Dáil Éireann debate -
Tuesday, 14 May 2013

Vol. 803 No. 1

Topical Issue Debate

Mortgage Arrears Proposals

Deputy Robert Dowds

Like most Members of this House, I am extremely put out at the snail's pace of movement on the part of the banks in dealing with the mortgage arrears crisis. More than 23,500 home owners are more than two years in arrears with their mortgages, which amounts to approximately 100,000 people when we include their families. This crisis has an appalling impact on families, leading to marital strife, stress, anxiety and mental health issues. It is appalling that the banks are so unwilling to address this issue adequately. Families need certainty about their situations, something the banks are failing abjectly to provide.

AIB is owned by the State. It claims to have set up 1,400 split mortgages to ease the burden on the families concerned. I have been reliably informed by a specialist in the area that all AIB has done is to identify 1,400 mortgages that would be eligible for a split mortgage. If my information is correct, AIB is misleading at best or downright deceitful at worst and I want to challenge the CEO of AIB to provide the proof that what he has said is true and that AIB has 1,400 split mortgage procedures processed and completed.

We need long-term forbearance measures that will ease the burden on hard-pressed families. There are two options for long-term forbearance in which the banks are not engaging. It is my understanding that they are not engaging in mortgage-to-rent arrangements or debt-for-equity arrangements, the effect of which lack of engagement is putting these families in great distress.

As I understand it, the banks do not want to accept ownership of debtors' houses while residents remain as tenants. The banks must get over this hang-up and enter into proper arrangements.

As the Minister of State, Deputy Jan O'Sullivan, will be aware, the public is appalled by the reckless way in which the banks dragged this country over a financial cliff. I ask her to insist that the CEOs of all the banks, particularly the State-owned banks, come in on a monthly basis to demonstrate how they are tackling the mortgage arrears crisis.

Deputy Seán Kenny

I thank the Ceann Comhairle for allowing me raise this matter as a Topical Issue and I thank the Minister of State for attending the House today.

I am sure every Member of this House has been contacted by constituents who are in a distressed state due to mortgage arrears. It is a widely held view that the odds are stacked in favour of the banks and mortgage lenders and that there is a need for further protection for the mortgage consumer. I understand that more than 23,000 households are more than two years in arrears with their mortgages. I believe nobody should be asked to leave his or her home and that families should have the option of remaining in the home as tenants as a last resort. All solutions should be based on the borrower's net disposable income.

The Irish Brokers' Association and the Independent Mortgage Advisers' Federation responded last month to the consultation paper on the code of conduct on mortgage arrears and suggested a number of alternatives. They suggested that borrowers be given 60 days' notice rather than 30 days' notice, in the context of the Personal Insolvency Act, before a lender commences legal action. I also support the suggestion that borrowers should be able to contact a team of identifiable staff with dedicated phone lines instead of having to ring free or CallSave telephone numbers and wait in a long queue to get through, which further compounds their difficulties.

It has been pointed out that, unlike in the United Kingdom, VAT will be charged on personal insolvency practitioners' fees, which are ultimately added onto the mortgage. I urge that this be changed.

The Irish Brokers' Association and the Independent Mortgage Advisers' Federation have expressed concern about the appeals process and suggested that the Central Bank should investigate the rulings to date of the mortgage appeals boards. We need to know in what percentage of appeal cases for each bank the original decision of the bank was reversed in full, partially reversed and upheld.

Minister of State at the Department of the Environment, Community and Local Government (Deputy Jan O'Sullivan)

I thank Deputies Robert Dowds and Seán Kenny for raising this issue. As they will be aware, the Minister for Finance, Deputy Noonan, is in Brussels. I am taking this on his behalf.

I can assure the Deputies that the Government is most aware of the significant difficulties some homeowners are facing in meeting their mortgage obligations and it remains committed to intervening to advance measures to assist those mortgage holders who are experiencing real and genuine difficulty. Incidentally, I attended the Cabinet sub-committee meeting on this issue yesterday.

One of the key measures is the Central Bank's code of conduct on mortgage arrears, which applies to mortgage lending activities with borrowers in respect of their principal private residence in the State. Compliance with the code is mandatory for all mortgage lenders regulated by the Central Bank. The code provides a number of protections to borrowers. These include the establishment of a formal mortgage arrears resolution process, MARP, to deal with mortgage customers who are in arrears or in pre-arrears, the establishment of a dedicated appeals support unit and a separate internal appeals process by lenders to deal with individuals on a case-by-case basis.

The Central Bank has advised that as soon as a borrower goes into arrears, a lender must communicate promptly and clearly with the borrower to establish in the first instance why the repayment schedule, as per the mortgage contract, has not been adhered to. Lenders must proactively encourage borrowers to engage with them about financial difficulties which may prevent them from meeting their mortgage repayments. They must ensure that all communications about arrears and pre-arrears are provided to borrowers in a timely manner. All information relating to a lender's handling of arrears and pre-arrears cases must be presented to the borrower in a clear and consumer-friendly manner. The language used in communications must indicate a willingness to work with the borrower to address the situation and must be in plain English so that it is easily understood. Where possible, legal jargon must be avoided.

The House will be aware that on 13 March the Central Bank announced new measures to address mortgage arrears, including the publication of performance targets for the main mortgage banks for proposing and concluding sustainable solutions for borrowers who are in arrears for more than 90 days, and proposed changes to the code of conduct on mortgage arrears. As the regulator, the Central Bank's intention is now to require banks to proactively address significant mortgage arrears cases, for both private dwelling and buy-to-let mortgages, and, where appropriate, to propose durable and sustainable resolution measures. In determining whether a proposal constitutes a sustainable solution, the lender needs to evaluate both actual and prospective affordability as part of the borrower's affordability test as well as the capital implications for credit institutions in terms of their prudential responsibility to minimise losses.

While the Central Bank is not mandating any particular model of restructuring and while sustainable solutions will be arrived at on a case-by-case basis, there are some fundamental principles that must be respected. First, the affordability assessment of the borrower needs to be based on his or her current and prospective future servicing capacity for all borrowings, and assumed prospective future increases in the debt-servicing ability of the borrower must be credible and conservative. In addition, lenders need to apply a realistic valuation of the borrower's assets, particularly his or her property. This also applies to any assumption of asset price appreciation as well as the estimated costs relating to a potential foreclosure of the property. Finally, lenders need to use an appropriate interest rate when discounting future income flows, which should take account of the lender's cost of funds. The Central Bank will assess compliance with these principles in its supervisory audit of compliance with the targets, including thorough analysis of a sample of modifications. Performance targets have been set for the following institutions: ACC Bank, AIB, Bank of Ireland, KBC Bank Ireland, Permanent TSB and Ulster Bank. These institutions cover the vast majority of the mortgage book in Ireland, accounting for nine out of ten of mortgages held. The Central Bank continues to engage with all mortgage lenders to ensure adequate mortgage arrears resolution strategies are in place.

As I mentioned, the Central Bank is also currently reviewing the code of conduct on mortgage arrears. The intention of this review is to strengthen the existing protections, where necessary, including improving transparency for borrowers, while also ensuring that the resolution of arrears cases is facilitated. Issues considered as part of the review, and on which views were sought in the Central Bank's consultation paper, include new safeguards to ensure borrowers are given sufficient warning before being classified as non-co-operating; changes to the contact levels permitted while ensuring consumers are not subject to harassment; transparency on resolution options so borrowers have a full understanding before making a decision; and consideration of whether there is merit in allowing a lender to move a borrower in arrears off a tracker rate where the lender has offered an alternative arrangement which is more advantageous in the long term.

It is expected-----

Acting Chairman (Deputy Olivia Mitchell)

I might come back to the Minister of State for the rest.

Deputy Jan O'Sullivan

The reply is rather long all right.

Deputy Robert Dowds

I thank the Minister of State for her reply.

I ask that the following questions be put to the banks. First, how many staff are working in the arrears support unit of each bank? Second, how many customers per month will have a restructured payment schedule in 2013 and what progress are the banks making in this regard? Third, according to the Central Bank quarterly report of December 2012, 47% of restructured mortgages were back in arrears after three months, clearly indicating that the restructuring was not what the client needed but what the bank wanted. Are restructuring offers being based on customers' ability to pay or on what the bank forces them to pay? Fourth, why will the banks not offer debt-for-equity swaps or mortgage-to-rent schemes in large numbers as long-term forbearance measures? Finally, how much has the taxpayer provided to the banks for mortgage debt write-off?

Deputy Seán Kenny

I thank the Minister of State for her reply.

I raise briefly the mortgage position of the Priory Hall home owners in my constituency. I ask the Minister of State to intervene with the various lending institutions and seek to arrange for these mortgages to be frozen as at the date of the Priory Hall evacuation on 17 October 2011 until a solution is found. Collectively, the residents in Priory Hall are approximately €1 million further in debt today than they were at the time of the evacuation in October 2011. Their average mortgage is now approximately €20,000 in arrears and the amounts outstanding will continue to rise as the matter drags on indefinitely. Priory Hall home owners are considerably distressed by the fact that lending institutions are seeking payment of the accrued interest and capital as part of the monthly repayments should a solution be found, as the average mortgage will increase by approximately €250 a month, a sum that many residents will not be in a position to pay, thus leading to possible repossession on top of the stress associated with the loss of their homes. There is also considerable distress and concern among the Priory Hall residents about their credit ratings, given the large arrears.

The banks are dealing with them as they would deal with a normal customer in mortgage arrears. However, I believe they represent a special case in that they are prohibited from living in their homes, and their arrears may be recorded with the Irish Credit Bureau, thus affecting their future credit rating. This is distressing for them as they may not be in a position to avail of future credit for family homes, cars, and school and college fees if their credit rating is downgraded. It is unconscionable that this further punishment would be inflicted on the entirely blameless families who have already been punished enough. The State-capitalised banks should set the example for all the other mortgage providers and freeze the mortgages at the balance owed at the time they lost their homes, and it should remain frozen until a solution is found.

Deputy Jan O'Sullivan

The Central Bank's announcement on 13 March stated that the performance targets were about concluding sustainable solutions as well as proposing them. I will pass on the Deputy's questions to the Minister for Finance.

Deputy Robert Dowds

Can I have some replies to them?

Deputy Jan O'Sullivan

I will ask him to reply to the Deputy. The Government is aware of the issue relating to VAT on practitioners, which Deputy Seán Kenny mentioned in his initial contribution. I know the Deputy has been extremely concerned about the residents in Priory Hall. I do not know if we can intervene in the way he has asked, but I will certainly examine it to see if it is possible.

Special Educational Needs Services Provision

Deputy Pearse Doherty

While this is no reflection on the Minister of State present, as has been raised in the Chamber previously, it is wholly inappropriate that the Minister for Education and Skills, or at least a Minister of State at that Department, is not here. I have had this issue down for debate as a Topical Issue matter for the past two weeks. It was only selected today and I am very glad it has been selected. However, the Minister for Education and Skills or someone from his Department should be here to answer the questions on this very serious issue that affects many children with Down's syndrome.

I commend the Down Syndrome Education Equality Advocates, representing parents of children with Down's syndrome, which has firmly placed this issue on the political agenda. If we look over history, I find it disturbing and saddening that parents of children with special needs or disabilities have to argue and fight continually for the rights of their children. I hope that soon it will no longer be necessary and parents and children will have their rights enshrined as a matter of course. I have been in regular contact with parents of children with Down's syndrome and some of them have become experts in the area. One person from the Donegal Down's Syndrome Association, Gina Grant, has given me international research evidence from Australia, the United States, Britain and other places.

The Minister of State may be aware that Down's syndrome is a low-incidence disability that affects 0.2% of the population in the State, but it does not appear on the list of low-incidence disabilities in the Department's 2005 circular. Being on this list would entitle the children with Down's syndrome and a mild learning disability to avail of resource teaching. However, in 2005, the then Minister for Education and Science decided to end that practice, taking away that right for automatic resource hours teaching for these children. The list of 11 makes specific speech and language disability one of those specified low incidence disabilities. However, to avail of resource hours under these criteria, a child's IQ must be average or higher. All children with Down's syndrome have a specific speech and learning disorder but do not qualify because they do not have an average IQ. International research clearly indicates that children with Down's syndrome with a mild learning disability often have speech and language delay over and above what would be expected with mild learning disability, resulting in problems with articulation, comprehension, expression and learning grammar. Thinking and reasoning skills are also affected. Speech and language delays affect access to all areas of the curriculum, not just language tasks.

While it did not happen during the term of this Government, a previous Administration in 2005 did a terrible injustice to children with Down's syndrome when the automatic right to resource teaching was taken from them. Unfortunately, many children with Down's syndrome have gone through the mainstream education system and had that resource denied to them.

I wish to articulate the feelings of those who work with children with Down's syndrome who can put it better than I can. A letter from a resource teacher in a school in Donegal states:

Frequently, a child with Down Syndrome may score just above the cut off point for resource hours and be denied this vital intervention.

Consider if you will, an infant with Downs in our school at the moment, whose overall intellectual ability is at the first percentile. His needs span the entire Downs range, from language, motor, social, academic and care needs. This child shares an S.N.A. with two other highly compromised children in his class, both with special needs. Add to that the daily demands of his other infant classmates and you can begin to imagine the uphill battle he faces daily. His report cited the absolute need for "individual resource tuition", but this was not granted. As a result, we have had to accommodate him in an already oversubscribed support system. This is an injustice, primarily to the child and secondly, to those who attempt to meet his needs on a daily basis.

Acting Chairman (Deputy Olivia Mitchell)

I must stop the Deputy there.

Deputy Pearse Doherty

I will conclude on this. The letter continues:

What will happen, is that he will begin to fall behind in a class and as the gap widens between him and his peers, we will then have to go through the lengthy and time consuming process of reassessing him. A bit like closing the gate when the horse has already bolted!!

Acting Chairman (Deputy Olivia Mitchell)

I really must stop the Deputy there.

Deputy Pearse Doherty

The letter continues: "I urge you; give him and every child with Down Syndrome ... [an] automatic entitlement to Resource hours."

Deputy Jan O'Sullivan

I am pleased to have been given the opportunity by the Deputy to clarify the position on the provision of teaching support for children with Down's syndrome. I am taking this matter on behalf of the Minister for Education and Skills, Deputy Quinn.

Pupils with Down's syndrome who are attending mainstream primary schools may receive additional teaching support in primary schools, either under the terms of the general allocation model of teaching supports if the pupil's educational psychological assessment places the pupil in the mild general learning disability or high-incidence disability category, or through an allocation of individual additional resource teaching hours which are allocated to schools by the National Council for Special Education if the child is assessed as being within the low-incidence category of special need, as defined by my Department's circular Sp Ed 02/05.

Pupils with Down's syndrome who are assessed as being within the category of mild general learning disability but who also have an additional assessment of another low-incidence disability, such as hearing impairment, will also be supported by an additional allocation by the NCSE. Resource teaching provision is therefore made for children with Down's syndrome in the same manner as for other children with assessed syndromes and in accordance with the policy of the Department, which is set out in circular 02/05.

Whether resource teaching hours are allocated to schools under the general allocation model or through an allocation made by the NCSE based on individual low-incidence special needs, it is a matter for schools to then utilise and manage those resources to best provide for the teaching needs of qualifying children. Each school will use its professional judgment to decide how the provision of additional resource teaching time and hours is made to the qualifying pupils in the school to ensure all their individual needs are met.

Additional teaching time may be provided to pupils on an individual basis or in pairs or small groups. It may also be provided in the classroom through team teaching or through withdrawal to a resource teaching room. Guidance for schools on the management of their resource teaching allocations is provided in special education circular 02/05.

The NCSE, which has a formal role under section 20 of the Education for Persons with Special Educational Needs Act 2004 to advise the Minister for Education and Skills on any matter relating to the education of children and others with disabilities, has been asked to provide policy advice on the issue of whether Down's syndrome should be reclassified as a low-incidence disability in all instances, regardless of assessed cognitive ability. This advice will be included in the NCSE's policy advice on how the education system can best support children with special educational needs, which will be published in the near future.

Deputy Pearse Doherty

I thank the Minister of State for the response, although it sheds no more light on the issue. Indeed, I can provide more information than she has provided. For example, the Minister of State said the NCSE would provide the policy advice in the near future.

It will do so directly to the Minister for Education and Skills at 11.30 a.m. on Friday at a public launch event.

The key question is about the rights of children with Down's syndrome. Until 2005 all children with Down's syndrome were allocated additional resource hours or resource hours on a one-to-one basis as a matter of priority. The Minister today could sit in his office and with the stroke of a pen could grant the 24 children per year the resource service as an automatic right allowing the parents to get on with caring for their children and not have to take on the State or the Government to get their children's rights.

Given that this would cost approximately €5,000 per child, when will the Minister act on the recommendations of the National Council for Special Education? Will he ensure that by September all Down's syndrome children classified with a mild learning disability will be allocated resource hours? Why must we wait almost two years for a report from the NCSE to do something when it should be a matter of fact and right? A cross-party group has been established in the House to advocate on behalf of parents of children with Down's syndrome. We are speaking about a small group of children who face many other difficulties in life. This is just one uphill battle they face. It is a small amount of money. This should happen as a matter of course and it should not have been as protracted as it has been. When will the Minister act on the advice of the NCSE? Will he assure parents that by September these resource hours will be in place? Schools must make arrangements in this regard.

Deputy Jan O'Sullivan

As the Deputy stated, the NCSE will report to the Minister very shortly, and I am sure his information must be accurate and it will be on Friday. It will then be in the public arena and I hope parents in particular and Deputies will have an opportunity to comment on the report. It is a statutorily appointed body, the role of which is to provide advice in this area to the Minister. He will have to consider this advice and the views of parents. I am sure he will not delay in responding but I cannot give the Deputy a date when he will reply. I am sure the Minister will take the opportunity to respond as soon as possible.

Ambulance Service Provision

Deputy Caoimhghín Ó Caoláin

I extend my deepest sympathy to the family of Vakaris Martinaitis, who died on Wednesday last after a tragic accident in Midleton. It was an indescribable tragedy for his family. It almost beggars belief that no ambulance was available to take this seriously injured young child to hospital immediately, as was required. Despite the HSE's contradicting this, the reality is that those who called the emergency services were told there was no ambulance and no ambulance arrived. The inadequacy of the provision of emergency services in east Cork is not a new concern. It has been raised repeatedly by the local community, by my colleague Deputy Sandra McLellan, by Midleton town councillor Pat Buckley and by other elected representatives for the area, including Deputy David Stanton with whom we share this Topical Issue matter.

Last March in the Dáil, the Minister for Health, Deputy James Reilly, claimed "improved training and better deployment through more efficient rostering ... will drive the improvement of response times in every region". It is very clear that response times in every region have not improved and that in areas such as east Cork there are major gaps in services. The Minister needs to intervene directly with those responsible for emergency services in east Cork to identify what now needs to be done. Throughout the State he must ensure that ambulance and other emergency services are of the standard required. I call on him to carry out an urgent review of the actual effect on the ground of the reconfiguration of recent years. The news - and often tragic news - coming back to us is that there are huge gaps and it is not confined to east Cork.

Deputy Sandra McLellan

The death of young Vakaris Martinaitis and the trauma and profound sense of loss his family must now endure is almost beyond belief. I extend my deepest sympathy to his family at this time. As a mother it must be absolutely shocking to find your child has fallen out of a window and that he is seriously injured, but I can only imagine the initial shock must then be magnified many times over by the realisation that no ambulance is available to take your child to hospital. Despite the line by the HSE on this, the fact remains that when an ambulance was requested, the caller was informed none was available, and no ambulance arrived to take little Vakaris to hospital.

Unfortunately, the unreliable nature of the emergency services in my constituency of Cork East is now having profound consequences for children and adults who have serious injuries or illness. Only six weeks ago another child, James Casey Butler, needed emergency care and again the circumstances surrounding this particular incident are causing concern in the area. Questions about the failures and inadequacy of the emergency services in east Cork are not new. I have repeatedly raised the issue in the House, as has my colleague Deputy Ó Caoláin. The situation has now reached a crisis point and, simply put, lives are now at risk as a result.

In March of this year the Minister, Deputy Reilly, gave an undertaking that response times would improve as a result of more effective rostering and improved training. However, recent incidents prove this is simply not the case. The people of Midleton are entitled to better. They deserve to know that if they or their children have an accident or become ill an ambulance is available to take them to hospital. Not only in east Cork but throughout the country people are entitled to an emergency service which is both reliable and dependable. I therefore call on the Minister to conduct as a matter of urgency a review of how the restructuring or reconfiguration of the ambulance and emergency services actually works for people and communities. The evidence to date suggests serious problems exist with the service and people are suffering or dying as a result.

Deputy David Stanton

Yesterday I attended the funeral and extended sympathy to the family of the little boy who passed away so tragically. I am pleased the Minister of State is in the Chamber, but I am disappointed neither the Minister for Health nor a Minister of State from the Department is present to debate such an important issue. I have faith in the Minister of State who is present.

Many serious questions must be answered. What happened? I want the preliminary report to be made available as soon as possible. For two hours yesterday I engaged with approximately 70 or 80 very angry, distressed and worried people who were outside my office. The anger and concern about this and other such incidents is palpable. We need answers and we need them quickly. I hope the Minister of State will have some answers for us. What about other first responders whom I understand are normally alerted when such an incident occurs? Why were they not alerted? We have since been told other ambulances were available. Why was one of them not dispatched to the scene? What about the other rapid response vehicle in the area?

The role of SouthDoc needs to be examined. The reconfiguration of the ambulance service needs to be examined and I call on HIQA to be involved in this. Why is it when ambulances go to Cork University Hospital they are often held there for quite an amount of time before they can leave because their stretchers and trolleys are kept in the hospital until the patients are taken off them? How many calls are responded to and what is the average time of response? How many frivolous calls are made to the ambulance service? Very serious questions are raised and it is a life-and-death situation. A family has buried a little two-year-old boy. Nobody knows whether he would have survived if an ambulance had arrived, but one was not available at midday on a bank holiday Monday, which one would imagine to be a very quiet time with not much demand for an ambulance service. We need answers quickly.

Deputy Jan O'Sullivan

I thank the Deputies for raising this issue, to which I am responding on behalf of the Minister for Health. I join with the Deputies in extending my sympathies to the bereaved family and all those involved. The death of a child in any circumstances is a tragedy for all concerned and, in speaking about this matter, I am conscious of their terrible loss. Nothing we can say can make it any easier for them.

To establish an accurate account of this incident, the HSE has asked the national ambulance service to examine the details of what occurred. The ambulance service, in line with the HSE incident review methodology, has commissioned an incident review into the management of a 999 call received at 2 p.m. on 6 May 2013. The review team will provide a preliminary report as a matter of urgency, to be followed by a full report. The ambulance service has also appointed a liaison officer to the family to ensure they are informed of the progress and outcome of the review.

A significant reform programme of pre-hospital care services has been under way in recent years. This is to ensure a clinically driven, nationally co-ordinated system, supported by improved technology.

The programme involves a number of measures, including the performance improvement action plan, development of the intermediate care service, the trial emergency aeromedical service, EAS, and the NAS control centre reconfiguration project.

The NAS is not a static service. It deploys its emergency resources in a dynamic manner and on an area and national, rather than a local, basis. In line with the need for increased efficiencies in State services under the Croke Park agreement, the NAS has been moving from on-call to on-duty rostering for ambulance services. The change to on-duty rostering means that highly trained paramedic crews are on site in their stations or their vehicles to respond to dispatches immediately, rather than in the average time of over 20 minutes that it takes to summon on-call staff and activate the vehicle.

In 2011, following a Labour Court ruling, the NAS began the phased move to on-duty rostering in the southern region. All of Cork now operates under on-duty rostering. In addition, county boundaries no longer apply - the nearest ambulance responds, regardless of its origin. The changes also mean that resources can be deployed dynamically, based on need and demand patterns, rather than simply by station location. This allows for more flexibility and responsiveness and will result in better response times for the people of Cork and Kerry and a better service. In the new model of service, on-duty ambulances and response vehicles will move to the optimal location at any time based on predicted needs assessments. The NAS in east Cork has been enhanced under these changes. Previously, for four nights a week, paramedics responded to calls after 8 p.m. from their homes. From 2012, the emergency resources in east Cork are in use, on duty in the stations or in their vehicles, 24 hours a day, seven days a week. All of these measures will allow the national ambulance service to provide a better, safer, more comprehensive and more efficient emergency ambulance service to the people of Cork as a whole.

Deputy Caoimhghín Ó Caoláin

I know this is not the Minister of State's area, which does make it very difficult. She is delivering a written reply, but nowhere in that reply is there any commitment to carry out the type of review we believe is required following the reconfiguration of the ambulance service. It is important that such a review be undertaken to establish an accurate account of the incident in question. The Minister of State indicated that the HSE had asked the national ambulance service to examine the details of what occurred. Has she any idea how quickly that report will be presented? These are important matters to inform us and the many others who will be interested in this exchange. When will the national ambulance service report, through the HSE, to the Minister and to the House? Will the Minister of State tell her colleague, the Minister for Health, Deputy James Reilly, that it has been strongly urged that a review into the configuration of the ambulance service, including emergency ambulance services across the State, be undertaken? This is to establish the adequacy of the service in terms of current and projected needs.

Deputy Sandra McLellan

People in the east Cork area are very concerned and do not believe they have an enhanced ambulance service. During the bank holiday weekend, a young man in Youghal suffered serious head injuries in an unprovoked attack and lay in the street in a pool of blood. There were reportedly two rapid response vehicles in the area but they did not attend the scene. Local gardaí had to obtain the assistance of the local fire brigade, whose members were on call but not on duty. The strategically positioned ambulance did arrive 53 minutes later.

Sometimes things might look good on paper but they do not work that well in practice. People in the area have no confidence in the ambulance service. Will the Minister give a commitment to undertake a comprehensive national review of the reconfiguration of the ambulance service?

Deputy David Stanton

A child is dead and one can imagine the kind of emotional response that has provoked in the area among families and parents when an ambulance was not available and did not arrive. Now, however, we are told that ambulances were available. Deputy McLellan, I and others worked hard when this reconfiguration was going ahead. We supported the national ambulance service in that work. We asked a lot of hard questions and got answers. At the time I felt it was an improvement, but I now have serious reservations.

The Minister must ensure that we have full information. The public must have full information on what happened as well as full information on the reconfiguration. This is an extraordinarily serious issue. How many calls have the ambulances responded to in the last while, and what is the average response time? We want an independent and ongoing review. The feeling in Midleton now is that no ambulance is available in the town. My understanding of the reconfiguration is that the ambulance is not a static service but moves around. If one tries to explain that to people, however, they neither accept it nor understand it.

Because of the incidents outlined by myself, Deputy Ó Caoláin and Deputy McLellan, the public no longer have any confidence in the ambulance service. When confidence disappears people get worried and angry. I am angry also, so I want answers quickly. How soon will this preliminary report be available? If the Minister of State cannot tell me that now, I would appreciate if she could do so before the evening is out. We also need to know how soon the full report will be available and what kind of information will be in it. I am quite angry about this, so I want a comprehensive response.

Deputy Jan O'Sullivan

I will ensure that the Minister of Health, Deputy Reilly, is made aware of all the Deputies' questions and concerns. I did indicate that the preliminary report would be produced as a matter of urgency and would then be followed by a full report. I note that the Deputies have also requested a review of the whole service and not just this specific incident.

Deputy Sandra McLellan

Yes.

Deputy Jan O'Sullivan

Deputy Stanton asked a number of questions about average response times and the number of calls. I will convey those queries to the Minister. I agree with all the Deputies that it is important that people have confidence in the ambulance service. I have no doubt that I speak for the Minister, Deputy Reilly, when I say that it is a major concern. I will ask that the information sought by the Deputies be supplied by the Minister as soon as possible.

Registered Employment Agreements

Deputy Joan Collins

I thank the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, for coming to the House for this Topical Issue. It appears that the relevant Ministers did not appear for the other issues that were raised, although I do not know whether that reflects something. I have raised this issue because a ruling of the Supreme Court last Thursday struck out the legality of registered employment agreements, or REAs. This happened previously with employment regulation orders, EROs, and joint labour committees, JLCs. All these abbreviations sound very confusing.

The 1946 Industrial Relations Act was specifically enacted to provide that a union or unions representing a majority of workers in a particular industry - and the employers representing a majority in that industry - could, if both agreed, register an agreement on pay and conditions with the Labour Court, which would then have legal status. I am seeking clarity from the Minister following what happened on Thursday. There was much coverage of this issue at the weekend. It must be clearly spelled out that the existing agreements remain in force unless renegotiated, so that workers already in contract are protected under the national contract of employment.

My second question concerns the problem with new agreements. Can employers now bring in immigrant workers on pay that is just above the minimum wage, or based on their own countries' minimum wage levels? An unemployed friend of mine has informed me about a recent advertisement in Poland seeking 900 electricians to do a big contract job in Intel. Workers here are obviously concerned about this.

Those affected are mainly construction workers, electrical contractors and plumbers. Will the Minister act to legalise the REAs through the Dáil, as we had to do before, without watering down the pay and conditions of these workers?

Deputy Barry Cowen

We acknowledge that there are certain sectors affected by the judgment on REAs that benefit from greater flexibility and the freedom to ensure wages reflect the economic reality. This would help boost employment in those sectors and disincentivise black market labour. Many employers that comply with REAs are being undercut by unscrupulous employers paying lower wages off the books. Following the Supreme Court ruling, it is essential we do not allow a free-for-all to emerge. We want confirmation from the Government that there will not be a surge of employers suddenly moving to unilaterally reduce the wages of workers who have been covered by REAs until now or seeking to displace existing staff with new employees on inferior terms. Existing legislative protection which applies to all employees in the State must be rigorously enforced. Guidelines must be set down to ensure engagement between employers and employees on any renegotiated terms and conditions in these sectors.

Industrial peace, as the Minister knows, is very important in attracting foreign direct investment. Despite the upheaval in the construction industry in recent years, it has not been hit by widespread strike action. Swift action by the Government is necessary to prevent a vacuum from emerging. Has the Minister consulted with the Attorney General in response to this judgment? What legislation is he preparing on that and when can we expect it to be in place? It is most important that we do not allow a vacuum to emerge after this judgment, which would create unforeseen difficulties for the sectors affected by REAs.

Minister for Jobs, Enterprise and Innovation (Deputy Richard Bruton)

I thank Deputies Joan Collins and Barry Cowen for raising this important matter and giving me the opportunity to respond. An employment agreement is an agreement governing conditions of employment, made between a trade union and an employer or employer organisation. Such agreements may be presented to the Labour Court for registration. Where the Labour Court is satisfied that the agreement presented satisfies the statutory requirements, it registers the agreement. Under the provisions of Part III of the Industrial Relations Act 1946, prior to its amendment by the Industrial Relations (Amendment) Act of 2012, the effect of this registration was to make the provisions of the agreement legally enforceable even in respect of workers or employers that are not party to the agreement.

From the parties' perspectives, the primary objectives of REAs are to provide them with a sense of certainty around terms and conditions that will apply when the employers are tendering for and working through contracts, and to have in place agreed grievance and industrial peace provisions. The agreements also have the effect of ensuring the industry terms and conditions are recognised and maintained. In addition, the existence of these legally-backed agreements is recognised under European Union law and ensures, in accordance with the posted workers directive, that contractors from outside the jurisdiction who may be using employees from lower-wage economies do not obtain an advantage over local contractors in terms of wage costs.

Six sectoral REAs were registered by the Labour Court, two in the construction sector and one each covering electrical contracting, printing, overhead power line contractors and Dublin drapery, footwear and allied trades. It is estimated that between 70,000 and 80,000 workers were covered by these sectoral agreements. In addition, there were almost 70 employment agreements covering individual enterprises.

As Deputies will be aware, in recent years there has been a continuing series of legal challenges to the JLC and REA systems, including the 2001 John Grace Fried Chicken case, which resulted in the High Court's striking down all employment regulation orders, EROs. A High Court challenge to the validity of the electrical contracting REA as well as the constitutionality of the 1946 Act was successfully defended in 2010 by the State. The decision was appealed to the Supreme Court. On 1 August last, informed by the judgment of the John Grace Fried Chicken case, a new legal framework for REAs and EROs was put in place by way of the Industrial Relations (Amendment) Act of 2012. The Act provided for more comprehensive measures designed to strengthen the constitutional and legal framework for both the JLC and REA sectoral wage-setting mechanisms, such as the specification of the procedures to be followed by the Labour Court and the provision of enhanced oversight and discretion by the Minister and the Oireachtas. The Act also reinstated a robust system of protection of workers in these sectors.

In a judgment delivered on 9 May in McGowan and others v. the Labour Court, Ireland and the Attorney General, the Supreme Court held that Part III of the Industrial Relations Act 1946 was invalid having regard to Article 15.2.1° of the Constitution. That Article provides, in effect, that the exclusive power to make laws is vested in the Oireachtas. The Supreme Court took the view that REAs are instruments having the status of laws made by private individuals. While the Constitution allows for the limited delegation of law-making functions, the provisions of the 1946 Act went beyond what is permissible under the Constitution. The effect of this decision is to invalidate the REA agreements previously registered under Part III of the 1946 Act. In consequence, the Labour Court no longer has jurisdiction to enforce, interpret or otherwise apply these agreements. As a result, all such agreements no longer have any application beyond subscribing parties and are not enforceable in law. This is a significant judgment that requires careful consideration. The Attorney General had been asked to supply advice on the issues arising from this judgment.

Contracts of employment will remain. They are separate from the enforceability of the REAs. While there is no such agreement in place, employers can seek to renegotiate or a new employer can employ on new terms. We have requested advice from the Attorney General and we are awaiting that advice, which will be with us shortly. We will not delay in responding.

Deputy Joan Collins

I thank the Minister for clarifying that. The point I want to stress is that there should be no vacuum that might leave workers vulnerable. I made the point regarding the advertisement in Poland seeking 900 workers for a big contract in Intel and offering only €10 per hour. While we have electricians sitting at home in Ireland who cannot get jobs, that will cause a lot of concern among unemployed workers. The Attorney General is to advise the Minister, but does he think legislation will need to be introduced, and how quickly does he think it can be brought to the Dáil? It is very important that we do that.

Deputy Barry Cowen

I thank the Minister for his response. I reaffirm my fears. I expect the Minister in the short term might confirm what he said regarding contracts of employment being legally binding. Those contracts of employment were based on the conditions and terms of REAs and I hope they are not deemed to be illegal based on the unconstitutionality of REAs, as the Minister rightly said. If he can confirm that with a degree of finality, without having to refer to the Attorney General, that is fine and we will accept it.

Regarding any proposed legislation that will emanate from the findings of the Attorney General in her response to this judgment, will the Minister ask for a degree of flexibility that may not be contained in the existing REAs struck some time ago that will help the sectors concerned while being cognisant of the economic realities regarding wages in those sectors? I do not decry those agreements.

I expect that any future legislation would not be deemed to be unconstitutional by any such court. However, there must be sectoral support and guarantees for those areas in which we had REAs in the first place and have continued to have them in the intervening years.

Deputy Richard Bruton

I can give an assurance to Deputies Cowen and Joan Collins that existing contracts remain and can only be altered by agreement. The fact that the REAs have been struck down, therefore, does not alter the contract an individual has with his or her employer. The same applied when the EROs were struck down - the contracts remained and the record will show there was no wholesale cutting of wages as a result of the period during which they were not underpinned.

Deputy Collins asked what would happen to the REAs. Obviously they will have to be reconstituted under the 2012 Act. The Deputy asked if new legislation was needed. The 2012 Act was drafted after this case was initiated and in that legislation we sought to establish policies and principles that would guide the establishment of such orders and agreements as well as reviews by the Labour Court that would ensure the workers and employers were representative of the broad category for which they claimed to negotiate, and so on. A number of hurdles are involved. These issues come to me, as Minister, and are laid before the Oireachtas. This was all designed to deal with the legal frailties that had been established in the John Grace Fried Chicken case.

In answer to Deputy Cowen's point, the new 2012 Act provides for principles and policies, including looking at the competitiveness of the sector as defined in broad terms in the Act. It provides that in the formation of a new REA the whole environment must be considered and, in that sense, it allows a review of the competitiveness, flexibility and appropriateness to the economic conditions in which the agreement is negotiated. We will wait for wait for advices from the Attorney General in order to have full understanding of the judgment before we proceed but that is the position at present, as I understand it.