Tá uair na cinniúna buailte linn, an deis a bhí le teacht i gcónaí dá mbeimis sách foighneach. Tá deis iontach ann anois breith ar an mbreac. The eurozone countries are struggling to reach agreement prior to the EU summit. It has been reported that Greek debt bondholders are likely to lose up to 50% of their money and that widespread recapitalisation of European banks will follow. This will deal with the roadblocks we have consistently faced in terms of burning bank bondholders. The problem with acting unilaterally was that the sources of money to pay health, education and social welfare services would have dried up immediately. We now have an opportunity to act on a structured basis across the eurozone. Has this matter been put on the agenda for the summit and will the Government insist on Ireland having parity in whatever arrangement is put in place for Greece? Will the Government veto any arrangement which does not provide us with the same treatment as Greece? The burden should be shared between those who lent money recklessly to the banks of Europe and those who received it. Where do we stand on this issue? It is vital that we do not miss this unique opportunity which, as I noted in Irish, is bound to come our way if we are patient enough.
Leaders’ Questions
It is a pity the Deputy did not point that out to his colleagues last year.
As Deputy Ó Cuív noted, a meeting of Heads of State and Government will be held next Sunday and various technical and high level official meetings are being held beforehand, including a meeting of eurozone finance Ministers on Friday and a meeting of the EU 27 group of finance Ministers on Saturday. Considerable work is being done to prepare proposals for consideration at Sunday's meeting. The President of the European Commission, Mr. Barroso, has stated we must consider a number of issues together to develop a comprehensive plan. The elements of the so-called five point plan are: a decisive response to the Greek situation; constructing firewalls to prevent contagion; addressing the issue of adequate capital and funding for European banks; pursuing sound economic and fiscal policies; and the framework for economic governance. In advance of the meeting, it is too early to speak about how the Government will respond to the proposals as they are still being developed.
We have said on a number of occasions that Ireland is not Greece and, therefore, different circumstances apply to us. Consider, for example, the range of measures Greece is required to implement. The Government has a good track record in this regard. It succeeded in achieving a significant reduction in the interest rate applying to our loans, even though that had not been agreed to at the first meeting which took place in March. We have to work to seek a resolution of the difficulties facing the euro, including the issues that have arisen affecting Greece. The approach the Government will take will be in the best interests of the people.
I agree that Ireland is not Greece, but it is important to ensure we are not penalised for taking the right steps. The Labour Party campaigned for a mandate to ensure bondholders would share the burden of the losses incurred in the banks.
That was then.
In January the Minister for Social Protection, Deputy Burton, stated:
Burden sharing for bank losses has become central to debates within the eurozone and now has the clear support of the IMF. A new Irish Government will have to engage fully after the election in pursuing this option.
I agree with her that we should pursue the option of burden sharing now that there is the opportunity to take a multilateral approach.
Does the Deputy have a question?
If there is a write-off for Greece, will the Government insist on there being an equivalent write-off of our bank debts?
The approach the Government is taking on this issue is aimed at minimising the cost to the taxpayer of bank restructuring and recapitalisation. We have already included a significant degree of burden sharing with bondholders in respect of what has been done in the case of Irish banks. The total cost of recapitalising them, arising from the decisions we made in March, was originally estimated at €24 billion but is now in the order of €17 billion, largely as a result of burden sharing. These decisions have also resulted in increased private sector interest in Irish banks. All of this is to our advantage.
The Government will take the approach that is in the best interests of the people, but when one considers the situation in Greece, one must also bear in mind the measures that country is required to implement. They are not measures we would want to contemplate here.
We have already taken them.
If they did what we have done, they would not have these measures.
Yesterday, the Taoiseach ducked and dived as he tried to explain away the Government's inaction in respect of the 950 job losses at Aviva. Following yesterday's briefing, workers at Aviva are still in the dark and fearful for their jobs. It is not clear whether the redundancies will be voluntary or compulsory. The Government has done a great deal of talking about jobs but the only action we have seen is the closure of one company after another. Some 250 jobs at Pocket Kings and 175 jobs at Allied Logistics have been lost in Dublin. Some 700 jobs are under threat at MBNA in County Leitrim. Some 139 jobs were cut at Vodafone in Dundalk. Of course, 575 jobs at TalkTalk in Waterford are gone. We now have the situation with Aviva in Dublin, Cork and Galway. We did not get far with the Taoiseach yesterday.
That is dangerous.
Perhaps the Tánaiste can enlighten the House on why the Government has not directly intervened with Aviva management. Why has it not moved to secure these jobs? Does it intend simply to let 1,000 jobs, and possibly more, haemorrhage from this economy with no Government response or action?
It is not true that the Government has not been dealing with the Aviva job situation. My principal concern is for the employees of Aviva who are facing the prospect of losing their jobs. It is a very big job loss. The way in which Aviva treated its employees yesterday was disgraceful.
Deputies
Hear, hear.
The manner in which the employees were called in, required not to talk to the press and then let back out again no wiser than they were when they went in is simply not acceptable.
It is illegal.
The Minister, Deputy Bruton, has been dealing with the company on this issue. They have been engaging on a continuing basis to minimise the impact on jobs in Ireland. The Minister has met the company's European chief executive officer, Mr. Mayer, and its global chief executive officer, Mr. Moss. He has remained in regular contact with them throughout the process. At the direction of the Minister, Deputy Bruton, IDA Ireland has also engaged with the company to explore the potential for additional jobs growth over the coming period. The Government is engaging with Aviva with a view to minimising the number of job losses and exploring how extra jobs can be created. The affected workers have and will continue to have the support of the Government and the State agencies. Deputy McDonald's assertion that the Government is doing nothing about jobs is inaccurate. There is nothing the Government is doing more about than jobs.
Deputies
Hear, hear.
It is not making much of an impression.
That is why, for example, the Government is seeking to get additional investment and additional jobs in this country.
A good few jobs are coming to my constituency.
I went on a trade mission to Japan and Korea last week. We will meet officials from India this week. We are pursuing a strategy of attracting investment from Asia.
This is waffle.
We convened the successful Global Irish Economic Forum to bring together the many people who have goodwill towards Ireland. We hope they will be in a position to move investment decisions in Ireland's direction.
Unemployment is rising.
We are very appreciative of the fact that President Clinton, who was at that event, is willing to convene a meeting of corporate leaders in the United States.
He was brought here by Denis O'Brien.
We hope that will bring about increased investment in jobs in this country.
That is all very laudable.
Deputies
Hear, hear.
We thank the Deputy.
The Government's response to the loss of jobs at TalkTalk and Aviva has been milk and water, to say the least.
Why is Sinn Féin not raising the problems at Priory Hall?
The Deputy is a gurrier. That is disgraceful.
Aithníonn ciaróg ciaróg eile.
It strikes me that if the Government is not in a position to protect existing jobs, its capacity to create new work has to be questioned. The Tánaiste correctly said the workers have been treated despicably by management. I am glad he acknowledged that. Their union, Unite, has made it clear that the workforce is willing to consider any other cost-cutting plans. In other words, the workers are prepared to fight for their jobs. There is no reciprocation on that matter from the Government.
A question, please.
A passive engagement from the Minister, Deputy Bruton, and others with management is not enough and neither is tea and sympathy for workers.
How can engagement be passive?
Be quiet Jerry, or I will tell Denis O'Brien on you.
I want the Tánaiste to tell the House what precisely he, as Minister with responsibility for trade and investment, and his Government colleagues will do in the next 24 to 48 hours to ensure these jobs are not lost.
I am glad the Deputy is interested in industrial relations.
I thank Deputy McDonald for her exceptional and unusual praise for the Government's efforts to bring about investment and jobs.
Deputies
Hear, hear.
It was faint praise.
They will take all the praise they can get.
As I said, the Aviva workers who are quite rightly seeking to protect their jobs and minimise the job losses in the company have the full support of the Government.
What does that mean?
It means the Minister, Deputy Bruton, who is directly responsible, is already engaging with the company.
It means no jobs.
He has had a considerable amount of talk with that company.
The talk is all one way.
The same can be said of the State agencies and that will continue.
Deputy O'Dea could not answer the questions he was asked on "Morning Ireland" this morning.
The strategy the Government is pursuing in the work it is doing is to increase investment in jobs in this country. We are pursuing that vigorous strategy everywhere we can. We want to attract investment into this country and create jobs. It is an unfortunate fact that from time to time, jobs will be lost in one company or another for a variety of reasons.
Is that the Tánaiste's message to the Aviva workers?
No. The Deputy should not be smart about it.
I am not being smart. I am very angry about this.
The Tánaiste was smart enough for 14 years.
People losing their jobs is a very serious matter.
Absolutely.
Where is the task force?
People are very worried this morning about losing their jobs and the consequences for them.
We need action, not engagement.
It needs to be taken a little more seriously than just the kind of political opportunism Deputy McDonald is engaged in.
It needs to be taken more seriously by the Government.
The Government is in discussions with the company in question and those discussions will continue.
This is Killinaskully politics from Sinn Féin.
The State agencies will continue to support the workers in the company.
How can these jobs be saved?
I have given my views on how the company has handled the situation.
The Tánaiste has been too quiet, just as he has been at the Cabinet table.
We will do everything we can to minimise job losses in the company.
They will be paid the dole.
In addition, we will continue to pursue the strategy we have engaged in since the Government took office.
They will get €200.
It involves generating investment and bringing jobs into this country.
Unemployment is rising.
It would be better for the people who are without work, or are in danger of losing work——
Jobs were promised under the Lisbon treaty.
——if the Deputies opposite occasionally expressed a bit of support for that in the national interest.
Deputies
Hear, hear.
That is laudable.
I call Deputy Ross.
Is the Tánaiste as good at the Cabinet table as he is in here?
I hate to——
Deputy Cowen knows what the last Cabinet did.
Let the man speak.
He was very close to it.
It is the Technical Group now, Jerry, so take it easy.
I hate to raise the name of George Lee in this House, particularly when interruptions are coming from the other side.
The Deputy would not be here only for him.
I am deeply——
He was very impressed with the boss.
The Deputy had better not say that to him.
Careful, Shane.
He is remembered by me with great affection but not with the same affection that is felt——
The Deputy is using up his time.
I want to remind the Tánaiste — the Taoiseach was reminded on Tuesday — that he has not gone away, you know. He is still here. I want to ask the Tánaiste his reaction to the "Pension Shock" programme which was produced and presented by George Lee on Monday night, and which painted a picture of a few people pillaging the pension funds of this country but also now being joined by the Government in that pillaging. The Taoiseach in response to a question on Tuesday admitted that the enormous amounts being taken out of those funds by the industry could well fund the 0.6% pension levy which the Government has imposed on these members. The Taoiseach stated: "the administration charges imposed by pension funds can absorb the vast majority of the temporary pension levy". Why are we not doing it? Why are we not moving in and saying to the pension fund managers, the industry and the people who are milking this industry, and it is an industry which is——-
A question, please.
Why are we not introducing legislation to ensure that levy is removed and the amount required taken from the industry? It is an industry in huge need of reform. It is an accident waiting to happen. This is an opportunity for the Government to take an initiative against those milking the system.
Is the Tánaiste happy with the situation that so many of our underperforming, overcharging pension funds are owned by the banks and are producing profits for the banks? The banks have these people with the same culture as their own. Will the Tánaiste give Members an assurance that he will fulfil the wish of the Taoiseach on Tuesday and take the money from the industry, not from the people putting money into the funds?
When the Government came into office earlier this year, we inherited a pensions system that was in crisis. This was reflected in the programme earlier this week. There is approximately a €10 billion to €15 billion hole in certain private sector defined benefit pension schemes. We know some of the demographic reasons that this is the case and some of the trends that are in the system. There is no doubt that the performance of pension funds has been affected by poor investment decisions that were made by pension fund managers who invested very heavily in equities and it has also been affected by pension fund administration charges, to which the Taoiseach referred earlier this week.
A Deputy
And by levies.
The Minister for Social Protection, Deputy Joan Burton, last weekend announced that her Department was initiating a study with the Pensions Board and the Central Bank on the level of pension charges and expenses associated with different forms of private pension arrangements. She is determined that employers and members of pension schemes should get value for money. The Government launched that study because of the concerns about the level of charges that are applied to schemes and the lack of transparency around some of those charges. The study will look at the charges in defined benefit pension arrangements, given some 220,000 people are in such schemes, and also at the charges in defined contribution schemes, given some 260,000 people are in those schemes. It will also examine retirement annuity contracts and personal retirements savings accounts, and will include a survey of the providers and the consumers of pension services.
It is important that people in schemes know the charges that are being paid and what they are getting for those charges. The study will provide comprehensive information on the categories of charges applying across the range of schemes. We expect that initial results from that study should be available by about December and the results will then inform the decisions that Government will take in respect of the action that will be taken on the pension schemes, including the issue of administration charges.
I thank the Tánaiste for the reply. However, we do not need a study to tell us what is going on in that industry. Our pension fund managers are among the worst performers in the world, they have made about the worst investment decisions in the world and they are among the highest chargers in the world. As a result, a large number of pension funds are in deficit and people's pensions are very badly affected.
I do not have faith in the Government telling me there will be a study by various people who are presumably representative of and involved in the industry. What we need are decisions. We do not need to wait for another study or for events to overtake us as they did with the banks. What we need is for the Government to give us a pledge — I ask the Tánaiste for this now — that it will move immediately to ensure the Irish pensions industry is not an industry which continues to make managers rich and to make pensioners poorer.
The Deputy may take it that the Government will move to ensure we have a pensions regime in this country that does not make managers rich and pensioners poor. We want to ensure that consumers get value for every euro they put into their pension schemes. We cannot tolerate a situation where the pensions industry takes too big a share out of the consumer's pension, especially when the State is providing tax breaks to support pension provision.
The Government is determined to get public and private sector pensions on a more sustainable footing. We want to ensure the money the State spends, including the tax reliefs that are provided for pensions, are more fairly distributed. The Government will take decisions on this and those decisions will be informed decisions. That is why the study is being conducted. It is not being conducted as some kind of academic exercise; it is being conducted to inform well-grounded decisions which Government will make on this matter. If there are legislative implications arising from those decisions, those legislative implications will be brought before the House.