Ceisteanna — Questions.

Social Partnership Agreements.

Enda Kenny

Question:

1 Mr. Kenny asked the Taoiseach if he will report on the implementation of the programme for Sustaining Progress; and if he will make a statement on the matter. [1004/04]

Enda Kenny

Question:

2 Mr. Kenny asked the Taoiseach when he will next meet with the social partners; and if he will make a statement on the matter. [1005/04]

Enda Kenny

Question:

3 Mr. Kenny asked the Taoiseach if he will report on the recent activities of the National Implementation Body; and if he will make a statement on the matter. [1008/04]

Pat Rabbitte

Question:

4 Mr. Rabbitte asked the Taoiseach when the next quarterly meeting of the social partners under the Sustaining Progress agreement will be held; the likely agenda for that meeting; and if he will make a statement on the matter. [1197/04]

Trevor Sargent

Question:

5 Mr. Sargent asked the Taoiseach when he will next meet with the social partners; and if he will make a statement on the matter. [1271/04]

Trevor Sargent

Question:

6 Mr. Sargent asked the Taoiseach if he will report on the implementation of the Sustaining Progress agreement; and if he will make a statement on the matter. [1272/04]

Trevor Sargent

Question:

7 Mr. Sargent asked the Taoiseach if he will report on the findings of the anti-inflation action plan and progress report, November 2003, published by his Department; and if he will make a statement on the matter. [1286/04]

Joe Higgins

Question:

8 Mr. J. Higgins asked the Taoiseach when he next expects to meet with the social partners; and if he will make a statement on the matter. [1838/04]

I propose to take Questions Nos. 1 to 8, inclusive, together.

Considerable progress continues to be made in implementing the wide-ranging set of commitments in Sustaining Progress. This was borne out by the third progress report, which was produced for the last social partner plenary meeting on 30 January 2004. I was represented at the meeting by officials of my Department. The agenda for the meeting included a presentation on the Irish Presidency of the European Union Council, a report from the steering group on Sustaining Progress and a discussion on the implementation of commitments in the area of social inclusion. The third progress report on the implementation of Sustaining Progress was also presented to the meeting. A copy of the report, a report from the steering group on Sustaining Progress and relevant powerpoint presentations were laid in the Oireachtas Library. The date of the next plenary meeting of the social partners has yet to be determined.

I continue to meet with the social partners, individually and collectively, as the need arises. The national implementation body continues to meet as necessary and appropriate to ensure delivery of the industrial relations stability and peace provisions of Sustaining Progress.

On foot of a request from the IMO, the NIB had a useful exploratory meeting yesterday evening, involving representatives of the IMO, the Department of Health and Children and the Health Service Employers Agency, on the dispute over the introduction of the clinical indemnity scheme. The NIB decided to reflect further on the possibilities for progressing matters and to revert to the two sides in due course. The NIB has also recently commissioned an independent examination of the brick and blocklaying sector of the construction industry with a view to improving industrial relations in this sector.

The anti-inflation group's action plan and progress report outlines a range of agreed measures to tackle inflation, focusing on pay, public expenditure, competition, fiscal and budgetary policy, insurance costs and consumer price awareness. Progress under each heading is set out in the report. Recent examples of action by the Government on foot of the group's recommendations include budget 2004, which was framed having regard to the priority attached to a targeted approach to inflation, and the major Government funded campaign, Price Awareness Pays, which was carried out towards the end of last year.

The recent fall in inflation to 1.9% — the lowest since October 1999 — is very welcome, but we cannot afford to be complacent. The Government will continue in the period ahead to prioritise this issue in the interests of competitiveness and jobs.

Is the Taoiseach aware of the comments made by IBEC's director of enterprise, Mr. Brendan Butler, that his organisation is seriously worried about the upcoming development levies and that IBEC made it perfectly clear during Sustaining Progress that it would be opposed to these? Is the Taoiseach aware that a 10,000 square metre industrial development is currently being levied at €155,000 by Sligo County Council, €750,000 by South Tipperary County Council and €1 million under proposals from Fingal County Council? Does he feel that this scale of charges and development levies will impede seriously the attractiveness of various locations throughout the country for industry to be sited? Will he comment on whether it is appropriate to raise levies at the moment as this case before the High Court is being taken by the Construction Industry Federation? Has he a view on whether local authorities should issue development levy proposals pending the outcome of the High Court case?

Whatever ultimately happens in the court case, obviously the legal advice is that they can continue to do this.

On Mr. Butler's comments in regard to costs on industry, it is a matter for the local authorities in each area. If we are to modernise and make a contribution towards infrastructural costs, given the necessity for infrastructure in areas, it does not seem unreasonable. There is a divergence in other areas for local authorities, both for domestic dwellings and business, but in this case we are talking about business. New business must contribute towards the necessary infrastructure.

We have an infrastructural deficit. We are making significant progress but we must continue to get some return on that investment. Local authorities are entitled to this from new businesses in their areas.

Given the reports from the National Competitiveness Council and the World Economic Forum, is the Taoiseach happy that we are living in a country where the consumer is being ripped off left, right and centre, as is evident from the 20,000 responses to the website set up by Fine Gael,ripoff.ie? This applies in a range of areas and it places great economic and social pressure on people. Is the Taoiseach aware of the concern that exists about the continually increasing cost of living for consumers? In Sustaining Progress, will the Taoiseach make the theme of rip-off Ireland a priority and ensure that consumer costs are kept as low as possible? These levies and charges are passed on to the consumer and add to the pressure on them.

Levies and other costs are one thing, but legislation is passed by this House and administered by the local authorities. Looking at the figures from local authorities, in some areas levies are quite low while in others, I admit, they are quite high. In other areas of competition and inflation, such as the food and clothing sectors, we see attractive competition. With the number of groups and operations in place, one would wonder how they can all keep going but, thankfully, with the rise in population it is possible and it remains attractive. Prices have decreased across a number of these sectors.

I am concerned and I continue to press the Competition Authority about the professions such as insurance, engineering, architecture, veterinary practices and dentistry. There is still much we can do in those areas in terms of prices and competition. Other sectors have also been highlighted by the Competition Authority in its recent reports. We cannot be complacent about the need to bring down inflation and this aim must be clearly communicated to consumers, businesses and employees. That is what the anti-inflation group is doing through a number of methods, working with the Competition Authority and working directly through pressure on organisations.

We recently discussed the issue of restaurants and the food sector. When I looked at the report on that and noted the divergence, I could see that there are arguments on both sides because of the staff rates. I recently saw figures for a Dublin hotel near here where people were being paid €16 on a Sunday. Management argues that is the busiest day of the week for lunches and other meals and the lowest paid staff member is paid €16 an hour.

Is that the Four Seasons Hotel or the Shelbourne?

It is one of them. That is a high rate of pay. The hotel management would argue that figures show they are not as profitable as people think. I said the opposite in the House and that is why the industry is sending me the facts.

There are, however, sectors of Irish industry with high profit margins. We must continue our work through the Competition Authority, particularly in those areas where there are large percentages over and above the bottom line. No one is saying they are everywhere but there is ample evidence of them in the professions, not to mention in insurance, where the Tánaiste is trying to identify anti-competitive practices and other constraints. I have been urging the Competition Authority to finish and publish its various reports. This year will be crucial because a number of the reports will be published and they will have a major impact on young people buying new houses, those renovating houses and on the professional services that people pay for every day.

What does the Taoiseach think of the prospects for renewing the pay agreement which expires after 18 months? Will the mid-term review engage in a meaningful fashion? Are the unions minded to extend pay terms to the end of the agreement?

In the context of pressure from rising prices and people's standard of living, does the Taoiseach agree that, while inflation is one thing, it is no more than a yardstick for comparison between one year and another? Does he agree that our prices are objectively 12% higher than elsewhere in Europe and that there is a disgraceful rip-off in a number of sectors, not just in the professional area, although that is happening as well? We read about outrageous conduct where the price of a pint can reach €10 and €12 for special events. The Taoiseach spoke earlier about the importance of tourism, but that is scarcely welcoming.

What headway has been made in meeting the target of substantial progress in the provision of a net additional 10,000 affordable houses by the mid-term review? The Taoiseach told me the last time I asked that not one brick has been laid on another. A sod has not been turned and there has been no photo opportunity yet, although we are 15 months into the project. What are the prospects for delivery of the 10,000 net additional social and affordable housing units, as provided for by the agreement?

I hope that over the next few months we will enter discussions on the pay terms. Obviously the Government would like to see agreement. As always there will be issues about whether it is possible to make that progress. I am conscious that people feel that the Government paid too much in the first part of the agreement, a generally held view, so we must get into negotiations and see what we can achieve. It would be the Government's intention to honour its commitments on benchmarking and the other aspects of the first round which continue into this and next year and then to negotiate the basic rate for the second round. We hope that work will get under way at an early date.

I mentioned the professions and I agree with Deputy Rabbitte. Other areas are being examined, such as the insurance industry and the banking sector. The anti-inflation group is examining all areas and good work is being done in the Competition Authority's studies. My only criticism of some of these things is that they are slow but maybe it is just not possible to move any quicker. This year, however, it is important that the reports on the various sectors that will be published in the next few months do not slip further behind because in them we will see our rates compared with other countries and the competition issues that arise from that.

I and other Members note what they do in this regard across the water, and they are fairly good at it. They secretly highlight the people concerned by making comparisons, and it works. It may be an underhand way of operating but it works. One gets the true facts and competition in rates drives down prices and stops the rip off element. We should be more aggressive in this area to ensure greater competition.

There are other areas where the issue in question is one of competition. There has been a substantial increase in the Competition Authority's resources and it has strong legislative powers, but it has pointed out areas where there is a lack competition. Some of the reasons prices are the way they are is because we do not have competition in those areas or our regulatory regime is too tight and works to the advantage of the cartels. Other issues are being dealt with in some areas, but they also have to be dealt with in other areas.

The affordable housing scheme is ambitious and complex. A number of developments are taking place and progressing well. First, the Government and local authority system has mobilised to provide an unprecedented amount of State land for affordable housing. We have announced sites together with units coming on stream under Part V of the Act. The potential number of units is 6,100. We are continuing to try to get Departments to release more land because the best and quickest way of securing that is to use State land. At this stage, given the provisions of Part V of the Act and the decisions of last July and December, the potential number of units is 6,100.

Second, we devised a delivery model that will use the existing local authority expertise as opposed to creating another one, as such a model would be too slow and probably too bureaucratic. This model will ensure fast, efficient delivery that will satisfy the condition that this scheme should not impact on the general Government balance, something we want to avoid.

Third, we have agreed, in principle, eligibility criteria with the parties to the pay agreement, subject to further discussion on the details. This is mainly with the Irish Congress of Trade Unions and another meeting with its representatives is to take place today or tomorrow. These criteria will take into account people's ability to pay and local housing market conditions. This is a good and simple enough model and it is being worked out with the Irish Congress of Trade Unions.

The Department of the Environment, Heritage and Local Government met all the local authorities to discuss the detailed implementation of the scheme. There are a number of views about how it can best be done. It has been suggested that a small committee should separately drive it rather than using the local authority system. I believe that matter will be agreed with the congress in the next few days.

Like all construction projects, this scheme must go through the usual process of procurement, design, planning, site preparation and construction, and this will take some time. Measurable progress has taken place and I am confident we will see construction commence on the initial sites later this year now that we have agreed the general Government issues, the scheme and the linking in with the local authorities. We hope that over the course of this year we will be able to identify the remaining areas to bring the number of units up to 10,000. The number of units now stands at 6,100. If we can finalise the remaining issues around procurement, design and planning, will be able to proceed very quickly.

On the pay terms, I did not quite hear the Taoiseach. Is he saying that he thinks the pay terms initially were too generous or is he saying others think that? I presume he is talking about public sector pay because the private sector arrangement expires in a few months. Against the canvas we have been discussing — Deputy Kenny raised the matter of prices and the cost of housing — I greatly doubt that private sector workers are minded to believe that the increases they got were too high. Am I to take it from the Taoiseach's answer that he expects to be able to negotiate an arrangement that is different in terms as between the private sector and the public sector? Is that his expectation?

I understand from what the Taoiseach said that he has now acquired — or perhaps a better word is "earmarked" — enough State land to provide 6,100 housing units. I presume he is saying that is verifiably separate from the provision for social housing as it would have been in any event.

He said they are going to stick with the delivery model in the local authorities. What exactly does he mean by that in terms of the building of the houses? Not everyone would say that the delivery model deployed by the local authorities to build public housing stock is the most efficient. When one examines the underprovision of funding to the local authorities for this purpose, it is manifestly an underprovision against housing need.

A question please, Deputy.

Is the Taoiseach aware that even against that limited provision, a number of local authorities do not deliver? They do not even build the number of houses for which they have been allowed capital funding. Is the Taoiseach satisfied that is the most effective delivery model to cause these houses to be built? We are close to the mid-term review and we have State land for the provision of 6,100 houses, if I understand it correctly, but no building has commenced. I wonder if the Taoiseach is satisfied that this is the most effective model to cause such units to be completed.

In regard to the Deputy's first question, we want to get a deal that covers everybody. The point I was making, which I accept I did not expand on sufficiently, is that in respect of the cost of the benchmarking on the public sector end, there is a carry-forward of €775 million for this year and a carry-forward of €925 million for next year. Whatever will be done on the general round will have to take account of those commitments. The private sector did not have that advantage. We cannot start on the public sector basis by saying what we have given in the first half is gone; we have to take account of the knock-on effect.

On the housing issue, I have some of the same concerns raised by the Deputy. I will be frank about this. That is why we are considering setting up a small committee to drive this scheme. We had four or five months of discussion with the social partners to find out what way they wanted to move on this. Since last summer, having regard to the provisions of the Part V of the Act and the two Government announcements regarding more than 6,000 units, and I believe we can increase that number. We have been discussing other lands on which we have to get decisions. I believe we will be able to get our hands on the land and, if we can do that, it would be a terrible pity not to get on with the process.

The Deputy asked what I meant by the delivery model of the local authority. I mean we should use its existing professional expertise rather than go outside. I share the Deputy's concerns about deliverability. I confirm we are talking about provision additional to social housing; this has nothing to do with social housing. Having pressed to get the land, we now have to go through the processes of procurement, design, planning preparation and construction. If there is not a small group driving this process, I would share the Deputy's concerns. Since around November I have been considering how we could get a small group of people to do this and trying to identify people who could do this work every day. Otherwise, it will be part of everybody's job but nobody will drive it. Having got the land, backup and everything else, it would not happen.

This type of number, which is not totally but is by and large in the greater Dublin area, is a little like the old local authority small site scheme for builders, which the Deputy and I would remember well. That scheme worked very well. One got good quality houses and good action, and the houses were cheap. This is what I visualised at the start and therefore I do not want to get involved in some enormous bureaucracy such that I will be on the zimmer frame when it is realised. I accept the Deputy's point, and the only way of achieving what I visualise is to get a small group to drive the scheme using the existing resources.

The Taoiseach mentioned examples of keeping prices down and preventing a rip-off culture — I believe he was talking about Britain. How much of the agreement in this country is agreement in name only? I ask this because workers at FLS in my constituency, which has since been sold, had to protest quite strongly that they were not getting their 3% increase under the national pay agreement, yet workers who were part of the same operation in Britain were getting it. Is there any control over the implementation of the agreement in that regard so it does not fall apart and so confidence will not be lost in it?

Many groups signed up to Sustaining Progress on the basis that social welfare rates would be 30% of the average industrial wage by 2007. Given that the Government's end-of-year tax returns in January proved it had more money in the kitty than it said it had — nearly ten times the amount required in terms of increasing the lowest social welfare rates — these groups expressed disappointment at the failure to increase rates. Is there any plan to review social welfare payments, cuts in rent supplement, the lack of assistance for child care, etc., in light of the revelation that more money was available? Perhaps the Minister will help in answering this. What plans are there to address the scandal of low pay which many of the social partners have talked about? Can the Taoiseach say at this stage if we can hope for more positive outcomes?

The Government seems to have so many problems dealing with many environmental crises — the nitrates directive being just one of many. In light of this, will it be possible in the next round to include environmental NGOs in the partnership talks that are to take place, given that the Government is facing not just environmental difficulties but also financial penalties as a result?

The position on pay is very clear-cut. A private sector company is entitled to plead inability to pay, but the case must be referred for examination by the conciliation system or the Labour Court system. Companies have a right to have their case assessed. This is a regular enough course of action. On this round, not many have claimed inability to pay. Where there is a difficulty regarding companies that lose contracts or markets, those companies can progress the case. It is a very straightforward system and they are entitled to do that. I am sure the company mentioned by Deputy Sargent would be putting forward its case.

On prices generally, I have nothing new to add other than that we will continue to examine all sectors on this issue, including professions, banking, insurance, leisure, catering, andpublic houses.

On the next round, in terms of the social partners being involved, the review is a mid-term review and I am not sure if any changes will be made to the structure. I am not sure if Deputy Sargent is saying some of the environmental groups have applied or are about to apply for membership of the process.

They have.

Presumably, it would be into the fourth pillar. I do not believe it is intended to develop another pillar. If people want to submit applications, a process exists for doing so.

The Taoiseach says he is committed to partnership between the bosses, Government and workers. Does his concept of partnership extend to the relation between Government and public sector workers? If so, why are certain Ministers acting in such a hostile fashion towards the workers in their Departments? Why is the Minister for Communications, Marine and Natural Resources failing to honour a shares agreement with An Post workers? Why does the Minister for Transport wish to walk roughshod over workers in Aer Rianta by breaking up a successful company, or over transport workers by his insisting on privatising a section of Dublin Bus?

If the Taoiseach includes a major programme of affordable housing as part of an agreement, does he agree that the homes I hope will be built should be affordable? How does this stand against the present position, whereby Fingal County Council is forced to charge a €45,000 deposit to those wishing to purchase its latest affordable homes because of the limit on the loan of €130,000 set by the Department of the Environment, Heritage and Local Government?

A question, please, Deputy.

Does the Taoiseach agree this would not be a sustainable position? Does he recognise that at a time when he is looking for models as to how affordable homes can be delivered — in fairness to Fingal County Council, it has been innovative in this regard and has provided some very good schemes — workers on average wages cannot afford the affordable homes?

The Deputy is making a statement. A question, please.

I agree that Fingal County Council is probably the most innovative council in the country on this issue. Fingal is the area of the country where both the council and developers, regardless of their history, seem to work well in terms of looking at innovative ways of delivering schemes. This should be encouraged. Fingal is also the fastest growing area and all the houses that are built have been purchased. Fingal's percentage of first-time buyers is the highest in the country. Of course the costs of land and development in new areas increase prices but Fingal County Council continues to do well in this area. That is why the Department of the Environment, Heritage and Local Government is investing so much in the infrastructure of these schemes.

It is now impossible to pay the deposit.

Allow the Taoiseach to speak without interruption.

I know it is difficult for first-time buyers but one must accept that all the houses are being purchased with various means, at record levels. They are being purchased by first-time buyers and not by——

It will come down——

I ask Deputy Joe Higgins to allow the Taoiseach without interruption.

I want clarification on this——

The Deputy is not entitled to keep interrupting the Taoiseach when he is speaking.

I was not interrupting. I was just eliciting——

I am afraid the Deputy is interrupting, by any standards. I call on the Taoiseach to continue without interruption.

On the other issues pertaining to workers, nobody can accuse the Government regarding the pay aspects in recent years. The Deputy is not doing so but talking about the areas of change. Discussions are ongoing with the Minister in Aer Rianta and the CIE Group mentioned by the Deputy, which are endeavouring to make changes and progress. In both areas, a process exists. Substantial progress has been made in CIE and I hope the talks can be concluded successfully, very much in terms of the transport partnership's original discussions and proposals.

In the case of the discussions in Aer Rianta, it is a matter of everyone being open and exchanging information and of the Minister being in a position to give information and put forward his assessment.

An Post is slightly different. It is difficult to distribute shares if a company is in serious financial difficulties. The unfolding figures in An Post are quite serious and it has fundamental issues to deal with. I do not blame the workers, but workers, management and the Minister have a big job to do to try to assist An Post. The figures are quite frightening. Recent analyses are far worse, for whatever reason, than was envisaged only six months ago. Deputies may put down questions to the Minister if they want detail on that.

I call Deputy Ó Caoláin,

Deputy J. Higgins rose.

I have called DeputyÓ Caoláin, unless Deputy Ó Caoláin wishes to give way to the Deputy, because we are coming to the conclusion of questions.

Will the Taoiseach raise——

Deputy Ó Caoláin without interruption.

I will raise the issue.

We must move on.

In a reply to a recent question which I put to the Taoiseach, he advised that there was a cross-departmental contact group on the affordable housing initiative in the social partnership document Sustaining Progress. I do not believe this group has been alluded to in earlier exchanges. Can the Taoiseach tell us its purpose and functions, how often it meets — if at all — its programme of work for 2004, and what it will deliver for first-time home buyers, given that some 50,000 household units are currently on local authority housing lists? I would like some elaboration of this group's remit.

The cross-departmental team and contact group relate to the ten special initiatives listed in Sustaining Progress. They meet very regularly and are driving forward all the initiatives in all the areas. They work under ten different Departments. The ten special initiatives are: housing and accommodation; cost and availability of insurance; migration and interculturalism; long-term unemployed, vulnerable workers and those who have been made redundant; tackling educational disadvantage — literacy, numeracy and early school leaving; waste management; care of children, people with disabilities and older people; alcohol-drug misuse; including everyone in the information society; and ending child poverty. The group comprises individuals and senior people across all the Departments. Individually and with their Ministers, they try to progress the agendas as set out. They report back both to monthly and quarterly meetings on Sustaining Progress. Those reports are published and placed in the Oireachtas Library each quarter.

On Sustaining Progress, will the Taoiseach comment on the fact that the Irish Medical Organisation has criticised the Government and is bringing to the implementation body the fact the Minister for Health and Children has broken the agreement in their view in terms of the enterprise liability proposal that the Minister has introduced, and that this pre-emptive strike by the Minister is now leading to an unprecedented industrial dispute where hospital consultants, very regrettably, are threatening to withdraw care, other than emergency care, from patients. Presumably the Taoiseach agrees that trust in the process is necessary if we are to have a further agreement. Will he comment on this breakdown in relation to the IMO?

A detailed question would be more appropriately put to the Minister for Health and Children. The Taoiseach did refer to the issue in his reply. I will therefore allow him to respond.

The reason I mentioned the issue in my reply is that there was a meeting with the IMO last night to examine this to see what progress could be made. I hope more progress can be made over the next few days. The issue arises out of a decision we took in December 1999 that enterprise liability should be introduced. The clinical indemnity scheme was established to give effect to that decision. As the full implementation of the clinical indemnity scheme is so clearly in the best interests of patients, doctors, hospitals and the taxpayer, it was imperative that it be introduced.

As a result of these measures most consultants will pay significantly lower indemnity subscriptions in 2004. I did not notice that in their advertisement this morning, however. The enterprise liability involves each health service, agency or enterprise covered by the scheme accepting liability for the actions of the staff, including consultants employed to provide professional medical service. Cover under the scheme came into effect in July 2002. It was immediately extended to consultants to allow some time to reach agreement with the respective representatives on terminating their existing indemnity arrangements. The Minister for Health and Children has been engaged in intensive discussions with the IMO and the Irish Hospital Consultants Association on the issue and most of the concerns of professionals about the scheme have been addressed.

The issue that has not been addressed is that of historical liability for claims arising from events which occurred before the establishment of the scheme. They remain outstanding. My Department has taken the view, and this was repeated at the meeting last night, that the insurance companies should remain liable for claims relating to previous years. This position is accepted by all the insurers and medical defence bodies with the exception of the Medical Defence Union.

I am aware that the consultants have decided to campaign against the Government rather than the Medical Defence Union. However, as a contribution to ensuring that consultants can continue to purchase professional indemnity cover for practice not covered by the clinical indemnity scheme, the Government has offered to accept liability for that element of clinical claims which exceeds €1 million, for obstetric claims, as I said on the Order of Business last week, to cap at €0.5 million. These decisions demonstrate the extent to which the Government has attempted to deal with all the reasonable concerns of the profession. It was decided last night to continue discussions with the Medical Defence Union. Some good points were made last night about issues where there is not clarity. If the points made are true, it seems there is a case to be dealt with.

On the Deputy's last question — I know she did not press the point — in my view it is absurd, and I said this here last week, that patients might be put at risk because of a dispute about who is responsible for claims that might arise out of past events, whether in relation to public or private treatment. That is just a cheap shot.