Dáil Éireann debate -
Thursday, 21 Feb 2013

Vol. 793 No. 3

Leaders' Questions

Deputy Willie O'Dea

As the Tánaiste is aware, yesterday the Government published the Mangan report on tax and social welfare, precisely 11 months after having received it. Commenting on this report, this morning's Irish Independent quoted a Government source as follows:

I don't think it's any coincidence this didn't see the light of day for 11 months. By the time of the next Budget, it will be well buried. After last year, she [the Minister for Social Protection] has no intention of revisiting child benefit any time soon.

I accept that the changes proposed are so radical that they could not be done in one budget. It would take at least two and perhaps three. If the Government is to make changes, the logical place to start would be in the next budget. On behalf of approximately one million people who have more than a passing interest in this matter, I ask the Tánaiste this question. Does the Government favour the recommendation of the majority of the advisory group chaired by Ms Ita Mangan that a two-tier child benefit system be introduced? Does the Government intend to start implementing the recommendations of the Mangan report and when does it intend to start doing so? Will the Government start implementing the report in the next budget or has it decided to long-finger the matter, as is suggested in various media outlets this morning?

The Tánaiste

The whole area of support for children and families is a hugely important one. When child benefit and the various child support payments are taken into account, the State is currently spending approximately €2.8 billion. As everyone is aware, a public debate has been going on for some time about the best way to direct and spend that money. The Minister for Social Protection commissioned the report that was published yesterday, the Mangan report. She has been engaged in discussions with other Departments about the report and how its recommendations should be addressed.

The intention now is that the Minister for Social Protection will bring the report to the Oireachtas committee where there will be an opportunity to debate and discuss it. If Deputy O'Dea wishes, I am sure there can be a full debate on it here in the House. The Minister for Social Protection is anxious that there would be a full discussion and that the opinions of all political parties, interest groups and those who are interested in the issue would be aired and addressed. The Government has not taken any decision on the contents of the report. That would be to prejudge the discussion that will take place at the committee, in the House and among the wider public.

Deputy Willie O'Dea

I thank the Tánaiste for his clarification. The parents of middle Ireland, who are extremely worried about the contents of the report, can breathe a little easier now. I take it from the Tánaiste's reply that there is no immediate intention to implement the report. The Government has not made a decision on the matter yet. Is that not what the Tánaiste said? No decision has been taken on whether the Government supports the recommendations in the report.

The report itself states that the impact of a two-tier system on poverty would be marginal. It goes on to concede that the people who would be hardest hit would be income earners in middle Ireland. It also concedes that the effects on employment incentives would be mixed, at best. It is hardly worth the political trouble and social dislocation of hitting middle Ireland, the squeezed middle, once more to bring about results which the writers of the report concede would be, at best, marginal.

The Tánaiste

Deputy O'Dea's question demonstrates the value of the approach the Government and the Minister for Social Protection are taking on this issue. It needs a broad discussion. This approach contrasts with that taken by his own party on the issue when in Government.

Deputy Finian McGrath

The Government took €10 in the budget.

The Tánaiste

In the National Recovery Plan 2011-14, published in 2010, the Government talked about:

The development of a rebalanced and integrated child income support payment system. This would provide for a universal component to replace child benefit with one single payment rate per child. This payment will be supplemented with a further payment in the case of children of families in receipt of a social welfare payment or in low income employment.

Deputy Willie O'Dea

And the Tánaiste promised not to cut child benefit.

Deputy Barry Cowen

Is there a red line under that?

Deputy Willie O'Dea

God protect us from protectors.

The Tánaiste

That was Deputy O'Dea's Government's settled policy in 2010, which it included in the national recovery plan.

Deputy Mattie McGrath

The Tánaiste is living in the past.

The Tánaiste

The approach the Minister for Social Protection is taking is a manifest improvement on that. We have a report of an expert group that addresses the entire issue of child support in its widest sense. We will have a full discussion on it. There will be plenty of time for people to discuss it in a committee. It will be discussed in the Chamber if that is required.

Deputy Barry Cowen

The local elections will be out of the way before that.

The Tánaiste

I am sure the Minister, Deputy Burton, will be happy to consider suggestions and proposals from Deputy O'Dea or from other Members of the House.

Deputy Pearse Doherty

This week, the CEO of AIB announced that further mortgage interest rate hikes were on the way. Every quarter of a per cent rise in interest rates adds €30 per month to the cost of repayments for every €200,000 borrowed. This increase will affect 70,000 AIB variable interest rate mortgage customers directly, and the move is likely to be followed by other banks, as has been the trend in recent times.

This move will push more people into mortgage arrears. The Tánaiste knows that AIB is State-owned, with the people owning 99.8% of it, and that it has received €21 billion of taxpayers' money. What is the Government going to do about this?

What has happened to the Labour Party's commitment that it will help home owners weather the recession? Two years ago yesterday, the Tánaiste launched the Labour Party plan for distressed mortgages and household debt. Two years ago, he told families that if the Labour Party was in government, they would enjoy peace of mind and that banks had already received hundreds of millions of taxpayers' money and there must be a quid pro quo for those in mortgage distress so that they would be given a breather. What has happened to those promises? Since then, billions more have been given to the banks, the numbers in mortgage distress have doubled and the Master of the High Court has claimed people struggling with mortgage distress are committing suicide. Since then, 180,000 families have found themselves facing mortgage distress, which is one in every four mortgage holders. Where is the breather and the peace of mind the Labour Party promised these families?

The Tánaiste

Since then we have gone on to implement what was in that document. We have brought forward legislation on personal insolvency to establish a personal insolvency service. The Minister of State at the Department of the Environment, Community and Local Government has introduced proposals on mortgage-to-rent and a range of measures to support those in mortgage distress.

We are not happy with the response of the banks. We have put in place personal insolvency legislation that establishes a personal insolvency service. That legislation sets out a framework by which banks are required to reach settlements with those with mortgage difficulties. The Governor of the Central Bank has already spoken about this and has indicated his unhappiness at the speed and urgency with which the banks are taking on the issue of mortgage distress. This is an issue the Government will continue to pursue and address. The difficulties faced by householders in paying their mortgages and the difficulties they have in their dealings with the banks must be addressed. We have put in place legislation that establishes the personal insolvency service, putting in place a range of supports for those in mortgage distress, and they will have to be implemented.

Deputy Pearse Doherty

Can the Tánaiste genuinely claim that after two years of the Labour Party being in government, it has provided any peace of mind or any breathing space for those in mortgage distress? That claim cannot be made despite having been in power for two years. The Tánaiste talked about the Personal Insolvency Bill but the banks retain a veto so they have the final say. The mortgage-to-rent scheme was piloted a year ago and rolled out eight months ago but only eight applications have been processed. Does the Labour Party claim to have dealt with this? There are 180,000 people in mortgage distress but the mortgage-to-rent scheme has only processed eight applications.

The banks are treating the public with contempt. Last October, Fiona Muldoon, the head of banking regulation at the Irish Central Bank, was scathing in her criticism of the bankers and their failure to address the issue. The Government has done nothing except to heap more charges on those in mortgage distress through the family home tax. What is the Government going to do for those 70,000 people on variable interest rate mortgages with AIB to give them some peace of mind or breathing space? Will it call in the banks and tell the CEO of AIB, which we own, that it is unacceptable to raise mortgage interest rates when we are in the middle of the greatest mortgage crisis the State has ever faced? Will the Government allow those people some peace of mind until the issue is resolved?

The Tánaiste

The cornerstone of Government policy is to enable people to continue to live in their own homes. The greatest fear anyone has is that he will lose his home. The Government approach to the mortgage crisis has been to ensure people are able to live in their own homes. That is why we brought in legislation for the first time in this State that puts in place a range of ways in which agreements can be made between householders and their banks to deal with their mortgage arrears problems. We have also put in place a range of supports that will provide that peace of mind to people that no matter what happens, where people are making the effort to pay the mortgage, or where they cannot pay for a variety of reasons, they will not lose the roof over their heads.

Deputy Pearse Doherty

Will the Government call the banks in?

The Tánaiste

We talk to the banks all of the time. This is the first Government that has had a serious engagement with the banks about how they deal with mortgage arrears. I have said frankly that we are not satisfied with the speed and urgency with which the banks are dealing with the mortgage issue. Deputies need be in no doubt that we will deal with the issue effectively with the banks. That is the approach we are taking and it is being effective. That is the approach that is in the interests of those in mortgage distress.

Deputy Pearse Doherty

What about the interest rate hike? That was the question I asked.

The Tánaiste

The Deputies only interest in this is to score a political hit.

Deputy Brian Stanley

The Tánaiste is scoring an own goal.

The Tánaiste

That is the approach. The Deputy comes in here and has more to say about other political parties and scoring points against them than he does about supporting those in need and mortgage distress. This Government has acted on the issue of mortgages and legislated for it.

Deputy Pearse Doherty

The problem is now twice as bad.

The Tánaiste

This Government will stand by people in mortgage distress.

Deputy Pearse Doherty

Will the Tánaiste call the banks in?

Deputy Richard Boyd Barrett

The Government has claimed repeatedly that it is legally prevented from cutting the obscene pensions of former politicians and top civil servants. As we speak, however, the Government is moving to tear up an agreement made with public sector workers that was supposed to run until the middle of 2014, and is demanding further drastic cuts in pay and conditions for public sector workers who have already been hammered with cuts in their pay and conditions in the last four years.

Even before the Croke Park agreement, public sector workers lost between 15% and 20% of their pay in levies, cuts and the universal social charge. Under the Croke Park agreement, public sector workers have given back €1.5 billion in savings through redeployment, linking increments to performance, changing shift patters, reducing the pay of new entrants by 10% to 20%, cutting pensions to career average earnings, increasing the retirement age to 68, reducing numbers, supposedly by 18,000 initially but now up to 35,000, and by endless other cuts in pay, conditions and allowances. Now, on top of that the Government wants another €1 billion in cuts.

Does the Tánaiste realise the proposed cuts in premiums and allowances will mean a 10% cut in pay for nurses, firefighters, gardaí and other public servants? Does he realise the additional five hours work per week proposed for public servants is an effective pay cut of 12.8%? Does the Tánaiste not understand that tens of thousands of public sector workers are among the 180,000 who cannot pay their mortgages and who are now to be hit by €1,000 extra in interest payments per year, home taxes and water charges?

An Ceann Comhairle

A question please.

Deputy Richard Boyd Barrett

I ask the Tanáiste, as leader of the Labour Party on the hundredth anniversary of the 1913 Lockout, is it not a monstrous betrayal by the Labour Party of the traditions of that party and its founder, James Connolly, to be asking further pay cuts of nurses whose take home pay is approximately €25,000 per year-----

An Ceann Comhairle

I thank Deputy Boyd Barrett.

Deputy Richard Boyd Barrett

-----or newly-qualified teachers whose take home pay is €21,000 per year-----

An Ceann Comhairle

I thank Deputy Boyd Barrett.

Deputy Richard Boyd Barrett

-----and those demands being made by Ministers who are on €140,000 a year? Would James Connolly not be spinning in his grave at what the Tánaiste is trying to do to these workers?

The Tánaiste

Deputy Boyd Barrett described the way in which the previous Government came in here with legislation and unilaterally cut the pay of those who work in the public services. This Government respects the staff who work in the public services-----

Deputy Mattie McGrath

It is a funny way to show it.

The Tánaiste

-----the gardaí, the nurses, those who work in the hospitals, those who work in the schools-----

Deputy Mattie McGrath

Yellow-pack nurses.

An Ceann Comhairle

Sorry, will the Deputy desist?

The Tánaiste

-----and those who go out and work on the roads, and clear the drains.

Deputy Dessie Ellis

Two-tier nurses.

The Tánaiste

These are the staff who we respect. That is why-----

Deputy Willie O'Dea

They do not respect the Tánaiste.

The Tánaiste

That is why the approach that this Government has taken is to sit down with their representatives-----

Deputy Mattie McGrath

And then threaten with legislation.

The Tánaiste

-----to negotiate the requirement to reduce the pay bill by €1 billion. That is the requirement.

Deputy Joan Collins

When those days are over, they legislate.

The Tánaiste

That reduction is something that will be negotiated with the representatives of the staff who work in the public services. When that process of negotiation is completed, their representatives - their unions - will put the outcome of the discussions to a ballot of their members, who will then decide democratically whether they want to accept it or not.

That is the right approach to take. It is one that respects the staff who work in the public services. It is the most sensible way of dealing with it. It is dealing with it by way of negotiation and discussion. The place for those negotiations and discussion to take place is at the negotiating table, not by megaphone. The place for it is not in here in this Chamber, but around the table with the representatives of those who work in the public services. Those discussions are underway and out of respect for those who work in the public services, everybody in this House-----

Deputy Mattie McGrath

The Government has broken them down.

The Tánaiste

-----should allow that process of negotiations to continue and to conclude and then let the outcome be put to the members by way of ballot.

Deputy Joe Higgins

The Government has stated it will cut unilaterally if they do not agree. That is democracy.

An Ceann Comhairle

Deputy Boyd Barrett has one minute.

Deputy Richard Boyd Barrett

How can the Tánaiste seriously talk of respect when Ministers who are earning €140,000 a year, several multiples of what teachers, nurses or firefighters are earning, are asking those workers-----

Deputy Emmet Stagg

Deputy Boyd Barrett is earning €130,000.

Deputy Richard Boyd Barrett

-----to take even further cuts in pay and conditions?

Deputy Emmet Stagg

Deputy Boyd Barrett himself is on €130,000.

Deputy Bernard J. Durkan

He is on €140,000.

A Deputy

The leaders' allowance.

Deputy Richard Boyd Barrett

I refer to workers, who can barely make their mortgage payments, who can barely pay their bills. How are they supposed to-----

Deputy Emmet Stagg

Some €40,000 of it tax free.

Deputy Finian McGrath

They still do not get it.

Deputy Richard Boyd Barrett

How are those, who are already in mortgage distress and in arrears, supposed to pay their mortgages? How are they supposed to pay the home tax the Government now wants to impose on them?

An Ceann Comhairle

A question, please.

Deputy Richard Boyd Barrett

Does the Ceann Comhairle not understand the subjunctive? I asked the Tánaiste how are they supposed to pay their mortgages and their bills, or the home taxes.

(Interruptions).

An Ceann Comhairle

Deputy Boyd Barrett is now over time. Would he please resume his seat?

Deputy Richard Boyd Barrett

What makes the Tánaiste think-----

An Ceann Comhairle

Deputy Boyd Barrett is now over time. The Tánaiste to reply.

Deputy Richard Boyd Barrett

-----the Government can justify another-----

An Ceann Comhairle

I thank Deputy Boyd Barrett. Would he resume his seat? He is over time. The Tánaiste to reply.

Deputy Richard Boyd Barrett

After you cutting across me, a Cheann Comhairle?

An Ceann Comhairle

Excuse me, it is my duty to remind Deputy Boyd Barrett that this is Leaders' Questions, not statements.

Deputy Richard Boyd Barrett

It was a question.

A Deputy

It was rhetorical rhetoric.

Deputy Richard Boyd Barrett

Excuse me-----

An Ceann Comhairle

Resume your seat.

Deputy Bernard J. Durkan

It was bad rhetoric.

An Ceann Comhairle

Resume your seat.

Deputy Richard Boyd Barrett

On a point of order, it was a question.

An Ceann Comhairle

Resume your seat, I said.

Deputy Richard Boyd Barrett

A Cheann Comhairle-----

An Ceann Comhairle

Resume your seat, I said.

Deputy Richard Boyd Barrett

It was a question.

An Ceann Comhairle

Resume your seat.

Deputy John Halligan

They will not let us speak.

An Ceann Comhairle

Resume your seat.

Deputy Richard Boyd Barrett

The Ceann Comhairle stated it was not a question; it was.

An Ceann Comhairle

Resume your seat, resume your seat.

Deputy John Halligan

Deputy Boyd Barrett is trying. The Ceann Comhairle is shouting at him.

Deputy Richard Boyd Barrett

I asked the Tánaiste-----

An Ceann Comhairle

Resume your seat, will you please?

Deputy Bernard J. Durkan

Deputy Boyd Barrett wants to go the scenic route.

An Ceann Comhairle

Would Deputy Boyd Barrett please resume his seat?

Deputy Richard Boyd Barrett

Could the Tánaiste answer the question?

Deputy Paul Kehoe

Deputy Boyd Barrett would sit down in St. Michael's if he was told.

Deputy Bernard J. Durkan

Take it easy now.

The Tánaiste

All over this country, individuals who work in the public services, whether teachers in schools or staff who work in the hospitals, local authorities or any area of the public services, voluntarily join a trade union-----

Deputy Mattie McGrath

Support the Labour Party.

The Tánaiste

-----and they elect their trade union leaders. Those trade unions sit down with Government to negotiate pay agreements, conditions of employment, how the interface between management and employee operates in practice. That is what this Government believes in.

We believe in sitting down and negotiating with the representatives of those who work in our-----

Deputy Richard Boyd Barrett

Pay cuts.

The Tánaiste

The only matter of which we can be sure is that those discussions are underway. There is no point in anybody here in this House trying to second guess what is going on in the negotiations or trying to predict the outcome.

Deputy Joe Higgins

The Government is threatening unilateral pay cuts.

The Tánaiste

The only matter of which we can be sure about the outcome of those negotiations is whenever they are concluded Deputy Boyd Barrett will accuse, as he always does, the representatives of the employees of selling them out.

An Ceann Comhairle

That completes Leaders' Questions for today.