The first matter is in the names of Deputies Kevin Humphreys, Robert Dowds, Anne Ferris, Ann Phelan and Arthur Spring. The Deputies have two minutes each to make an initial statement.
Topical Issue Debate
Banking Sector Remuneration
I thank the Ceann Comhairle for selecting this matter for discussion.
Everybody will be aware at this stage that the Bank of Ireland general court will take place in the Burlington Hotel tomorrow. Resolution No. 2 relates to agreement of the report on directors' remuneration as outlined in the annual report 2012. The Minister of State will be aware that the Government has a 15% shareholding in Bank of Ireland. The current CEO at the Bank of Ireland receives a basic salary of €690,000, which is well above the Government cap of over €500,000. He also receives other payments, including pension contributions, bringing his package to more than €800,000 per annum. This CEO is one of the architects of the lending bubble at Bank of Ireland.
The Minister for Finance has indicated his intention to abstain on the aforementioned resolution. I put it to the Minister of State, Deputy Hayes, that abstention is not policy and in this case is not good policy. We need to send a clear message that these outrageous salaries by a bank bailed out by this State and its taxpayers are not acceptable. I urge the Minister to abandon the policy of abstention and vote "No" in this instance.
I am concerned that the Bank of Ireland has lapsed into its old ways. These excessive payments to its executives are over the top. It has also been revealed that the bank is using market research to trick people into giving up their tracker mortgages so as to improve its bottom line and pay super salaries to its top executives. I ask that the Minister exercise the State's shareholding to ensure this does not happen and to raise this issue at the annual general court tomorrow.
Like Deputy Humphreys I believe it is unacceptable that the banks - in this case the Bank of Ireland - despite their having been bailed out by Irish taxpayers continue to refuse to cap executives' pay. I also believe the Government has been too soft on the banks for too long. It is now time for the Minister for Finance to take a stand on behalf of the public when dealing with them.
The banks are hounding mortgage holders, refusing to give credit to small businesses and, in paying these enormous salaries, laughing in the faces of Irish people. It is not that a cap of €500,000 is too low. What the banks are doing is brass neck greed. We all know that the banks played an enormous part in driving this country off the cliff. We owe them nothing. I call on the Minister for Finance to use the Government's 15% shareholding in Bank of Ireland on behalf of the Irish nation.
What bothers me most about the appalling behaviour of so many banks is the undermining effect it has had on people's confidence in our institutions which, in turn, affects our economy. For this reason alone, people would cheer at this issue being tackled.
I join with my colleagues' criticisms of the Bank of Ireland. I look to the Minister to ensure that the voices of the Irish people are heard at tomorrow's Bank of Ireland AGM. I have been contacted by constituents in Bray and elsewhere in Wicklow who are struggling to make mortgage repayments. While I accept and welcome the Government is doing what it can to assist those in arrears, it must also ensure the banks play ball.
I was surprised to learn that the Bank of Ireland conducted market research on tracker mortgages with a view to moving customers off them thereby strengthening its financial position. I would like the Minister to address this important matter at the Bank of Ireland's AGM tomorrow. I am not pleased that customers are being intentionally misled. I am concerned that Bank of Ireland is not alone in attempting this underhanded tactic.
I would also like the Minister to explain what social dividend is to be achieved, in terms of buildings or otherwise, from the support shown by the taxpayer to Bank of Ireland. To take the example of Bank of Ireland on College Green, why has the State not repossessed that building? Why has a request not gone in, at least, from the Minister's representatives that Bank of Ireland vacate those premises? The building it occupies is of significant historical value as the world's first purpose-built two-chamber parliament. I ask the Minister of State to ask the Minister to address these important matters, with urgency, at the AGM tomorrow.
I thank the Acting Chairman for the opportunity to speak on this extremely important issue. Tomorrow morning will see the annual general court of Bank of Ireland take place, with the nation represented by the Minister for Finance, Deputy Michael Noonan. The nation holds 15% of the bank's shares and, as such, is one of the biggest shareholders in the bank. Many items will come up at this AGM, one of the most important of which will be the remuneration of its directors.
It emerged recently that the chief executive of Bank of Ireland, Mr. Richie Boucher, was in receipt of more than €840,000 per annum, including salary and pension contributions, despite the cap on such salaries of €500,000. This would seem to be blatant disregard for the current economic situation in the country and further highlights the high-handed attitude to the Irish people who are struggling to make ends meet. How can it be argued that Mr. Boucher should receive such remuneration when the ordinary men and women on the street cannot get an overdraft, an extension to a loan or a mortgage? The bank's doors are closed to the people who need it most but it seems that is not so for its directors. Our small and medium enterprises are starved of cash and our farmers are resorting to Teagasc and the Minister for Agriculture, Food and the Marine to bail them out with funding for fodder for starving animals, only because the banks will not play ball. I ask the Minister, Deputy Noonan, if he is going to play ball with Bank of Ireland.
The feeling on the street is that the big companies and the banks, as well as the big men and women, are still coining it while the ordinary man and woman are struggling very hard against all that this economic situation is throwing at them. The word on the street is that little or nothing has changed. It is time we put things right and the Minister has an opportunity to do that tomorrow morning. I urge him to strike a blow for the people of Ireland, the people whom we represent, and say "No" to huge salaries for bankers. I urge him to restore to the Irish people some faith that we will do right by them.
I thank the Ceann Comhairle for choosing this topic.
This is the second time I have raised this issue with the Minister, Deputy Noonan. In light of the fact that Mr. Boucher, when appearing before the Joint Committee on Finance, Public Expenditure and Reform on 1 November 2012, showed what was nothing shy of a contemptuous attitude towards this House and our position as public representatives, it is fitting that we have representation at the Bank of Ireland meeting tomorrow.
There is no doubt that the banking licence application under the Central Bank Act 1971 defines responsibility for proper management and control of the credit institutions and the integrity of their systems as resting solely with their board of directors. Mr. Boucher joined Bank of Ireland in 2003 and became a director in 2006. He has been remunerated for his time as an employee, but surely to God we can question whether his appointment as a director benefited the shareholders and the State or was in breach of the Central Bank Act 1971. I am of the opinion that Mr. Boucher should be subjected to a shot across the bow. Every member of the public I have met would like to be at that AGM tomorrow. Many of them have never dabbled in shares and are not shareholders, yet they have felt the full brunt of the inability of the directors to govern the bank in a prudent manner that does not go against the interests of the nation. The people of Ireland would like to see a cap on remuneration and I think Mr. Boucher should be put in his place. He is one of the few remaining directors in the banks, of whom 55 have been removed since 2007. However, his position is something the people of Ireland believe is not worthy of the remuneration currently on offer. It also shows that there is a hangover in the bank from the old banking systems. The people of Ireland want to see a 15% execution. They want to say "No. Enough is enough." Let us get back to what is morally and financially correct.
The primary focus of the issues raised by the Deputies appears to be the voting intentions of the Minister for Finance, as a 15% shareholder on behalf of the State, on resolutions concerning remuneration and election of directors at the impending annual general court of the Bank of Ireland, which is to be held tomorrow, 24 April. In that regard, it might be helpful and useful if I outline the operational relationship that exists with the bank and the general policy on remuneration at the covered institutions before dealing with some of the more specific points that have been raised by colleagues.
The relationship framework provides that the State will not intervene in the day-to-day operations of the banks or their management decisions. These frameworks, which are bank-specific, are published on the website of the Department of Finance, having been agreed with our international partners, the troika. They recognise that the covered institutions remain separate economic units with independent powers of decision and that the boards and management teams retain the responsibility and authority to determine their institutions' strategies and commercial policies and conduct their day-to-day operations.
The current policy on remuneration at the covered institutions dictates that no individual may receive annual aggregate remuneration, excluding pension contributions, exceeding €500,000 unless specifically authorised. This overarching policy is now supplemented by the inescapable conclusion, arising out of the recently published review of remuneration practices and frameworks at the covered institutions conducted by Mercer, that as the remaining institutions still incur losses, their respective cost bases need to be reduced further. This is essential if they are to return to profitability and be in a position to support the economy and repay the State's investment through a return to private ownership.
On behalf of the Government, the Minister for Finance has directed the banks to come up with plans for how they intend to address this issue in a manner that can help meet the State's objectives. I expect the value of those plans to mean a saving of somewhere between 6% and 10% of total remuneration costs, through reductions in payroll and pension benefits, new working arrangements and structures that deliver efficiency gains.
The Minister has not directed the specific measures that each bank should take, respecting their differing paths to profitability and the relationship with the State as explained above. I expect to receive an outline of each bank's strategy by the end of April. However, I expect that any measures proposed will require sacrifices at all employee levels and strong leadership to be exercised by the banks in delivering in a timely manner. The stakes for all are high.
I readily acknowledge the sacrifices and changes made by bank employees to date at all levels and recognise that this has been achieved without major industrial unrest in what is a critically important sector of the economy. However, it can never be forgotten by the management and employees of these banks, both past and present, that without enormous cost to Irish taxpayers these institutions would not have survived. This needs to be borne in mind during future discussions. It was in this context that the Minister decided to abstain on the resolution to consider the report on directors' remuneration. In regard to the other resolutions, I can confirm that the Minister has voted in favour of each of them, one of which relates to the election and re-election of the bank's directors.
In regard to some of the more specific points raised by the Deputies, I can confirm that the bank is in compliance with the existing policy on remuneration. As I mentioned, the current policy and previous iterations of it allowed for exemptions. It was under this parameter that the previous Government authorised a salary for the present CEO of the bank in excess of the then salary cap of €500,000. I am reluctant to discuss the remuneration details of an individual on the floor of the House. However, such details are well known, having been published in annual reports of the bank over the last number of years.
The Deputies will appreciate that this was the position the Minister for Finance faced on this particular issue.
The strong legal advice available to this and previous Governments is that pre-existing contractual commitments have to be honoured. In the case of the new CEO appointments at AIB and Permanent TSB, respectively, the Minister ensured the policy on remuneration was observed and it continues to be held.
I am not asking the Minister of State to interfere in the day-to-day operations of the banks; rather, I am asking him to operate the taxpayer's 15% shareholding. Reducing the cost base by 6% to 10% normally affects ordinary working people in the banking sector. I ask the Minister of State to raise tomorrow the issue of senior executives on outrageous salaries, not ordinary everyday workers. I have grave concerns about some of the directors being re-elected to the board of the bank.
As a shareholder, I ask the Minister to watch how the banks are returning to their old ways. A tracker mortgage of €250,000 over the period could be worth up to €100,000 to the mortgage holder. The findings of market research will be used to inform and develop attractive products to encourage tracker mortgage holders to move off the product and ultimately improve the overall profitability of Bank of Ireland's mortgage book. That will be to the detriment of ordinary tracker mortgage holders. We need to exercise our 15% stakeholding and I ask the Minister of State to do so.
In supporting Deputy Kevin Humphreys I will mention two points, the first of which has been passed to me by Deputy Peter Mathews, for which I thank him. The CEO is on the equivalent of nine Deputies' salaries. I appreciate that we only have 15% of the vote in the bank, but it would send a very important message to the people if we were to use it against such a high salary. We are in the position of having to ask public servants to take another pay cut. It would put us in a stronger moral position when requesting them to do so and obviously we will take a pay cut also.
I am giving my time to Deputy Arthur Spring.
I am doing the same.
Such blithe unawareness of considerations other than commercial interests and short-term commercial games is totally inappropriate for Mr. Boucher. It is incumbent on us as public representatives to exercise our 15% shareholding and send a message to Bank of Ireland and every other licensed institution in the country that the consequences of reckless behaviour or banking methods not commercially viable or prudent will be that the people concerned will be-----
Sacked.
Some people hold the view that they should be sacked. They should not be kept in a position where they are compensated in a way that is far in excess of what anybody else in society is being paid. As a former employee of banking institutions, including Bank of Ireland, I can tell the Minister of State that many of my former colleagues are looking at the CEO of Bank of Ireland and Mr. Kane who lost bonuses in the United Kingdom because of the way he had conducted himself and is now in a position of authority in Bank of Ireland as a director. These former colleagues and people working at the front desks of the banks face losing their jobs and are concerned, as they have massive debts. They look at Mr. Boucher and his ilk and say he is not aware of what is morally and financially correct. I urge the Minister for Finance, Deputy Michael Noonan, to tomorrow morning use the 15% shareholding on behalf of the people. We are public representatives and the public does not want to see bankers walking out with golden sunset cheques in their back pockets.
I fully understand the frustration of my colleagues concerning this issue. The firm intent of the Government is to make sure the new banking model that will be operated in this country will be sustainable and responsive to the needs of the economy. That is clear. The taxpayer has put enormous funds into the banks and it is crucially important that they are the engines of growth in the economy. That requires significant cultural change in the model which virtually collapsed the country.
It would be wrong of anyone to describe this as the Minister's position. It is the Government's position, as is well known and clear, following the publication of the Mercer report. We expect to receive from the covered institutions by the end of April very clear plans for how they will reduce their cost base by somewhere between 6% and 10%. It will be a matter for the banks to bring forward these plans in a circumstance where significant de-leveraging has already occurred within the banking system following the announcement we made in March 2011 on entering government.
It is appropriate that the greater reductions in salary would be at the top rather than the bottom, but we will wait and see what the banks will produce by the end of April. Government policy, endorsed by all members of the Government, is that each of the institutions must produce a plan by the end of April. The key task that we face is to return the banking system to profitability. We are determined to do this to ensure we get our money back as taxpayers.
While I understand the deep frustration of colleagues and know this to be the majority view in the country, we have also negotiated as part of our EU Presidency the CRD IV directive which is vitally important because it places significant limits on the entire bankers' bonus and pay culture that was at the rotten heart of the European banking system for the past decade or so. That is a significant achievement of the Government and our Presidency. The banks will operate under the directive when they return to profitability.
Mortgage Arrears Proposals
I thank the Ceann Comhairle for choosing this important topic.
We all want to see the mortgage arrears problem solved. We can all agree that one of the potential solutions for many borrowers is the split mortgage model. At the end of 2012 there were only 52 such split mortgages, but the evidence of the past couple of months is that the banks are beginning to offer split mortgages to varying degrees. We know, for example, that AIB has offered 1,400 split mortgages to its distressed borrowers in the first quarter of the current year and other banks are apparently doing the same.
The key issue I want to raise is the lack of consistency in the way in which the split mortgage model is being implemented. I refer, in particular, to the manner in which the warehoused element of the mortgage is being treated, especially the interest rate being applied to that portion of the mortgage. AIB does not charge any interest on the warehoused portion. While I do not intend this to be a Bank of Ireland bashing day, Bank of Ireland is charging full interest on the warehoused portion. As I understand it, Permanent TSB is charging 1% on the warehoused portion.
This makes an enormous difference to borrowers. If it is calculated that a distressed borrower with a mortgage of €200,000 can repay half of that mortgage, the other half is warehoused.
As part of the Bank of Ireland solution, that €100,000 will accrue interest over ten years at a rate of 4.5%, which will come to €57,000. The same customer with AIB would have no interest added to the warehoused portion, while in the case of Permanent TSB, at a rate of 1%, the figure would come to €10,500. The difference is dramatic. The point is that split mortgages are sponsored by the Government and the Central Bank, but, again, there is a distinct lack of uniformity and consistency in the manner in which they are being rolled out. If one looks at the other solutions proposed, we all know the terms “interest only”, “arrears capitalisation” and “term extension” mean the same thing across the board. It is not acceptable that, in essence, the split mortgage solution is being denied to many people through the terms and conditions attached to it. Will the Minister give a commitment to, at a minimum, raise this issue with the Central Bank and ask if it is satisfied with the manner in which the split mortgages are being rolled out? Will it ensure there is consistency and uniformity, particularly on the key issue of the interest rate applied to the warehoused portion of the mortgage?
I thank the Deputy for raising this important matter. He will be aware of the Government’s announcement on 13 March which coincided with the Central Bank’s announcement of additional measures to address mortgage arrears, including the publication of performance targets for the main mortgage banks. The objective is that 50% of distressed borrowers will have received potential solutions from the banks by the end of the year.
As the Deputy’s main point was about split mortgages, I will jump to that issue. I have been informed by the Central Bank of Ireland that the majority of lenders have introduced, or are in the process of introducing, a split mortgage arrangement. A split mortgage warehouses a part of what remains unamortised from the initial capital sum in what can be called part B of the loan. Part B is not serviced unless the borrower's financial position improves significantly in the future, in which case the split will be revised in line with the new circumstances with the provision that, to preserve incentives, only a fraction of the new resources will be applied to the loan. Also, the maximum amount that can be warehoused is dependent on each lender's own internal criteria. The split mortgage, like all other forbearance and modification arrangements, is based on affordability and sustainability of the arrangement from both the borrower's and the lender's perspective. All of the products offered by the banks have been prepared in the context of the Central Bank's mortgage arrears resolution strategy.
The banks, including those in which the State has a significant shareholding, are independent commercial entities. Decisions on the handling of their individual mortgages and other loans, including distressed loans, are solely a matter for the board and management of individual institutions in the exercise of their commercial and fiduciary responsibilities. In respect of the covered institutions, under the relationship framework agreements the Minister for Finance has with the covered banks, responsibility for commercial policy and day-to-day operations remains with the boards and management of the banks. The Minister for Finance does not have any involvement in such decisions. He has no role to play in the decisions the covered banks make on the treatment of individual loans.
We do, however, engage on the macro-policy response. The Minister for Finance recently met board representatives from the three covered institutions to receive an update on the progress each institution was making in dealing with their distressed mortgage holders. The Department of Finance is also meeting the main mortgage lenders regularly to assess their progress in addressing the banks' mortgage arrears strategies and meeting the targets set by the Central Bank in offering sustainable, long-term mortgage solutions to borrowers in difficulty. This is part of the regular ongoing engagement the Department has with the institutions as part of the overall policy response.
In summary, the Government is making significant progress to address the problem of mortgage arrears and believes the ingredients of a transparent resolution process for borrowers are now in place.
Deputy Michael McGrath has made a sensible point on how the banks deal with split mortgages. Now that we have targets in respect of these solutions, it is important there be uniformity in the way these products are rolled out. I will raise the matter with the Central Bank to see what engagement it can have with the covered institutions. It is in all our interests, particularly those with distressed mortgages, that we make progress in this area. Issues could arise if one were to create a dichotomy in the products available owing to which bank one was dealing with. It is a fair point.
I am glad the Minister of State did not read the full reply.
I am too.
I thank him for getting to the point quickly. Split mortgages are a really good solution for many people with distressed mortgages. However, if one is going to hammer one group of customers with a full interest rate while others get a good deal through interest-free warehousing, we are not going to achieve the consistency and fairness we want in bringing about a resolution of the mortgage arrears crisis. I have outlined the stark difference if one warehouses a figure of €100,000 for ten years between Bank of Ireland, AIB and Permanent TSB at €57,000, 0% interest and €10,500, respectively.
In the case of the Minister’s script, it was more of the same about not getting involved in the detail. That is what has been wrong up to now. If we leave these issues to the banks’ own devices, they will not solve the problem. It is welcome that some of them are rolling out split mortgages, with AIB claiming it will reach a figure of 1,400 by the end of the first quarter. I hope a good share of customers take up this offer because it is a good one. It is welcome that the Minister will raise this specific issue with the Central Bank and I hope he will come back to me on it.
I will give a commitment to raise the issue with the bank. It is in the banks’ interests to make progress on it. If they are bringing forward solutions that will offer no support to people, we are not going to hit the ambitious and exacting targets we have set in terms of mortgage resolution. As we are so heavily involved in the banks, there is a responsibility on us to make rapid progress on the issue. Already in the first quarter between 3,000 and 4,000 split mortgages have been raised across the institutions, which is good progress. If we see that number rolled out in each quarter of the year, it will make a significant difference to the 100,000 families who are in an appalling situation and whom we are all interested in assisting.
Farm Assist Scheme Eligibility
This matter was also raised by Deputy Áine Collins. Unfortunately, she has been unavoidably detained and relays her apologies for not being able to attend the Chamber.
I thank the Ceann Comhairle for selecting this pertinent and relevant issue, particularly when the matter of the unbelievable weather-related conditions many farmers have faced has been raised today and last week. While I welcome the Minister of State, Deputy Dinny McGinley, it is regrettable that the Minister for Social Protection could not attend to reply to this Topical Issue matter which cuts to the hearts of many rural families.
It is predominantly an issue that affects people in small holdings on bad land across many counties, including my county where farmers with dry stock in small holdings were unable to save hay or silage last year. This year they are at the stage where they cannot get it, and many of them cannot get the supports that were available for farm assist. As the Minister of State is aware, to qualify for farm assist a farmer has to be on the lowest rung of the ladder in terms of income. I raise that because the income levels of many of the people who would qualify for farm assist have been affected dramatically, even in recent weeks. Given the county he is from the Minister will appreciate that input costs, particularly for beef and dairy farmers, have gone through the roof in recent weeks. There is no access to fodder on the island. We know it must be imported. I do not like using the term but this is a critical situation for many people.
I have just left my office where I spoke to a farmer who not only has to contend with the fact that his income is down but he had the veterinarian from the Department out to his farm today. He has lost four animals in recent weeks and the veterinarian has put that down to dietary-related illnesses. Dietary-related illnesses means the cattle are not getting the nutrients they require to keep them alive. In addition to that he has the cost of disposing of the carcases of the cattle that died on the farm. He then must account for that to the Department.
This is not a political issue. It is an issue affecting farming families up and down the country. I implore the Minister for Social Protection and the Minister for Agriculture, Food and the Marine to come together on this issue and try to come up with a scheme of humanitarian assistance. Last week the Minister for Agriculture, Food and Marine, together with his colleague, the Minister of State with responsibility for overseas development aid, committed €21 million over three years for developing countries through the World Food Programme. A humanitarian issue is quickly developing on this island which is threatening animal husbandry and animal welfare, and I do not say that lightly. If farmers cannot feed their cattle, sheep or any of the animals on their farms and they are left with no alternative other than to watch them, as we have seen in some instances up and down the country, starving in sheds, somebody must intervene to protect those animals and to protect the farmers because their psychological health is suffering.
I heard the president of the Irish Farmers Association speak on a radio programme today and he was very responsible in terms of what that organisation is doing. I had a good deal of engagement with the farming organisations over the weekend, as I am sure did other Deputies, but this is a major issue and if it is not addressed in a coherent way in the coming days between the Departments of Social Protection and Agriculture, Food and the Marine, particularly for those on the lowest rung of the income ladder, namely, those on farm assist, we will be facing a major issue. I appeal to the Government to intervene in this issue on humanitarian grounds for farmers who have nothing more to give.
I thank the Deputy for raising this matter as a Topical Issue. It is an appropriate time for it. I apologise for the absence of the Minister for Social Protection who is otherwise engaged and for whom I am deputising.
The farm assist scheme referred to by the Deputy is based on jobseeker's allowance. It was introduced in 1999 to replace smallholder's unemployment assistance for low income farmers, without the requirement to be available for and genuinely seeking work. Farm assist recipients retain all the advantages of the jobseeker's allowance scheme such as retention of secondary benefits and access to activation programmes.
Budget changes over the past two years have brought the more beneficial treatment of farm assist claimants relevant to the treatment of other self-employed persons who would be claiming jobseeker's allowance to an end. This ensures greater consistency in the treatment of all self-employed persons in both farm assist and jobseeker's allowance.
The 2013 budget changes increased the amount of means from self-employment which is assessed against the claim from 85% to 100% and discontinues means testing disregards for child dependants of claimants.
The headline rates for farm assist are being maintained, therefore, farm families with the lowest income will be least affected by these changes. Farm assist remains a flexible payment and any farmer experiencing lower levels of income or cashflow issues due, for example, to bad weather can ask his local welfare office to review the level of means applying to his claim.
The assessment of means for the purpose of qualifying for farm assist is designed to reflect the actual net income and considers gross income from farming, less any expenses necessarily incurred. Income and expenditure figures for the preceding year are generally used as an indicator of the expected position in the following year. However, account is taken of any exceptional circumstances so as to ensure that the assessment accurately reflects the current position.
It may be noted that the farm assist means test continues to offer distinct advantages to farmers. For example, payments received under the agri-environment options scheme or special areas of conservation schemes are assessed separately from other farm income. With regard to this income, the first €2,540 is disregarded and 50% of the balance and related expenses are disregarded, with the balance being assessed as means.
In addition, farm assist participants can participate in the rural social scheme. This scheme provides additional resources to maintain and improve local amenities and facilities in rural communities. Communities benefit from the skills and talents of local farmers and fisherpersons, while participants experience opportunities to improve existing skills or develop new skills, and perform valuable work in the community.
Any proposals to change the existing structure of the scheme would be for Government to consider in a budgetary context.
I thank the Minister of State for his reply. He is right that income and expenditure figures for the preceding year are generally used as an indicator. The problem is that the allocations being made are on the income achieved in 2012 but anybody farming in 2012 was feeding cattle with silage or hay cultivated in 2011 when we had a good summer. My county has had 19 months of almost continuous rain. A farmer told me at the weekend that he should not be entitled to an acreage payment but a litreage payment because there is so much water on the ground.
I am aware the Government has €108 million available for farm assist and that the saving this year was projected to be €3.75 million, which is approximately 3%. That can be achieved, but it must be pushed down the road, so to speak.
I note from the Minister of State's reply that there is flexibility regarding this issue. I ask, through the Minister of State's office, that the Minister for Social Protection and the Minister for Agriculture, Food and the Marine introduce some flexibility in terms of that €108 million within the next 24 to 48 hours to ensure that either farm assist can be advanced to people who actively need it or that something is done with the single farm payment.
This is not an issue for the Department of Agriculture, Food and the Marine or the Department of Social Protection. It is a humanitarian issue. If this country can afford to give €21 million to the World Food Programme over three years for developing countries, it behoves us to try to do something for our own farmers whose animals are starving in their farmyards. That is not an exaggeration. If anybody in the Department wants me to give them the details of farmers who currently cannot feed their farmers, I will gladly do that but I appeal to the Minister of State to use his influence to get the Ministers for Social Protection and Agriculture, Food and the Marine to come up with some scheme, be it an advance on farm assist, an advance on the single farm payment or a restructuring on the saving for farm assist that can be made within the remainder of the calendar year for 2013.
Coming from a rural background and representing a rural community I am in consultation with farmers and I understand and empathise with the points made eloquently by Deputy O'Donovan.
The farm assist remains a flexible payment for any farmer experiencing a lower level of income or cash flow issues due to bad weather. It has been horrific these past couple of weeks and driving from our constituencies to the capital we wonder whether the spring will come at all. Thankfully, the first visible signs of spring are here today. Hopefully, this issue will be addressed by the improvement in the weather. Farmers who find themselves in this situation can approach their local welfare officers to see whether any further assistance can be given. That said, I will convey the points made by the Deputy to the Minister.
Fish Farming
As the Minister will be aware, while many fish farms are welcomed by the communities in which they are situated, there have been concerns expressed about others. The Minister will be particularly aware of the proposal, supported by Bord Iascaigh Mhara, to allow a €60 million project to proceed in Galway Bay. While there is support for the project, particularly from the local processing sector, the project has also led to considerable opposition from some quarters, including those engaged in traditional fishing, who are concerned about the impact which the farmed fish will have on wild stocks. I also understand that Inland Fisheries has expressed its reservations.
Before a decision is made by the Minister I hope that we have a much wider debate on the proposal, one that involves all of the relevant bodies, groups and businesses which will be impacted if the farm goes ahead as currently proposed. The debate should include not only the relevant State authorities, but also the presentation of evidence from people concerned at the possible impact on wild stocks, a concern they say is based on research pertaining to similar fish farms in other countries. It is vital that such evidence is considered, as any depletion or contamination of wild stocks would have a detrimental impact on already existing fishing enterprises and on tourism and domestic and overseas anglers.
I am not opposed to fish farms and there are many instances where they have had a positive impact on local communities and have brought jobs. However, I have concerns over large projects and the impact they might have. I also understand there has been a suggestion that the project could be based onshore rather than in the bay and I wonder if any consideration has been given to that. I hope the Minister takes all of the concerns on board and that there is a fuller debate. What is required is a debate between the industry, the traditional fishermen and the scientists on the experience in other countries, such as Norway, Chile and Scotland, because this is a very contentious issue, particularly in Galway Bay.
I thank the Deputy for raising this matter, one in which, given my constituency, I also have an interest. All applications for marine-based aquaculture licences are considered by the Department of Agriculture, Food and the Marine in accordance with national and EU legislative provisions, which include: Fisheries (Amendment) Act 1997; Foreshore Act 1933; the EU Habitats Directive of 92/43/EEC; the EU Birds Directive 79/409/EEC; and the Consolidated Environmental Impact Assessment Directives 2011/92/EU. The licensing process involves consultation with a wide range of scientific and technical advisers as well as various statutory consultees. The legislation also provides for a period of public consultation. All submissions received on foot of the consultation process are given the fullest consideration by the Department of Agriculture, Food and the Marine.
The EU birds and habitats directives are an important consideration for the licensing process. In 2007, the European Court of Justice issued a negative judgment against Ireland for breaches of the EU birds and habitats directives. At that point, the systems and data were not in place to enable consents for aquaculture in compliance with the relevant directives. As most aquaculture activity takes place in areas designated as special areas of conservation and-or special protection areas for birds, known as Natura 2000 sites, it is necessary to gather a substantial amount of scientific data in the bays. This data must be obtained in respect of the benthos and the birdlife of the bay under examination.
Once the data collection is complete, habitats maps are produced and conservation objectives are set by the National Parks and Wildlife Service, NPWS, of the Department of Arts, Heritage and the Gaeltacht. It is then necessary to undertake an "appropriate assessment" of the effects of aquaculture activity on these areas, in the context of the conservation objectives, before any new licence can be issued or any existing licence can be renewed. This process represents a major investment by the State to ensure the continued sustainable development of the aquaculture industry while maintaining the maximum protection for our coastal environment in accordance with the requirements of national and European legislation. An additional factor is that all fin fish aquaculture licence applications must be accompanied by an environmental impact statement. Because of issues associated with Natura 2000 areas, a substantial backlog has built up in the processing of applications for new licences and renewal of existing licences.
A crucial factor in addressing the backlog is the availability of appropriate assessments for sites located in Natura 2000 areas. The first stages of the work plan agreed with the EU Commission has focused, by necessity, on the collection of necessary benthic, ornithological and other data relevant to Natura sites. This data is required for the development of conservation objectives in those sites. This setting of conservation objectives allows the sites to be appropriately assessed. In summary, the availability of appropriate assessments will enable the progressive roll out of licensing determinations in line with Natura obligations providing all other licensing requirements have been met.
The steps in the process are as follows: -----
May I interrupt? The time is up and the Minister seems to have a lot more to say. Will he summarise what remains?
The response provided outlines the steps that must be taken and points out there is an independent body to adjudicate on issues. The Minister also adjudicates on licences and if an applicant is unhappy with a decision, the Aquaculture Licences Appeals Board, an independent body established under the provision of the Fisheries (Amendment ) Act 1997, is there to consider appeals on ministerial decisions in respect of aquaculture licence applications.
I thank the Minister of State for his response. I represent the concerns of traditional fishermen, islanders in the Aran islands, inshore fishermen and anglers and other concerned groups in regard to the proposed project off the Aran Islands. This project is raising huge concern and there is a serious worry that it could contaminate the wild salmon. Like me, the Minister of State is well aware of the tremendous industry the wild salmon used to be for our coastal communities. That industry is in recovery, but there is concern that if there is any contamination, through sea lice or whatever, that would cause a further depletion of our wild salmon stocks and would be detrimental.
I fully appreciate there is huge emphasis on trying to create jobs, but it should not be jobs at any cost. If this project is to go ahead, it should be done following a full debate between the people involved, the traditional fishermen, the companies involved, like Bord Iascaigh Mhara which is behind the project, and all concerned stakeholders, including Inland Fisheries Ireland, anglers and scientists. We need an open, full debate so that people can be satisfied that if we are taking this step, we are doing so with the right information.
There are many checks and balances when an application is being processed. Each application goes through statutory and public consultation, in accordance with the provision of the national legislation. In the case of proposed possible recommendations, specific draft licence conditions are prepared.
Each special condition is individually discussed with the National Parks and Wildlife Service and approved by the service. Typically, between ten and 20 special conditions feature in an individual licence. A recommendation is made to the Minister in respect of each application. The decision by the Minister in respect of a licence application much be published. All licences that are granted are subject to appeal to the Aquaculture Licences Appeals Board, which is an independent body. It was established under the provisions of the Fisheries (Amendment) Act 1997 for the purpose of considering appeals against ministerial decisions on aquaculture licence applications. There is no doubt that it is a fairly drawn-out process. There are checks and balances to ensure all interests are adequately considered. I thank Deputy Ferris for raising this matter. The entire reply will be made available to him.