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Dáil Éireann debate -
Thursday, 19 Jul 2012

Vol. 773 No. 3

Leaders’ Questions

In last year's budget the Government made great play of the fact that it did not cut-----

Welcome back.

Thanks very much. I appreciate it.

Siberia is a very cold place.


Order, please.

While it may not have cut the headline rate of social welfare payments, the Government made sharp and deep cuts in a raft of schemes that are very important to people, including the fuel allowance, family income supplement, community employment, Tús, jobseeker's benefit, child benefit, farm assist and, in particular, schemes that affect women. For some reason, the Minister for Social Protection always seems to target women for her cuts.

No one takes that remark seriously.

In the budget the Minister announced significant cutbacks of two thirds in the materials and training grants for the 22,000 people on community employment schemes, targeting a saving of €36 million. However, as a result of the backlash against this measure, she announced a review which we understand has been completed for some considerable time. According to RTE, letters have been sent to some community employment providers informing them that their materials and training grants will be cut by between 30% and 40%. When will the review be published and why has it not yet been published?

Does the Deputy not read the newspapers?

Why is it being hidden from the House? Will the Tánaiste outline the cuts that are being applied to the community employment and Tús schemes? How many places will be lost and how many will be laid off the schemes as a result of Government action?

The Deputy was almost on jobseeker's allowance himself.

I welcome the Deputy back to active service. I have missed him.

A Deputy

The Tánaiste was on active service for long enough.

Deputy Éamon Ó Cuív needed some reconditioning.

Judging by the actions of the Labour Party, the Tánaiste will not be on active service for long.

Since this is the last day of this Dáil session, I look forward to seeing the Deputy here regularly when we return in September.

The Government supports the community employment programme which plays an important role in the provision of crucial services for rural and urban communities. There are 1,143 community employment schemes in operation nationally. Of the 23,300 places available, approximately 22,000 are for participants, while approximately 1,400 are full-time supervisor posts. The overall estimated budget for the community employment scheme in 2012 will be approximately €340 million.

As part of the requirement to fix the hole left in the public finances by Fianna Fáil, it is necessary to examine all aspects of expenditure across every Department. It was against this background that the financial review of community employment schemes got under way a couple of months ago. The main objective of the review was to identify areas where savings could be achieved through efficiencies in order that the best use could be made of available funds. As a result of the review, significant savings have been made in the overheads of community employment projects in terms of annual insurance costs and audit fees. The savings will increase next year as some projects had incurred these costs prior to the introduction of the new arrangements. Under the revised arrangements, schemes will no longer be given universal amounts of financial support. Instead, they will be provided with a specific level of support aimed at meeting the particular costs necessarily incurred by the individual scheme, having regard to the overall level of funding available to the community employment programme nationally.

The materials and training budget for the community employment programme has been increased by €9.5 million from the original budget of approximately €11 million, following savings identified elsewhere in the budget of the Department of Social Protection. The new materials and training budget is thus €20.5 million. Each community employment scheme has been notified of its revised materials and training allocation based on the amounts recommended by the Department's divisional staff, following consultations with schemes. The majority of schemes have indicated satisfaction with their revised allocation in these difficult economic times. In addition to the training allocation for schemes, community employment scheme participants may also access a number of Springboard, vocational educational committee and FÁS courses free of charge. As a result of the community employment scheme review process, the Minister for Social Protection has also introduced an appeals mechanism for schemes which believe they are unable to survive on the new allocations for training and materials.

It is also worth noting that a separate policy review of labour activation schemes is under way. This review which is nearing completion will also help to inform the Department's strategic approach to these schemes, including community employment schemes.

When responsibility for community employment schemes was transferred to the Department of Social Protection, it was intended to spend some of the €5 billion we paid people to do nothing, which was bad for their health and well-being, on providing people who were out of work with opportunities to make a useful contribution to society. In other words, we viewed people not as a burden but as a resource. The Government appears to think otherwise.

Can we have a question, please?

Will the Tánaiste confirm that the ESRI has made it clear in its review that the 2012 budget imposed a higher percentage of losses on those with low incomes? When will the review be published? Will the Tánaiste provide details of the average cut per scheme across the country in order that we know exactly what has been done to community employment schemes?

The Deputy has a hard neck to lecture the Government on community employment schemes, the budget or the economy.

What about the ESRI?

He left behind a wilderness.

Where is the Minister of State, Deputy Róisín Shortall?

When he exited government in February 2011, he left behind the biggest financial and economic mess the country had ever faced.

You are a sham and a fake.

The Labour Party wrote to SIPTU.

In the 16 months since the Government has made strides to restore the country's economic fortunes.

Wrong. You are a fraud.

The Labour Party wrote to SIPTU.

Keep quiet, please.

We have successfully separated bank debt from sovereign debt, a problem with which the party opposite left us, and we have reduced the interest rate on our borrowings.

Nobody believes that nonsense.

We are working our way towards recovery. In regard to those on the lowest incomes, we reversed the cut in the minimum wage that Fianna Fáil had made.

The Labour Party is looking after the wealthy. It is Fine Gael's way.

Is that Donie's way?

We removed 300,000 people from the universal social charge which Fianna Fáil had introduced. We are making reforms in the area of social protection. The Minister for Education and Skills, Deputy Ruairí Quinn, is the man who introduced the social employment schemes which the Government is committed to maintaining. We are supporting them. The amount of money available for labour activation-----

The Tánaiste means labour promotion.

-----social protection and other such schemes has increased. We have more than 22,000 people participating in social employment schemes and the Minister for Social Protection has made changes to the way moneys for training grants and materials are provided for social employment schemes.

Where is she today?

The vast majority of schemes have indicated their satisfaction with this.

The Labour Party spin doctors are hard at work.

The Deputy drank the soup also.

This is the last warning. Somebody is going to take a walk.


I ask the Tánaiste to use the opportunity offered by the final Leader's Questions of this Dáil session to firmly rule out any attempt to curtail further entitlements to medical cards, as proposed yesterday by the IMF. Will he also rule out Government consideration of an attack on child benefit?

When the Cabinet met last Tuesday to sign off on the Health Service Executive Governance Bill 2012, was any indication given by the Minister for Health, Deputy James Reilly, of the decision by the CEO of the HSE, Mr. Cathal Magee, to tender his resignation? When and how did the Tánaiste learn of Mr. Magee's decision? How does he explain the situation where his party colleague and Minister of State at the Department of Health, Deputy Róisín Shortall, indicated that she had only learned of Mr. Magee's decision through the media and, correctly, expressed her regret? Does he agree with her comment that his departure was a "significant blow" to the health service? How would the Tánaiste describe the relationship between the Minister for Health and the Minister of State in their respective roles in the Department? Are they even on speaking terms?

We are over time.

Does the Tánaiste accept that the health budget allocation in 2012 was such that the targeted so-called savings were unrealisable, with a €750 million cut this year built on a cut of €1 billion in the previous year? Does he accept that these are unrealisable targets and that we have burdened health service delivery management with an unattainable target for this year?

The Deputy asked about the statement made by the IMF on child benefit and other matters. The statement issued yesterday by the IMF is different from the quarterly review of the Irish programme carried out by the troika. The statement was issued under what is known as Article 4, which is a very different process from the quarterly troika programme review mission and has a different focus and rationale. The quarterly programme review by the IMF, the European Union and the ECB focuses on short-term issues and our adherence to the agreed commitments in the programme. The Article 4 process which was announced yesterday by the IMF has a strategic focus and considers medium to long-term policy themes.

We should welcome the comments made by the IMF on our steadfast efforts to deal with the banking crisis and implementation of fiscal consolidation measures, despite an adverse external environment that has tested confidence and delayed recovery. The IMF outlined medium to long-term recommendations to the Government. They were not made specifically in the context of next year's budget or the programme. The issue of next year's budget is one the Government has yet to address and at this point in the year it is not appropriate to speculate about what may be included in it.

It is important to clarify that the IMF statement was the result of a different process from that which refers to the Irish programme.

In regard to what is discussed during Cabinet meetings, it is a long-standing practice that we do not share this information outside the Cabinet.

When was the Tánaiste told?

The Tánaiste failed to answer my questions directly. I asked him to avail of the opportunity to state firmly and clearly that no countenance would be given to the IMF's recommendation of a further curtailment of access to medical cards. He has not ruled this out. He spoke in vague terms about what might happen some point down the road, but he has not ruled this out, nor has he ruled out any attack on child benefit. This was his opportunity to put these ideas firmly to bed. They should not be matters for consideration, whether in the upcoming budget or any future budget. When will the Tánaiste and the Labour Party draw the line in respect of these matters?

They cannot see the line.

I have asked about the matter of the departure of Cathal Magee. The Tánaiste will not share with us the so-called confidentiality of Cabinet discussions, but-----

Deputy, you are over time. You have had one minute. Thank you.

I will ask the Tánaiste again. When and how did he become aware of Mr. Magee's decision? What does the Tánaiste believe to be the current relationship between the Labour Party Minister of State at the Department of Health and the senior Minister with responsibility there? Is it not clear that the Tánaiste has had to assert his and his party's position-----

Come on, Deputy, please. You are over time.

-----or is it going to be Reilly's way rather than Labour's way?

There will be a court martial.

Can we hear the Tánaiste, please?

What about Deputy Ó Caoláin's relationship with Deputy Adams?

I have explained to Deputy Ó Caoláin that the statement from the IMF was not in the context of the programme that we are operating or next year's budget. It was under the Article IV process which involves medium to long-term recommendations. It is not a case of ruling out something in terms of next year's budget. These are recommendations made for the long term. The IMF does this for every country; it is a periodic thing done under the Article IV process. It is not something the Government has to follow and it is not part of the programme. We will deal with the issues relating to the budget when we come to budget time and when the Government makes decisions in respect of the budget.

What about my question about Mr. Magee? I hope the Tánaiste is not hiding behind the Ceann Comhairle. Surely the Tánaiste will answer that question.

The House is anticipating and will welcome the announcement of an inquiry into the bank guarantee of September 2008. The sooner it comes, the better. I say as much because I believe we are in danger of repeating the mistakes of 2008 unless we are particularly vigilant. The Tánaiste will be aware that there are banking scandals breaking globally. Giants such as Barclays, Lloyds TSB and HSBC are the subject of investigations in the USA and the United Kingdom.

We have had our own problems with Ulster Bank but there has been another more sinister development in recent days. When the Ulster Bank scandal began to break here, Bank of Ireland made an announcement which raises the question of whether the Government is really hands-on with the banks. It announced a new governor in a press release one day after the Ulster Bank scandal started to break. No one really noticed what was happening when it did so but it was important for the Government for two reasons: first, because Bank of Ireland is part of the Government's pillar bank strategy, and second, because it holds 15% of Bank of Ireland and has two directors on the board. The governor was recruited from Lloyds TSB. It is not in the press release but Lloyds TSB is the subject of a serious investigation and was found to have mis-sold more than £3 billion worth of personal protection insurance less than two years ago.

A question, please.

Was the Tánaiste aware that the appointee to the post of governor of the Bank of Ireland was the director in charge of insurance at that time and had his bonus docked by £250,000, which is somewhat unique for a banker?

What is the question?

It is almost impossible for that to happen. Was the Tánaiste kept informed of this by the public interest directors?

The Government is determined to get to the bottom of what happened on the night of the bank guarantee by holding a banking inquiry. The objective is to ensure that we have the most effective mechanism to get to the truth of it. Our focus is on having the most robust form of inquiry within the confines of the Constitution and to shed as much light as we can on who was involved politically and administratively in the decision-making process that lumbered this State with a debt-ridden situation, which we are working hard to undo now. Since the outcome of last October's referendum, a substantial and detailed analysis has been carried out on the scope for Oireachtas inquiries operating within the parameters set out in the Abbeylara judgment. The main conclusions of this legal assessment are summarised in the letter from the Minister for Public Expenditure and Reform to the Chairman of the Committee of Public Accounts which issued following the Government's consideration of options for an Oireachtas inquiry on banking matters at the end of last month.

The technical problems at Ulster Bank are having a significant effect on the bank's personal and business customers throughout the country.

That was not the question.

He is moving on.

It is totally unacceptable that it has taken Ulster Bank so long to deal with these problems. With regard to the other issue mentioned by the Deputy, Bank of Ireland is substantially a private company and I was not informed of the governor's background.

I thank the Tánaiste. The Bank of Ireland was largely privately owned when the last disaster occurred in 2008. The reason we have a 15% holding, which had been larger, and two public interest directors is that it is such a vital part of the Irish economy. The appointment of its governor is a crucial decision in which the Government obviously has a key interest. My guess is that the Government did not know anything about his history, his pedigree, the mis-selling scandal at Lloyds TSB or the fact that he was a director at the time and was forced to give up his bonus.

The Government did not want to know about it.

I have no wish to be too specific.

Can we have a question? Thank you.

Can the Tánaiste tell me, generally, are the public interest directors doing anything in these banks? If they did not inform the Government about the pedigree and the detailed history of the person who was to be the governor of the Bank of Ireland then they were not doing their job. Did they report to the Minister and explain the situation? Did they report to the Minister and explain about the man who was to be appointed and his history? Did the Minister know this and accept it?

As I have said, I was not aware of the individual's background. Bank of Ireland is 85% privately owned. Deputy Ross would be the first to criticise the Government were it seen to be somehow micro-managing the affairs of the bank. The questions Deputy Ross is asking about the communication between the public interest directors and the Minister for Finance are matters that should appropriately be addressed to the Minister for Finance by way of direct parliamentary questions.