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Dáil Éireann debate -
Tuesday, 8 Oct 2013

Vol. 816 No. 1

Ceisteanna - Questions (Resumed)

If we could have some order, we will proceed to Question No. 1.

Cabinet Committee Meetings

Gerry Adams

Question:

1. Deputy Gerry Adams asked the Taoiseach the number of occasions on which the Cabinet sub-committee on mortgage arrears has met since the beginning for the summer recess. [39064/13]

Micheál Martin

Question:

6. Deputy Micheál Martin asked the Taoiseach when the Cabinet sub-committee on the mortgage crisis last met. [39088/13]

Joe Higgins

Question:

16. Deputy Joe Higgins asked the Taoiseach the number of meetings the Cabinet sub-committee on mortgage arrears held since the summer recess. [40866/13]

Richard Boyd Barrett

Question:

19. Deputy Richard Boyd Barrett asked the Taoiseach when the Cabinet sub-committee on mortgage arrears last met. [42212/13]

I propose to take Questions Nos. 1, 6, 16 and 19 together.

Will the Taoiseach say that again, please?

Nos. 1, 6, 16 and 19 together. Big Dáil change here.

These are on mortgages. The Taoiseach is listening.

Of course I am. I made an offer to the Deputy last week to help him even further, but we will talk about that again.

The Cabinet committee on mortgage arrears and credit availability has met twice since the Dáil summer recess, most recently on 30 September. That answers the question.

The Taoiseach did not say much. Did anyone else hear what he said?

Very succinct answers today.

The Taoiseach has finished.

I was ready to rise on a point of order because I had been advised that the Taoiseach was going to take Questions Nos. 1 to 22, inclusive, together. Since they cover a range of issues, I was going to tell the Taoiseach that he needed to answer them in a more definitive way. When he stated that he would take Questions Nos. 1, 6, 16 and 19 together, I was pleased for him until I got his answer.

The sub-committee on mortgage arrears, no matter how often it has met, is not grasping the fact that the personal insolvency service is deeply flawed and not fit for purpose and that many families in mortgage distress will be barred from using it. I am delighted that the Taoiseach quoted Sinn Féin's alternative budget two or three times. He may have noted that we provided for 100 extra publicly funded personal insolvency practitioners. They are necessary, as there are 185,201 residential mortgages in distress. Under the Taoiseach's governance, the number of families in distress has doubled.

I raised a matter with the Taoiseach last week. Grant Thornton Debt Solutions, one of the largest personal insolvency practitioners, carried out a study of 1,057 cases of mortgage distress. It concluded that only one in seven, some 14%, would avail of a personal insolvency arrangement and that 43% of families earned less than the level of reasonable living expenses set by the Insolvency Service of Ireland. Those families have nothing left with which to pay down their mortgage debts. Does the Taoiseach accept that, according to the analysis done by Grant Thornton Debt Solutions, this number of people have nothing left? If they have nothing left, how can they be expected to come out of mortgage distress?

The main problem is that the banks have been given a veto. I suggest that the Government should consider having an independent mortgage restructuring panel, one that has teeth, is appointed by the Minister and has the statutory power to agree and impose agreements on lending institutions where it believes that such agreements would enable mortgage holders to remain in their family homes. I commend this idea to the Taoiseach and ask him to respond positively.

Deputy Adams is aware that the Government has put in place a whole range of things for mortgages that are in distress. I gave some figures on this last week, I think. At the end of June this year, there were 770,610 private residential mortgage accounts. Out of those, 97,874 were in arrears of more than 90 days.

What is the position here? Clearly, the first point of engagement is between the borrower and the lender. They will not be sorted out unless there is that kind of engagement across a range of options. That is something that should be taken up by everybody.

The Deputy talked about having a sort of independent mortgage restructuring operation. Eighty thousand mortgages have been restructured already. That is an agreement between the lender and the borrower. Eighty thousand of them have been restructured. That restructuring is to be on a sustainable basis. That means that, for the borrowers, they are able to repay the agreed figure and still have, obviously, an income to spend and-----

We do not know that.

-----for the lenders, they have signed off on that as being a sustainable solution to a problem that had arisen. I understand the Central Bank has to audit all of these figures that have been submitted by the banks to the Central Bank, which is their licensor, if the Deputy knows what I mean. The indications are that 76%, almost 77%, of those restructured mortgages are actually paying their way and are sustainable, as agreed between the lender and the borrower. If one took any of those and had a different system of deciding what it should be, I am not sure that it would be all that helpful, to be straight with the Deputy.

The personal insolvency agency obviously opened its doors for business a number of weeks ago.

The banks have a veto.

Yes, but while the banks can disagree with the proposition, the fact of the matter is that we have already put into law the stay on any process of repossession until all options are considered. While the banks can disagree with an option that is set out by a practitioner, clearly the last option open is one of bankruptcy, where the banks have no option at all and obviously would lose very heavily. It is in banks' and lenders' interests to be able to sit down with the borrowers, discuss their circumstances, discuss the situation in which they find themselves and work out a solution.

Eighty thousand of these have been restructured. Having spoken recently to the Governor of the Central Bank, the Central Bank must verify and audit the figures that have been submitted by the banks, as I said last week to Deputy Martin. Nobody can be happy with a situation where this is not happening as quickly as one would like. I trust that the pressure that is on here now will see that this happens.

The banks have 4,500 split mortgages, either in trial operations or on offer to customers. One of the banks the other day made its decision in respect of a reduction in an interest rate on a portion of a mortgage that might be warehoused. There is a trial going on at the moment. The split mortgages will be listed in the Central Bank's statistics when they have been operated successfully for a six month period.

When the Deputy speaks of the bank veto - we dealt with this before - the reality is that it is in the best interests of the debtors and the creditors to seek to conclude an acceptable and workable bilateral arrangement under the personal insolvency legislation, be it by debt settlement arrangement or personal insolvency arrangement.

Why is the Taoiseach against independent adjudication?

At the end of the day, the person who borrowed borrowed from a lender. A personal insolvency practitioner, if it is necessary to go through the insolvency agency, will sit down with the people and work through all of the options. This is independent.

The banks may disagree with that, but the end of that line is bankruptcy where they get nothing. It is therefore in the interests of lenders to work out an acceptable and agreed sustainable solution. By that I do not just mean putting it on interest free for another few years. That is not sustainable in the longer term. It is necessary to give the insolvency agency a period to see how effective it is. It has worked well in other jurisdictions and there is no reason why it should not work well here. The evidence is that, of the 80,000 that have been restructured, almost 7% clearly seem to be on a path of sustainability, which is in the interests of the borrowers who are living in the houses. Obviously it is an agreed position with the lenders, be they mainline banks or whatever.

The Governor of the Central Bank, Professor Patrick Honohan, has confirmed that 74,000 of the 98,000 mortgage holders in arrears of more than 90 days at the end of June were not yet in an arrangement. Targets have been missed all over the place. More worrying, of the 35,000 proposed resolutions offered by banks to the end of June, 62% referred to surrender or repossession of property. The Taoiseach has set his face against any independent mortgage arrears resolution office or household debt resolution office, which we proposed over two years ago. All the evidence points to the error of the Taoiseach's ways. He seems to think that lenders will ultimately do what is in the best interests of the person in arrears, but I do not share the Taoiseach's view. The anecdotal evidence is that the banks, and lenders generally, are moving more towards repossession and surrender of property as the first resort rather than the last. The Cabinet sub-committee on mortgage arrears has got it fundamentally wrong in terms of its overall strategy. It has not met often enough. Does the sub-committee think that is satisfactory? Is the Taoiseach happy with that high level of reference to repossessions and surrender of property as the first resort?

No, I am not. The evidence given before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, which the Governor attended himself for a considerable period, set out his view. Clearly, however, the lenders - which are the banks - have, in 80,000 cases, reached agreement on a sustainable solution. I do not accept that letters stating it is the intention to proceed down the road of repossession is a solution to a problem.

That is what has happened in 35,000 cases, however.

Yes but clearly, as happened in other jurisdictions where these letters arrived, and where there was no engagement, it brought a measure of engagement hopefully leading to a conclusion that is in everybody's interest. We deliberately inserted in the Act a section whereby a judge has a right to put a stay on all processes of repossession until every option and circumstance involved in a person's mortgage is explored and discussed. In that way, every possibility of having a sustainable solution to the problem - and, as the Deputy is aware, all the circumstances are different - can be put on the table.

The Governor of the Central Bank, Professor Honohan, is completely independent. He has been strong in saying he wants the banks to do more and we all share that view. The Cabinet sub-committee on mortgage arrears was established to engage, through the Department of Finance, with the banks and the Central Bank so that everybody understands all the options that are on the table and how they can be processed. It would be great if another 20,000 or 25,000 arrangements were made in addition to the 80,000 already agreed.

It is important to wait to see the analysis and audit by the Central Bank of the figures submitted by the banks. How serious are they, are they real and is there any attempt to put in figures and numbers just for the sake of it? These matters concern people in their homes who are anxious to work out a sensible solution. Ultimately, it has to be done either directly with the lender or through the personal insolvency practitioner who has authorisation, through the agency, to work through all the circumstances of any individual mortgage in distress.

There is a proposal today for the suffering former residents of Priory Hall, which involves cancellation of their mortgages - as we know, they were on a criminally compromised residential complex, which was a fire trap - State-sponsored remediation of the fire hazard, and new secure homes for a range of people. The residents are considering those proposals and I will not transgress on that matter. They are the type of solutions that some of us suggested two years ago when this scandal came to light. Yet for two years suffering has been imposed on people while the Government dragged its feet.

Can the Taoiseach not learn the lesson of the mortgage arrears crisis? There have already been years of agony for many home-owners who were forced to buy their homes at blackmail prices, in that era of speculators, profiteers and bondholders, as well as governments under their sway. There were years of agony as the crash inevitably happened. They have been left with massive negative equity and unsustainable monthly mortgages. On numerous occasions, I have called for an overall solution, that is, the wiping out of negative equity, calibrating down to the real value of those properties for their owner-occupiers, and calibrating down monthly repayments. That is the solution which would end the suffering. It would make the lives of so many people so much better. In addition, it would release huge new amounts of liquidity funds into the real economy providing jobs and services because people would not be shackled to the banks 24 hours a day, all year round.

Although, admittedly, there will then probably be a new face in the Taoiseach's position, rather than Deputy Kenny's, will we be back here in two, three or five years with the same suffering? Can the Taoiseach not learn the lesson? Will he bring that message to the next meeting of his Cabinet sub-committee on mortgage arrears and move on it?

The Deputy suffers from a lack of confidence about the future. The Priory Hall fire-traps were a legacy of an era that, I hope, is gone forever.

There are perhaps many, as yet, undiscovered.

The Deputy and I have discussed this matter before. These kind of fire-traps should never have been allowed to be built in the first place.

While one cannot and should not paint every developer with the same brush, what happened in the case of Priory Hall was a scandal and a disgrace. A number of weeks ago, we looked at this matter seriously. The Minister for the Environment, Community and Local Government, Deputy Hogan, made some comments yesterday. The residents now have the opportunity to discuss the detail of that and make their decision. I hope that we will not be back here in a few years with the same proposition.

Reports indicate that the property situation in Dublin and the greater Dublin area is beginning to improve. I hear of people queuing to see houses or apartments on offer. I have reports of extensive requirements for public housing in different areas.

That situation is not replicated everywhere in the country but there are some signs of movement. Negative equity is not an issue for people who do not have a job. Those who were working and have lost their jobs find themselves in a position of distress. It is hoped that banks and other lenders will engage constructively in the process of cutting a deal that is sustainable for borrowers and them. The point made by the Deputy has been made here on many other occasions. The committee on mortgage arrears is not oblivious to that. We all want to see a situation whereby solutions are worked out so that people can know with some degree of certainty that they can meet their mortgage repayment requirements while at the same time being able to live their lives. Nobody wants to go back to the situation to which the Deputy quite rightly referred.

The Deputy can take it that the Cabinet sub-committee dealing with this issue will continue to focus on ensuring that the suite of options put in place are followed through quickly, diligently and fairly so that sustainable solutions to particular problems are found. This is, and will continue to be, the remit of the Cabinet sub-committee. It is hoped that when the Governor is in a position to report on the audit of figures submitted by the banks, the targets set out will have been achieved, which targets are rising by each quarter. I genuinely hope that we get to a point as quickly as possible whereby sustainable solutions will have been put in place for the majority of people, with banks continuing to focus on finding sustainable solutions in the remainder of cases.

I do not disagree with the principle of the Deputy's point. The Cabinet sub-committee is focused on getting results and solutions for all concerned.

It is not that we lack optimism about the future when we ask these questions, rather it is that some of us and members of the public are fed up to the back teeth of warning against certain behaviour and activity by developers, and the bankers and Governments who facilitate them, and never being listened to. Regardless of how many times these warnings are issued, be it by political representatives or ordinary people, they are ignored, the Government permits this activity to continue and nobody is ever held accountable. I will give an example. When the Priory Hall issue arose and I heard the name Tom McFeely I knew I had heard it before. I then recalled that approximately ten years ago when a developer was trying to evict an 84 year old woman and three other residents from a block of flats in Charlemont Street so that he could build an apartment block, myself and a few others gathered with the residents and Charlemont Street community and mounted a 24-hour six week long protest to prevent those evictions and calling on Dublin City Council to, rather than permit this developer to evict people so that he could build an apartment block, take control of that site and construct social housing thereon. The developer involved was Tom McFeely. We succeeded and stopped him. Despite all the bullying and threatening, and his having a court order to evict an 84 year old woman from her home, we forced Tom McFeely to abandon the site and the council to take ownership of it. We said at that time that we would in the long run save public money. We should not be facilitating these gangsters. If we had not succeeded the result would have been another Priory Hall. What we should be doing is building affordable social housing so that the new market is not dominated by developers like Tom McFeely but we are never listened to. Even now, we are not being listened to.

The Government's policy on social housing is to outsource it to the same people, although not Tom McFeely this time but other people like him. The Government has abandoned the direct provision of social housing and has handed over, as the Taoiseach calls it, the most important market of a roof over the heads of human beings, which is the precondition for civilised existence, to the bankers and developers who got us into the mess we are in. The Government has also given the bankers the power to veto sustainable mortgage solutions. After all of the revelations of the past few weeks and given the attitude of the banks, did the Cabinet sub-committee not realise when it met on 30 September that a radical change of policy is necessary?

There has been much talk about sustainable solutions. We have discovered that the banks are trying to bully as much money as possible out of distressed mortgage holders. That is their strategy and we all know it. The Taoiseach knows it and I know it. We know from the deliberations of the Joint Committee on Finance Public Expenditure and Reform that their strategy is to squeeze every penny out of people. Even those who are forced to give up their homes by handing back their keys are being chased for outstanding money. There is no willingness on the part of the banks to accept that they must take some hit. There is also no willingness on the part of Government to enforce that hit on them. When will we see change? Are we going to continue to allow the McFeelys and bankers of this world dictate the pace of everything at the expense of ordinary residents? That is what makes people depressed. People are depressed that this is allowed to continue.

I recently discovered there may be a Priory Hall type issue with properties at the Pavilion site in Dún Laoghaire. I have heard that apartment owners living on the ground floor of the Pavilion apartment development, which some of us opposed and were denounced for doing so, have had to move out because damp rising from below has made them uninhabitable. There was no regulation. Despite public opposition, this development was backed by Fine Gael and Fianna Fáil councillors. How many more tragedies like Priory Hall must there be before we finally wake up and stop these gangsters, opportunists and greed driven people controlling the provision of housing, the roof over the heads of families? That is what we want to know?

I am not sure of the Deputy's question.

The Taoiseach knows it well.

This is one of a number of scandals across Irish society that was left to this Government to deal with.

The Taoiseach should not be playing politics with something that is fundamentally wrong in terms of how a local authority regulated. There were regulations in place.

Please allow the Taoiseach to continue.

The Taoiseach plays politics too often.

I am responding to questions from Deputy Boyd Barrett and would appreciate it if there were no interruptions. The situation is that Priory Hall as constructed is a fire trap. When I purchased my home I had to obtain a fire certificate stating that the property was in compliance with the planning conditions. All of the residents of Priory Hall were asked to sign documents when seeking to draw down their mortgages. It has always been the case that these conditions had to be met prior to signing for and draw down of a mortgage.

The local authorities constructed thousands of houses down through the years. There are a number of cases in respect of which they too did not cover themselves in glory.

They did better that Tom McFeely.

Obviously, those cases involved smaller houses. There is no reason the construction industry, in the provision of public and private housing, should not have integrity and enjoy trust. One cannot paint everybody in the National Asset Management Agency and all developers and contractors with the same brush. Clearly, the McFeely episode, which was a disaster for the people of Priory Hall, is iconic. There are pieces to the jigsaw and what we are doing and must do is put in place a process whereby a person who signs for a mortgage to buy a property can have trust in a system that measures up and is compliant.

Deputy Boyd Barrett referred to a development in Dún Laoghaire and there may be other cases. The Priory Hall case was appalling. A resolution has been placed before the residents who will make their views known this week.

During the years when the so-called Celtic tiger was running around the country, I came across cases of planning authorities refusing requests to build a single house in a particular location because it would obstruct the view, yet in certain circumstances the same local authority said it was fine to build 100 houses. The Deputy can see such developments himself.

There is pressure from families with three or four children who are living in one or two bedroom apartments and need housing.

We built box apartments.

Land is available and contractors with a good reputation who have not been involved in any scandalous carry-on have applied to build some of them. The Minister of State, Deputy Jan O'Sullivan, is working with the relevant organisations to see what can be done to provide good, proper housing for those who need it. There is a clear demand for several thousand homes.

Deputy Boyd Barrett and I know that what we need is a process that is clear, measures up and is effective. I recall cases where a good clerk of works would tell developer X to knock a building because it was not in compliance with planning conditions.

We no longer have clerks of works.

What we need is an inquiry into the local authorities. That is where the real story lies.

We have to put in place a system where that type of approach applies and we do not have cowboys playing hard and fast with people's lives by placing them in fire traps.

In years gone by, very strict conditions had to be met when people were buying houses and mortgages would not be given unless these conditions were complied with and could be stood over. I understand fire certificates, which are an independent and important issue, were simply issued, which is not good enough. As I stated to Deputy Martin last week, 25 years ago the name and integrity of the agricultural sector were brought down, yet the sector is now at the highest level of competence and professionalism and accepted worldwide. We need a building and construction sector that has integrity, pride and a good name and can also be trusted. We must not return to the position Deputy Boyd Barrett described.

I hope that when they consider the proposition before them the residents of Priory Hall will find it acceptable. This would remove from the equation another running sore and sorry legacy of a time to which we do not want to return.

I have been struck by the two previous contributions and would like to join them together. I ask the Taoiseach to arrange a plenary session of his Cabinet every 21 days to examine in a comprehensive manner the overall situation that obtains. Two weeks ago, Mr. Sebastian Barnes of the Fiscal Advisory Council, in describing Ireland's sovereign or national debt position as a proportion of national income or gross domestic product, stated we ranked third after Greece and Italy in the debt table. A very important omission was made from that observation. The two thirds of the equation that are missing are household debt and non-financial corporate debt, which is business or small and medium enterprise debt. These are the two elements of the debt problem that weigh most heavily on Ireland. If one takes all three elements of debt in the economy, one finds that Ireland's debt is the highest in the world. This is the problem and the reason the banks are caught in paralysis. Their lack of capital means they are not getting on with the job of writing things down, as Deputy Higgins correctly noted, and they also lack competent board direction and management to articulate the operation of so doing.

The banks have been drawing out the problem in a slow-motion resistance exercise as they seek to preserve the capital they received following two inadequate capital assessment processes. The first of these occurred in March 2010, at around the same time as payments were made to bondholders from money borrowed from the euro system, by the Central Bank in the case of Anglo Irish Bank and by the European Central Bank in the case of the two pillar banks because Allied Irish Banks and Bank of Ireland had acceptable assets or loan security. We must get real about this issue by assembling a robust combat team of negotiators to deal with the euro system and ensure the remaining banks, Allied Irish Banks and Bank of Ireland, can secure creditor buy-in from the euro system for the remaining capital requirements they need to press on with the job. The two pillar banks also need to have competent experienced managers who can negotiate with customers.

Professional insolvency practitioners are a new profession and while some of them have experience, others do not, even if they are technically qualified. To use the analogy of the health of the nation, when a pandemic breaks out doctors cannot fly over cities in helicopters and spray antibiotics or other medicines over the population but will instead engage in case-by-case assessments. This also holds true for loans. The lack of evidence that the banks have engaged in the restructuring or sorting out of loans means they do not meet the requirements for performing this task. In other words, they do not have capital, experienced management and competent direction. Their boards have been weirdly absent-----

The Deputy must ask a question.

I ask the Taoiseach to convene a plenary Cabinet session to discuss these matters and to be advised, in an evidential way, about what is taking place at these levels.

The Governor of the Central Bank, Professor Patrick Honohan, demonstrated that the banks do not have experienced visitation audit or inspection teams. If they had, we would know better what is going on in the banks but we do not have a clue. No one has an honest, evidence based assessment of what is going on because the process is like being in a hall of moving mirrors. It is a tragedy because 100,000 households are in a distressed position and some of them are experiencing disease and death as a result. The creditors in Europe do not have a clue what is going on either, notwithstanding the pats on the head we may receive from Chancellor Merkel. Opinion articles written by the German finance Minister in the Financial Times have been correctly dismissed by evidence based counter-arguments showing that Mr. Schäuble does not have a proper handle on the issue.

Ireland is being pushed around like a tea trolley and Irish people have been burdened with approximately €60 billion of misplaced debts.

The two so-called pillar banks are behaving like zombie banks, and they need capital and management as I have said. The conversion of the promissory note into long-term 40-year bonds was not negotiated but given to us. It was only given to us because the outsiders know that Ireland's economic breathing would have stopped.

I thank the Deputy.

There was no negotiation on that; it had to happen for us even to reach the last drawdowns of the assistance programme. There has been talk about us exiting the programme as if it is a positive step we will take. It is not. The people need to know that means we are just down to the last drawdowns - we are down on empty now on the loans. They have left us on empty and it is not right. The Germans have not got a clue.

I ask the Deputy to ask a question, please.

Does the Taoiseach realise that the Germans did not even know in January 2012 that the €75 billion of private sector loan losses on the Irish people would have equated in a German scale to €1.2 trillion in misplaced bank losses on the German people? The reality is that its banks are very fragile at the moment. For some of them their gearing is 50 times; Lehman Brothers was only 32 times when it went bust. Can we get together a really fit-for-purpose combat team in the nicest sense? I do not mean throwing hand grenades but getting the truth out there - not just boring old lever-arch files but well-articulated positioning of where we are and what we have done.

I thank the Deputy.

We saved Europe and we have got sweet damn all from Europe for it.

I thank the Deputy for his global analysis of the financial situation.

It is only a taster of it.

He is certainly not wrong in saying that experienced management was certainly lacking in the banks. Clearly, the extent of recapitalisation of the banks was an issue and obviously banks were given capital to deal with a range of mortgage options. The German general election is over. I understand negotiations are going on and it may take some time to determine what party or parties will form a government with the CDU. I accept it would be great to have a creditor buy-in from the European situation.

We have not asked for it.

In June 2012, the European Council signed off on the question of the ESM having the potential to recapitalise banks. There has been considerable discussion of that. I would not say the promissory note deal was given to Ireland. The Governor of the Central Bank is a member of the board of the European Central Bank.

He created the promissory note.

He negotiated very strongly Ireland's case there. I disagree with the Deputy from that point of view. Nor were the other issues surrounding that just given to Ireland. We agree that for some time banks have lacked the experienced management to be able to deal with these things. At the more local, national level of dealing with distressed mortgages, it has been necessary to retrain people whose previous occupation was, if one likes, lending money rather than dealing with circumstances where people are now in trouble. However, some 80,000 have been restructured. We would like that figure to be higher.

They have been bandaged, not restructured.

We would like to think that the solutions worked out in those 80,000 and more are absolutely sustainable.

Household debt and business debt are clearly real issues. The Deputy asked for some sort of financial SWAT team to be put together to deal with this problem. The Cabinet meets every week and if it is necessary to report situations, the Minister for Finance, obviously, has his finger on the pulse.

Does the Cabinet understand it?

It is not a question of putting together some kind of exclusive SWAT arrangement here. The Cabinet actually meets every week and when it is necessary, this is discussed.

It is not a SWAT; it is a combat team.

Economic Management Council Meetings

Gerry Adams

Question:

2. Deputy Gerry Adams asked the Taoiseach the number of occasions on which the Economic Management Council is scheduled to meet in advance of budget 2014. [39070/13]

Gerry Adams

Question:

3. Deputy Gerry Adams asked the Taoiseach when the Economic Management Council last met representatives of the Irish banks. [39071/13]

Gerry Adams

Question:

4. Deputy Gerry Adams asked the Taoiseach if the Economic Management Council has any plans to meet representatives of the banks. [39072/13]

Gerry Adams

Question:

5. Deputy Gerry Adams asked the Taoiseach the number of occasions on which the Economic Management Council has met since the summer recess. [39081/13]

Micheál Martin

Question:

8. Deputy Micheál Martin asked the Taoiseach when the Economic Management Council last met. [39091/13]

Joe Higgins

Question:

17. Deputy Joe Higgins asked the Taoiseach if he will report on meetings held between the banks and the Economic Management Council. [40867/13]

Richard Boyd Barrett

Question:

18. Deputy Richard Boyd Barrett asked the Taoiseach the schedule of meetings for the Economic Management Council before the budget. [40915/13]

Richard Boyd Barrett

Question:

20. Deputy Richard Boyd Barrett asked the Taoiseach when the Economic Management Council last met. [42213/13]

I propose to take Questions Nos. 2 to 5, inclusive, 8, 17, 18 and 20 together.

The Economic Management Council has met five times since the summer recess, most recently on 2 October. In general, the EMC meets on a weekly basis and it will continue to meet over the coming week in advance of the budget.

The members of the council met representatives of the banks twice in 2012, the last time on 26 June 2012. As part of this process, I expect that members of the Economic Management Council will meet representatives of the banks as required during the remainder of 2013 to ensure that the banking sector supports economic recovery.

I agree with everything an Teachta Boyd Barrett said. It is a matter of deep concern that when people raise these issues, the Government seems to be oblivious to what is happening in communities, households and families. I do not understand why the Government kowtows to the bankers. I do not know why it cannot introduce an independent adjudication arrangement or service. That deals very much with the previous question.

The budget is being put together by this EMC, which, as I understand it, is a group of four male Ministers. The way the Government goes about its business contradicts all the high rhetoric we hear about transparency, openness and political reform. The budgets have been mean spirited. I have no sense of the Taoiseach being a mean-spirited person, but these are the types of budgets that have been introduced. Four men decide to cut child benefit and the entire Cabinet signs off on taking allowances away from people with severe disabilities. It has cut respite care and imposed a family home tax on tens of thousands who are in mortgage distress. Labour in government has no notion of equality-proofing a budget and has no notion of looking at the social consequences of the types of measures being introduced.

I cannot find a way of articulating the reality of 300,000 mostly young people leaving the State with consequent communal and societal damage. In the 1980s it was only about half that number. Every week 1,200 to 1,700 young people are leaving and more than 400,000 people are unemployed. This small group of middle-aged men have no notion of introducing a stimulus and believe that austerity rules. Austerity is not working - it might work for the elites but it does not work for working folks. The biggest unemployment burden is carried by young people. Youth unemployment is huge and there is no real policy response.

Is it not time to review the Government's budgetary decision-making process and put in place protections? As we face into this budget no one has legislative protection - the Government can decide to do whatever it wants in terms of cuts and all the rest of it. I ask the Taoiseach to review those processes.

I again commend to the Taoiseach Sinn Féin's budget proposals. This is not mathematical, but ideological. The Government can adjust the deficit in a fair and equitable way or it can do it in the way it is doing it.

The reason I raise all of these points is to suggest that there is a better way of going forward, positioned, founded, based and embedded upon equality and fairness as opposed to what we have at this time. Let us remember that this is the seventh austerity budget and another one is promised for next year. I commend that approach to the Taoiseach and call on him to review the processes which he currently has in place.

There are ten minutes remaining. Deputy Martin, Deputy Higgins and Deputy Boyd Barrett have yet to ask questions.

I hope Deputy Martin did not think I was going to speak for ten minutes.

I would not doubt the Taoiseach.

Should we take the questions first and then get the Taoiseach to reply?

I put it to Deputy Adams that the budget for 2014 has not been signed off on. The budget for 2014 will be signed off on collectively by the Cabinet before next Tuesday. The House is aware that the Minister for Finance deals with the income stream in terms of taxation measures and so on. The Minister for Public Expenditure and Reform deals with the question of current spending and related issues. The Minister for Public Expenditure and Reform, Deputy Howlin, is engaging with all Ministers individually about the ceilings for their Departments, how the allocation is to be spent, the issues they have raised in that regard and all of that. That applies in the case of every Minister. The Minister for Finance, Deputy Michael Noonan, has set out the options or the range he must deal with in terms of taxation measures.

Deputy Adams will be aware that today the Cabinet approved the general structure for the budget. This was a matter for discussion with the troika personnel in Brussels, as is normal procedure, but not the detail of the budget - the framework only. Very good reasons have been set out for this because, as has been mentioned already, with debt going to peak next year it is important that the targets we have set out be achieved, that there be a primary surplus and that the Government takes into account an understanding of the pressure, difficulties and challenges that so many people in our country have to contend with every day. That is the deliberation for the Cabinet. The Economic Management Council does not sign off on all the details of the budget; that is a constitutional responsibility of the entire Cabinet.

I put it to Deputy Adams that his figures are incorrect in respect of emigration. There have been 15 consecutive months of a fall in the live register and unemployment is now down to 13.3% and is going to fall further.

Does the Taoiseach think that is okay? Will he give us the emigration figures?

Obviously it is not enough, but the initiatives taken by the Minister for Social Protection, Deputy Burton, have certainly contributed to that positivity and sense of achievement. We know it is not enough but given the situation and that we still have to borrow €1 billion per month, it is never easy. We have made the point that this budget is difficult. We want to do what is necessary to achieve our targets but at the same time we understand the pressures people are under. We will use whatever flexibility we have to put that into situations where jobs can be created.

The Minister, Deputy Howlin, announced a €2.5 billion stimulus last year for the likes of one quadrant of the Grangegorman campus, a number of schools that are currently under way, major roads and so on. There is a €13.5 billion capital expenditure programme between now and the end of 2015 which should create thousands of jobs and will provide much-needed infrastructure in various locations.

Let me confirm again that the budget has not been signed off on. That is a matter for the entire Cabinet. The process involves each Minister dealing individually with the Minister for Finance in terms of the income revenue. The overall framework is now in place and the details will be worked out before Tuesday night.

My questions relate to the Economic Management Council. Many people are concerned that more advisers than members of Government attend and speak at this very powerful council. Fundamental questions must be asked in terms of the constitutionality of the council. Some Ministers, the Minister for Agriculture, Food and the Marine, Deputy Coveney and the Minister for Social Protection, Deputy Burton, in particular, have been highly critical of the overarching role of the Economic Management Council. There is a lack of transparency around it because many budget documents which had been published automatically are now withheld because the Taoiseach has given this council the right to assert Cabinet confidentiality.

I draw the attention of the Taoiseach to a startling revelation in a recently published book, The Price of Power, by Pat Leahy in respect of the role of the Economic Management Council in a fundamental decision approximately two years ago, in which the Minister for Finance, Deputy Noonan-----

A great book. Interesting reading.

A Cabinet decision was taken-----

This is a serious matter and I am keen to proceed without interruption, please. A formal Cabinet decision was taken to burn bondholders by €6 billion. Subsequently, the European Central Bank got wind of this and Mr. Trichet, the then Governor, was in touch with the Minister for Finance, Deputy Noonan. A tense situation unfolded and the Economic Management Council was convened and told about the resistance of the ECB to this measure.

To the great surprise of the rest of the Cabinet, the Minister for Finance, Deputy Noonan, was ten minutes late in making his presentation to the House. When he arrived in the House he announced the recapitalisation proposals minus the burning of the bondholders, to the astonishment of several Ministers. The book states that no one noticed that a drama of huge proportions had just taken place. No one in this House was informed that such had occurred in the hours and days beforehand. The book states that the Minister for Transport, Tourism and Sport, Deputy Varadkar, although in Brussels, was especially angry when he learned the news. Only the members of the Cabinet knew that a different course of action had been decided upon a few days earlier. The book further states that some wondered about the legality of Noonan's announcement given what the Cabinet itself had agreed and so on. We have a situation made up of an extraordinary decision-making process involving the Economic Management Council whereby the Cabinet had taken a formal decision that there would be recapitalisation plus burden sharing, which I understand was of the order of €6 billion. The intervention of the European Central Bank stopped the Government in its tracks but there was no subsequent Cabinet meeting to deal with the ECB's resistance. Many Ministers were stunned with what had happened.

I put it to the Taoiseach that there is an urgent need to publish the minutes and work of the council. Why did the Government not open up on that day in terms of what had happened? Why was everyone else kept in the dark, including Ministers, in terms of the announcement that the Minister for Finance made that day to Dáil Éireann? He was ten minutes late. His speech was hurriedly put together because of all the engagement and threats from Mr. Trichet, who said that if the Government did it, the bomb would go off but it would not go off in Frankfurt. It would go off in Dublin, he warned. I call on the Taoiseach to confirm that this occurred. Why was that withheld from the public for so long? Why did we have to wait for the publication of this book to get some insight into the manner in which the Economic Management Council works, particularly vis-à-vis the rest of the Cabinet?

We have time for brief questions from Deputy Higgins and Deputy Boyd Barrett, after which the Taoiseach will reply to all questions.

Will the Taoiseach indicate whether there are Standing Orders or written materials on the Economic Management Council or its function and role? Many people believe that a coup d'état has taken place inside this Government and that the Economic Management Council has seized all powers to itself. It is made up of the Taoiseach - the prime minister, the deputy prime minister and two finance ministers. They are the four horsemen of the austerity apocalypse or the austerity agenda, so to speak. They ride roughshod over the other Ministers.

The Minister for Social Protection has evidenced great angst over this seizure of power and has delivered of herself quite publicly on the issue, let alone the number of private briefings she has given, which seem to go on endlessly. I am not too concerned about bruised ministerial egos.

More seriously, the Taoiseach rides roughshod over the democracy of the Irish people. That is the key point. The Taoiseach's predecessors in history, the four horsemen of the apocalypse, brought pestilence and famine and he has not gone quite that far yet.

There are three of them sitting on the Opposition benches.

However, the Economic Management Council foists the dictatorial demands of the European monetary and political establishment on the people to save the financial interests of the big bondholders and financial markets and at a huge cost. I ask the Taoiseach to answer the question raised by the revelations on the part of the deputy editor of The Sunday Business Post, which are that the President of the European Central Bank dictated to a few Ministers, who then came in and dictated to Parliament to foist on the Irish people the entire burden of the European financial crisis, which is a crisis brought about by the speculators and the bondholders. Can the Taoiseach explain this? Did any Ministers revolt at the fact that a Cabinet decision to burn them to some extent at least was overturned by the four horsemen of austerity? The Taoiseach must explain this to the people.

Finally, does the Taoiseach not realise the people fundamentally distrust both him and the Government? Does the Taoiseach realise the undemocratic way in which the Government is operating was a huge factor in people's minds last Friday? The Taoiseach could not convince the people to abolish an institution elected by means that would make the managers of the old rotten boroughs in the Ireland of the 1700s and 1800s blush. Does the Taoiseach agree it is time the Irish working people took back the power from the bondholders and the bankers, as well as from the Government that carries out the wishes of those massively powerful and private sectors to the huge cost of the people?

My question to the Taoiseach is similar to that asked by Deputy Higgins, albeit looking at it from the angle of those who are affected by this dictatorship of the Economic Management Council, which itself appears to be nothing more than a conduit for the demands of the European Central Bank, the international financial markets, the bankers here and the very wealthy. Such groups appear to get what they want as notwithstanding a certain amount of rhetoric and expressions of concern and sympathy on the Taoiseach's part for the plight of those who are obliged to suffer austerity, when it comes to the bottom line, they get what they want. Taxes they do not like are not imposed, tax breaks they seek are given and vetoes they seek on mortgages are granted to them. In short, whatever it is they seek, they get. On the other hand, ordinary people and civil society organisations, trade unions and so on, plead with the Government year after year and are doing so again this year. I refer to antipoverty groups that index the worsening crises of poverty, of homelessness, of emigration and of mental health deterioration among huge swathes of the population such is the stress, anxiety and pressure being imposed on them because of the financial straits in which they find themselves. They plead repeatedly with the Government, say "no more" and ask that it not be done to them again. However, reports in today's newspapers indicate the Government is setting its sights yet again on the most vulnerable. This is because the Government will not increase corporate tax and will not consider increasing higher taxes for those in receipt of more than €100,000 per year. Moreover, as it will not impose a financial transaction tax, who else remains? The only people the Government can attack are the same people it has attacked year after year. The Taoiseach may put up his hands and may say he is terribly sorry about this, it hurts him more than it hurts them but that is what the Government does. As this is what the newspaper reports suggest again, the Taoiseach should tell Members this is not true.

The Taoiseach should tell Members the Government does not intend to take €400 million from the poorest people in Ireland out of the social welfare budget. He should state the Government will not hit the disabled again, it will not hit class sizes and will not hit low and middle-income families. The Taoiseach should provide Members with such an assurance and that the Government is at least considering the possibility of imposing some of the burden on the corporate sector and on the very wealthy through wealth taxes, higher income taxes on higher earners or whatever. He should indicate whether the Government is even considering such measures.

A range of questions was asked. First, the Economic Management Council has the status of a Cabinet committee and has four members, namely, me, the Tánaiste and Minister for Foreign Affairs and Trade, the Minister for Finance and the Minister for Public Expenditure and Reform. It is not the Cabinet and does not have the collective responsibility of the Cabinet in putting together and agreeing the final details of the budget. A second Secretary General has been appointed in my Department whose responsibilities include managing support for the Economic Management Council and who deals with that area of support. Moreover, additional support is provided for the Economic Management Council from within the existing resources of my Department. They work in close connection with the Departments of Finance, Public Expenditure and Reform and Foreign Affairs and Trade. The role of the council is to manage the Government's programme in respect of economic planning and budgetary matters, the economic recovery programme, including the representation of Ireland internationally with the European Union-European Central Bank-IMF troika, the integration of the work of Departments and agencies in these matters and the co-ordination of banking policy. This is what the Economic Management Council was set up to do and these are its responsibilities.

The council provides a forum to discuss strategic issues before they get into Government for decision and like other Cabinet committees, it does not replace the role of the Government, whereby all Ministers have a duty and responsibility to contribute to final decision-making. It is good practice, on foot of lessons learned from previous mistakes, to have a forum in which relevant Ministers and officials can consider the economic strategy based on the best advantages to the country. As I stated, the budget for 2014 has not been signed off on or approved by the Cabinet in general and that will happen before Tuesday. I might add the Ministers present, namely, the Minister for Social Protection, Deputy Burton, and the Minister for Children and Youth Affairs, Deputy Fitzgerald, are both strong and vociferous contributors to the Cabinet process, as are all other Ministers and as they have a duty to be.

Deputy Higgins spoke about a revolt and whether anyone revolted. While the people obviously have strong views to express at times, that falls somewhere short of the revolution of which Deputy Higgins speaks.

What about the Ministers?

There can be nothing as absolutely democratic as consulting the people. That is the essence of democracy, namely, asking one's people. Four years ago, in respect of the Seanad business, I stated that people would be asked this question.

It is not about the Seanad.

People stated it was a stunt or simply was opportunism, but it happened and I am glad the people gave a clear answer.

The Taoiseach blew it.

Who drew up the Seanad amendment?

Far be it from me to comment on the esteemed author of a recently-published book.

I am not asking the Taoiseach to do so.

No, the Deputy is not but-----

The Taoiseach should give him a plug; he needs a plug.

-----he is asking me to confirm what he read out.

Yes. Is it true?

Clearly, the matters that are discussed by the Economic Management Council have the same status as any Cabinet committee and are therefore subject to confidentiality.

The Taoiseach must be joking.

Deputy Martin does not expect me to comment "Yea" or "Nay" in respect of-----

I do. It is a very serious issue.

-----what he has read out there, no more than-----

It is a very serious issue. He should.

-----any other book or newspaper report. Speculation is-----

The Taoiseach's people, as well as those of the Minister, are leaking like sieves.

Speculation is one thing but the minutes of Cabinet meetings are something else.

Can the Taoiseach confirm it? This relates to a statement to the House.

Unlike the crowd with which the Deputy was associated himself.

Does the Deputy not remember the fact that the plate seems to be cleaned-----

I am asking the Taoiseach to answer a question. Did that happen? Why is he hiding it?

-----seems to be sanitised of minutes of the meetings that have been held?

The Taoiseach will not even comment on this.

It seems to be sanitised-----

The Taoiseach should go by his own standards. Did it happen or did it not?

-----of the greatest crucifixion ever put on the people. There is not a trace of it.

The Taoiseach will not answer the question.

Some €64 billion, €400 billion in all-----

Where are the minutes of that?

The Taoiseach is blustering and everybody knows it.

-----and there are no minutes. The minutes of the Cabinet meetings that we deal with are there for everybody.

The Taoiseach was asked a straight question. Did the Minister, Deputy Michael Noonan, come in-----

The Deputy can talk and comment all he likes-----

-----and do something in this House contrary to what his Ministers had decided? Yes or no, Taoiseach.

-----but facts speak for themselves, and in due course the minutes of the meetings of this Cabinet will tell the true story of our actions-----

The Taoiseach is blustering and filiblustering.

-----unlike the fact that we still have to have a banking inquiry to find out the background to the carry-on-----

-----of the Deputy and his associates which left hundreds of thousands of people suffering hardship, challenge and difficulty every day of the week.

Go all around the Houses now, Taoiseach.

Where are the Deputy's minutes?

Can the Taoiseach confirm that? Did it happen?

That concludes Taoiseach's Questions.

A Leas Ceann Comhairle, I asked a very serious question-----

No, Deputy. I am having no more of this.

-----and the Taoiseach has made a big deal about being accountable to the House.

What about Punch and Judy politics?

It is a very important point.

Deputy Martin, please.

It has got to do with a significant proposal that was made before this House-----

More Punch and Judy.

-----and the Taoiseach is hiding the truth from this House and from the people. I asked him a very straight question. Did that happen or did it not? He could not be honest enough to answer it.

No, I do not-----

(Interruptions).

I must move on to the Order of Business. Order, please. I will have to suspend the House if I cannot get order.

As usual, the Taoiseach avoided answering the question. It is not the first time.

What happened on the night of the guarantee?

We are moving on to the Order of Business.

Selective accountability is now the order of the day.

Deputy Bernard Durkan

The Deputy would have been a signatory to it.

The Deputy supported it, for God's sake, so what is he on about?

I can assure the Deputy of one thing; he could tell us a whole lot about it.

Written Answers follow Adjournment.
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