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Vol. 668 Wednesday, No. 1 19 November 2008 DI´OSPO´ IREACHTAI´ PARLAIMINTE PARLIAMENTARY DEBATES DA´ IL E´ IREANN TUAIRISC OIFIGIU´ IL—Neamhcheartaithe (OFFICIAL REPORT—Unrevised) Wednesday, 19 November 2008. Leaders’ Questions ……………………………… 1 Ceisteanna—Questions Taoiseach ………………………………… 5 Requests to move Adjournment of Da´il under Standing Order 32 ……………… 15 Order of Business ……………………………… 16 Broadcasting Bill 2008 [Seanad]: Financial Resolution ………………… 23 Gas (Amendment) Bill 2008: Second Stage (resumed) ………………… 23 Ceisteanna—Questions (resumed) Minister for Arts, Sport and Tourism Priority Questions …………………………… 38 Other Questions …………………………… 47 Adjournment Debate Matters …………………………… 60 Gas (Amendment) Bill 2008: Second Stage (resumed)……………………………60 Referral to Select Committee ………………………… 81 Arbitration Bill 2008: Order for Second Stage …………………………… 81 Second Stage ……………………………… 82 Private Members’ Business Gangland Crime: Motion (resumed) ……………………… 94 Adjournment Debate Health Services ……………………………… 118 Hospital Services ……………………………… 120 Fisheries Protection …………………………… 121 Schools Building Projects …………………………… 124 Questions: Written Answers …………………………… 127 DA´ IL E´ IREANN DI´OSPO´ IREACHTAI´ PARLAIMINTE PARLIAMENTARY DEBATES TUAIRISC OIFIGIU´ IL OFFICIAL REPORT Imleabhar 668 Volume 668 De´ Ce´adaoin, 19 Samhain 2008. Wednesday, 19 November 2008. ———— Chuaigh an Ceann Comhairle i gceannas ar 10.30 a.m. ———— Paidir. Prayer. ———— Leaders’ Questions. Deputy Enda Kenny: I am sure the Taoiseach will acknowledge the constructive approach from this side of the House in regard to the protection of Irish jobs and, in particular, small businesses. It is a little more than three weeks since I initially asked about the Government’s requirement to introduce a scheme of recapitalisation for the banking system to ensure the protection of Irish jobs and the availability of credit to small businesses. The Taoiseach in his response yesterday indicated a range of matters. In view of reports today of meetings between the Minister for Finance and Financial Regulator will he accept it is now not a matter of if the Government will introduce a recapitalisation programme but of when and in what format this will be done? In the interests of thousands of small businesses, is the Government working towards a recapitalisation programme which will allow for credit to be extended to businesses to enable them survive and to protect thousands of Irish jobs? The Taoiseach: It is important that discussions on these matters take cognisance of possible reactions outside this House and to ensure we are responsible and prudent in this regard. The joint board of the Central Bank and Central Bank and Financial Services Authority of Ireland, CBFSAI, has submitted to the Minister for Finance a report on the financial position of the six major institutions covered by the bank guarantee scheme. The Minister has met with the Governor of the Central Bank, the Financial Regulator and PricewaterhouseCoopers, PwC, to discuss the report which presents an analysis of the capital positions of the six institutions 1 Leaders’ 19 November 2008. Questions [The Taoiseach.] having regard to their loan book. The content of the report is, of course, commercially sensitive, the details of which cannot be disclosed. The report confirms that all the institutions reviewed are in excess of regulatory capital requirements as of 30 September 2008, the date the guarantee scheme was announced by Government. The PwC report demonstrates, under a number of stress scenarios, that capital levels in the covered institutions will remain above regulatory levels in the period to 2011. The Government’s guarantee scheme has been successful in safeguarding the stability of the Irish banking sector and in restoring its liquidity position. However, the Minister is aware that inter- national market expectations in respect of capital levels in the banking sector have altered and that meeting these expectations may be challenging with consequences for the sector and the wider economy. The Minister expects that the covered institutions will explore fully the poten- tial for meeting these capital needs through raising private capital and the disposal of appro- priate assets and is, of course, keeping the matter under close review. Deputy Enda Kenny: This refers to the Taoiseach’s comment that the Government will take action in this area only as a matter of last resort. The Taoiseach has read out a number of details in this regard. If the Government is to introduce a recapitalisation programme, perhaps the Taoiseach will outline what principles will underpin that programme in terms of the availability of competition to the process. We do not want a return to a duopoly. Will the Government ensure the system is transparent and not subject to pressure from large financial entities and that concern is expressed about the requirement for Irish-owned financial institutions, which is important in an Irish context? In introducing a recapitalisation programme it will be important to ensure that moneys given to Irish banks does not sit in their vaults but is used for the purpose intended, namely, to enable credit lines to flow for Irish business and, in particular, to enable Irish small businesses to survive and to maintain and protect jobs. I am sure the Taoiseach does not want a situation whereby capital extended to banks sits in vaults and is used only for the purpose of supporting delinquent developers in whatever form. Perhaps the Taoiseach will comment on that matter. I make these points in a constructive fashion because, no more than any other public represen- tative, I am acutely aware of the real concern, anxiety and fear of people who have jobs in regard to their being able to continue in employment. It is inevitable a recapitalisation programme will be introduced. Perhaps the Taoiseach will state, in the interests of providing hope and confidence to people in the small business sector, how and in what format the Government intends to act. The Taoiseach: I have given a formal statement in reply to Deputy Kenny’s initial inquiry about this matter. I emphasise it is important that people act not in a speculative manner — I am not suggesting Deputy Kenny is doing so — but in a responsible manner in respect of this matter. They should not suggest that any particular way forward is the panacea for all ills. We are in the midst of an international recession and of a situation where credit markets have yet to return to normalcy. The detailed analysis and report from PricewaterhouseCoopers is as I outlined in my initial statement. People must be measured in assessing what is the current stated position. The Government will do all it can to facilitate a strong banking sector that is capable of providing funding for Irish commercial business. We will do everything we can to achieve that but it is important to avoid suggesting that any particular course of action taken immediately would provide the overall solution to this problem. I indicated yesterday that under the State guarantee scheme the question of banks having to submit business plans to 2 Leaders’ 19 November 2008. Questions show they are prepared to provide credit lines to Irish businesses is an important factor in the Government’s consideration of these plans. If it was the case that capital was provided by private or other means to the banking sector, that would represent capital for the banks concerned. It would not be automatically provided as cash flow to Irish businesses but would go towards improving the capital adequacy ratios of the receiving banks. It is important that people do not think the injection of capital per se provides for increased lines of credit. We have received a detailed report which confirms that the regulatory capital requirements are being met by the institutions under review and demonstrates in a number of stress scenarios that capital levels in the covered institutions will remain above regulatory levels in the period to 2011. That is an important statement in the context of considering the options which may be available to those institutions in dealing with the changing views in international markets regarding expectations for capital levels in the banking sector. Deputy Eamon Gilmore: I wish to follow up on the Taoiseach’s response to Deputy Kenny. Did I hear him correctly as saying the report received by the Minister for Finance from the Central Bank and the Financial Regulator arising from a study by PricewaterhouseCoopers shows that the banks were in a sound position on 30 September, when the decision was made to introduce the guarantee scheme? If that is the case, why were we led to believe that one bank, or more than one, was in imminent danger of collapse on 30 September? Given the Minister now has the report, when will he make a decision arising from it? Is the Government considering some form of recapitalisation of the banks, either through the use of taxpayers’ money or by means of some scheme to attract private money back to the banks? Arising from that, I wish to pursue the comments he made yesterday in respect of the capital- isation of the banks. He said on a couple of occasions that it would not necessarily ensue from the recapitalisation of the banks that money would be made available to business and that the credit famine which businesses are now experiencing would not necessarily be relieved. If that is the case, and I believe it is, what conditions does he intend to impose on the recapitalised banks to ensure credit is made available to businesses which need it? I refer to the proposals made to the Government by the Small Firms Association on establishing a small business fund which could draw down the moneys made available through the European Investment Bank and on the development of a mechanism whereby those moneys can be released to small businesses which need them. Clearly, the commercial banks are not availing of this scheme.