Rehab Group has appointed the independent management consultant, Dr. Eddie Molloy, to advise on strategy, rebuild morale within the organisation and repair a damaged reputation, according to its own press release. It also talks about the damage done to other charities because of the serious issues raised regarding the operation of Rehab. Many issues have emerged recently, in particular the necessity for the former CEOs Mr. Frank Flannery and Ms Angela Kerins to ensure they appear again before the Committee of Public Accounts. The issues are serious and involve the expenditure of a considerable amount of public money and the organisation paying for the lobbying of Departments, including the Departments of Education and Skills and Social Protection. The organisation, allegedly, paid its director Mr. Flannery for lobbying the Government on a range of issues, including the charitable lotteries issue and National Learning Network. Given that Mr. Flannery had unparalleled access to the Government, the Taoiseach in particular - he enjoyed a pass from Fine Gael to enter Leinster House unhindered - the issues are serious. Was the Taoiseach aware at any stage that Mr. Flannery was being paid by Rehab to lobby Ministers and Departments? Does he agree with me that there is a serious question mark over the ethical correctness of such action? Does he believe it is correct and proper that a section 39 body such as Rehab, that enjoys regular engagement with the Government and Departments because of the nature of its relationship with the State, should pay its director to lobby Ministers and Departments? I do not, but I would like the Taoiseach's view on it. Does he accept that it is extremely important that Mr. Flannery and Ms Kerins respond to the request from the Committee of Public Accounts and appear before it to ensure full transparency on all of these issues?
Leaders' Questions
I have no information on any dealings Rehab Group had with any individual. My only engagements with the man the Deputy mentioned have been purely political in terms of elections and constituencies. That is why we are introducing legislation on freedom of information, whistleblowers and lobbyists. It is only right and proper that there be full accountability and transparency about these matters. I have no information on whether organisations were paying personnel to meet people with political responsibility. For a very long time my belief has been that anybody involved with a section 38 or section 39 organisation should appear before the Committee of Public Accounts, as that would be in the interests of charities. We have already agreed that when people make donations to their charity of choice, they need to feel happy that all of that money will go for the purposes for which it is intended. That is why the Minister for Justice and Equality, Deputy Alan Shatter, has introduced a regulator which will change the nature of the perception of charities for the good of everybody. When the regulator is in situ, auditing the accounts of charities, people will know everything is as it should be.
My view for a long time has been that everybody associated with section 39 organisations should of course be prepared to go before the Committee of Public Accounts and deal with any questions that may arise.
The Taoiseach answered two from the three questions, which I appreciate.
What was the third?
The first question was whether the Taoiseach was aware of the issue and the second concerned appearances of Ms Kerins and Mr. Flannery before the Committee of Public Accounts. The other question was whether it is right and ethically correct for an organisation such as Rehab to pay one of its directors to lobby Ministers and Departments. Does the Taoiseach believe that is right, given the very regular access that such bodies, like Rehab, would have to the Government? Department officials meet representatives of these organisations on a regular basis to discuss service plans and a range of service level agreements. Does the Taoiseach believe it is right that these organisations should pay directors significant sums of money for the purpose of lobbying Departments and Ministers? This case is unique, as the Taoiseach has stated the individual concerned had unparalleled access to Ministers, particularly with this Government. He had a pass for Leinster House and so on. To put it mildly, one's reaction would have been one of some surprise when it emerged that this was the case, as reported by The Irish Times. A body such as Rehab should not in any shape or form have to pay anybody to lobby Departments, and the Government should be clear in instructing such bodies that they should not pay people to lobby the Government, particularly when the Government normally enters into relationships by means of service plans etc. There is something amiss in that respect. Does the Taoiseach believe it right and ethically correct for an organisation like Rehab to pay a director to lobby Departments?
The question is one for Rehab to answer, whether it has paid any individual to carry out lobbying or whatever else. I have already stated that I meet many people, although I do not know if they are paid by organisations.
Is it right?
I agree that is why we need lobbyist legislation, and the Minister for Public Expenditure and Reform will introduce that in order to bring about transparency and accountability. I do not believe charitable organisations should pay personnel to lobby Ministers or anybody else if they operate on such a charitable basis. I do not have any information about that. The Government is very open to dealing with all organisations where it is appropriate and notes are taken in those meetings. I hope I have answered the Deputy's questions.
The Deputy will cause mass unemployment among his former colleagues.
It might affect some of the Minister's former colleagues in the tobacco industry.
Order, please.
The Deputy could tell us for what the Taoiseach should look out.
Another comedian.
The Minister, Deputy Rabbitte, is for the birds.
The Deputy has been waiting to say that for a while.
Aontaímid go léir go bhfuil turas Uachtarán na hÉireann chuig Sasana an tseachtain seo tábhachtach agus stairiúil. Táimid uilig an-bhródúil as an Uachtarán agus an bheirt bhan a bhí san oifig sin roimhe seo. We all acknowledge this week's State visit, which has taken 93 years to agree, was made possible because of the peace process and Good Friday Agreement. We also know this is part of a journey and much more needs to be done on the ground in the North and between both parts of the Ireland, particularly with the issue of rights. There are great possibilities and much potential in all of this, which needs focus and commitment from everybody. All identities across the island, whether Irish, British or other, must be given respect on the basis of equality.
The participation of Mr. Martin McGuinness is another sign of positive commitment by Irish republicans to engagement with our Unionist neighbours - she represents all the people in the North - and a new relationship with Britain based on equality and mutual respect. This is all very much work in progress and the State visit should be an incentive for us to look beyond this week to build the peace and continue this journey to finish our unfinished business. Does the Taoiseach agree the occasion of this week's State visit, which is wonderful in itself, should also focus minds on the need for political leaders to resolve all the outstanding issues in the peace process?
Yes, I do, and I do not underestimate the importance of the significance - symbolically or practically - of the first State visit by an Irish President to Britain since the foundation of the State. President Higgins will fulfil his duties admirably and set out in his own unique fashion the range of historical, academic, educational, social and cultural connections between the people on the two islands. This goes back to the point raised by the Deputy about whither the peace process. I am reminded of the words of former US President Clinton in Derry when he said we had to finish the job. The five groups in Northern Ireland party to the Haass talks must get to grips with a position where young people in Northern Ireland have found the political process is a blockage to the future, as it is tied to the past in a way in which it will not let go. We all understand it is not right and proper to forget what happened in the past but there is a way of dealing with it.
I expect the President, in his comments and engagement with the Irish diaspora over the next few days, to set out in his own unique way another platform by which this engagement can take place. It was in July 1593 go ndeachaigh Gráinne Ní Mháille thall go Londain ag caint le Banríon Éilís a hAon. Ní i mBéarla nó i nGaeilge a bhíodar ag caint, ach i Laidin. A second formidable personality from the west of Ireland was the first to make the connection in Buckingham Palace and there was a third formidable personality in the form of former President McAleese. This is an occasion for everybody to reflect on where we can go from here.
Perhaps it is a pity the Deputy First Minister did not visit Dublin Castle when the Queen was here just a couple of years ago. I do not want to sound a discordant note but the importance of the issue then was equal to now. In any event I hope the occasion in Britain will be outstanding for the Irish diaspora and people, as well as the connection between our two people and Governments. I noted Deputy First Minister McGuinness's comments about being invited to the Queen's house. It is some house.
Ná déan dearmad faoi Mary Robinson fosta. Rinne sí obair thábhachtach mar Uachtarán. Nuair a bhí an Taoiseach ag caint faoi Ghráinne Mhaol, agus nuair a luaigh sé an focal "maol", bhí mé ag amharc ar an Aire Airgeadais. Nílim ach ag magadh anois. Gabhaim leithscéal.
Táim ag ruaig air.
Tá fhios agam. We need to celebrate peace on the streets as well as in the big houses and palaces. It needs to be felt in loyalist hinterlands and republican communities. It needs to be felt along the Border corridor. This is a journey and, uniquely, there is an all-island dimension to this, with Mr. Peter Robinson, Mr. McGuinness, an tUachtarán and the Taoiseach having been there. That is essential. Many times, when commentators in this State speak about the nation, they mean the Twenty-six Counties. When they speak about "nationally", they mean across the Twenty-six Counties and when they speak about Ireland, they mean the Twenty-six Counties. We need to think in an all-island way, and when I looked to frame this question, I wanted to do it in a way that considered the possibilities of which a Government here could avail.
The Taoiseach should forget about the British. What can the Government do to seize and build on these opportunities? There is a series of initiatives that could have a real impact on communities in the North and along the Border corridor. I am 100% sure the President and Sabina and all of our other representatives will do us proud this week. We should, however, consider the potential and possibilities beyond this week and build on them. Let us remind ourselves that it took 93 years to put this visit together. It did not take Martin McGuinness 93 years to do it, rather it took the State and the British Government 93 years to put it together. Does the Taoiseach agree that the real significance of this state visit will be realised in a lasting way only if we continue to build the peace, transform and complete the journey we are all on?
I agree that it is a journey everybody is on. I also agree that this is an opportunity to take another step forward. It might be a very good idea if everybody could get together and say Dr. Haass made genuine attempts to move the process forward and ask could we not come to agreements on a range of issues about the past, parades and flags. As I have said before to the Deputy, when one meets the people from Ballymurphy, one taps into the reservoir of raw emotion because the matter was never concluded. When one talks to the survivors of the Kingsmills massacre, there is the same emotion for people on the island of Ireland who feel the issue has never been satisfactorily concluded in the sense of finding out what happened. I have also said on many occasions to the Deputy that there is the question of the families of the disappeared who have not had closure.
Everybody could take from the visit of President Higgins to Britain an opportunity to reflect again on what we could do for young people, North and South, who would see the excitement of being able to conclude issues arising from the past and look forward to the adventure of the future. Politicians have that responsibility; that is what they were elected to do. The Government will work tooth and nail to bring about that sort of understanding, but we cannot forget about the British, with whom we have a very close, unprecedented relationship, through economics, business and in many other ways. The Good Friday Agreement speaks for itself. We need to move to have it concluded and fully implemented, with the Weston Park agreement, and deal with the other issues that affect people every day of their lives in fragile communities on either side. I hope that from this will come an opportunity to move the process forward.
The Deputy cannot blame the Government of the Republic for everything.
I am not blaming anyone.
The responsibility is shared between governments and peoples. I again refer to what former President Clinton said in Derry: “I came here 20 years ago. I am back again. Finish the job.” The job can only be finished by the politicians, the elected leaders of the people across the spectrum, and this requires understanding, tolerance, compromise and a capacity to say, "I might not have got everything I looked for, but let us move on." I hope the President’s visit to the house of the Queen today and in the next few days and his engagement with the Irish diaspora will bring about a new understanding of what we can achieve together.
The negative equity generation has fared very poorly under the Government which refuses to make child care affordable, while reducing child benefit. It forces people to pay property tax on their debts, while claiming it is a tax on wealth. It taxes on the double those who have become accidental landlords. It denies families the right to bid on their own mortgages, while selling these mortgages to US-based vulture funds. To date, the insolvency service has processed only approximately 50 cases because the Government gave the banks a veto over all proceedings. The result is that over 175,000 mortgages are in arrears. For three years the Government has allowed the banks to ride roughshod over these individuals and families. The only thing it has done is set targets for the banks to make offers of “sustainable” restructures, but it has let the banks define “sustainable”.
In advance of the hearings of the Joint Committee on Finance, Public Expenditure and Reform this week, the banks have submitted their latest figures to the end of the year for these so-called sustainable restructures. The good news is that they have hit the Government’s targets. The bad news concerns how they have done so. As of 1 January, approximately 57,000 offers had been made, of which a total of 52,000 do not include any financial concession from the banks whatsoever, in spite of the people making €7.5 billion available to them to deal with the mortgage crisis. Approximately 18,000 of the offers made will increase the amount the mortgage holders will pay to the banks over the course of the mortgages. Approximately 5,000 are so-called voluntary surrenders. As of 1 January, approximately 22,000 of these so-called offers of sustainable restructures were the subject of legal proceedings. That figure will have increased significantly since 1 January. I recall Fine Gael stating during the general election campaign that it would help the negative equity generation. Instead it has abandoned it. It has hiked people's taxes to pay for the sins of the bankers, while allowing the banks to squeeze those in mortgage arrears for every cent they have. When they do not have any more, they go into arrears and the Government lets the banks do as they please. Is the Taoiseach satisfied with these targets, with how the banks have hit them and that 22,000 cases of legal proceedings count as sustainable offers of mortgage restructuring?
No, I am not happy that people are still in mortgage distress because of the catastrophic economic situation and I will not be happy until everybody has received a workable and practical offer that is not just related to interest-only repayments. The total number of permanent restructures, those that work in a sustainable way, has increased to approximately 54,000 accounts. Term extensions and arrears capitalisations are the dominant permanent restructure type. They comprise approximately 60% of the total. There has been an increase in the number of split mortgages to over 7,100 from 2,500 at the end of August last. This includes split mortgages on a trial basis, pending completion of a short period of successful payments. The targets have been set by the Government and the Central Bank for the banks to achieve. It is down to the relationship between the borrower and the lender and how they avail of the suite of opportunities available to work out a solution in each individual case.
The Deputy commented that we had said we would help those in negative equity. What should we do, except strive to make the economy more competitive, productive and strong? There is growth in the economy. We have managed to pull the country back from an economic abyss. We created 61,000 jobs last year. Interest rates have fallen from 15% to less than 3%. The National Treasury Management Agency, NTMA, can go back into the international bond markets with a sense of confidence and be in a position to raise finance to meet most of its financial requirements in 2015. That helps to create the opportunity for an increase in house valuations and property prices again, but it is uneven. There is pressure to have significant numbers of houses built in the greater Dublin area and other cities and so on. The rise in property values and prices has not touched all parts of the country. When the Deputy asks me to help those in negative equity, the best answer is that we rectify the public finances and get people working. That is what stimulates confidence, growth and jobs in the economy and prosperity.
Were we to continue in the position in which we found the country, we would be paying back another €3.1 billion on the promissory notes today. That would give cause for raising a variety of questions here, I should think.
Bond yields are of no interest to the people who are fighting to save their houses. The problem lies in the Taoiseach's answer. He stated that recapitalisation of arrears and term extensions account for 60% of the offers made to date. Recapitalisation of arrears and term extensions are not sustainable for people who have too much debt. Both of those so-called solutions increase the total payments made over the lifetime of a mortgage. He asked what does he do besides creating jobs. It is great that the jobs figure is rising. I will tell him what this Government needs to do for people who are in mortgage arrears. It needs to focus not just on the quantity of offers made but also on the quality of those offers and the consistency of offers across lenders. Last week the Joint Committee on Finance, Public Expenditure and Reform met representatives of organisations supporting mortgage holders. These are the people who are on the ground helping mortgage holders. They stated that providing figures for targets approved is counterproductive because the focus is on the target and, therefore, not on the individual. Representatives made the following observations:
Over 3,000 people contacted FLAC last year through our centres and telephone lines in utter frustration at the lack of professionalism in the way they were being dealt with...
The helpline has handled 11,000 calls since its establishment. Of those calls, approximately one half was made after the people had already received a final offer from their lender and two thirds of those were sale or repossession. That was the only offer on the table...
We have a crazy situation, whereby it is alleged that repossessions take place only as a last resort but there is no front-end supervision or monitoring and no rules to ensure that is the case... It is like the Gaza Strip. Individual lenders can do anything... The Central Bank confirmed to us in July that it does not have the power to compel lenders to offer specific products... The only language that these guys understand is legislation. The only thing that is going to work is firm, strict, unambiguous and crystal clear legislation.
In light of the overwhelming evidence for the benefits of a sustainable set of mandated solutions for tens of thousands or hundreds of thousands of men and women in terms of ensuring consistency, quality and fairness, will the Taoiseach consider introducing legislation that mandates a single set of solutions for mortgage holders?
That is one-size-fits-all, and that does not work because everybody's circumstance is different.
It does not work for the bondholders.
It is when one sits down with the people involved that one discovers their circumstances differ. In regard to the engagement between the consumers and the lenders which led to the permanent restructuring of 51,188 mortgages, an increase of 6,011 accounts in the last quarter of 2013, does Deputy Donnelly accept they were clear, consistent and flexible because they arrived at a solution?
Not at all.
The Deputy is not happy with the fact that almost 51,000 permanent mortgage restructures were arrived at between people who borrowed and lenders who lent.
No, not remotely.
He does not believe that is the way things should go. He wants a situation in which one size is assumed to fit everybody, which clearly is not the case. If that is what he suggests, he is very much out of touch. The legislation to which he referred is crystal clear. The targets have been set and they are being achieved.
Where are the mortgage-to-rent arrangements?
The sustainable solutions are for the men and women who have borrowed money to live in their houses and are happy to deal with the lender in the first instance.
They are not happy.
There has been a significant rise in split mortgages, from 2,500 in August to 6,200 by the end of December. That means 4,000 people have agreed a split mortgage with their lenders. The number of mortgage accounts in arrears of longer than 90 days has fallen from 81,000 to 79,000. That decrease is not as much as we would like, but it is there.
Smoke and mirrors.
These are facts. They are crystal clear and they arise because of the conclusions reached between borrowers and lenders.
The Taoiseach is being misled.
Temporary restructuring arrangements are also continuing to fall. The Central Bank's quarterly mortgage arrears statistics, as opposed to the Department of Finance's monthly figures, show a welcome decline in all arrears, whether for primary dwellings or buy-to-let properties. Deputy Donnelly may not want to accept those facts, but they are facts. The most difficult to accept are those who are longer in arrears. I welcome the decline in the number of primary home mortgages that are more than 90 days in arrears. It is the first time the figure has begun to fall since 2009, when the Central Bank first published these data.
That is because of legal proceedings.
There is a solution to everybody's individual problems. They are not all the same. Circumstances of geography, family, debt and property with debts are all different. There is a solution to all of them, but working out the solution requires borrowers and lenders to sit down together.
And capital for the banks.
The suite of opportunities that is now laid out can result in many more people arriving at a solution. There are people who do not want to engage with lenders in the first place. That only makes the situation worse because if a solution is to be found, it will take two to work it out. The task before the Government and the facilities available to the Government, the Central Bank and the banks - the finance committee can help on this - is to work out sustainable solutions for everybody so that, as the economy improves and negative equity declines, those who have felt this distress for quite a long time can have it removed and go back into the economy to play their part as the country develops.
Who caused the negative equity?