interim NAMA executive, at the request of the Opposition parties in the course of a Dáil debate. That plan clearly rested on assumptions and information provided by the financial institutions at that stage. As Senator Ross pointed out, it is clear that many of the assumptions that were relied on by the banks were inaccurate and wrong. The Chairman of NAMA, Mr. Daly, made the same point this afternoon. I am glad to say the legislation provides that it is a criminal offence for a financial institution to provide wrong information, in the context of the institution itself. Of course the information in this case was provided before the NAMA legislation came into force. Having said that, I maintain that what has happened since last autumn has entirely vindicated the Government’s decision to establish an asset relief agency. It is clear that we needed an independent statutory valuation of these assets. The argument that was made by many people at the time, including some Members, although not all of them, on the Opposition side, was that the banks should be left to their own devices in arriving at valuations. I suggest it was a very fallacious argument. Given the scale of the problems that existed at the banks, it was clear this country needed an independent statutory valuation of these loans. If we are to draw any happy conclusion from this most unhappy episode, it should be that NAMA at least ensures we have first mover advantage in recognising the reality of how great the losses were in the banking system. It is clear that not all European countries have been in a position to do that yet. The first mover advantage we obtained when we forced the banks to recognise the losses they had on their books will assist our banking system in time. The next question that was raised by Senator Ross was the close proximity between regulators and the banking system. This cultural problem, which was also mentioned by other Senators, was at the core of many of the regulatory difficulties we experienced. I am not suggesting there was actual corruption, or anything like it. I am suggesting the regulatory system displayed an unhealthy subservience to the banking system. That cannot be repeated. Senator 91 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

[Deputy Brian Lenihan.] Alex White asked why the architecture should be changed. One of the features of the architecture designed in 2003 was a great lack of clarity, for a small country.

Senator Paul Coghlan: Indeed.

Deputy Brian Lenihan: In a small country like Ireland, there is a clear need to relate the stability function of the Central Bank in a clear and transparent way to the regulatory function of the regulatory system itself. We will have a unified board over which the Governor will preside, and to which the head of central banking and the head of financial regulation will be accountable in their own distinctive capacities. We need that type of structure to prevent a repeat of what we saw in the past. I agree with the many Senators who said that regardless of the structures that are devised, men and women rather than measures are decisive at the end of the day. In all of these matters, careful attention to appointments is of decisive importance. Many other points were raised. I have tried to deal with as many points as possible.

An Cathaoirleach: The business that was ordered today limited the amount of time available for the Minister’s reply.

Deputy Brian Lenihan: I thank Senators for their attention.

Question put and agreed to.

An Cathaoirleach: When is it proposed to take Committee Stage?

Senator Marc MacSharry: Now.

Agreed to take remaining Stages today.

Central Bank Reform Bill 2010: Committee and Remaining Stages

Sections 1 to 3, inclusive, agreed to.

NEW SECTION. An Cathaoirleach: As amendments Nos. 1 and 6 are related, they may be discussed together.

Senator Alex White: I move amendment No. 1:

In page 10, before section 4, but in Part 1, to insert the following new section:

“4.—On the cessation date, the Freedom of Information Act 1997 is amended by inserting—

(a) in paragraph 1(2) of the First Schedule, “the Central Bank of Ireland,”, and

(b) in Part I of the Third Schedule at the end thereof—

(i) in column (2), “Central Bank Acts 1942 to 2010”, and

(ii) in column (3), “any provision” opposite the mention in column (2) of the Con- sumer Protection Act 2007.”.

I operate on the basis that the application of the Freedom of Information Act 1997 should be the default rule across public administration. 92 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

I do not exclude from that the operation of the Central Bank, especially in circumstances where such relatively radical changes are being brought about in the regulatory system and in the Central Bank, the decisions that are relevant and those we debated on Second Stage. I have made the point many times in debates on the application of the Freedom of Information Act that this ought to be the position. In other words, it should be incumbent on the Govern- ment to demonstrate why the Freedom of Information Act ought not to apply rather than it being necessary for us to argue it should. In those circumstances, we tabled the amendment to seek to persuade the Minister, even at this late hour in both the day and the passage of the Bill, that it would and should be appropriate for the Freedom of Information Act to apply to the Central Bank of Ireland in its new manifestation. I am interested to hear what the Minister will say in response to this amendment, on the basis that the default position should be the application of the Act rather than its non-application.

Deputy Brian Lenihan: Senator White moved this amendment on his own behalf and that of Senators McCarthy, Ryan, Prendergast, Bacik and Hannigan. This issue was discussed in the other House. There are good reasons for the exclusion of the Central Bank from the freedom of information legislation. First, there is the sensitivity of the information it holds; second, the independent position of the bank under the European statutes and the very restrictive information constraints which are associated with that; and, third, the risks of an inadvertent disclos- ure of sensitive information. However, I am prepared to consider whether the level of information made available by the Central Bank could be improved within the legal and other constraints that apply. I will reflect further on this issue with a view to re-examining it as part of the second Bill on financial regulatory reform which will be published in the autumn. At this stage I do not propose to accept the amendment.

Senator Alex White: What the Minister says is useful and helpful, apart from the conclusion. It seems the first reason, namely, sensitivity of information and the third, the risk of an inadvertent revelation of sensitive information, are the same so there are two rather than three reasons. The fact that there is sensitive information within the Central Bank which people might seek is not of itself a reason for excluding the application of the Act because there are many controls and savers in the freedom of information legislation. The Minister knows well this is for the protection of this or that information or this or that exclusion of the availability of information in particular circumstances. It is possible to circumscribe this. It is relatively easy to circumscribe and delimit the level, extent and sensitivity of information in regard to what is made available. I am disappointed that a simple statement that some information may be sensitive of itself is a reason for rejecting the amendment. However, I am encouraged by what the Minister said in regard to his revisiting this issue which is important. The argument has been made many times and I will not hold up the House by revisiting and rehearsing it. The question of confidence in the system requires to a very considerable extent that information be available to the public, not only from the point of view of idle curiosity, as it were, but because where information is available and accessible to the public, whether through the efforts of journalists or well motivated individual citizens, there is a much better chance of the presence of a higher degree of confidence in these institutions, which have taken such a battering in recent years. On foot of what the Minister said, I will take his word that he will revisit this issue in the autumn legislation and will not forget the undertaking he has given. We can revisit the issue then and on that basis I will not press the amendment.

Amendment, by leave, withdrawn. 93 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

SECTION 4

Senator Paschal Donohoe: I move amendment No. 2:

In page 10, before section 4, but in Part 2, to insert the following:

4.—The Governor of the Central Bank and the Head of Financial Regulation shall present to the Houses of the Oireachtas an appraisal of the Recommendations of the Statutory Commission of Investigation on the Banking system within 3 months of such Commission completing its work.”.

We had much discussion in the House on the various banking reports taking place. The institution which is to be set up will play a very important role in ensuring that such difficulties will never again confront our country. The purpose of this amendment is to ensure that when the banking reports are completed the Central Bank commission and the organisation under it will produce a view on the recommendations of the reports, allowing Members of the Oireachtas to hear those views and understand what action will be taken to ensure we are never again plunged into this difficulty.

Deputy Brian Lenihan: I am not sure whether this amendment arises from the Bill but that is not for me to say. The terms of reference for the statutory commission will be before the Seanad either this or the following week and at that stage Senators will have an opportunity to discuss the operation of the statutory commission. The Government proposal is that the terms of reference will relate to the management of the banks, their boards, regulators and supervisors, the accountants and any communications from the Department of Finance to the other Minister to the regulatory or supervisory system. Those are the terms of reference of the commission of investigation and there will be an opportunity to debate them in the other House this week and in this House next week — obviously that is a matter for this House. The amendment before us looks at the recommendations of the statutory commission of investigation. I am not sure that is a matter that requires express recitation in this Bill. Clearly, the Governor will always make himself available to the committees of the Houses as will the head of financial regulation. I assume that is what will happen in regard to the statutory commission of investigation. It will not preside at the statutory commission and the Governor rather than the head of financial regulation has clearly done the preliminary scoping exercises on which the terms of reference are based. Messrs. Regling and Watson were the authors of the other report. The terms of reference are based on those scoping reports and when the final commission report is to hand early next year clearly there must be Oireachtas action on it. I do not take from that. It would seem to me the finance committee is the appropriate forum but if this House wished to take steps that is a matter for it to decide.

Amendment, by leave, withdrawn.

Section 4 agreed to.

Amendment No. 3 not moved.

Section 5 agreed to.

SECTION 6

Senator Paschal Donohoe: I move amendment No. 4:

In page 12, between lines 1 and 2, to insert the following: 94 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

“(9) Within one year of the enactment of this Act, and each year thereafter, the Agency shall publish an assessment of the performance of the Commission in protecting consumer interests through its regulations, orders, codes of practice and other activities.”.

I thank the Minister, Deputy Brian Lenihan, for his contribution and welcome the Minister for Defence, Deputy Killeen. It has been acknowledged in discussions we have had on the banking industry in recent years that there has been an omission in that the interests of consumers were not adequately represented against the strength of large banking organisations. This amendment seeks to compel the new commission to produce a report, where possible, on the work it will do to advocate for and represent the consumers of banks.

Minister for Defence (Tony Killeen): Under the Bill, responsibility for providing consumers with financial information and education will be transferred to the National Consumer Agency, along with the associated staff. The Government has decided the agency is best fitted to support consumers of financial services and products by providing information and education in line with the agency’s overall responsibilities for consumers. The supervision and regulation of products, markets and institutions from a consumer perspective remains with the bank. It would be entirely inappropriate to assign the NCA, which is responsible for consumer information and education, the role of reporting on the Central Bank’s performance of its statutory functions which are outside the remit of the NCA. However, the Bill makes separate provision for a consumer advisory group and amendments made on Committee Stage in Dáil Éireann have further developed the role of that group. There is also provision for the Central Bank to make available to the Oireachtas an annual statement of its regulatory performance and discuss that statement before an Oireachtas committee, if so requested. I am not in a position to accept the amendment because it runs counter to the underlying philosophy of the Bill in that in circumstances where the National Consumer Agency is to take over the financial information and education element it would be inappropriate also to task it with responsibility for the statutory functions of the bank.

Amendment, by leave, withdrawn.

Section 6 agreed to.

Sections 7 to 13, inclusive, agreed to.

Amendment No. 5 not moved.

Section 14 agreed to.

Amendment No. 6 not moved.

Section 15 agreed to.

Sections 16 to 19, inclusive, agreed to.

SECTION 20

Senator Paschal Donohoe: I move amendment No. 7:

In page 18, between lines 2 and 3, to insert the following:

“(6) Regulations under this section shall be laid before each House of the Oireachtas and shall come into force after 21 sitting days, during which time a motion may be tabled in either House to amend or annul the regulations.”. 95 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

[Senator Paschal Donohoe.]

The amendment addresses a difficulty regarding organisations such as this. It seeks to ensure the Houses of the Oireachtas would be aware of the work in which the organisation is engaged through the laying of regulations before them. The amendment would require the new Central Bank organisation to provide a report for the Houses of the Oireachtas on the regulations being put in place to enable them to discuss them, if they so wish.

Deputy Tony Killeen: Members will remember that the Bill was amended on Report Stage in the Dáil by way of the acceptance of a Fine Gael amendment along these lines to provide that regulations made by the bank relating to fitness and probity would be laid before the Oireachtas. This referred to in section 26(6). However, the Minister also advised on Committee Stage in the Dáil that it was important for the Central Bank to be in a position to act promptly in designating controlled functions to ensure the full rigour of the fitness and probity provisions could be applied. For that reason, he is not persuaded by the argument that there should be a 21-day delay which the amendment would cause. In addition, it is important that once the Central Bank is assigned this function, it is able to act independently and at arm’s length from the political system. For that reason, it is not proposed to provide for amendment or annulment of the regulations by the Oireachtas.

Amendment, by leave, withdrawn.

Section 20 agreed to.

Section 21 agreed to.

SECTION 22

Question proposed: “That section 22 stand part of the Bill.”

Senator Paschal Donohoe: Why does the Minister believe it is necessary to specify in subsection (4) the offices held by persons covered by the pre-approved control provisions included in the legislation? If one specifies the offices that will be subject to the terms of legislation, there is a temptation — as happened in the past — for the organisation one is regulating to create another job that does not carry of the titles specified but which encompasses the same work. In transport legislation, with which I am more familiar, a provision is included to the effect that the Minister may deem another post or job to be the equivalent of the roles performed and as such falls within the parameters of the legislation. Why does the Minister believe it is necessary to specify the jobs of director, chief executive, secretary and so on in this respect? Will such a specification create an opportunity to have the same work done under a different title perhaps outside the scope of the Bill?

Deputy Tony Killeen: This is an element that has been debated previously. It is my understanding that the section prohibits regulated financial service providers from permitting a person to perform a controlled function, unless a financial service provider is satisfied that the person concerned complies with any published standards of fitness and probity and has agreed to abide by such standards. The Central Bank can publish a code of standards of fitness and probity with the powers given to it in section 50. The section also provides that the bank can take into account published standards when performing its functions and exercising its powers. The list of offices for which the section provides is more indicative than exhaustive. It provides for a situation where someone is performing these roles perhaps under another title. It 96 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages seems the concern of the Senator in that regard is covered by the prohibition provided for in the section dealing with the controlled functions to be performed by a person.

Senator Paschal Donohoe: I am not sure it is covered. The section is clear. Subsection (4)(a) reads”... any of the following positions or offices ...”. It also reads: “(i) the office of director; (ii) the office of chief executive; (iii) the office of secretary; (iv) subject to ... [ an earlier] subsection ..., an office or position ...”. By being so specific about such offices, does this not create an opportunity for somebody to redefine the work done by a person under a different title and for it, therefore, to fall outside the scope of the section?

Deputy Tony Killeen: The bank may publish a code of standards of fitness and probity using the powers given to it in section 50. It is my understanding that it would be in a position to prevent such a circumvention of the provisions under section 50 and de facto under section 22. In reality, such a list could not be exhaustive in terms of including every possible function that might be performed by persons in the specified posts; in other words, I am referring to functions rather than posts.

Senator Paschal Donohoe: Section 50 reads: “The Bank may issue a code setting out standards of fitness and probity for the purposes of this Part.” My point stands. In other legislation regulating an organisation the Minister or the regulator has the ability to define any other post he or she deems fit as falling within the scope of the legislation. For example, if this provision were to cover a person involved in investment banking activity, some of those who discharge these functions do not carry any of the titles concerned; however, they do provide services that affect the health and overall performance of the organisation in question. I hear what the Minister is saying and understand his response, but my response is that section 50 is ambiguous in that it provides that the bank may issue a code setting out standards of fitness and probity.

Deputy Tony Killeen: To return to the point made on section 50, I had a quick look at the provision while the Senator was speaking and it seems to be open in encompassing anybody who might have a function about which the bank might have a concern in regard to his or her duties and responsibilities. Even section 22(4)(a) seems clear. It reads: “in the case of a regulated financial service provider that is a body corporate of a prescribed class, a person who holds or performs the duties of any of the following position or offices in a regulated financial provider shall be taken to exercise a significant influence on the conduct of the regulated financial service provider’s affairs”. That seems to encompass any person who is trying to circumvent the rules by designating a post with a particular title. The section encompasses responsibilities rather than titles, even where an attempt is made by a particular institution to circumvent the rules in the manner outlined by the Senator.

Question put and agreed to.

Amendment No. 8 not moved.

Sections 23 to 49, inclusive, agreed to.

SECTION 50

Senator Paschal Donohoe: I move amendment No. 9:

In page 38, between lines 8 and 9, to insert the following:

“(2) The code shall not come into force until it has been submitted to the Minister for Finance who shall submit it for consideration and approval by the Houses of the Oireachtas or a Committee of the Houses of the Oireachtas designated to deal with such matters.”. 97 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

[Senator Paschal Donohoe.]

Given the discussion we had on the importance of section 50 in laying out the standards for probity and fitness upon which so much of the Bill will rest, the suggestion is simple, namely, that when the reformed Central Bank has put the code in place it allows the Houses of the Oireachtas to discuss the code. Given how evident was lack of fitness of some people to perform the jobs with which they were entrusted, it is appropriate that public representatives have an opportunity to see this code, table any amendments to it and have their views heard.

Deputy Tony Killeen: In a sense this is a philosophical question on how one would view the role of the Central Bank and the regulator in these matters as opposed to the political system, with the Minister on the one hand or an Oireachtas committee on the other. If one were to take the view that one would charge the Central Bank and the regulator with particular responsibilities, among them setting out their code of practice, and also to take the view that it would be very undesirable that there would be interference in the pursuit of the functions of the two offices by the political system or the Minister, one would come to the view that even in the case of the code of practice, which perhaps Senator Donohoe would argue is fairly narrow and parallel to the operations of the regulator and the Central Bank rather than central to them, it would seem to be more desirable that the bank would come forward with its own code of practice and operate in accordance with it without having to refer to the political system. The general provisions of the Bill with regard to the accountability of the Central Bank for its regulatory performance to the Oireachtas and its committees seems to strike a reasonable balance between its operational independence and accountability, which is very necessary and is provided for in this Bill, and its capacity to order its own business in terms of its code.

Senator Paschal Donohoe: I do not think the code is quite narrow. It allows very generous latitude to the banks to set out the standards in question. None the less, I understand the importance of the independence of the Central Bank and ensuring it is free from unnecessary political interference as opposed to direction.

Amendment, by leave, withdrawn.

Section 50 agreed to.

Sections 51 to 53, inclusive, agreed to.

SCHEDULE 1

Amendments Nos. 10 to 12, inclusive, not moved.

Senator Paschal Donohoe: I move amendment No. 13:

In page 53, column 3, between lines 6 and 7, to insert the following:

“(n) credit union affairs.”.

We have had a lot of discussion on this in the House and many Members have raised concerns about the need to strike a balance between the needs of the credit union movement and the broader regulatory duties that the organisation will have. We understand the role the commission will play in running it. All this amendment suggests is that there should at least be an ordinary member of the commission who could have an understanding of the particular needs of the credit union movement and ensure it is represented in the commission. 98 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

Deputy Tony Killeen: I heard a good deal of the Second Stage debate and the points made by Members on the role and functions of credit unions, as was the case in the other House. As everyone is aware, credit unions fall within the definition of financial service providers which is set out in the Bill. The Minister for Finance believes that the issue is covered and that relevant knowledge of credit union affairs is already recognised among the many disciplines from which Central Bank commission members may be drawn. In other words, it is central to financial service provision by institutions.

Amendment, by leave, withdrawn.

Amendment No. 14 not moved.

Senator Paschal Donohoe: I move amendment No. 15:

In page 53, column 3, between lines 42 and 43, to insert the following:

“(4) No person shall be appointed for more than two terms.”.

It is important in an organisation such as this, when the financial world is so fast moving and the organisation which it seeks to regulate is so sophisticated, that there should be some mandatory turnover of people who are at the head of the organisation, that is, a term limit. That is what this amendment hopes to deliver, to ensure there is always a degree of freshness within the commission.

Deputy Tony Killeen: Amendment No. 15 is already covered by section 24B(4) on page 53. It was accepted by the Minister for Finance in response to an amendment tabled by Fine Gael on Committee Stage.

Amendment, by leave, withdrawn.

Amendment No. 16 not moved.

An Leas-Chathaoirleach: Amendments Nos. 17 and 22 are related and will be discussed together.

Senator Paschal Donohoe: I move amendment No. 17:

In page 56, column 3, between lines 22 and 23, to insert the following:

“(2) In publishing its proposed levies, it shall publish an impact assessment of the proposed levies including relevant comparisons of cost effectiveness of its operations with comparator countries.”.

This amendment seeks to ensure that the new Central Bank, in the reports it will produce, makes adequate use of international benchmarks in these areas. It is proposed that in terms of levies we consider the degree of levies imposed in other countries to ensure the levies being put in place are appropriate. We tabled this amendment because we have seen examples in other regulatory bodies where easy decisions are made on the level of levy to fund and put in place large, well-funded regulatory bodies. We need a profitable banking system and for it to be well regulated. I want to ensure there is focus on making sure the levies imposed are adequate and ample to fund the organisations and are also proportionate. The way to check that is to examine what has been done in other jurisdictions.

Deputy Tony Killeen: In respect of amendments Nos. 17 and 22, the Minister for Finance has asked officials in his Department to undertake a process of consultation with the Central 99 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

[Deputy Tony Killeen.] Bank, the Financial Services Regulatory Authority and representatives of the financial services industry with a view to examining how a move to 100% funding of the regulation of financial services by the industry might come about. In a statement to the industry in December 2009, the Governor of the bank signalled his expectation of an increasing degree of industry funding for financial regulation. Shoestring regulation will not work and the Minister is mindful of the points made in the recent banking reports on the past under resourcing of regulators. The Bill makes provision for the Central Bank to seek value for money and it will be subject to audit by the Comptroller and Auditor General. The levy provisions set out an open regime whereby the Central Bank must make a transparent statement of its requirements and must seek to match revenue to expenditure on an ongoing basis, subject to certain provisions for flexibility. The Bill strikes a balance between resourcing the Central Bill on the one hand, while not giving it a blank cheque on the other. However, the resourcing of our regulatory system should not be subject to an industry impact analysis that fails to take account of the wider economic and societal costs of regulatory failure. It will take many years before the levies cover the cost of rescuing the banking system. The Bill’s provisions as they stand address the many considerations that must be borne in mind, including the issues outlined by Senator Donohoe. Accepting amendments Nos. 17 and 22 would distort the balance somewhat by making it more difficult to achieve our shared aims in respect of the functions of the Central Bank and the Financial Services Regulatory Authority.

Amendment, by leave, withdrawn.

An Leas-Chathaoirleach: Amendments Nos. 18 and 19 are related and may be discussed together.

Senator Paschal Donohoe: I move amendment No. 18:

In page 60, column 3, between lines 20 and 21, to insert the following:

“(c) the benchmarks or domestic and/or international comparison against which its regulatory performance should be viewed,”.

There have been occasions in which the advice Ministers received was so overwhelming that they had no choice but to follow it. The amendments provide that any advice provided to a Minister in regard to the discharge of his or her duty is published and made available.

Deputy Tony Killeen: The issues raised by amendment No. 18 ought to be viewed together with the provisions of section 32B(3)(d), which requires the Central Bank to specify the targets and criteria for assessing its performance in strategic planning. This will, in turn, inform the regulatory performance plan and provide for the assessment of regulatory performance against relevant international benchmarks. The international peer review provided under section 32M will also feed into this process and help inform the development of appropriate international benchmarks over time. On that basis, the proposals in amendment No. 18 are already addressed by section 32B. With regard to amendment No. 19, the purpose of section 32L is to allow for the assessment of the regulatory performance of the Central Bank. The amendment seeks to provide an auto- matic requirement to publish information that may be highly sensitive, even where doing so seriously compromises the commercial position of financial service providers or the Central Bank in its attempts to regulate the sector effectively and stabilise the overall system. Clearly, that is not Senator Donohoe’s intention. The Minister has already shown a willingness to 100 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages explore whether information could be made more readily available from the Central Bank but he believes the proposed amendment is too far reaching and takes insufficient account of the genuine public interest reasons for the protection of sensitive information in these instances.

Amendment, by leave, withdrawn.

Amendment Nos. 19 and 20 not moved.

Question proposed: “That Schedule 1 be Schedule 1 to the Bill.”

Senator Shane Ross: This is a fine Bill in many ways but section 18CA of Schedule 1, which deals with the membership of the Central Bank commission, badly damages its credibility. We addressed this issue on Second Stage. The most important part of this Bill is the commission and the Central Bank will be judged by its performance and personnel. If a Government ever had an opportunity to act in a new way, this is it. Let us forget about the abuse of patronage in Bord na Móna, the Dublin Airport Authority, An Post or VHI. These commercial State sponsored bodies are not quite as sensitive as the Central Bank, which will be the institution on which the credibility and credit rating of this State will stand or fall. It will regulate the banks but if the international markets lose faith in the sector or the institution, we will be in even more serious trouble than we are at present. I hate to anticipate the sort of doomsday scenario that threatens us as a result. Whenever I make this argument, the response is always that it is very unfair to exclude political people just because they are members of Fianna Fáil. Ministers always say that because they always make appointments from the ranks of Fianna Fáil.

Senator Donie Cassidy: And Fine Gael.

Senator Shane Ross: I agree Fine Gael does the same thing, as does the Labour Party. It just happens that Fianna Fáil does it more often because it has been in power longer. The entire State apparatus is in its hands as a result.

Senator Donie Cassidy: Ten out of ten for that.

Senator Shane Ross: Ten out of ten for performing in Fianna Fáil’s own interest.

Senator Donie Cassidy: Not true.

Senator Shane Ross: I agree that nobody should be excluded simply on the basis of membership of a political party but dozens of people who are qualified to sit on the Central Bank commission have no association with political parties. The suspicion that those who are closely associated with political parties can be relied on to do what their party demands rather than serve the interest of the State will be held over the Central Bank if these eight ministerial nominees are appointed in the sordid method this Government has used to make appointments to all the semi-State bodies under its control. This issue is too serious to play politics. The future of the nation is in the hands of the Central Bank. The performance of the Government leaves an enormous amount to be desired in this area and not only with regard to Anglo Irish Bank. The Government’s appointment of Mr. Honohan and Mr. Elderfield indicates it has some idea of the importance of independence but when it comes to the banks it capitulates and appoints the same people. It had an incredible opportunity with Bank of Ireland to appoint someone untainted with past associations but it appointed someone who had been chief executive of that bank for many years. It could have done the same in AIB but it let the deputy chairman slip in. Nothing changed. Nearly all the 101 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

[Senator Shane Ross.] directors of AIB who were in place during the property frenzy remain. Even though the Government virtually controls that bank, it has done nothing to replace them. Colm Doherty, the arch insider who is chief executive of AIB, was appointed with the eventual consent of the Minister for Finance and the Taoiseach. While they resisted it for a while, they were eyeballed, gave in and lost. The same occurred when Richie Boucher was appointed chief executive of the Bank of Ireland. We have the same guys in charge, the same people at all levels and no change. Why did the Minister not take the opportunity to introduce something along the lines of what is being done by the Committee on Communications, Energy and Natural Resources, on which Senator O’Toole sits? It is interviewing candidates for one of the State bodies and while I do not know how this is proceeding, the process is certainly taking place. Why was a body that is a little detached from us not established to make these appointments and ensure they have credibility? If the Minister returns next week with a list of eight appointees and I am able to argue that the loyalty of the individuals in question — at least seven of them at any rate given that the Green Party would insist on one appointment — is more to the Fianna Fáil Party than to the State, the Central Bank commission will be in danger of being discredited, despite having ex officio members. In such circumstances, the entire organisation would be discredited. Why must the Secretary General of the Department of Finance sit on the commission when it will include as members the Governor of the Central Bank and head of regulation? One of the great problems under the old regime was that the Secretary General of the Department automatically became the Governor of the Central Bank. This has been changed in what was a welcome and great break with the past. However, while this appeared to be a culture change, the Minister has now made a provision to automatically make the Secretary General a member of the commission. As a result, the Department will continue to exert a strong influence. I cannot emphasise how important these appointments are. If there is to be an acid test of independence, it should be that we can be confident that those who are appointed are strong enough to say “No” to the Minister and tell him they will not do what he wants. Many of the appointments the Minister has made to the banks, including the nationalised bank, do not pass that test. I will not name again the individuals to whom I refer but they are self-evident because they have pedigree in the Fianna Fáil Party and extraordinarily obvious loyalties to it.

An Leas-Chathaoirleach: I ask the Deputy to stick to the issue.

Senator Shane Ross: Having stuck rigidly to the issue, I plead with the Minister to think again on the Schedule and establish a system which separates the party in power from these appointments by at least one remove. I do not mind how he achieves this but the issue is of the utmost importance. I assume the appointments will be made in the next week or thereabouts. I ask the Minister to give some assurance they will not be riddled with the political complexion with which they have been riddled in the past.

Senator Paschal Donohoe: I concur with Senator Ross on this point and made a similar point on Second Stage. I propose to respond to the Minister’s argument that we are damaging the reputation of politics and proposing to undermine the independence of the Central Bank. I disagree completely because I do not for one moment suggest that politics is bad. I am proud and pleased to be a politician and any inference to the contrary is completely misplaced. I hope I will be able to continue in my current role for a while longer. I have a good appreciation of the worth and value of politics. We are discussing the one institution whose independence is a matter of national interest. The Central Bank is of such importance that appointments to it must be made in a process 102 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages that is independent of all forms of political influence. Our role is to provide political leadership, whereas central banks are meant to be independent. The Schedule creates potential for inappropriate political influence. For this reason, I support the view expressed by Senator Ross and ask the Minister, even at this late stage, to reconsider the provisions of the Schedule.

Senator Marc MacSharry: I fundamentally disagree with Senators Ross and Donohoe. The institutions of the State command and demand a certain level of respect. As I stated, in a small country it will be possible to trace some level of lineage or connection to a political party, even in the case of Senator Ross. We expect the Government of the day to take decisions on behalf of citizens. Governments must have confidence in their ability to exercise this function and be accountable to the electorate. People can adjudicate in this matter under the Constitution when a general election is held. It is imperative that the Minister has decision-making powers. I am pleased he is in a position to make appointments to the Central Bank commission. How often are Senators frustrated by ministerial answers stating that a matter raised is the responsibility of this or that body? I am pleased the Minister can make the appointments in question as they arise and do not accept there is a political complexion to this issue. What is the optimum selection process? Would appointments be made by the Trinity club? Does one have to be a graduate of Trinity College Dublin to be acceptable to the masses? Such a proposition would not be acceptable to the National University of Ireland. Must appointees be members of the Fine Gael or Fianna Fáil parties or a member of the teaching profession? What prescribed body would one choose other than a government that has been democratically elected to select the most appropriate people to do a job? What elitist group could one choose that would be best placed to decide what individuals are best qualified? The Minister indicated that people must be qualified to do the job. Ministerial appointments must be made and no process is fairer or more accountable than democratically elected representatives taking decisions on behalf of their electors. If they do not perform to scratch, under the Constitution we have a good means of getting rid of them in due course.

Senator Paschal Donohoe: This is not a matter of people failing to show respect to the institutions of the State. That does not drive the points Senator Ross and I have made. The Fianna Fáil Party has made appointments in a manner that does not show respect for State institutions.

Senator Marc MacSharry: That is the Senator’s opinion. This is a democratically elected Government which has made determinations with which the Senator happens to disagree.

An Leas-Chathaoirleach: Please allow Senator Donohoe to continue without interruption. We are discussing Schedule 1.

Senator Paschal Donohoe: It is a fact, rather than an opinion, that appointments were made by the Fianna Fáil Party in the past ten years that did not show respect for State institutions.

An Leas-Chathaoirleach: This is a Committee Stage debate.

Senator Paschal Donohoe: I am aware of that. I am responding to a point made by Senator MacSharry and I contend that this issue is relevant to the spirit of the debate. A range of mechanisms are available for making the appointments. In this country and elsewhere adver- tisements are placed in the media inviting people to put forward their name for positions and selection is made by a body on which politicians do not sit. There is ample scope for the Oireachtas to understand the work the Central Bank is doing and interrogate it through the 103 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

[Senator Paschal Donohoe.] committee structure. The successful operation of the Central Bank is a matter of national interest. For this reason, it must be devoid of political influence and be seen to be such. Making this point does not show a lack of respect to the institution but an understanding of its role.

Senator Shane Ross: I am staggered by what Senator MacSharry said. I do not know whether he ever heard of the Drumcondra mafia. It was not possible to be a member of the Drumcondra mafia without being a member of a State board. Perhaps it just happens that they were all incredibly qualified to sit on the boards to which they were appointed. However, it is fair enough to point out that this is an abuse that has existed for a very long time.

Senator Marc MacSharry: We are talking about the future of the Central Bank. I am not talking about the past.

An Leas-Chathaoirleach: We are on Schedule 1 to the Bill.

Senator Shane Ross: There was at least one member of that group on the board——

Senator Marc MacSharry: It must have been close to the bone. They seem to be getting very——

Senator Shane Ross: ——of the Central Bank, so Senator MacSharry should be careful.

Senator Marc MacSharry: I have nothing to be careful about. I am talking about the future.

An Leas-Chathaoirleach: Senator Ross, without interruption. I remind the Senator we are on Schedule 1.

Senator Shane Ross: Correct. I was making exactly that point. One only needs to look at the performance of the coterie that surrounded the last Taoiseach to know that every single one of them was slotted in to a position on one of the semi-State boards for which, in many cases, they were blatantly unsuited and under-qualified. It is absurd to maintain that 11 o’clock that sort of thing was not going on. It was going on and it is still going on. The temperature of this debate has been raised because Senator MacSharry has made such an absurd defence. We are trying to say that we accept that it has happened and was unacceptable, but for God’s sake, in an institution like the Central Bank let us not let it happen because too much is at stake. Let us not pretend that people who were not qualified were not appointed because they were. While it would be a pity to do so, I will name names if necessary. To go into denial about this is utterly crazy and unreal. That is what has happened, but please let it not happen in this case. We have the opportunity to plead with the Minister in the next week not to make that sort of appointment.

Senator Larry Butler: It is outrageous to suggest that because someone is a member of any political party, he or she would not do the best for the country.

Senator Shane Ross: No one is suggesting that.

Senator Larry Butler: That is an outrageous attack on the political system. When we look at what the banks did, we can see they were members of their own club. There were no members of the political system in the banking system. They destroyed their own organisations. To suggest now some connection between that and someone who was appointed to the board of the Central Bank on the basis of being a member of any political party is an outrageous attack on the political system. We can clearly see what happened in the health services. When we got 104 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages rid of all the politicians from the health services, what happened? We cannot get one question answered. I do not subscribe to Senator Ross’s proposal. I believe that we are committed people regardless of whether one’s orientation is to Fine Gael, Labour, the Green Party or Fianna Fáil. We are Irish people committed to doing the best job we can. The one stipulation is that a person should have the qualifications, which is provided for in the Bill. It is important for us to stick to that. Having qualifications and the ability to do the job are what are most important.

Senator Marc MacSharry: I want to talk about the future and build on the good work already done with the other appointments. Do the appointments of David Begg, Matthew Elderfield or Alan Dukes to the board of Anglo Irish Bank represent cronyism? We cannot cherry pick. It is not about showing a lack of respect. In changing the regulatory regime with this Bill and two more Bills to follow, it shows the belief in this institution to do its work in the appropriate way without bowing to whether a person is a product of the Trinity regime, the Fianna Fáil scholarship programme or the Fine Gael training programme. It is the ability to take the appropriate judgment that these people have the qualifications and the independence we expect them to have and that they will ask questions. There are other organisations. For example Messrs. Regling and Watson did not pre-write the report as determined by the Fianna Fáil members of the Oireachtas Joint Committee on Finance and the Public Service, nor did Gay Byrne pursue a line in the Road Safety Authority that was dictated to him by any Fianna Fáil entities or otherwise. I believe in this institution’s ability to pick the six to eight members of the Central Bank commission in the appropriate fashion which will reflect that. I will not account for any past appointments that turned out to be bad — absolutely not. I am speaking about the here and now, based on the Government actions that have been adjudicated on by the international community to have been very good. We continue to lead the world in implementing the kinds of measure that need to be put in place. I say to Senator Donohoe that it is not about lack of respect.

Senator Paschal Donohoe: That is what the Senator said. I have been misquoted.

An Leas-Chathaoirleach: Senator MacSharry, without interruption.

Senator Marc MacSharry: I believe in this institution’s ability to do that well and continue to do it in the way it has been undertaken. It has shown the world an example in recent times.

Deputy Tony Killeen: At approximately this time last year a report was published suggesting that there were approximately 850 State agencies, boards and groups of one kind or another. Three weeks ago Dr. Muiris MacCarthaigh of the IPA published a report stating that there are 240, of which 189 have boards, with memberships ranging from three to, I believe, 35, which is an average of approximately ten or 12. This means that several thousand people are board members. Anyone would accept that it would be a miracle — even Solomon would be chal- lenged — to appoint all the members of such boards to a particular standard and for all of them to be fully engaged and doing the job well. The point Senator Ross makes now and has made previously is as much about members of boards who are somewhat disengaged or freewheeling along as about people who are seeking to subvert the integrity of the purpose of the board. In either case there are challenges. I accept that the points made by Senators on all sides of the House are made from a position of personal integrity based on the concerns they have. It is important to accept that as a starting point. I do not suppose that either Senator Ross or Senator Donohoe were ever fortunate enough to attend a Fianna Fáil cumann meeting. However, if they did so frequently, they would hear, among other criticisms, that we seem to appoint many people to boards, who are very definitely 105 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

[Deputy Tony Killeen.] tagged with memberships of or alignments with other political parties and traditions. Whenever that is said to me I have no difficulty in defending it if I believe that the person is suitable for the job. I believe it is probably true that all parties in government have appointed people from other political traditions when they have regarded them as suitable for particular jobs. In his Second Stage speech, Senator Ross referred to the quality of Matthew Elderfield and Professor Honohan and their suitability for the job. Given the record of the Minister, Deputy Brian Lenihan, in this regard, it is reasonable to expect and accept that he would be able to find and appoint people of that calibre. I know the Senator is making a slightly different point about being less than satisfied about the appointments to the boards of banks, which may not be germane to the current debate on the Central Bank and the regulator. However, it is a point he holds very strongly and can be argued one way or the other. On Second Stage, Senator Donohoe raised a query about the Secretary General of the Department of Finance being on the commission. If we cast our minds back to some of the points made by Professor Honohan and Messrs. Regling and Watson, one of the concerns would be that the policies being followed by the Department of Finance would be informed by what was known at Central Bank level and at regulator level. There is a strong argument for including the Secretary General in those circumstances. In general terms the Minister has an established track record in finding people of particular quality, which is challenging because there is not an enormous pool of people who are completely divorced from the activities of recent years and the difficulties into which we have got ourselves. On balance in our type of democracy with an Executive that is answerable to the Parliament and the committees thereof in a very immediate way, it is reasonable to accept that the Minister will come up with good quality people and, as Senator Ross said, even if he did not, there would be an opportunity to make that point very strongly. On the basis of previous experience, I am confident he would be in a position to do so. There are other points on, for example, the independence of the Governor on the budget of the institution. Given the many safeguards that are in place, I would be very confident that the new Central Bank and regulatory system will be capable of standing much more independently and clearly and will set out the terms of regulation much more strongly than has been the case in the past, which led to many difficulties.

Question put:

The Seanad divided: Tá, 29; Níl, 15.

Tá

Boyle, Dan. MacSharry, Marc. Brady, Martin. McDonald, Lisa. Butler, Larry. Mooney, Paschal. Carroll, James. Ó Brolcháin, Niall. Carty, John. Ó Domhnaill, Brian. Cassidy, Donie. Ó Murchú, Labhrás. Corrigan, Maria. O’Donovan, Denis. Daly, Mark. O’Malley, Fiona. Dearey, Mark. O’Sullivan, Ned. Ellis, John. O’Toole, Joe. Feeney, Geraldine. Ormonde, Ann. Glynn, Camillus. Walsh, Jim. Hanafin, John. White, Mary M. Keaveney, Cecilia. Wilson, Diarmuid. Leyden, Terry.

106 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

Níl

Bradford, Paul. Healy Eames, Fidelma. Burke, Paddy. McFadden, Nicky. Buttimer, Jerry. Norris, David. Cannon, Ciaran. O’Reilly, Joe. Coghlan, Paul. Phelan, John Paul. Cummins, Maurice. Ross, Shane. Donohoe, Paschal. White, Alex. Fitzgerald, Frances.

Tellers: Tá, Senators Niall Ó Brolcháin and Diarmuid Wilson; Níl, Senators Paschal Donohoe and Shane Ross.

Question declared carried

SCHEDULE 2

Amendments Nos. 21 and 22 not moved.

Senator Paschal Donohoe: I move amendment No. 23:

In page 83, between lines 21 and 22, to insert the following:

“This Part shall not come into effect until an order for its commencement is approved by both Houses of the Oireachtas. The Minister shall, at the same time making such an Order, publish a report on the impact of this Part on Credit Unions in Ireland generally.”.

There has been discussion among many Members of the impact of the Bill on the credit union movement. The Minister made a helpful speech on Second Stage in which he clarified that some changes had been made in response to representations received from credit unions. That said, there is still concern about the effect the Bill will have on credit unions. Their great work has been acknowledged by many, as have the standards they have reached. While the amendment accepts completely the need for regulation across all financial services, including the credit union sector, it simply proposes that a report be prepared to enable us to understand the effect the Bill will have on the credit union sector and to obtain some facts in order that we will be better able to understand how it will work and determine whether it will have unnecessary and negative consequences.

Senator Paul Coghlan: And so say all of us.

Senator Nicky McFadden: Hear, hear.

Senator Marc MacSharry: I assume the Minister will not accept the amendment but between the passage of this legislation and the publication of the Central Bank Reform (No. 2) Bill perhaps the Department or the Minister might agree to liaise with the regulator and the Irish League of Credit Unions to assess the impact of the legislation on the day-to-day running of that organisation in continuing the very good work it has done in the past 40 years in serving communities.

Senator Alex White: On the face of it, there is nothing wrong with what Senator MacSharry has proposed, but the difficulty is that the machinery to be extend to the credit union movement will have been brought into operation. I support the amendment because once the measures are extended in an extensive, if not a draconian, way to the operations of the credit union movement, it will be nigh on impossible to change them. It may well be that there is a justifi- 107 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

[Senator Alex White.] cation for what the Minister has proposed. No one doubts the necessity to extend rigorous regulation to the credit union movement and the operation of credit unions, which is important. I agree with my colleagues that credit unions have not conducted themselves in anything like the same way as the banks and other financial institutions. They have been almost completely free of criticism in the past decade and a half. However, it is important in an environment in which we are extending rigorous regulation that we do not leave the credit union movement out of the system. I do not believe there is a case to be made for the exclusion of exclude the movement completely. The value of the amendment is that it would allow for an assessment and an evaluation to be made of the likely impact of the measures to be introduced. It would delay the commencement of this part of the Bill. The proposals would not be commenced until an order was made for that purpose. The amendment would allows the assessment and evaluation proposed to be made in the interim. The only net difference between the amendment and what Senator MacSharry said is that the operation of the new machinery would be delayed until that assessment and evaluation were made. For that reason, the amendment is worthy of support. As Senator O’Reilly and others said, we have all made the point that the credit union movement has made an extraordinary contribution and been available to the ordinary everyday borrower borrowing to tide them over or for something perhaps a little more ambitious. Credit unions have operated in an extremely prudent and reliable way and proved themselves during the years. If for that reason alone there should be a breather to allow this issue to be assessed and evaluated and a further study to be made of how the Bill will impact on the credit union movement.

Senator Cecilia Keaveney: I support the views of Senator MacSharry. I have met the leaders of the credit union movement and I am very conscious of the tremendous work being done by credit unions. A minority in the movement have faced financial difficulties and I understand where the Minister is coming from to ensure everything will be straightforward. The banks and the credit unions have been linked together. It is important that the good work being done by credit unions is recognised. The vast majority are operating properly and in a prudent manner. It is very important, therefore, that we review what they are doing as opposed to linking them with the operations of the banks. I support what Senator MacSharry said in that regard.

Deputy Tony Killeen: It is important to bear in mind that the wording of section 35 differs dramatically from that in the Bill as published originally. I took the Bill on Report Stage in the Dáil when eight substantive changes were made by the Minister, many arising from points made by Opposition spokespersons and others, as well as those made by Senators Keaveney, Alex White, Donohoe and MacSharry. There is an acceptance of the importance of the credit union sector, particularly for people who for a variety of reasons, not least that they are the least wealthy, tend to have less access to banks. It is also important to bear in mind that there are advantages for credit unions in running with the situation as is currently proposed. One of the effects of the amendment, if enacted, would be to make the commencement of the provisions amending section 35 of the Act of 1997 contingent on an order made by the Minister for Finance and approved by both Houses of the Oireachtas. Additionally, the amendment would oblige the Minister to undertake and publish a report on the impact of the provisions on credit unions generally. One of the impacts of that would be that there would be considerable delay. It is important that the provisions be enacted quickly to make it possible for credit unions to have the increased flexibility to reschedule loans, subject to appropriate liquidity provisioning and accounting requirements, and so that credit union members can benefit from this. If the amendment were accepted it would delay 108 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages the introduction of the provisions and thus undermine the original rationale for their introduction. In addition, section 2 already provides for the commencement arrangements. Therefore, if the amendment were to be accepted it would be in conflict with another part of the Bill. With regard to the impact of the provision on credit unions generally, the Registrar of Credit Unions indicated to the Joint Committee on Economic and Regulatory Affairs on 27 May, that the registry had carried out an impact analysis which examined the level of provisions held against rescheduled loans. It is not clear, therefore, that a further assessment in this regard is necessary. Also, the strategic review of the credit union sector will provide an early opportunity to review the operation of the measures relating to credit unions, including the amended section 35 provisions. That was the point made by Senator MacSharry. We expect that report will be ready in spring 2011. As the Minister and other speakers said earlier, the Bill is the first of a suite of three. Therefore, there will be opportunities to revisit issues of concern or that cause difficulty. At this point, the best balance is struck by the provisions as currently provided for.

Senator Paschal Donohoe: I thank the Minister for his contribution. I understand the changes made to the Bill on Report Stage in the Dáil. They were helpfully detailed by the Minister for Finance earlier. That said, we believe the issues raised are legitimate and the amendment deserving of support.

Amendment put:

The Committee divided: Tá, 15; Níl, 29.

Tá

Níl

Tellers: Tá, Senators Maurice Cummins and Paschal Donohoe; Níl, Senators Niall Ó Brolcháin and Diarmuid Wilson.

Amendment declared lost

109 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages

Amendment No. 24 not moved.

Schedule 2 agreed to.

Schedule 3 agreed to.

Title agreed to.

Bill reported without amendment, received for final consideration and passed.

An Cathaoirleach: When is it proposed to sit again?

Senator Donie Cassidy: Ag 10.30 maidin amárach.

Adjournment Matters.

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Arms Trafficking. Senator David Norris: I welcome the Minister of State, Deputy Killeen. I believe he has already been made aware by the person who contacted me of the substance of some of the matters which were of concern and which I raise. They are extremely serious, highly important and controversial matters and, if true, extremely damaging both to this country’s reputation and to the Irish Army. The allegations suggest that serving and former members of the Irish Army were first retained as security advisers and then, as part of a company, became advisers to the Govern- ment of the Seychelles. The Seychelles Government was under the impression that the United States intelligence organisation was bugging certain state offices and a sweep was made. This was denied by the American authorities but a subsequent investigation involved some of these people. Intriguingly, they were involved in a company which they called CIA and which detected the presence of bugs or claimed to do so. Subsequently, they became enmeshed with the Seychelles Government and this is now a matter of considerable concern in the Seychelles. The Le Noveau Seychelles Weekly newspaper has carried front page stories and articles determining this and making the people of the Seychelles aware of the situation. It is alleged that these Irish Army officers, having profited from their involvement in two firms, CIA and Aver, went on to develop their interest in co-ordination with certain elements within the Seychelles Government. They went on an arms buying spree and bought a considerable number and variety of arms on the black market in South Africa. They were sold back into highly dangerous organisations operating within the Seychelles. That is the substance of the allegations. The allegations have been widely distributed through the electronic media on a website with which the Minister is familiar. A question has been asked in the other House by a Member from Sinn Féin, which is interesting, and some people might find that slightly ironic. In any case, these matters appear to have been widely dispersed not just in the Seychelles newspapers, electronic media and questions being asked in the Dáil by Deputy Martin Ferris but also by an interesting and significant article in the Sunday Independent of 13 June last by Mr. Tom Prenderville. He has indicated that he is also very clearly aware of the allegations and there is apparently an investigation into the matter. Will the Minister reassure the House that these allegations are being substantially investi- gated? Is it true that former or serving officers of the Irish Army also involve themselves in the operations of security firms both here and in the Seychelles? I remind the Minister that 110 Central Bank Reform Bill 2010: 6 July 2010. Committee and Remaining Stages these matters came before the High Court with sworn affidavits and documentary evidence, so there is at least some circumstantial proof. Will the Minister determine if there is an Army or Garda inquiry ongoing on the international ramifications of the matter? Have existing or retired members of the Irish Army been involved in buying arms on the black market in the Seychelles and selling them to disreputable organisations within that country? That is the statement being made widely within the Seychelles. These are just allegations currently but I understand they are supported by taped and documentary evidence, along with evidence from the Seychelles in the administration and media there. It is very important to establish any degree of truth in these allegations to save the honour and reputation of the Irish Army, which is and always has been very high in the peace- keeping field. I have never before known of allegations that Army officers were involved in the arms trade. If members are, whether it is legal or not, it is completely disgraceful. This is true whether the people involved are retired or currently serving. It is a very important matter because even if the allegations are untrue, it is vital they be addressed. Damage has been done and will undoubtedly continue to be done domestically and internationally if these rumours are allowed to persist without being clearly examined in detail, with a definitive answer given on these most disturbing questions.

Minister for Defence (Deputy Tony Killeen): I thank Senator Norris for raising the matter and affording me the opportunity to put the position on record in so far as I know it. The military authorities have advised that the position regarding members of the Permanent Defence Force engaging in off-duty employment is that membership of the Permanent Defence Force is a full-time professional occupation. This may, from time to time, involve long, arduous and unsocial hours of duty at the member’s home station or elsewhere within or outside the State. As members of the force must be available for duty at all times, off-duty time is dictated by operational requirements and may be irregular, changed or cancelled at short notice. Their service to the State as a member of the force takes precedence over off-duty employment and no employment should be undertaken which would prevent a member of the Permanent Defence Force being available for duty at all times. The Defence Forces do not exercise any authority on the nature of any employment entered into by former members. The Defence Forces prides itself on the integrity and professionalism of personnel, and the reputation of the Defence Forces at home and overseas has been acknowledged by all to be exemplary in the manner in which business is conducted. The good name and reputation of our Defence Forces must be upheld and not be damaged by the actions of a small number of individuals. Any allegations of impropriety or wrongdoing by serving members of the Defence Forces are treated with the utmost seriousness by the military authorities. Where appropriate, the military authorities will commence investigations into any such alleged wrongdoing. I am advised by military authorities that an investigation into the matters referred to regarding serving members has commenced and is ongoing. To afford due process and fair procedures to any persons who may be the subject of this investigation and to ensure the outcome of the investigation, or any follow-up action that may arise as a result of it, are not prejudiced in any way, the Senator will appreciate that it would be inappropriate for me to comment further until the investigation has concluded. Ireland established diplomatic relations with the Seychelles in 1999 through our respective missions to the UN in New York. The Seychelles, along with all countries in the region, is responding to the threat posed by the piracy emanating from the coast of Somalia. We should, 111 Fire 6 July 2010. Service

[Deputy Tony Killeen.] however, be very careful not to participate in or add to any sensationalist commentary about the national security position in that country. With regard to piracy, the European Union launched Operation ATALANTA in December 2008 to contribute to the deterrence, prevention and repression of acts of piracy and armed robbery off the Somali coast. The UN Security Council welcomed the launch of the operation to combat piracy off the coast of Somalia and to protect vulnerable ships bound for Somalia. From the outset, Ireland has fully supported the objectives of Operation ATALANTA. Fol- lowing approval by the Government, two Naval Service officers were deployed to the operational headquarters of Operation ATALANTA in Northwood in the UK on 12 June 2009. The officers filled appointments in force generation and civilian military cells. Five other officers are deployed in Uganda, engaged in capacity building of Somali justice and security personnel. Deployment to this operation is fully in accordance with Ireland’s commitment to UN-man- dated peace support operations.

Senator David Norris: I am grateful to the Minister for his reply but I would like to make a few points and he might comment on them. I accept that the Defence Forces do not exercise any authority on the nature of employment entered into by former members but the Garda might. I specifically mentioned this so I would like the Minister to take back a request for the Garda to investigate the matter. The Minister said it would be inappropriate for him to comment further until the investigation has concluded. I am sure the Minister will accept that although I am in possession of the names of all five of the personnel involved, I scrupulously avoided putting them on the record as I agree justice must be seen to be done. The Minister will also accept that with regard to his comments on sensationalist commentary regarding national security in the Seychelles, the matter was not breached by me. There was nothing sensationalist in what I said and I simply recorded what was in the Seychelles press. I refer to these as matters raised abroad. I deplore Somali piracy. As the Minister has done, I pay tribute to the wonderful record of the Irish Army and no one could construe anything I said as in any way contradictory to that idea. Even in facing the problem of Somali pirates, domestic and international law must be observed. It is the responsibility of this House, among other agencies, to ensure those laws continue to be observed.

Fire Service Senator Mark Daly: The fire brigade service in Kenmare is a professional service provided by very committed firemen deserving of the best equipment and facilities. The fire brigade station location has varied through the years. In the 1940s and 1950s it was a shed in the corner of the butter market in Kenmare with a fire pump pulled by a car. It was operated by men such as Dan Dooley, Jerry Shea, Sonny Palmer, John Downing the Square and Mickey Stephens. Eventually it was upgraded to Market Street where a small fire tender was serviced by volunteer firemen within the town. In 1977 it was moved to the library, where a Firefly Ford van was operated by Pete Hanley, Tony Murphy, John Digger, Flor Batt, Tom O’Connor, John and Michael Pio, John Arthur, Bertie McSwiney, Billy Lynch and his brother Mickey Lynch, Derry Downing and John Crowley among many others who served Kenmare and the people around it with distinction. A site was subsequently located that was owned by the council and which was to be allocated for a new fire station in 1997. The cost would be €300,000. However, the project never came to fruition. 112 Fire 6 July 2010. Service

The station was relocated from its position adjacent to the library to its current location in 2004. I understand the rental cost of the property is in the region of €17,000, but I am open to correction in that regard. The current team of firefighters — Mr. Billy Bevan, Mr. Joe Crowley, Mr. Noel Hanley, Mr. Dan Keane, Mr. Paul Cassidy, Mr. Michael Connolly, Mr Michael Dono- van and Mr. John Sweeney — provide cover for the entire Kenmare area. There is a site next to the station which is controlled by the council and which has, I understand, been designated as the location of the new fire station. Planning permission has been granted and the project was supposed to be put out to tender. The funding required for the project which has not been included in the capital programme for a number of years is estimated at €1.2 million. Perhaps the Minister might enlighten the House on when the very professional fire service in Kenmare will obtain access to new facilities and a permanent home.

Deputy Tony Killeen: I thank the Senator for raising this matter, to which I am responding on behalf of the Minister for the Environment, Heritage and Local Government. I appreciate the significant contribution which fire services have made and continue to make each day in safeguarding our communities. I am glad to record the Government’s commitment to the fire service in terms of modernisation and financial investment. The provision of a fire service in its functional area, including the establishment and maintenance of a fire brigade, the assessment of fire cover needs and the provision of fire station premises, is a statutory function of individual fire authorities under section 10 of the Fire Services Act 1981. The role of the Department of the Environment, Heritage and 12 midnight Local Government is one of supporting and assisting local authorities in delivering fire services through the setting of general policy and the provision of funding under the fire service capital programme which supports local fire authorities in the development and maintenance of a quality firefighting and rescue service. It also provides funding for the construction and upgrading of fire stations, as well as the procurement of fire appliances and specialised equipment. There have been significant improvements affecting all areas of the fire service in recent years, including enhanced structures to provide stronger leadership at national level, allied with local delivery through the establishment of the national directorate for fire and emergency management; increased investment in infrastructure and equipment; and further development of training and the provision of improved communications infrastructure. The Government strongly supports the valuable work being done in the development of both the full-time and retained fire service. A modern and efficient fire service provides an important service for the community. Kerry County Fire Service has ten fire stations and responds to approximately 1,330 call-outs annu- ally. Since 2002 some €4.7 million has been provided in grant aid for the council for the provision of new stations and appliances and equipment. The recent refurbishment and extension of Tralee headquarters fire station was supported by the provision of €1.8 million from the Department’s fire service capital programme. In addition, since 1998, the council has been approved to purchase 12 new fire appliances and two combined aerial appliances. The station in Kenmare was built in 1977 and responds to some 60 call-outs per year. Pro- vision was made in the 2005 capital programme for a new fire station in the town. In 2008 approval was conveyed to the council to proceed to the planning stage in respect of the project. The Department also requested that an updated cost plan be prepared and submitted before the project proceeded to statutory planning. It is understood planning permission for the project was granted in March 2008. The provision of funding by the Department for the project will be considered in future capital programmes within the constraints of available resources and 113 Employment 6 July 2010. Rights

[Deputy Tony Killeen.] in the context of the fire authority’s priorities, the spread of existing facilities and the totality of demands from other fire authorities for available funding. I hope I have been able to clarify the issue for the Senator.

Employment Rights Senator James Carroll: Given that it is now five minutes past midnight, I thank the Minister for Defence for remaining in the House to take this matter. The hour is late and I appreciate the fact that the Minister is present. This matter relates specifically to the fact that employers have temporarily laid off staff and deliberately decided not to make them redundant in order to avoid paying them the money they have rightfully earned in respect of the period of notice. I thought this was a one-off when a constituent contacted me about the matter. However, I have subsequently been approached by others on the same issue. As everyone is aware, redundancy occurs when there is a lack of work in a firm or a downturn due to financial circumstances. As an alternative to redundancy, employers may lay off employees or place them on short-time working for a number of weeks. Under the Redundancy Payments Acts 1967 to 2007, there is a lay-off of workers where an employer is unable to provide work but where he or she believes this to be temporary and gives notification of the lay-off before work finishes. When I studied law in UCD, employment law was one of the key subjects taught. It is because of this that I have a keen interest and specific knowledge of this area. If there is a lay- off of workers or they are placed on short-time working and this continues for four weeks or more, or for six out of 13 weeks, one may give one’s employer notice in writing of one’s intention to claim redundancy under the Acts to which I refer. However, one must do this no later than four weeks after the period of the lay-off or short-time working has ended. People will obtain their redundancy payments in taking this course of action, but they will not will not obtain what they have earned. In simple terms, they will lose their right to notice from their employer under the Minimum Notice and Terms of Employment Acts 1973 to 2001. As the Minister is aware, it is the employer who decides initially whether there is redundancy. I am sure he will inform me that if there is a dispute in this regard, the matter should be referred to the Employment Appeals Tribunal which can also be consulted on a raft of employment issues. However, the specific matter to which I refer is not being dealt with and people are left hanging for weeks or months. Two of the people by whom I was contacted had alternative job offers but could not take them up. One of the individuals informed me that he was afraid to do so because of the thought that his former employer would state after a number of weeks that his short-term lay-off period was over and that his services were again required. As a result, the people concerned are not in a position to take up new employment, while obtaining what is due to them from their previous employment. I hope serious consideration will be given to this matter. The Minister of State with responsibility for labour affairs is examining the position on redundancy and I hope he will give consideration to the specific aspect to which I refer. I look forward to the Minister’s reply.

Deputy Tony Killeen: I thank the Senator for raising this matter, to which I am responding on behalf of the Minister of State with responsibility for labour affairs. The turbulence experienced in the labour market during the past 12 to 18 months has been unprecedented in modern times and presented employers and employees with huge challenges. Unfortunately, in certain sectors the economic downturn has left some employers with little 114 Employment 6 July 2010. Rights choice other than to radically reorganise and rationalise their business models. In a worst case scenario, this leads to employees being made redundant. The haemorrhage of jobs from the economy is evidenced by the redundancy statistics published monthly by the Department. These show that the level of redundancies has risen three- fold, from just over 25,000 in 2007 to in excess of 77,000 in 2009. While in the first six months of the year there has been some evidence of a levelling off of redundancy figures, the number of job losses remains extremely high. In 2009 the average monthly level of redundancy claims lodged with the Department was 6,000. To date in 2010, this has fallen by 20% to an average of 5,000 per month. The Minimum Notice and Terms of Employment Acts 1973 to 2001 provide that an employer shall, in order to terminate the contract of employment of an employee who has been in his or her continuous service for a period of 13 weeks or more, give to that employee a minimum period of notice. The Acts prescribe that period of notice which varies according to length of service and ranges from one week’s notice for an employee with 13 weeks to two years service to eight weeks’ notice for an employee with more than 15 years service. An employee’s contract of employment may also provide for other periods of notice which may be in excess of these amounts. The RP9 form to which the Senator refers may be used by an employer to notify an employee of temporary lay-off or temporary short-time. There is a lay-off when the services of an employee are not required because there is no work available; when the employer expects the cessation of work to be temporary; and when the employer notifies the employee to this effect. There is a short-time arrangement when an employer, because he or she has less work available for an employee than is normal, reduces that employee’s earnings to less than half the normal week’s earnings or reduces the number of hours of work to less than half the normal weekly hours when the employer expects this reduction to be temporary and notifies the employee to this effect. An employee has the right to a redundancy lump sum payment by reason of the lay-off or being placed on short-time working where he or she has been laid off or kept on short-time working, or a mixture of both, either for four consecutive weeks or a broken series of six weeks, where all six occur within a 13-week period. If he or she then wishes to claim a redundancy payment, the employee must serve a written notice on the employer stating he or she intends to claim a payment because of a lay-off or short-time working within the period of four weeks after the lay-off or short-time working ceases. An employee who wishes to terminate his or her contract of employment in these circumstances must give his or her employer the notice required by his or her contract of employment or, if none is required, at least one week’s notice. The RP9 form may be used for this purpose. The RP9 form may also be used by an employer to give counter-notice to an employee’s notice of intention to claim redundancy by offering that employee not less than 13 weeks of unbroken employment starting within four weeks of the employee serving notice of redundancy. The employer indicates in this way that he is contesting a claim for a redundancy payment. An employee who claims and receives a redundancy payment in respect of being placed on short time or lay-off is deemed to have voluntarily left his or her employment and, therefore, is not entitled to notice under the Mini- mum Notice and Terms of Employment Acts 1973 to 2001. I appreciate the Senator’s concerns that the potential exists for employers to take advantage of the recent economic downturn to retain employees on short time or lay-off indefinitely in an attempt to force them to claim redundancy, thereby losing their entitlement to notice. The legislation attempts to strike a necessary balance for employers in circumstances in which economic realities may force them into temporarily placing employees on short time or lay-off. In 115 The 6 July 2010. Adjournment

[Deputy Tony Killeen.] such circumstances it allows them to retain trained staff rather than making them redundant. The loss of notice pay in such circumstances may be in the best interests of employees and may serve as an incentive for them to remain in employment as the only way of obtaining some level of employment. Given the numbers of people on the live register, many employees might prefer to endure the temporary pain of being placed on lay-off or short time with the possibility of being reinstated rather than being made redundant or seeking redundancy of their own volition. It is the intention of the Redundancy Payments Acts to allow for both sets of circumstances and to be fair to both employer and employee. If the Senator is aware of abuses of the legislation, however, he should bring them to the attention of officials in the redundancy payments section of the Department of Enterprise, Trade and Innovation. Disputes on the existence or otherwise of a redundancy situation may also be referred to the Employment Appeals Tribunal for a determination. It is important to note that an employee must make an application for a redundancy payment or seek a determination from the tribunal within 12 months of ceasing his employment. The 12-month deadline applies to the making of a claim to the employer and the making of a claim to the tribunal in a situation where the employer disputes payment of redundancy.

Senator James Carroll: I appreciate the Minister’s comprehensive reply. I reiterate that I absolutely accept that an employee who claims and receives a redundancy payment is deemed to have left his or her employment voluntarily. This issue does not relate to employees who want to leave but to employees who have earned their due notice and are deliberately not being given it. I appreciate the Minister’s long reply. I will bring the specific cases of abuse to his attention at a later stage.

The Seanad adjourned at 12.15 a.m. until 10.30 a.m. on Wednesday, 7 July 2010.

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