Is section 1 agreed?
Irish Bank Resolution Corporation Bill 2013: Committee and Remaining Stages
Are there no amendments?
Are Members allowed to table amendments?
It is too late to table amendments at this stage. We will move on to section 1.
I wish to have this formally clarified. Can amendments be tabled? In reality there is no point in going through a charade.
No amendments have been tabled and it is too late-----
Can they be tabled verbally?
It is too late now.
As per the Government decision and the Order of the House.
That is the advice I have from the Clerk.
SECTION 1
Question proposed: "That section 1 stand part of the Bill."
With regard to the definition for security in section 1, I raised a query on Second Stage about the Minister's reference to the ministerial guarantee in his speech. Will the Minister inform the Dáil what he meant by "ministerial guarantee"? Does it refer to the e-mails between the former Minister, Brian Lenihan, and the Governor of the Central Bank at the time of issuing the emergency liquidity assistance and that the Government will make good any losses?
Section 1 is the interpretation section and given the guillotine this may well be the last chance we have to raise any issues. I have several questions for the Minister. In his response to the Second Stage debate he made the point quite strongly this is about protecting the interests of the State and that IBRC has assets of a value of between €12 billion and €14 billion. Tonight he stated security has been put on a number of these assets. Will the Minister clarify the threat to the assets of IBRC and therefore explain once again the requirement for the urgency of this Bill? The most recently published balance sheet of IBRC shows its assets and liabilities, and I ask the Minister to explain the need for overnight security and emphasising the urgency of this legislation being passed before people with a commercial interest in it not being passed have an opportunity to challenge it in the courts.
Will the Minister give further reassurance to the staff of IBRC? What will happen to them tomorrow morning? Legally, their contract of employment will have been terminated on the appointment of special liquidator. Are they to turn up to work tomorrow? Will there be a staff meeting tomorrow? Clearly they have received no information. They have been reading the leaks that have been coming out all day. These are people with families, mortgages and commitments and they deserve to be treated with a degree of dignity and respect. Will the Minister tell us what lies before them tomorrow as they try to pick up the pieces from the shattering news they faced tonight that their jobs are gone?
Given that the Dáil has been given 15 minutes for Committee Stage for this €40 billion legislation-----
Deputies
We cannot hear the Deputy. Turn on his microphone.
Do not turn on his microphone.
(Interruptions).
What is funny?
Given that Dáil Eireann has been given 15 minutes on Committee Stage for this €40 billion legislation, I wish to ask whether securities as defined in section 1 are what the Taoiseach was speaking about in his speech on the restructuring of the promissory note, and whether it is the intention of the Bill to transfer the debt owed to two dead banks to the Central Bank of Ireland and therefore by proxy to the European Central Bank.
The key substance of the Bill is that whereas previously the promissory note was owed to Anglo Irish Bank now this money will be owed to the Central Bank and the European Central Bank. In the first case there was some chance for us to repudiate a debt which is not ours, but once we do this and once these assets and liabilities are transferred to the Central Bank there is simply no way we can repudiate the debt.
The last bit of leverage with the ECB in terms of demanding a write-down will be gone. We were told that the winding up of the IBRC was part of the discussions as a prelude to any deal, but once this is done the ECB does not have to give the Government anything at all, despite any promises it may have made to the Government in the negotiations. That is because we will have fully taken on board the liability for the promissory note, which is what section 12 of the Bill does.
Not true.
We were informed earlier that the transfer of undertakings that would normally apply to employees in a situation like this, will not apply to ordinary bank workers in Anglo Irish Bank who, as of tomorrow, will have no jobs. It will be at the whim of NAMA or the Government to decide which of those employees, if any, still have a job tomorrow. It is deplorable that the Minister has not, at least, inserted some safeguards and protections for ordinary workers in the bank who, as the Minister said himself, were not responsible for the financial casino gambling of Anglo Irish Bank. Those are abominable failings in this Bill and make it all the more reprehensible that the Taoiseach should try to ram this legislation through in such a short time.
I want to refer to section 6 concerning the special liquidation order.
We are on section 1.
I am aware of that but you might impose a guillotine and put them all together, so can I speak on section 6 now? Otherwise I will not get to it.
I do not know.
Well I know.
I call the Minister to reply.
I will speak to section 1 then because I will not get to section 6.
(Interruptions).
Please, a Leas-Cheann Comhairle, I have indicated.
Order please.
Section 4 provides for the making of a special liquidation order. Section 6 provides that there shall be an immediate stay on all proceedings against IBRC, other than regulatory or criminal proceedings, and that no further actions or proceedings can be issued against IBRC without the consent of the High Court.
I wish to propose an amendment there that would include the words, "That all existing cases can proceed without getting the agreement of the High Court".
Members cannot table amendments at this stage. I have already said that we cannot have that.
That is very serious. There are people and families - some very rich and some ordinary business people - that are being destroyed by Anglo Irish Bank. They need to have their day in court and are entitled to make their case.
Thank you, Deputy. I call the Minister.
In the first instance, Deputy Doherty's question refers to section 1 - the interpretation section - and asks me to define "security". On page 6 of the Bill it is already defined. It states:
"security" includes -
(a) a charge,
(b) a guarantee, indemnity or surety,
(c) a right of set-off,
(d) a debenture,
(e) a bill or exchange,
(f) collateral,
(h) any other means of securing -
(i) the payment of debt, or
(ii) the discharge of performance of an obligation or liability,
and
(i) any other agreement or arrangement having a similar effect;
In this context, "security" refers to security provided primarily to the Central Bank by Anglo Irish Bank or its successor IBRC.
Deputy Michael McGrath's question concerned the threat to the assets. I am aware of no specific threat. From his former profession, however, I would say he is well aware of what happens on liquidation and if there is any indication in advance that a liquidation may occur. I want to ensure that nobody who has a commercial interest one way or another, can move into the High Court in the morning - either here or into the courts in London - and try to prevent or challenge what I did in the afternoon.
As regards the power under the special liquidator, the legal mandate is stronger than the legal mandate under the Anglo Irish Bank legislation, which I used this afternoon to secure the assets in the first instance.
As for the staff, we all share the concern about the staff. When the representative of KPMG moved in to the IBRC this afternoon, there was some communication with the staff.
Get out.
In the morning, the same person will be in communication with the staff. I understand the channel will be through the head of human resources, if that person is available in the morning. However, we are not acting on the spur of the moment. The negotiations have gone on for a very long time and it always was envisaged that this course of action would be the first step. Consequently, the KPMG team is well aware of the responsibilities it will be expected to carry out and it has planned for them. As I indicated, employment will be offered to a majority of the staff by the liquidator and there will be further vacancies for staff with particular expertise - I do not know in what numbers - for NAMA, when that agency subsequently acquires the assets.
On Deputy Mattie McGrath's question, there is no need to protect ongoing legal cases, if that is the point the Deputy is making.
They are preserved and the liquidator in the first instance will be mandated and will have the full powers to proceed with cases and maintain their continuity. Alternatively, if a point arrives at which it is in the interest of the State to settle, he may do that also. At some point, some of this responsibility will transfer to NAMA. However, I wish to assure the Deputy there is no need to put in place his proposed amendment to protect the continuity of current legal cases that are being processed. That is preserved within the mandate that is being given to the liquidator.
That is only in respect of regulatory and criminal matters.
No, it is in there.
In the question I asked the Minister, under the definition of "security" in section 1, I referred to subsection (b), which specifies "a guarantee, indemnity or surety". The question was specific and pertained to the Minister's speech in which he stated, "The ministerial guarantee underpinning the net debt owed to the Central Bank will also be transferred to NAMA". What is that ministerial guarantee because later on, I note the Minister states that any shortfall to NAMA will be met by the existing ministerial guarantee? Does this refer to the exchange of e-mails between the bank, the Central Bank and the late Minister for Finance, which has no legal standing? Is this what is being referenced in this legislation?
On the issue of staff, the Minister will be aware that in normal practice, when there is a transfer of assets from one institution to another, under the TUPE rules, the staff also are transferred. When the assets transfer, the staff assigned to those assets also transfer. However, this legislation waives those rules and the Minister basically is leaving those 850 staff members at the whim of the KPMG-appointed liquidator.
I seek clarification that what this Bill will do is to transfer the €28 billion of debt the State owes to two dead banks in such a way that the State will now owe the same €28 billion of debt to the European Central Bank. It sounds as though the potential structure of a new deal is imminent. It sounded as though the Taoiseach was suggesting this will be discussed by the European Central Bank tomorrow when it receives the proposals. I understand it is not possible to give a precise time as to when such a deal might be reached but can the Minister indicate to the House what is the envisaged timeframe? Is it by tomorrow or within a few days, weeks or months? Will an agreed structure to a new deal be evident within a few days?
I will be brief. The Minister might confirm the position, on foot of the transfer of this €35 billion of debt to the ECB, under Article 123 of the Treaty on the Functioning of the European Union. In all the debates that took place or that would take place throughout the country as to whether Ireland should have a renegotiation on the debt or a write-off of the debt, the vast majority of people in Ireland sought a write-off of the debt.
Based on this article of the treaty, will the House be told, once and for all, that there will not now be a write-down on this debt? The people of Ireland have a right to know that now. It is a very simple question based on the article in front of me, which states that the ECB cannot be in a position to write down the debt of any country; in other words, the debt will certainly be passed on to our children and their children.
I wish to get to the heart of the Bill so I will put my question in its simplest terms. The promissory note was about us promising to repay €30 billion of debts to Anglo Irish Bank. Is it true that this Bill means we will promise to repay the European Central Bank? That is what is happening with the Bill. The substantial deal is being done now in order to promise the European Central Bank that we will repay every cent. Its officials told the Irish Government that this must be done before they would even entertain any discussion on the rescheduling of the debt. This is being permanently pinned on our backs.
That is not in the Bill at all.
It is contained in section 12, which deals with the transfer of assets and liabilities.
It is a bit late at night for conspiracy theories.
It is in the speech. It is in the second paragraph.
With regard to Deputy Doherty's question, I read out the appropriate section which lists in detail what the security means under the terms of the Act. I understand the ministerial guarantees offered by my predecessor, the late Brian Lenihan, are not supported by e-mails, so that does not arise in this issue. There were fully formed letters exchanged and in so far as there is a ministerial guarantee, it was carried in the letters by the Minister for Finance. The e-mails are not relevant to the discussion.
Are they being given legal standing in the legislation?
A guarantee is a guarantee and we tend to honour them. That is not the primary issue, which is the promissory note process. That is where the commitment was made by the previous Government. There was an arrangement to repay the funding provided by the European Central Bank through emergency liquidity funding for the Central Bank of Ireland. The money which kept the IBRC where it is was provided by the European Central Bank, so the circle is being completed. It is the principal creditor at one remove, although its agent in Ireland is the Central Bank of Ireland. There is no issue.
Deputy Donnelly asked what the Bill does. It allows me to appoint a special liquidator to liquidate the IBRC and part of that liquidator's functions will be to sell existing assets, with the purchaser of last - and perhaps only - resort being NAMA. It does not do anything else. We are not debating any kind of deal done between the Government and the ECB tonight or the form it may take. I appreciate that there is much speculation about this but no deal has been done.
To whom do we owe the money if Anglo Irish Bank no longer exists?
I may be in a position tomorrow to answer some of the questions being asked now.
The Minister, Deputy Rabbitte, is like the cat with the cream.
I am not in a position to answer those questions tonight.
It is worth stating for the information of the House that if a deal had been done today, the first element would have been what we are doing tonight. There is no contention between the European Central Bank and the Governor of the Central Bank of Ireland or the Irish Government on the approach of liquidating IBRC, having one bad bank, the National Asset Management Agency, and having an orderly transfer by way of sale to NAMA for NAMA bonds of the assets, after which the wind-down will proceed.
Deputy Michael McGrath stated this is not typical of a normal liquidation and that is, of course, correct but no one is suggesting the liquidator should go in and try to dispose of the all the assets in a fire sale. We are trying to protect the Irish taxpayer and recover some of the ground lost and are doing so in a number of ways. Part of this involves ensuring an orderly wind-down of the IBRC assets, which will be in a special purpose vehicle operated by NAMA when the transfers take place. We want to realise the maximum benefit and obtain the best price possible for the Irish taxpayer because if we do not do so, there will be a shortfall. As the assets are systematically wound down, part of the debt is cleared to the ECB and the more we get for them, the better we will do. If it transpires that some of the information given by representatives of IBRC to the Committee on Finance, Public Expenditure and Reform is correct - they spoke of being in a better position than envisaged - there may even be a profit. However, I am not predicting that will be the case as I would like to wait and see how this works out.
Why did the Minister not protect the workers in IBRC?
Deputy Higgins has been calling for the liquidation of Anglo Irish Bank for years. It is a bit late in the night to talk about the workers when he sentenced them himself years ago.
That is a despicable comment.
As the time permitted for this debate has expired, I am required by an order of the Dáil of this day to put the following question: "That in respect of each of the sections undisposed of, the section is hereby agreed to in Committee, the Schedule, the Preamble and the Title are hereby agreed to in Committee, the Bill is accordingly reported without amendment, Fourth Stage is hereby completed and the Bill is hereby passed."
Question put:
The Dáil divided: Tá, 113; Níl, 35.
Tá
- Bannon, James.
- Breen, Pat.
- Bruton, Richard.
- Burton, Joan.
- Butler, Ray.
- Buttimer, Jerry.
- Byrne, Catherine.
- Byrne, Eric.
- Carey, Joe.
- Coffey, Paudie.
- Collins, Áine.
- Collins, Niall.
- Conaghan, Michael.
- Conlan, Seán.
- Connaughton, Paul J.
- Conway, Ciara.
- Coonan, Noel.
- Corcoran Kennedy, Marcella.
- Costello, Joe.
- Coveney, Simon.
- Cowen, Barry.
- Creed, Michael.
- Daly, Jim.
- Deasy, John.
- Deering, Pat.
- Doherty, Regina.
- Donohoe, Paschal.
- Dooley, Timmy.
- Dowds, Robert.
- Doyle, Andrew.
- Durkan, Bernard J.
- English, Damien.
- Farrell, Alan.
- Feighan, Frank.
- Ferris, Anne.
- Fitzgerald, Frances.
- Fitzpatrick, Peter.
- Flanagan, Charles.
- Flanagan, Terence.
- Fleming, Sean.
- Gilmore, Eamon.
- Griffin, Brendan.
- Hannigan, Dominic.
- Harrington, Noel.
- Harris, Simon.
- Hayes, Brian.
- Hayes, Tom.
- Heydon, Martin.
- Hogan, Phil.
- Howlin, Brendan.
- Humphreys, Heather.
- Humphreys, Kevin.
- Keating, Derek.
- Kehoe, Paul.
- Kelleher, Billy.
- Kelly, Alan.
- Kenny, Enda.
- Kenny, Seán.
- Kirk, Seamus.
- Kyne, Seán.
- Lawlor, Anthony.
- Lowry, Michael.
- Lynch, Ciarán.
- Lyons, John.
- McCarthy, Michael.
- McConalogue, Charlie.
- McGrath, Michael.
- McGuinness, John.
- McHugh, Joe.
- McLoughlin, Tony.
- McNamara, Michael.
- Maloney, Eamonn.
- Martin, Micheál.
- Mitchell, Olivia.
- Mitchell O'Connor, Mary.
- Moynihan, Michael.
- Mulherin, Michelle.
- Murphy, Dara.
- Murphy, Eoghan.
- Nash, Gerald.
- Naughten, Denis.
- Neville, Dan.
- Nolan, Derek.
- Noonan, Michael.
- Ó Cuív, Éamon.
- Ó Fearghaíl, Seán.
- Ó Ríordáin, Aodhán.
- O'Donnell, Kieran.
- O'Donovan, Patrick.
- O'Dowd, Fergus.
- O'Mahony, John.
- O'Reilly, Joe.
- O'Sullivan, Jan.
- Perry, John.
- Phelan, Ann.
- Phelan, John Paul.
- Rabbitte, Pat.
- Reilly, James.
- Ring, Michael.
- Ryan, Brendan.
- Shatter, Alan.
- Smith, Brendan.
- Spring, Arthur.
- Stagg, Emmet.
- Stanton, David.
- Timmins, Billy.
- Troy, Robert.
- Tuffy, Joanna.
- Twomey, Liam.
- Varadkar, Leo.
- Wall, Jack.
- Walsh, Brian.
- White, Alex.
Níl
- Adams, Gerry.
- Boyd Barrett, Richard.
- Broughan, Thomas P.
- Collins, Joan.
- Colreavy, Michael.
- Crowe, Seán.
- Daly, Clare.
- Doherty, Pearse.
- Donnelly, Stephen S.
- Ellis, Dessie.
- Ferris, Martin.
- Flanagan, Luke 'Ming'.
- Fleming, Tom.
- Halligan, John.
- Healy, Seamus.
- Healy-Rae, Michael.
- Higgins, Joe.
- Keaveney, Colm.
- Mac Lochlainn, Pádraig.
- McDonald, Mary Lou.
- McGrath, Finian.
- McGrath, Mattie.
- McLellan, Sandra.
- Murphy, Catherine.
- Nulty, Patrick.
- Ó Caoláin, Caoimhghín.
- Ó Snodaigh, Aengus.
- O'Brien, Jonathan.
- O'Sullivan, Maureen.
- Pringle, Thomas.
- Ross, Shane.
- Shortall, Róisín.
- Stanley, Brian.
- Tóibín, Peadar.
- Wallace, Mick.
Tellers: Tá, Deputies Paul Kehoe and Emmet Stagg; Níl, Deputies Aengus Ó Snodaigh and Joe Higgins.
Question declared carried.
The Dáil adjourned at 2.55 a.m. until 1 p.m. on Thursday, 7 February 2013.