Dáil Éireann debate -
Tuesday, 18 Oct 2011

Vol. 744 No. 1

Leaders’ Questions

Deputy Micheál Martin

Some 80% of Irish defined benefit schemes are in deficit and hundreds of thousands of workers are members of these schemes. The Taoiseach and the Government were advised in advance that the 0.6% pension levy would have a very negative impact on pensioners. Specifically, the Ministers for Finance and Public Expenditure and Reform were advised that the levy "is coming at the worst possible time as employers and employees do not have the resources to make additional contributions." The Pensions Board stated it would make existing difficulties even worse. The sum of €470 million that will be raised per annum will not even be used for the purposes of the jobs initiative. In essence, in the next four years more than €1.8 billion will be taken from pensioners in order to pay the levy. There were further warnings given to the Taoiseach that it would lead to the creation of a funding cliff at the end of the four year period. On "Prime Time" last night the Minister for Social Protection, Deputy Burton, admitted that "she was not a big fan of the proposal." I would like to know what that means. Against all advice, the Government decided to plough on regardless. The concerns of individual pensioners were dismissed in the House and the decision is already hitting thousands of elderly persons living on modest pensions from schemes into which they paid from their own earnings.

I mentioned previously in the House the workers at Tara Mines to illustrate the impact on pensions. In recent days I read correspondence from the Retired Aviation Staff Association which had been sent to the Taoiseach and the Government and the correspondence it had received from its trustees who said they were likely to be hit directly by the levy. These are pensioners of Aer Lingus and the Dublin Airport Authority and their pension schemes will be hit during the four year period to the tune of €30 million.

Given all the advice received and the distressed nature of the pensions industry, why did the Taoiseach decide to introduce the pension levy? Why did he decide specifically to hit pensioners because the impact was to reduce their benefits? It is pensioners who will be hit.

An Ceann Comhairle

The Deputy's has exceeded his allocated time.

Deputy Micheál Martin

Why did the Taoiseach, premeditatively, go after pensioners more than anybody else in this regard?

The Taoiseach

When the Government took office earlier this year, it inherited a pensions system in crisis. There is a €10 billion to €15 billion hole in certain private sector defined benefit pension schemes. This has been clearly identified, as has the extent of the fat and costs involved in their administration, a matter also referred to in the programme broadcast last night to which the Deputy referred. The Minister for Social Protection, Deputy Burton, announced this weekend that her Department is initiating a study with the Pensions Board and the Central Bank on the level of pension charges and the expenses associated with the different forms of private pension arrangements. The Minister is determined that employers and members of pensions schemes will get value for money. Everybody can support that. The Government launched this study because of concerns about the level of charges applied to schemes and the lack of transparency around some of them.

I met some of the workers from Tara Mines during a recent visit to Navan. They brought their case to me and I will speak further with them. There are two sides to the story. The study which the Minister has initiated will examine charges in defined benefit pension schemes, which cover approximately 222,000 people, and charges in defined contribution schemes, which cover 260,000 people. It will also examine retirement annuity contracts and personal retirement savings accounts. It is important that people know how much they are paying in charges and what they are getting in return.

The study initiated by the Minister will give comprehensive and clear information on the categories of charges that apply across and within pension schemes. The findings of the study will be essential to informing the debate and determining whether further measures are required. The initial results are expected by December 2011.

The Financial Times recently reported that some pension savers are losing more than one third of their savings as a result of high charges on certain pension products. I regard that as a disgrace. Other research suggests that a 1% annual fee can reduce the pension pot by 20% in respect of a customer who pays in over a lifetime. I am sure Deputy Martin will agree that we need to get an accurate read on these matters if we are to deal with the extent and scale of the problem. There is a commitment in the programme for Government to cap taxpayer subsidies for all future pension schemes that deliver income on retirement of more than €60,000. This is a matter of considerable anxiety.

The Deputy asked me why the Government introduced the scheme when we did. The scheme was introduced as a temporary measure on foot of the Government's determination to create a jobs initiative. This initiative also involved renegotiating with the troika the memorandum of understanding and the introduction of reduced levels of PRSI and VAT, which had a direct impact in terms of employers finding it easier to keep existing staff and hire new people. The results are self-evident across the entire hospitality sector in that people were maintained in employment and new people were taken on. That was the reason for the introduction of the temporary pension levy and, as last night's programme clearly indicated, the administration charges imposed by pension funds can absorb the vast majority of the temporary pension levy.

Deputy Micheál Martin

I asked the Taoiseach why he specifically hit pensioners in applying the pension levy. At the behest of the industry, he stitched into the legislation a specific provision that pensioners' benefits could be reduced through the application of the levy because they were in deficit. If he was convinced about charges, fees and administrative fat he would not have given that leeway to the trustees and pension funds. That is my point.

The Minister, Deputy Burton, advised the Minister for Finance, Deputy Noonan, in writing that the introduction of a levy could force certain schemes to wind up. It is too late to carry out a study because the horse has bolted. Will the Taoiseach consider carrying out a comprehensive assessment of the levy's impact on the thousands of pensioners concerned, particularly those who work for Aer Lingus and the Dublin Airport Authority? The pensions for these people will be reduced because the legislation specifically targeted their benefits to ensure the levy would raise €1.8 billion. The Taoiseach did that at the behest of the industry because he was lobbied on the matter. The industry told the Government it must include this measure in the legislation so that the pensioners could be hit. The pensioners will be hit according to the letters they have received from the trustees of the schemes.

The Taoiseach

The horse bolted a very long time ago.

Deputy Micheál Martin

Who brought in the levy?

The Taoiseach

The findings indicate that the hole amounts to between €10 billion and €15 billion.

Deputy Barry Cowen

It is the Government's levy.

The Taoiseach

That horse galloped for quite some time.

Deputy Micheál Martin

The Government added to it.

The Taoiseach

The defined benefit schemes are entirely voluntary arrangements between employers and employees.

Deputy Timmy Dooley

Say that to the pensioners.

The Taoiseach

The role of the State is to regulate the schemes to ensure employers deliver on their promises. The State has no role to play in filling holes that have emerged in these schemes.

Deputy Timmy Dooley

The Taoiseach is pushing the blame to somebody else.

The Taoiseach

That is a job for the employers and employees.

Deputy Micheál Martin

The Government made it worse.

The Taoiseach

They are voluntary arrangements.

Deputy Barry Cowen

Make the pensioners pay.

The Taoiseach

The State pension is the safety net on which people can rely if an employer fails to meet its private pension promise. Deputy Martin referred specifically to Aer Lingus. The Aer Lingus pension scheme has a deficit of €500 million. The 0.6% levy was not the cause of that. The State's job is to regulate so that the employers live up to their promise to their employees in respect of voluntary arrangements.

Deputy Micheál Martin

The Government is hitting the pensioners.

The Taoiseach

This is a serious matter for thousands of people.

Deputy Bernard J. Durkan

The only thing hit was the country by Fianna Fáil.

The Taoiseach

I have met many pensioners. One of the fundamental issues that will be addressed in the initiative by the Minister, Deputy Burton, is a comprehensive assessment of the scale of what has gone wrong. We know it is in the region of €10 billion to €15 billion but, as was pointed out previously, the pension schemes are able to absorb a substantial proportion of the 0.6% levy.

Deputy Micheál Martin

Not the way the legislation was written. The industry was given a way out.

The Taoiseach

It is nonsense to suggest otherwise when last night's programme clearly indicated the extent of excessive charging. As I noted in my previous reply, the smallest transaction charge can have a serious impact over the lifetime of a pension.

Deputy Micheál Martin

Why was that not stitched into the legislation? That is the point.

The Taoiseach

That is the arrangement they entered into.

An Ceann Comhairle

We have dealt with that issue. I call Deputy McDonald.

Deputy Bernard J. Durkan

The Deputy's deep concern is touching.

Deputy Paul Kehoe

It is a pity he did not show the same concern when he was in Government.

Deputy Billy Kelleher

It is not our levy.

Deputy Paul Kehoe

When did he show responsibility on the matter?

Deputy Timmy Dooley

The Minister of State, Deputy Kehoe, is not showing much responsibility now that he is in Government.

Deputy Paul Kehoe

Remember the IMF.

An Ceann Comhairle

I call Deputy McDonald. Deputy Kehoe, stay quiet please.

Deputy Paul Kehoe

I apologise.

Deputy Timmy Dooley

I hope he has shown more responsibility around the Cabinet table than he does when he tweets.

Deputy Mary Lou McDonald

Today the HSE publishes reports on deaths and serious incidents among children in State care. Information has come into the public domain about a further 35 deaths of children in care since March 2010. There were 22 deaths last year and another 13 this year. These children, who were in the care of the State, died from a range of causes, including suicide, drug overdose and medical issues. I am sure the Taoiseach will agree this represents a monumental failure on the part of a State which continues to fail young people and their families. We are far away from the ideal of cherishing all the children of the nation equally.

The issues arising in respect of the HSE and the State's care of young people might never have come to light but for the leaking of a report into the death of Tracey Fay in 2009. It is a scandalous situation. Is the Taoiseach satisfied that the structures currently in place resolve the deep concerns about lack of transparency in the HSE's child protection services? Will he tell the House what his Government intends to do to ensure no more children die in the care of the State?

The Taoiseach

We need to speak further about this matter when a better opportunity presents. My first thought is for the families who lost children. No words of mine can deal adequately with their sense of loss. I do not think the words of anybody else here could do so either. The second point I would like to make is that today the HSE is publishing a series of reports. The National Review Panel for Serious Incidents and Child Deaths was established under the guidance of the Health Information and Quality Authority. Its first annual report which provides an overview of the work carried out by the group since its establishment in 2010 is also being published today.

The Deputy has mentioned that this is a scandalous situation. That was certainly the case when the Minister for Justice and Equality, Deputy Shatter, and I were on the other side of the House. The leaked information given to the Minister, Deputy Shatter, in February 2010 on the tragic death of Tracey Fay led to the establishment of the national review panel. The six reports concern four deaths and two serious incidents involving young people. Three deaths were caused by natural causes and one followed an accident. The two serious incidents were also accidents. I would like to be able to say we could reach a situation where no other child would pass away while in the care of the State, but obviously I cannot do so.

The steps taken since the issue was highlighted by the Minister, Deputy Shatter, in February 2010 have, at least, resulted in the publication of the reports which set out the situation to date. The annual report covers deaths and serious incidents involving children who were in care, who had been in care or who were known to have availed of HSE child protection and welfare services. It covers 22 deaths and nine serious incidents in the period examined. The deaths were due to a combination of natural causes, suicide and tragic accidents, including road traffic accidents. In all cases, the inaction or mistaken action of the child protection services was not linked with the death or serious incident. My thoughts, as I said, are with the families involved.

The Government expects the national review panel to continue its work by assessing deaths and serious incidents that took place this year. The Minister for Children and Youth Affairs, Deputy Fitzgerald, is expecting to receive in the coming months a further report on the deaths of children that occurred while they were in the care of the State. The report is being written by two experts in the field, Ms Norah Gibbons and Dr. Geoffrey Shannon.

Deputy Mary Lou McDonald

I am sure everybody in the House and beyond shares the Taoiseach's expression of sympathy to the families of the children involved. I have to say, however, that expressions of sympathy are not enough. It is not obvious why the State cannot guarantee the security and safety of children in its care. The Taoiseach has established the Department of Children and Youth Affairs and expressed his well known concerns about the HSE's child protection performance. However, it strikes me that he is not at all forthcoming in reassuring the House and families and children across the country that the State takes seriously its responsibilities regarding the care of children. If the Government is not working to an agenda to ensure every child in care is safe and secure, I wonder what the HSE guidelines and the new Department are all about. I ask the Taoiseach to make a commitment to set out what needs to happen to ensure children in care are safe and will not die in such enormous numbers.

The Taoiseach

I reject completely the charge that the State and the Government I lead do not have the care, safety and comfort of children as a priority. For the first time since the foundation of the State, a senior Department of Children and Youth Affairs has been founded. It took time to extract all the relevant connections dealing with children in order that they could be put into that Department.

Deputy Micheál Martin

It was in place already.

The Taoiseach

We cannot legislate for human nature. In so far as is humanly possible, the State will do what it can to put in place legislation and facilities to ensure this will not happen again. There have been eight deaths since March. There have been two cot deaths due to natural causes. There have been three suicides, the cause of one of which is as yet uncertain. There has been one death as a result of a road traffic accident. In two cases, the cause of death has not yet been declared. It is clear from the reports that the inaction or mistaken action of the child care services was not linked with the cause of death or serious incident on each of the occasions referred to by the Deputy.

The Minister for Children and Youth Affairs, in accordance with the programme for Government, is establishing a dedicated child protection and family support agency which will provide a stronger and more comprehensive system for identifying child protection concerns at an early stage and, as a consequence, appropriate supports for families and children. In other words, we will do whatever it takes in so far as is humanly possible to ensure this system is put in place.

Neither the Deputy nor anybody else here wants any child to die in care. As the leader of the Government, I do not want it to happen. That is part of the reason it was decided to establish the Department of Children and Youth Affairs which will link directly with the HSE and those providing services in this regard. I look forward to receiving the report being prepared by Ms Gibbons and Dr. Shannon who are acknowledged experts in this field. No punches will be pulled. There will be no inadequacy in terms of the response of the Government.

Deputy Finian McGrath

Last Sunday over 5,000 people attended a protest against the major flood defence plan in Clontarf. This was the largest turnout for a protest in Dublin North-Central for many years. People are furious and angry about the major environmental decisions being made by people in suits behind closed doors. I ask the Taoiseach and the Government where exactly they stand on the proposal to construct a 9 ft. barrier which would block the views of Dublin Bay of thousands of residents, walkers and tourists.

Deputy Timmy Dooley

This would be more appropriate to the Topical Issue Debate.

Deputy Derek Nolan

Did Deputy McGrath make a submission?

Deputy Finian McGrath

Does the Taoiseach accept that if construction of this barrier goes ahead as planned, it will amount to environmental vandalism?

Deputy Paudie Coffey

It is a matter for the council.

Deputy Finian McGrath

Does the Taoiseach share the view of the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, who has said he was bitterly disappointed by the lack of consultation? Does he accept that the public consultation process relating to the controversial plan which took place in July 2008 was minimal and did not work?

Deputy Derek Nolan

The Deputy did not participate in that process.

Deputy Finian McGrath

Does the Taoiseach acknowledge that the stretch of coastline along the Clontarf Road, looking out over Dublin Bay, is a major local asset and amenity not only for the people of Clontarf but also for all the people of Dublin city? Will the Taoiseach stand with the people by telling the city manager, the city council and the Minister of State with responsibility for the Office of Public Works to come up with a new and reasonable flood plan while protecting this local amenity?

Deputy Timmy Dooley

Who is Deputy McGrath backing for President this week?

The Taoiseach

I know the area he is talking about.

Deputy Micheál Martin

Fair play to the Taoiseach. Whom did he meet there?

Deputy Timmy Dooley

It is amazing what one can do with Google Earth.

The Taoiseach

I have matrimonial connections in Clontarf. I understand there may have been up to 10,000 people at the event on Sunday. I do not like the sea to be blocked off anywhere. The people of Ireland, a maritime country, like to be able to see the sea.

Deputy Niall Collins

We see it.

The Taoiseach

It is of particular importance to residents along the road that the view they have had for a long time should not be taken away from them. The problem for those of us who have been elected to this House is that permission has been granted for the construction of a barrier of the scale in question. It will be almost 3 m high. I am not sure how that slipped by all the vigilant councillors on Dublin City Council. Perhaps it was buried in some of the small print when a detailed analysis was made of the height a flood might reach in the event of high tide coinciding with poor weather. As I understand it, full permission was granted for a barrier 2.75 m high. Obviously, the local people feel very strongly about this and I know they originally gave consent to a barrier of 1.2 m in height. It is not just the Minister, Deputy Bruton, who is concerned about this as many other people are also concerned. There is a huge number of sandbags in the area and flooding has occurred on occasion in particular locations on Clontarf Road, as the Deputy is aware. It is visually appealing for people to be able to see the bay and the sea and to have a polder or levy of that scale would cause people to feel rightly aggrieved.

There is a problem here in that permission was issued for this by Dublin City Council. The question is what can be done about it. As the Deputy is aware, there are some other suspicions about the real nature of the reason for a mound of that scale in the first instance. I share the concern and anxiety as well as the very strong feeling among local people that we should work out some compromise here. Planning permission was granted for this through Dublin City Council. While I am not passing the buck, it is a problem for Deputy McGrath and everybody else who does not have an impact on the planning decisions of the council.

Deputy Timmy Dooley

Does the Taoiseach not recognise the planning authority?

Deputy Micheál Martin

If they did not wear suits, they might not have made the decision.

Deputy Bernard J. Durkan

What about the flooding?

(Interruptions).

Deputy Finian McGrath

I will answer the Deputy's question and he will be in for a big shock in a second. I know of the Taoiseach's personal connections with Clontarf — I think I met him in the Blackheath area in 2003 when I was dropping leaflets.

The Taoiseach

He did.

Deputy Finian McGrath

I remind my colleagues in the Labour Party that I was not a member of Dublin City Council in 2008 and Deputy Ó Ríordáin was — that is on the record.

Deputy Aodhán Ó Ríordáin

Not for Clontarf; it was a different ward. Deputy McGrath represented the area, though.

Deputy Finian McGrath

Councillor Damien O'Farrell was not even elected, so that shows the need for independent voices on the council.

I thank the Taoiseach for his response but I also believe there is another issue about which the Taoiseach should have major concerns. Does he accept that it is not just a sea view problem but also a potentially major anti-social behaviour problem, for example, in regard to graffiti and personal security? The barrier has great potential to provide cover for criminality, which is a major point of debate.

Deputy Timmy Dooley

Would Deputy McGrath save this for the council?

(Interruptions).

Deputy Finian McGrath

This is a very serious issue. Some of my colleagues in the Labour Party think it is funny, but it is not funny for the people of Clontarf.

This barrier will hugely damage our local tourism industry, particularly small businesses along the bay. It will particularly impact on our 2014 celebrations of the Battle of Clontarf, when we hope to have tourists coming from Norway, Sweden and Denmark. We would not want to be in a situation where we damage the potential of the local tourism industry.

Once and for all, will the Taoiseach get off the fence on this issue?

Deputy Dinny McGinley

Get off the wall, perhaps.

Deputy Finian McGrath

Where exactly does the Government stand?

Deputy Aodhán Ó Ríordáin

That would have made a great submission to An Bord Pleanála.

Deputy Finian McGrath

The Deputy was not there in 2008.

Deputy Bernard J. Durkan

What about the flooding, Finian?

The Taoiseach

I do not want to pass the buck as I know it is an important issue. I take the points made by the Deputy. The point on the re-enactment of the Battle of Clontarf is realistic — we do not want Brudair to take out poor old Brian Boru again on this occasion.

In response to concerns by residents and businesspeople in recent weeks, Dublin City Council made a presentation at a special meeting of councillors of the north-central area committee last week. It was at this point that a representative of the OPW was present in laying out why this was agreed and placed at the level determined. If Dublin City Council, following consultations with local interests and its own consultants, decides to send in an alternative in respect of flood arrangements to protect the residents of lower level houses in Clontarf, the OPW will be happy to consider those. It may be that, somewhere between 1.2 m and 1.75 m, a compromise could be reached where people can still see the bay and the sea while their houses can be protected.

Nobody wants to see the pictures we saw in Dublin several years ago where people with wellingtons were standing in flooded streets and all of that.

Deputy Bernard J. Durkan

He even tried to walk on water.

The Taoiseach

We do not want to see that on the Clontarf Road or anywhere else in this city. We realise that something needs to be done but perhaps not on the scale envisaged. If Dublin City Council, with its consultants, in talking to local businesspeople and residents decides to send in an alternative compromise to the OPW, the OPW is willing to consider that.

Deputy Finian McGrath

The Taoiseach blames the councillors who were there at the time.