Skip to main content
Normal View

Dáil Éireann debate -
Tuesday, 2 Dec 2003

Vol. 576 No. 1

Leaders' Questions.

Does the Taoiseach intend to take account of the advice of the National Competitiveness Council that the Government should avoid fuelling inflation? As he will be aware, yesterday's report highlighted that Ireland is now the joint most expensive country in the eurozone for consumer goods and ranks fourth most expensive of 16 countries for insurance premia per capita while our industrial electricity costs rank third most expensive of nine countries. This will come as no surprise to consumers.

A website launched by my party ten days ago to deal with this matter has been inundated with complaints from people throughout the country, including, for example, a man in Dublin who was charged €2.50 for a pint of tap water with a splash of blackcurrant juice, a man who paid €3,200 for a cooker, whose equivalent price in Britain was €1,700, and a young man quoted €4,000 for insurance for his van, who paid the equivalent of €90 when he lived in Australia. Has the Taoiseach taken cognisance of this report and will this be reflected in attempts to control inflation, keep down stealth charges and limit increases in charges on hard-pressed consumers tomorrow?

I regularly engage in discussions with the Competition Authority and take account of its views in many areas. In its reports over the years, it has highlighted many issues which we have not only taken account of but implemented. The major example is the provision of resources and staffing to set up the Competition Authority and the legal powers to deal with areas. It has commenced studies across the professions, examining how it can deal with these issues. I know this has taken some time. They have engaged in discussions across all the major professions in an attempt to seek control of costs and price inflation. This is one of the major areas. They have also recommended many other initiatives for the country going forward. The social partners anti-inflation group has also helped since it was set up. I know international positions have helped us, but we have reduced the rate of inflation from more than 5% to less than 2.5% and it is continuing to decline.

The Deputy is aware of what we have been doing in terms of insurance costs. That is helping, but as I said during Question Time, competition is ultimately required. We have seen concerted action in terms of the introduction of penalty points, changing the legal framework and the introduction of tougher legislation both in the legal area and in the area relating to the Tánaiste which will have a successful part to play. A big part of the inflation problem in recent years was imported through a weaker euro and higher energy costs. We are an open economy and we cannot get away from those issues.

As regards charges, we cannot look for better services one day and then complain about the cost the next day. I do not accept that argument. If we want better services, we must ensure they are efficiently delivered. When inflation was at its worst at 5.3% or 5.4%, less than one quarter was related to Government charges. Those charges will ensure better services. We cannot have it both ways. I discount that argument.

As regards competition, the groceries order and the retail planning guidelines are big factors in terms of competition. However, as soon as that is mentioned, the lobby groups, such as IBEC, become involved. Mr. Burgess used to be a regular presenter of the case when he wore his other hat and was totally opposed to it. He understands all the arguments about why we cannot do that. There is not any doubt that if the groceries order were removed, it would have a good impact on inflation and the demand price. The same applies to the retail guidelines. However, the entire food sector joined together and made a good argument that employment in the indigenous food sector would be reduced. It accepts that prices coming in would be lower.

I know it is easy to talk about competition. However, in any discussion I have had on the retail prices order, the entire food sector and the private sector, such as IBEC, the Chambers of Commerce of Ireland and RGDATA, have said we should not do that. They are usually supported by all parties in this House. We like to challenge some of the issues. If we dealt with them, we would bring down prices. However, people do not want to do that.

The Government does nothing.

There is a strong understanding that people are being ripped off. It is fine for the Taoiseach to refer to studies, discussions and controlling costs. However, studies are not required to determine that last year VAT increased by 8%, motor tax by 12%, hospital charges by 26%, the drugs refund scheme increased by 31%, VHI payments by 18%, cigarettes and alcohol by 15%, bank and card charges by 108%, bin charges by 29%, ESB bills by 13%, college fees by 9%, parking rates by 25%, bus fares by 9% and the television licence fee by 40%.

The Estimates for 2003 show that the threshold for the drugs refund scheme will be increased by €8, accident and emergency charges will be increased from €40 to €45, the cost of a private bed in a public hospital will be increased by 15%, the cost of an overnight stay will rise by €5 to €45 per night with a cap of ten nights per year.

Where are the backbenchers now?

Third level student registration fees will be increased by €80 to €750, the fee for the junior certificate examination will be increased by €10 to €82, the leaving certificate examination fee will be increased by €10 to €86 and development levies of between €6,000 and €30,000 are likely to raise €700 million from house buyers.

Allow Deputy Kenny to conclude without interruption.

One does not need any discussions, studies, analyses or reports to understand that is rip off Ireland over which the Taoiseach presides.

The Government is the culprit.

What about the development charges?

I will not jump to give the other figures. The Deputy is comparing us with some countries where prices are allegedly lower, but where the unemployment rate is more than 10%. The European average is more than 8%. Economic growth in Europe is 0.3%, whereas it is more than 2% here where our financial situation is lower—

We are looking at last year and the year before.

—and our income tax take is almost 10% lower than it was a year ago.

What about the stealth taxes?

It is Deputy Kenny's question. Deputy Allen should not undermine his leader by asking questions.

When stealth taxes are charges for services, they are right. I will gladly defend service charges.

What about the development charges?

People paid for the services.

Our inflation rate, which started this year at more than 5%, is now only a little more than 2%. We are creating more jobs than any other country in Europe and we have more people in third level education.

Students cannot afford to go to third level.

We are spending 5% of GDP on infrastructure, which is almost double what most countries are doing. It is the right thing to do for a developing country. If one wants the country to decline, one will not charge for anything. I challenge some of the areas where people say we should do something while prices are different. Tomorrow we could change the position and bring prices down if we did away with the groceries order and the retail planning guidelines and allowed all foreign goods into the country. This would drive down prices and undo our own sector.

The Taoiseach could, but will he?

Foreign goods are coming in unknown to the Taoiseach.

Allow the Taoiseach to conclude.

Unfortunately, I did not hear that in much of the analysis today or from the Competition Authority because there is a downside to it. If we are having a debate about these issues, we should consider the underlying factors. The other issue is wage inflation. These are the benefits. That is why people are working in this country. That is why we are not on our knees like many other economies.

Does the Taoiseach accept that while the outcome of the Assembly elections represents the democratic wishes of the people of Northern Ireland and, therefore, must be respected, the permutation thrown up is likely to make more difficult the restoration of the Executive and the institutions? Does he accept that majority support among the Unionist community for the Agreement is no longer there and does he have any proposals on how that majority support within the Unionist community might be restored? Does he believe the failure of the republican movement to live up to its obligations under the Agreement in respect of decommissioning has played into the hands of the DUP and that the outcome is likely to be the exclusion of Sinn Féin and other parties from devolved Government in Northern Ireland? Does he believe the exclusion of the SDLP in the run-up to the elections and for a prolonged period before that has contributed to the circumstances in which it now finds itself? Does he have any regrets about the manner in which the SDLP was excluded?

As regards the review, I know the Taoiseach made some public remarks about this at the weekend. When does he envisage the review being initiated? What form will it take and does he have any idea of how long it might take? Does he have any confidence that it will lead to the restoration of the institutions in Northern Ireland?

I will try to answer the Deputy's questions as quickly and as fully as I can. The outcome of the election makes matters more difficult. It is not easy, given the combinations that now exist, to form an inclusive, working Executive. We must deal with the democratic wishes of the people in Northern Ireland and try to achieve one, but it will certainly not be as straightforward as it would have been had it involved the UUP, SDLP, Sinn Féin and the pro-Agreement parties in general. A number of changes in the position since the election will make it difficult and not just the one factor that has been focused on, namely, the DUP.

More than 70% of the next Executive, if we can establish it, will comprise pro-Agreement candidates, which is a high percentage. All the opinion polls on the election, including RTE's extensive poll last week, show two thirds of the people in favour of devolution. All the parties are in favour of devolution, even if they differ on how it can be achieved.

The Government will attempt to engage in dialogue with all the parties. I hope that is possible. I have stated publicly that we will be glad to meet them as soon as possible. I have already been contacted by the SDLP and Sinn Féin with the aim of meeting as soon as possible, which we will do.

On this day four years ago, 2 December 1999, the institutions of the Agreement were signed. There was an agreement that there would be a review after four years, and this falls due today. Letters will be issued tomorrow or the next day to the parties. The review was for parties to reflect on the past four years and to give their views on the institutions and their workings. Even though it is coincidental, it will be useful. It is broad enough for people to be able to say almost anything. We will have to study their views and proceed to dialogue and discussion.

I hope some of that will begin before Christmas, but realistically, other than preliminary meetings, it is unlikely that the detailed work will begin before the new year. That is the realistic position. I look forward to a review because we will make progress if people take their business seriously and positively. The early indications suggest all the parties will.

I was asked about the positions of both the SDLP and Sinn Féin. I will deal with Sinn Féin first. It is a pity that some of the issues with which we have dealt for the past year or so could not have been brought forward more quickly. It has been more than a year since the act of completions paper, which both the Prime Minister, Mr. Blair and I supported, was produced. That is a long time ago.

The institutions collapsed because of alleged spying by Sinn Féin in Stormont. We were not able to make progress despite considered efforts in the spring and autumn. We achieved an act of decommissioning in the autumn but, unfortunately, the regulations surrounding that did not allow us to make the necessary progress. Although these regulations were known and the IRA representative and General John de Chastelain adhered to them, they were prohibitive and did not allow us to make the necessary progress. Much has been made of the allegation that I knew that and did not do anything about it. Unfortunately, I could not change the rules, nor was I engaged in the discussions with the IRA representative to enable them to be changed. I tried to get General John De Chastelain to change them, which he attempted to do last summer but for which he was not able to get agreement. This created a difficulty.

The SDLP has played an enormously constructive role in everything we have done over the years and especially since the spring of 1998. I am grateful for the work of Mark Durkan and his colleagues. They did not do as well as they would have liked, but they certainly did not do so badly, as neither did the UUP which increased its vote.

I do not accept the SDLP's position on being marginalised. I would like to be able to agree with it for the sake of agreeing but I cannot. I do not accept the argument. I do not want to get into an argument about this in the aftermath of the election, but for Deputy Rabbitte's information, the week before, representatives of the SDLP had an exclusive meeting with the British Prime Minister, Mr. Blair, the following week they met the Minister for Foreign Affairs, Deputy Cowen, and a few days later they met me. The party's argument does not stand up. The two hour meeting with the UUP and Sinn Féin at which I had recommended the SDLP's attendance was on a specific issue in which the SDLP had no part. I have already expressed the view that too much was made of it and it does not hold up.

I look forward to proceeding with the review. I hope the Democratic Unionist Party adopts an enabling, not a disabling, role. I will be as constructive as I possibly can and look forward to trying to deal with the party. I know its position has tended towards not meeting the Irish Government. However, it put forward four issues in the election. It said it wants an arrangement that would ensure stability, something with which I have no argument given the collapse of the institutions on four occasions during the lifetime of the agreement. It wants an accountable arrangement, something with which I have no difficulty, and also an efficient and effective arrangement. It left out the word "inclusive". If it adds that to its agenda, we can all work towards finding a solution.

To go back to the old days of ignoring other people's mandate and the fact of their election and denying that they have a role to play in an inclusive Assembly and Executive will cause major difficulties. I will not cause them but there will be no agreement from Sinn Féin, the SDLP, or the northern Nationalist and republican community. However, Mr. Robinson has said that he is prepared to work towards a resolution that would satisfy all communities – republican, Nationalist, loyalist and Unionist. On that basis we can all work to try to achieve it, and the quicker the better.

Does the Taoiseach not agree that the SDLP is justified in feeling that it was too little too late, notwithstanding the meetings to which he referred, and that in the substantial period leading up to the elections, the exclusion of the SDLP permitted Mr. Adams and his colleagues to depict themselves as the only champions of the Good Friday Agreement? Has the Taoiseach invited the DUP to talks, and if he has, what has been the response?

When the Taoiseach says that the review is wide enough to allow a discussion on anything, is he saying that there is a narrow dividing line between review and renegotiation? Does he accept that, if there were to be textual changes to either the British-Irish Agreement or the multi-party agreement, it would involve a Constitutional referendum at least in this jurisdiction? Assuming broad support for that, would he be well disposed towards it?

Does the Taoiseach accept that the impasse created by the outcome of the elections means in all probability that we now face a prolonged period of direct rule while the review is under way. I understood the Taoiseach to say that the review is likely to commence early in the new year. Does he hope that the review as envisaged can encompass a sufficiently wide approach to the impasse to facilitate the involvement of the DUP?

The review is provided for in paragraph 8 of the Good Friday Agreement and, as I have said, was scheduled to take place when the Government signed the British-Irish Agreement, which came into effect when the constitutional changes were made. The review allows the parties represented in the last Assembly to put forward their opinions on how the institutions operated and to give a broad account, in writing, of how they see the operation of the Agreement. It gives people a chance to provide a narrative of how they see the position. It will be different when we get down to discussions. The Governments will need to assess the results of the review, pinpoint areas of disagreement and initiate discussions and meaningful dialogue on these. I am not saying the review will allow for everything but people's response to what has happened in the past four years cannot be restricted and there is no point in doing so. If people say they will not talk to representatives of another party or take extreme positions. the discussions will not get anywhere. They will be able to put forward a presentation, however.

I publicly stated that we would meet any party and the SDLP and Sinn Féin have indicated that they will meet us. The DUP has not yet communicated an intention to meet but we will do everything we can to ensure this happens. I think it is possible to have a meeting but I do not want to press the issue until there has been some exchange on how best to arrange it. It is not necessary to rush matters. The DUP and other parties will want to work out their own tactics, particularly the DUP, which has never engaged in meetings with the Irish Government. Mr. Robinson has said he will meet us, however, and I assume that will happen.

Direct rule will continue, as will the suspension of the institutions. The latter will continue for some time, but if the suspension is lifted the law indicates that an Assembly and an Executive should be formed within six weeks. If that is not done there can be a further suspension or another election – I assume there would be a further suspension. It is unlikely the British Government will lift the suspension, at least until we have had talks. The position will remain the same as it has been for most of the past 14 months. The key issues are how we can re-establish devolution and examine the submissions to the review to get workable solutions from them.

In regard to the SDLP I will not repeat what I have said except that the Government had more meetings with the SDLP than with Sinn Féin. There was a lot of dialogue around Sinn Féin and the UUP and, as I said many times, the reason is that Sinn Féin was still associated with a paramilitary organisation and the SDLP was not. The aim was to separate the organisations and drive paramilitarism out of Irish politics, but we have not yet succeeded in doing that. We must continue to work on this in the future.

Last night I was invited to a meeting of parents who organise a wide range of clubs and activities for children and youths in their communities, from playschools and Irish dancing to services for disabled youth. These people are facing a massive crisis which is threatening the very existence of this huge community network that provides vital facilities for youth in the area, the only facilities which many can access, that is, the imminent closure of Hartstown community centre, the base of those activities. This arose because of the cuts of thousands of places on the community employment scheme.

Is the Taoiseach aware that this crisis is replicated all over the State, from Cork to Cavan and from Sligo to Dublin? Will he allow the extreme right-wing ideology of the Minister for Enterprise, Trade and Employment, Deputy Harney, to dictate that this scheme, which has become a crucial pillar of support in communities of working people, be wound down? Does he understand that what started out years ago as a way of dealing with long-term unemployment is now part of the social fabric of communities and a basic support for community services that would not otherwise be there? To wind down the scheme would be to rip out part of the social fabric, inadequate as it is in some cases. I put it to the Taoiseach that he knows this well because his normally silent backbenchers have been attempting to roar about it. Tomorrow morning the Labour Party will provide them with an occasion to prove whether they are a parade of tear-shedding crocodiles or are genuinely upset about this issue.

The gang of 40.

Will the Taoiseach direct that the numbers on community employment schemes be maintained at the levels necessary to at least continue the services that existed at the beginning of this year?

I am well aware of the benefits of all employment schemes, including the community employment scheme, the job initiative and the social economy schemes. The Government has decided to support the retention of 25,000 places this year, which is the same as the number of places on the scheme last year. In addition, we have mainstreamed several thousand of the positions in the education sector, including secretaries and caretakers. This adds to a high proportion of places on the scheme. The Deputy is correct in saying that when long-term unemployment was high – about 10.4%, if I remember correctly – there were 40,000 people on the schemes. Now, taking in those in the education sector, there are probably more than 30,000 places, although long-term unemployment is at 1.4%. The rate of unemployment was 17.4%, now it is 4.4% and declining.

This year €350 million is being put into the schemes in addition to the amount going into the mainstreamed positions. This means that a proportionally higher amount is going into the scheme than was the case previously. This contributes to the benefits pointed out by the Deputy. The schemes have become part of the communities in which they are based and are working successfully. While there have been difficulties in certain areas, FÁS has endeavoured to manage them and the Government continues to investigate these areas. As I said earlier in the year, there was a need to make sure we were making the best use of the schemes in many areas and that has been successful. We now have a baseline of 25,000 places and the secretaries and caretakers have moved into full-time employment in education. With much lower unemployment and only one tenth of the previous level of long-term unemployment, the number of places continues to approach the maximum of 40,000 – it is currently between 30,000 and 35,000. The Deputy can see the benefit of this.

I put it to the Taoiseach that the question of long-term unemployment should no longer be the criterion for continuing the community employment schemes, which now have complete validity and are necessary in communities where a whole series of critical services are built around them. In terms of costs, the cut of 5,000 places in community employment schemes which the Government has envisaged is equivalent to the amount of tax legally avoided by one tax exile, Mr. O'Brien, on the profit made on one business deal. It is not a huge amount to provide for. Will the Taoiseach come back to the figures he has just mentioned? Is he saying that the number of people on community employment schemes at the beginning of this year is to be maintained in full next year and, therefore, the reports and notification from FÁS advising community fora they are to cut CE jobs are entirely unnecessary?

I do not administer the scheme, but what I—

A good job.

—-said was that even in a more difficult economic climate, the combined participation levels in both community employment, in jobs initiatives and social economy programmes at the 2003 levels—

That is a completely different thing.

I would ask Deputy Joe Higgins to resume his seat.

—-with no further reduction in numbers is envisaged in 2004—

There will be an opportunity later this evening to raise this matter further.

—-as a recognition of the invaluable contribution—

Deputy Joe Higgins is out of order.

—-these programmes make to the local community.

I would ask Deputy Joe Higgins to resume his seat, please.

I am sorry, but will the Taoiseach—

I will ask the Taoiseach to conclude.

It is not different. The level of places in 2004 is being funded at the same level. The only thing different is at the educational end. I do not know the exact figures, but when unemployment was at its height, at 17.4%, and there was long-term unemployment of 10.4%, there were 40,000 people on this scheme. Now some 25,000 people are on the three schemes that make up this area plus what is in the mainstream area. Given that these are full-time jobs there is somewhere in the order of 30,000 to 35,000. While the Deputy might say it does not matter—

The Taoiseach is right.

Who are these people—

—the issue is that it does matter because when people are wanted for community employment schemes, in many parts of the country where difficulty is being experienced in this regard, they must be recruited from among the unemployed. It therefore has a direct bearing. When Deputy Joe Higgins maintains that in some areas people are needed for essential services, that is why the area of education has been mainstreamed, which is forgotten in this debate—

To give Deputy Fahey a job.

The Taoiseach is right. Deputy Fahey is wrong.

—which is a large cost factor and is additional to the social employment scheme. It is not possible to mainstream every particular position. The Minister of State at the Department of Enterprise, Trade and Employment, Deputy Fahey, put forward a suggestion earlier this year—

Last week.

—that we would look at the operation of the schemes to maximise the benefits of participation for organisations and communities and the Government has been looking at that particular area. Those discussions will continue. The Minister of State's efforts achieved a position where we are spending some €350 million directly on social employment this year. I am not sure what the figure is on the mainstream 5,000 or so positions in education.

Top
Share