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Dáil Éireann debate -
Wednesday, 8 Oct 2008

Vol. 663 No. 1

Order of Business.

It is proposed to take No. 23, Electoral (Amendment) Bill 2008 — Second Stage (resumed); and No. 24, Broadcasting Bill 2008 [Seanad] — Second Stage (resumed). Private Members’ business shall be No. 49, motion re unemployment (resumed) to conclude at 8.30 p.m., if not previously concluded.

There is no proposal to put to the House.

Will the Taoiseach elaborate on when he expects the matter of the structure of the guarantee for the banks and financial institutions will be discussed in the House? I understood it was the Government's intention to bring it in yesterday, but the Government was to meet yesterday evening — which it did — and again today. The last the Fine Gael Whip heard was that it was to be on Thursday.

I suggest that, if it is ready, we will facilitate the Dáil sitting on Friday, Saturday or Monday to facilitate the debate. I suggest this for several reasons. First, the budget is due on Tuesday next. That is a major event and the Government will not want the two matters in the House at the same time. Second, the Taoiseach has to travel to Brussels on Wednesday for a Heads of Government meeting to give his views on Europe and the path ahead. Another reason I suggest we have it now is because there is evidence from all over the country of the squeeze banks are putting on small businesses, which I understand is related to the liquidity problem. There is an urgency on the part of the Taoiseach to get the structure right, but it is also urgent to get it through here, because the guarantee will not take effect until passed by the Houses.

While there is a guarantee in place in name, in political or legal terms this can have no impact until it has been passed by the Houses. Will the Taoiseach elaborate on the situation? If it is necessary for the Dáil to sit on Friday, Saturday or Monday, Fine Gael is willing to agree to that to facilitate Government bringing the scheme before the House so we can discuss it, find out the details and implications and tease it out so that, in so far as is possible, the political response in supporting a banking system and the economy can be got right. Will the Taoiseach elaborate on this matter?

The point being made by Deputy Kenny demonstrates the problem involved with people asking us to be specific about when something will be brought to the House and we in good faith saying it should be here next week, but then other developments take place in the interim. Initially we were talking about the six Irish banks, as set out in the original guarantee statement. Concerns arose during the debate and we sought to accommodate those. There have also been meetings in Paris and Luxembourg. The competition Commissioner had something to say on the issue and the Bundesbank also discussed the matter. Issues arise and the matter moves on, and we had a further development this morning.

This is not a static situation. However, this does not mean the Government is not clear about its objectives. It is, but we must ensure we cover all the angles. We are considering extending the guarantee, at the request of many Members and their view of the retail presence of some banks whose head offices are incorporated elsewhere. We must try to ensure we take into account all the aspects of extending the guarantee. There are also technical issues that must be addressed. There has been constructive engagement with those parties and they will return to us during the course of today to provide some of the clarifications we need to be satisfied as to where this is going and as to whether we should consider it sympathetically or positively at that stage. That is the current situation.

Arising from what has been happening over the weekend and what the Minister for Finance has heard from the competition Commissioner — following constructive engagement — we have said we will keep in touch with the Commission during the course of this week as we finalise arrangements so we can ensure that we find something that will be regarded as compatible with requirements. Otherwise, we would have to return to deal with the issue. We want to deal with the issue appropriately, sequentially and as comprehensively as possible.

We are very clear as to our objectives, but we want to ensure that the technical detail is such that it meets the requirements of everybody concerned and is as accommodating as possible without taking on inordinate risk. On that basis, it seems clear it will be next week before we take this scheme. I think it will probably be Wednesday afternoon or some time after the budget and budget debate. It may be possible to deal with it on Wednesday or Thursday next week. That would be the sensible approach, based on the state of play as matters stand today. That is the route we should take considering what has to be done, who we are talking to and that they have to return to us to confirm their views.

I understand the complexities of what the Taoiseach is doing. I merely ask that he instruct his office to keep the Opposition parties briefed on what is happening.

It is not appropriate to debate this alongside the budget. The Taoiseach will have a lot to contend with and he will also have to explain his position in Brussels. While this matter is absolutely critical, dealing with it before or after the budget may be more appropriate. I am sure many Deputies will want to ask questions about the conditions attached, the scale of the problem and the challenge and whether, in so far as this House is concerned, all bases have been covered. If it is to be debated subsequent to the budget, it should not be immediately afterwards. Perhaps the Taoiseach will see to it that we are kept informed on the progress being made in regard to when we can get a fix on this, if he does not mind.

That is fair. The Whips will meet this evening and we will keep in touch as regards what is happening. It is a question of making sure the work covers all the bases and meets the requirements of the various people who are indicating an interest.

The arrangements that the Taoiseach has outlined are wholly unsatisfactory for a number of reasons. We are flying blind. A guarantee scheme was enacted last week but we still do not have the details or the scheme. The essential information which the public wants is not yet available.

The Taoiseach is uncertain about when this will be introduced. He speaks about introducing it next week and said that he would bring it in on the Wednesday following the Budget Statement. By all accounts, this is going to be no ordinary budget but even in a normal year the Wednesday and Thursday of budget week are busy days in terms of our parliamentary work. I do not know whether it can be done when the House sits on Tuesday or if we can sit on Monday. I certainly think, however, that lumping it in with the budget on Wednesday and Thursday is madness.

The Taoiseach has stated that it is being worked through, it is complicated and there is toing and froing with the Commission. How big is the problem? What is the toing and froing? Last week, we were given to understand there was no major problem with the Commission in regard to the scheme. If that much toing and froing is happening, a problem of some kind has arisen somewhere and we are not being informed. The arrangements which the Taoiseach outlined are most unsatisfactory. I would like to raise other issues but I first wish to hear more from the Taoiseach on this matter.

As I have said, as soon as the scheme is available, ready and approved by the Cabinet, it will be brought to the House and subject to the Whips' agreement on when it will be taken. Obviously, people are indicating that they would like to take it as quickly as possible. We are having a discussion and I was asked when I felt it could be taken, and I replied that it will be more than likely next week, based on the fact that the consultations to which I referred on Leaders' Questions are taking place. The Deputy asked what the problem is, but it is not a question of a problem. Many Members opposite took the view that we should extend the guarantee to other banks which have a retail presence here and that doing so should not be regarded as a problem but considered sympathetically. However, issues arise about which we must be satisfied in terms of how we ring-fence the assets that will be available within this jurisdiction and what will be the view of the headquarters or parent group on the assets should anything occur. All these technical issues have to be sorted out. These banks are in a different position from those which are incorporated and headquartered in this country. It is not the same legal situation. We have to cater for and be sure of other considerations.

The Taoiseach should have had that information before introducing the legislation

Let us be fair, Deputy Costello. This situation arose in very extraordinary circumstances. Decisions had to be taken and legislation was brought before the House. The Minister for Finance was as expansive as he could be in explaining the reasoning behind it and what we were trying to achieve. The legislation allowed people to discuss how this would work in practice. The UK Chancellor of the Exchequer came forward with his response this morning. He stated that it would take him some time to provide his Parliament with all the necessary details. This is not a simple area.

All these questions were asked last week.

Let us be fair. People are entitled to information and I will give as much as possible, but we also have to be fair to each other, make sure we get this right and take into account all the issues concerned. If the EU says that we need to avoid the distortion in the capital flows which it believes could possibly emerge or that we should deal with other banking institutions in the country in what it would claim to be a non-discriminatory manner, we are working through those issues with some of the parties in this country who may have an interest but who may not subsequently apply. Danske-Northern Ireland Bank has indicated that the Danish guarantee for Danske bank is sufficient as far as it is concerned. It will get on with its business and is probably unlikely to apply under our bank guarantee scheme. People are taking different views depending on the situations that arise. Denmark gave its guarantee in recent days.

Issues are arising and it is not a static situation in which we go off, deal with the matter and bring it back here quickly. We need to make sure that we take account of what is a moving situation. What happened this morning across the water was a very significant initiative and we have to make sure our people consider the implications of that and advise the Government accordingly. These are important points.

Of course it is important that we progress this as quickly as practicable. It is not my intention to foster uncertainty. We are clear in our objectives and we have stated them clearly. Arising from the debate in this House, a request was made for modifications and expansion of the scheme in certain respects. We are considering that and are speaking with the people concerned and the Europeans, who have views on the matter. We want to ensure that whatever we do will withstand rigorous scrutiny from any source so that this matter is sorted the way we want it sorted. I do not suggest for a moment that this decision on its own addresses the entire situation — of course it does not — but it provides for the immediate stabilisation and access to liquidity that we need to proceed in a way that is not regarded by others as hostile. That is what we are trying to achieve and the initial reaction of the markets has been helpful. We brought in the legislation last week and we had a very expansive debate on it. As Deputy Gilmore suggested, to accommodate debate we delayed our deliberations after concluding Second Stage and spent an entire day on Committee Stage. We did all that, we then sent the Bill to the Seanad, which did its work.

We are now in the process of dealing with this detailed scheme. We outlined during the course of the discussions on the legislation what in essence we are trying to put in place. We are now discussing the detail of that, based on continuing advice from the Central Bank, the Financial Regulator and the Department of Finance, taking into account the developments taking place in other countries and what the European Union institutions have to say about it. Let us be fair, honest and straight about this. We are proceeding cautiously, prudently, I hope, and comprehensively so that we can come to this House with confirmation that what is put to the House will cover the questions Members are entitled to ask, such as where this stands in regard to European Union arrangements and what view the Directorate General for Competition takes. We need to make sure we can answer these questions and the only way we can do so is through an ongoing consultative process, which is taking place and which cannot be turned around overnight or in a matter of hours when dealing with these institutions. That is the position. We should accept that we will be able to come here with fewer questions to answer on the basis we have covered all the angles and bases.

Deputy Burton on the same issue and then we must move on.

On the same issue, the net point is that as a State we have effectively given an unlimited guarantee with regard to a series of classes of debt, as outlined this morning by the leader of the Labour Party, some of it risky. At the weekend the Government was to a degree celebrating the fact that the Irish arrangement had resulted in massive inflows into the banks benefiting from the guarantee. What are the dimensions of the scheme? Is it an absolutely unlimited guarantee? This is why we want a briefing on the scheme and its framework. Until the framework of the scheme is available to us, even if the finer detail has not been totally worked out, we do not know what we are guaranteeing.

We are also moving towards the budget. The Taoiseach mentioned Denmark which is charging up to €5 billion per year, plus an equity stake, for what it is doing for its banks. We have had no indication of the budgetary arithmetic. Has the Government factored in an income from the scheme, as we were assured there would be? This morning we heard Deputy Kenny talk about cuts in the health service. We need to know the framework of the scheme. Has the Attorney General advised that there is a clear impediment in European law with regard to the framing of the guarantee and the additional institutions which have now applied to be included in the scheme? I referred to this in my contribution last week as a potential Pandora's box. Will the Taoiseach tell us what Pandora's box is now turning out to be? What has the Attorney General advised in this regard?

It is not helpful to refer to this as a Pandora's box; nor is it accurate. It is not a question of an impediment. There is a question from the European Union about what it regards as the possible discriminatory nature of a scheme provided for just the banks incorporated or regulated in one state. We must deal with this issue. We are engaging constructively with the European Union. The competition Commissioner has been constructive and co-operative in this regard. We are working through the issues involved, as the Opposition expects us to do. It is not a question of there being an impediment but of how we can ensure the scheme meets the requirements of the European Union competition directorate, while at the same time leaving us in a position to consider any applications sympathetically and in a way that will not provide an inordinate risk for the State. From the European Union point of view, we must make sure we are compliant with EU competition law and from our point of view, if we are to make arrangements with institutions other than those in our own jurisdiction, we must make sure we are covered and that we can ring-fence their Irish operations. The assets and liabilities must be ring-fenced and we must know what we are taking on in the same way as we know what we are taking on with Irish banks which are not part of a wider group incorporated somewhere else. How can we make sure, for all the reasons Deputies expect, that it is the authentic Irish operation with which we are dealing, not flows coming in and out from within the group, inter-company debts and all the rest?

Those are precisely the questions I asked the Minister last Wednesday.

Of course; they are the questions we all put to one another.

He said everything was fine.

No. What it points to is the need to deal with these questions comprehensively. We are having constructive discussions with the parties I mentioned. We are sitting down with them and seeking clarification. They are going back to their people and coming back to ours. That is what one would expect — that it be done in a diligent, proper and rigorous way. It is a different situation. We are genuinely making efforts to be more inclusive, but we are also trying to make sure we know exactly what we will be dealing with. These are important matters. If it takes some time to get it right, let us get it right. That is what Deputies expect us to do.

The Government put the cart before the horse.

It is not a question of putting the cart before the horse. To reduce the challenges facing the country to carts and horses says more about the Deputy——

Deputy O'Donnell on the scheme coming before the House. I am then closing the matter. We must move on.

Carts and horses. What does that mean?

Carts and donkeys.

With the price of diesel we will all be back to carts and horses.

The Taoiseach spoke about liquidity in the market. I have been getting telephone calls from people running small business who say that in the last week since the scheme was introduced their overdraft facilities have been cut back. There are people running small businesses who cannot pay staff wages.

This is about the scheme coming before the House.

There is a degree of uncertainty. The Taoiseach should ask the Central Bank and the Financial Regulator to talk to the banks in order that they will ease credit and allow businesses to grow.

I cannot deal with that matter now, only the scheme coming before the House.

The purpose of the scheme is to provide for liquidity. I ask the Taoiseach whether he has brought up these issues with the Central Bank and the Financial Regulator. If not, I ask him to do so. There is uncertainty. Small businesses, in particular, are suffering.

I have a one-line question.

A speech in Trinity College last weekend.

I ask the Taoiseach whether the Government is considering injecting capital into one of the banks — or more than one — in return for preference shares or an equity stake. Is that under examination?

That is not under examination at this time.

I am moving on. Deputy Gilmore had other questions on the Order of Business.

The Minister for the Environment, Heritage and Local Government, in response to a question from my colleague, Deputy Ciarán Lynch, yesterday, announced that the Government would introduce legislation to cap expenditure in local elections. I welcome that announcement. When will this legislation be introduced? Given that local elections are scheduled for June next year, will the Government consider adding another part to the Electoral (Amendment) Bill before the House to provide for a cap on expenditure in local elections?

What arrangements will be made to debate the report of the Morris tribunal in the House? Does the Ceann Comhairle intend to convene a meeting of the Committee on Procedure and Privileges to consider the enormous implications of the report for Members of the House? My party and I fully stand over and support the actions taken by our colleague, Deputy Brendan Howlin, and former Deputy Jim Higgins and the way in which they handled the information provided for them. The implications of the report are very serious for every Member of the House. Many of us come into possession of information on matters such as child abuse or other problems. The idea that an individual Member of the House would have to conduct some kind of private investigation into material brought before him or her has serious implications for all of us. I ask that an early meeting of the Committee on Procedure and Privileges be convened to consider the matter and the implications of the report for all Members of the House.

The Taoiseach on the local government legislation.

I will have to check with the Minister for the Environment, Heritage and Local Government as to how he will proceed with that aspect of what he said yesterday. He has given a view in the House, with which I do not have a problem. We can proceed through legislation in whatever way is required, although I will have to discuss the matter with the Minister.

The matter of a debate on the Morris tribunal is for the Whips to decide. I do not want to comment on anything contained in the report. We should take time to consider and reflect upon it and have a debate in the House. It is a matter for the Ceann Comhairle to decide what he wishes to do in respect of his own responsibilities.

On the electoral issue, the Taoiseach seems to be implying that this was a personal opinion expressed by the Minister. Is it not a Government decision to have a cap on spending in local elections?

In other words, is legislation promised in this area?

I do not know whether legislation is promised, but understand work on the issue of capping local election spending for next year is ongoing in the Department. The matter can and will proceed but in what way it will I am not sure.

I seek clarification on that matter. The Minister for the Environment, Heritage and Local Government told Deputy Ciarán Lynch yesterday there would be a cap on spending limits for the 2009 local elections. Deputy Lynch and I understood that to be a promise of legislation made by the Minister responsible. Is the Taoiseach pulling back from that position?

No, I am not. I am indicating I am not aware at this point what the legislative method for dealing with that issue is so I will take it up with the Minister and convey it to the Deputy.

Is this a Minister of State, Deputy John McGuinness-type opinion or is it a real promise of legislation?

No, it is not. It is a promise of legislation.

The Taoiseach will be aware from yesterday's discourse that we have a serious issue regarding nursing home beds. Their unaffordability is leading to people being left in hospitals, unable to be discharged.

On legislation, Deputy.

I will come to the legislation, Sir.

Do come to it.

We have been promised this new nursing home Bill which we are constantly told is coming. I want two assurances. When will it come and when it comes, will we stay to discuss and pass it? If we can stay here all night talking about bankers, surely we can stay here all night talking about the needs of the elderly. Currently in Dublin North there are——

On the legislation, Taoiseach.

——120 free beds in nursing homes, yet they will not be used by the HSE.

The Deputy will need to raise that matter in another way.

If the Bill does not go through before the end of the year, will there be provision to use the funds to get these beds into operation——

On the legislation, Taoiseach.

——and relieve the situation in our hospitals where people are lying on trolleys all over the place?

The Deputy will need to raise the matter in another way.

I understand it will be published this week.

Given its urgent environmental implications, when will the forestry amendment Bill to update existing legislation from 1946 and 1998 be published? It is important that it is published as soon as possible. On the capping of expenditure in local elections, there does not seem to be joined-up thinking by the Government.

Do not mind that.

The Minister, Deputy Gormley, has one view but Fianna Fáil does not seem to have a view on the matter.

On legislation, Deputy.

There is a serious crack in the Government on the matter.

A Deputy

The Deputy is a gas man.

There is a crack on the other side.

I call the Taoiseach on the forestry Bill.

The forestry Bill will be next year.

Slowly, slowly.

Earlier in the year, Fine Gael introduced a Private Members' Bill, the Cluster Munitions Bill. On list A of future legislation, No. 9 under the Department of Foreign Affairs is the inhumane munitions Bill. When can we expect to see the Bill? Would the Government consider changing its Title? I believe it is inappropriate because it creates the impression that humane munitions might exist.

On the legislation, Taoiseach.

I believe it is due this session. That term is used in conventions or other instruments. It a question I asked myself when I saw it.

Will the Taoiseach ask the Minister for Foreign Affairs to consider it?

Great minds work alike.

I call Deputy P. J. Sheehan.

The only humane munition would be one that would take this Government out.

Deputy Sheehan did not interrupt Deputy Timmins.

When can we expect the Harbours (Amendment) Bill to be discussed in this House?

It is in the Seanad at the moment.

Does the Taoiseach have any idea when it will come to this House?

Until it is finished in the Seanad, we cannot say when it will be in this House. I am sure if the Deputy went up there it would keep him amused.

It is slow moving.

It is sailing around.

Yesterday, the Financial Regulator announced that the Irish Nationwide Building Society had been fined €50,000 after one of its employees touted for business following the Government's guarantee.

What legislation is that?

It is in the context of the mouse roaring.

There is no Bill called "the mouse roaring".

It could be related to the Minister, Deputy O'Dea.

Two Bills are promised, the financial services miscellaneous provisions Bill, which is to transfer the supervision of building societies from the Minister for the Environment, Heritage and Local Government to the Department——

What is the other Bill?

This relates to billions of euro, some of it hot,——

I cannot go into that now.

——going into Irish accounts.

On the legislation, Taoiseach.

A fine of €50,000 is derisory.

The Deputy will need to find another way to raise the matter.

That employee would have made €50,000 in an hour for his building society.

On the legislation, Taoiseach.

I ask the Taoiseach to bring forward that legislation so that we can have some real regulation.

On the legislation only, Taoiseach.

I understand that legislation is due next year.

I call Deputy Tuffy.

The building society one.

Those people would spend €50,000 in a weekend in Temple Bar.

Deputy Tuffy did not interrupt Deputy Burton to the best of my knowledge.

A large element of the crisis in financial institutions relates to land speculation. The Government has encouraged land speculation.

I cannot have that now.

It relates to legislation.

Then ask about it, Deputy Tuffy.

One example is a 2005 tax break which allowed pension schemes to invest in property.

The Deputy is learning bad habits. She should stick to the legislation.

The former Taoiseach, Deputy Bertie Ahern, said he would implement the property rights report of the committee on the Constitution that would include legislation to cap the value of land that had just been rezoned. What will the Taoiseach do about that?

Is legislation promised in that area?

Now is the time to draw the line regarding land speculation.

Is legislation promised in that area?

The Minister for the Environment, Heritage and Local Government, Deputy Gormley, promised to do something about the matter.

A property services Bill is due this session.

It is not the property services Bill.

In light of the serious jobs situation, when will we discuss the industrial development Bill? Agreement was reached at St. Andrews that we would have an all-island approach to animal disease. However, the animal health and welfare Bill has been postponed rather than brought forward. Can anything be done to move that on? I welcome the Taoiseach's guarantee about the nursing home support Bill.

On the legislation, Taoiseach.

The industrial development Bill is due this session. We have no date for the second Bill on animal welfare.

I seek clarification on time to debate a report of the Oireachtas Joint Committee on European Scrutiny on the cod recovery plan, which will have a major impact on the viability of the fishing industry and which is on the Order Paper. I also ask about time to debate another report on a directive on toys. It is critical that they be debated in the Chamber as they will have a major impact. Will the Taoiseach allow time to discuss these very important reports? In light of the serious democratic deficit, it would be a major loss not to have these reports discussed here. Four reports are listed on the Order Paper and I ask the Taoiseach to encourage the Whips to allow time to discuss them.

I commend the work the Deputy is doing in that committee. It is a matter for the Whips to decide whether to allow time, but I believe it should be brought to the floor of the House, with the agreement of everyone.

Thus far the Government has contrived not to discuss any of the reports of the Morris tribunal. Now that we have the final two reports, I urge the Taoiseach to direct the Chief Whip to allow the Dáil to consider the totality of that tribunal's work as soon as possible. All we got yesterday evening was a statement from the Minister for Justice, Equality and Law Reform, who managed to abstract reference to the two Members who caused the Morris tribunal to be established and whose offence is that they went in private to the then Minister for Justice, Equality and Law Reform.

Does the Deputy want to discuss the Morris tribunal report?

The current Minister for Justice, Equality and Law Reform cannot pass a sleeping dog without kicking it.

I cannot call the Minister on that.

The Deputy well knows he is out of order.

When we have this debate, the Taoiseach should ask the Minister for Justice, Equality and Law Reform to rein in his nasty partisan instincts for a change so that we can all get more business done on it.

I call the Taoiseach on the question of a debate on the reports of the Morris tribunal.

It is a matter for the Whips to decide whether to deal with the entire series of reports or the ones most recently published, the seventh and eighth reports. The report says what it says and I am not commenting on that. We should all reflect on it and prepare for the debate in due course. I would not ascribe partisanship.

Is the Taoiseach aware that the Irish Family Planning Association has been forced to suspend its family planning services?

That is not in order.

The question is relevant to legislation. It gets a budget of €290,000 and provides services to the entire country.

It sounds tenuous enough to me.

It has received no increase in the past two years.

What is the legislation, Deputy?

Yet it must bear the cost of any overspend and the HSE has a catch-22, whereby it is not providing it with funding and yet it is providing extra medical cards.

Will the Deputy say what is the legislation? I shall have to move on.

The service being provided is aimed at young people, teenage pregnancies etc. and is now suspended entirely because——-

What is the bonus scheme attached to that?

What is the legislation, because I have to move on?

——while the extra medical cards are being put in place, there is no extra funding. Is the Taoiseach proposing to introduce another supplementary budget in relation to the HSE, which we are already producing on the Order Paper today?

What is the legislation?

I am talking about the supplementary budget for salaries and expenses——

What is the legislation? It is not in order and I must move on. We cannot go into that.

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