Topical Issue Debate

Local Government Reform

Deputy Kevin Humphreys

I thank the Minister for taking this issue. The local elections are over and the political landscape has changed. However, the need for a directly elected mayor for Dublin city has not gone away. I know the Minister is strongly committed to this idea. The people of Dublin should be allowed have their say in a plebiscite next year at the same time as the marriage equality referendum. The four local authorities in Dublin cover a population of nearly 1,300,000 people. Dublin is not competing with Cork, Limerick or Galway. It is competing against cities of the world such as London, Singapore, Cape Town and Geneva. Dublin needs a strong, single voice with a mandate. That is why I believe this city needs a directly elected mayor.

We recently completed a process for considering a directly elected mayor as laid out in the Local Government Reform Act 2014. Many said it was doomed to failure from the beginning but the forum of 22 elected councillors tabled a proposal that was overwhelmingly endorsed by councillors of three of four Dublin councils. There were legitimate reasons for Fingal councillors to vote against the proposal for a plebiscite but I do not believe it should be dropped completely. I would have concerns also about splitting the functions of the IDA and Enterprise Ireland under a Dublin mayor but a mayor must have an economic role.

I ask the Minister to call on the mayors and chairs of each of the councils to restart the process. I ask him to meet with them in the next few weeks to see how that process could be started. My reading of the legislation is that it would have to be amended to allow a further vote at council level. I ask the Minister to consider bringing these minor amendments to the House quickly. Failing that, the Government should convene a convention for Dublin modelled on the Constitutional Convention. We need more public debate on what a mayor should do, the powers he or she should have and the elements of transport, housing and environment issues that are so important to this city. We need to bring ordinary citizens together with their councillors, business and community organisations to build support and tease out the problems in a democratic way. All stakeholders should have a say in crafting a proposal to put Dublin, and the people of Dublin, first. Such a convention could address the problems in the original proposal and allow Dubliners to have their say. People want a vote. They were prevented from getting one this year due to a small minority of councillors, but we have the time and space now to rethink and reinvigorate the proposal that can shape the future of our capital city.

I ask the Minister to act in the coming weeks by bringing together the new chairs and mayors of this city who can bring forward a proposal that would allow us directly elect a mayor of our capital city. That would be a progressive move. I believe the Minister is committed to it, and it would be a fine legacy if a plebiscite could take place next year.

Minister for the Environment, Community and Local Government (Deputy Phil Hogan)

I thank Deputy Humphreys for raising this important matter. As he knows, the establishment of a directly elected mayor across the area of the four local authorities in Dublin has been attempted a number of times by Governments over the years, and there have been a number of changes of heart by those Governments, with a lack of structured consultation with local representatives or the people of the Dublin metropolitan area.

Within the framework of the Local Government Reform Act 2014, I provided for the first time a more consultative and bottom-up approach to the creation of an office of directly elected mayor for the metropolitan area of Dublin. The option of a plebiscite remained as had always been envisaged - that is, a local plebiscite allowing the elected councils in the first instance, and the electorate in Dublin secondly, to decide whether Dublin should have a directly elected mayor, and the range of functions for the office.

In recognition of their democratic mandate as local public representatives, and in the best traditions of representative democracy, the elected councillors in Dublin were given a proposal in respect of their vision for an office of directly elected mayor developed by a forum of the elected members from across the Dublin authorities, which was representative of a wide range of political perspectives. Each of the local authorities took its own decision on whether there should be a plebiscite in light of what they felt was best for the area they represent.

There was a clear divergence in the views of Fingal County Council and the other three local authorities in Dublin on the role of a directly elected mayor, leaving us with no consensus on a model for the office that could be put in a plebiscite in tandem with the recent local and European elections on 23 May. In our system of representative democracy, it would have been wrong to ignore the views of Fingal and to put a proposal to the electorate that did not enjoy the support of all four authorities in the region.

My immediate focus has now switched to bedding down the very significant reforms to the local government system generally that have been introduced from 1 June this year. The meetings of 30 of the new councils last Friday were a further welcome step in the reform programme, and I look forward to the completion of meetings of the new municipal district members over the rest of this week and early next week.

The changes we have brought about in local government are the most important changes across the country in more than a century, and their successful implementation will greatly improve local government and the role it plays in representing local communities and in economic, community and social development. However, that is not to say that, following a period of reflection, proposals for a directly elected mayor for Dublin could not be revisited.

I assure Deputy Humphreys and the House that I am committed to the concept of a directly elected mayor for Dublin. The Government remains committed to the notion of a plebiscite for a directly elected mayor for Dublin, and it appears that it is down to me to come up with a fresh initiative in view of the failure of the forum to achieve that consensus. This must take account of the differing views, significant in some respects, among the different local authorities on the role of such an office. Engagement will be required with the four authorities and all relevant Government Departments at a time most likely to maximise the prospects for agreement on a meaningful proposal to put to the electorate, and to maximise the prospects for success in the ballot box.

In that context, consideration would have to be given to not only how an office of a directly elected mayor would impact on functions currently discharged at central government level but also how the existing four Dublin local authorities' remit would be affected by such an office. It is my intention to write to the newly appointed mayors and chairpersons of those local authorities to invite them to a meeting in the Custom House in early July to discuss how working together we can take the directly elected mayor issue forward.

Deputy Kevin Humphreys

I welcome the Minister's statement that he proposes to invite the mayors and chairpersons to a meeting in the Custom House in July to discuss how this issue can be taken forward. I believe it is fundamentally important to Dublin city that a directly elected mayor role be developed. That was the view of the citizens' forum, which included elected councillors, held in the Mansion House by former Lord Mayor Oisín Quinn. As I said earlier, three of the local authorities voted overwhelmingly in favour of a plebiscite. The only local authority not in favour was Fingal County Council, whose legitimate right in that regard I acknowledge. However, one of the fundamental groups not consulted was the citizens of Dublin. Citizens were not given the opportunity to vote for or against a plebiscite. A referendum on another matter is to be held next year. Knowing the work rate of the Minister, Deputy Hogan, I believe he is well capable of achieving consensus on the holding of the plebiscite on a directly elected Lord Mayor. This would require only minor amendment of the relevant legislation or the holding of a convention in Dublin through which we can engage with citizens, small and medium sized businesses and local groups on the drafting of a proposal.

A directly elected mayor of Dublin would have a democratic mandate. From that democratic mandate power could be built. As I said, Dublin is competing on an international basis for inward investment. A directly elected mayor for Dublin, representing 1.3 million people, will allow Dublin to compete on an international scale in attracting foreign direct investment into the city. We face enormous challenges in terms of sustainable development, employment, arts, culture, housing and flood protection in Dublin city. These issues can be best addressed by a directly elected mayor for the city.

I welcome that the Minister proposes to issue an invitation to the chairpersons of the four councils. I look forward to that process being built upon quickly so that a plebiscite on the election of a mayor for Dublin city can take place in the middle of next year. I believe this will add to the economic recovery not only of Dublin city but the country. It should not be forgotten that more than 50% of all taxation raised is raised from within in the greater Dublin city area. Anything that allows us to attract more foreign direct investment must be welcomed.

I again welcome the Minister's commitment and look forward to an engagement with the citizens of Dublin on the issue of the holding of a plebiscite on a directly elected mayor.

Deputy Phil Hogan

I again assure Deputy Humphreys that I am committed to the concept of a directly elected mayor for Dublin. It is regrettable that in the discussions between the four local authorities it was not possible for them to reach consensus on what should constitute the powers and functions of a directly elected mayor. It certainly was not possible for me to ignore the fact that one of the local authorities had some difficulties in that regard. In establishing the forum to allow local public representatives of the four local authority areas, as they then existed, to come together I thought it would be possible for them, as those closest to the citizen, to come to a conclusion on the matter. Deputy Humphreys mentioned some of the issues that are of concern, particularly to the councillors in Fingal, which perhaps should have been reflected upon a little earlier in the process and not taken for granted.

As the saying goes, we are where we are. I will kick-start the process by way of early engagement with the mayors and chairpersons of the four Dublin authorities in early July. I look forward to a constructive process in the future which will meet the objective which Deputy Humphreys and I want.

Medicinal Products Supply

Deputy Brendan Griffin

I thank the Minister of State, Deputy White, for coming to the House to respond to this matter. I first became aware of this problem on Facebook, when a constituent tagged me on a post uploaded by a young Galway woman in relation to the circumstances facing her family, particularly her mother who suffers from MS. Rather than try to describe the situation I propose to read into the record the post uploaded onto Facebook by the young woman, which I believe will illustrate the situation far better than I can. It states:

I don't normally make statuses like this on FB but our government needs to see and hear what effect the decisions they make have on families, from the families themselves! My name is Caitriona I'm a 24 year old student nurse, from Galway originally but I'm studying in Sligo. As you know, nursing is a profession that involves providing high quality care and treatment for the sick and promoting health for all. And as a nurse the situation my family is facing at the moment has greatly affected me because our country won't provide my mother with the treatment she needs. We recently received the news that my mum, who has Multiple Sclerosis, will no longer receive her medication (Fampyra) on the Long Term illness Scheme. Meaning that she will now be forced to pay 500 euro a month if she wants to have the only tablets that have treated the symptoms of her MS in particular her walking ability and fatigue. My mum retired early because of the illness, and her loss of mobility and loss of power in her arms and hands, she uses a collator to walk, and has a hand controlled adapted car as her legs have severely reduced power, she has foot drop and has had two falls, one of which took me and my brother ages to get her off the ground and resulted in a fractured shoulder. Watching the effects that her condition has on her has been awful, hell actually and without her medication things will progress sooner. It will be impossible for her to afford these on the pension that has already been cut and making ends meet at the moment is already difficult. She currently has a six weeks supply left and if I have to write to every TD in this country for the next 6 weeks I will, because she needs this medication as much as anyone with a terminal illness needs theirs! This issue is not only affecting her but others around the country and it needs to be brought to your attention, and I cant emphasise this enough! It took me hours to write this because I couldn't get the words out, but because of the fear of what the future has for her, I did!! Please like and share this status in the hope that someone hears my voice and yours in support of my mums treatment.

As I said, that post was uploaded by a young lady in Galway.

In a recent article in the Irish Independent a man said that the drugs allow him to continue to do a job he loves, pay taxes and not need any home care. He has been on the medication for three years and in one instance when he could not get the drug for two weeks he went from using one stick to needing two sticks to walk. The article states:

If I forget to take one of the tablets I am very unsteady and can barely walk. It gives me the strength to lift my feet up steps and basically get around the house and get in and out of work. In the evening when I have a double dose in my system I can even climb a flight of stairs.

The man also said that the drug has improved his balance and reduces his risk of falling. The article continues:

I have gone on to secondary progressive multiple sclerosis and there is no cure. All I can do is hope that it will not get bad quickly.

That is what the drug has been doing for the lives of real people. I appeal to the Minister of State to do anything that he can to help these people, including re-engaging with the pharmaceutical company involved and the HSE. These are real people's lives. I implore the Minister of State to find a solution to this problem and to help these people.

Minister of State at the Department of Health (Deputy Alex White)

I thank the Deputy for raising this issue. I wish to clarify that fampridine, fampyra, was never available to multiple sclerosis patients under the long-term illness scheme. However, I understand that the manufacturer of fampyra supplied the drug free of charge to some patients who were prescribed it by their clinician. The manufacturer has recently decided to stop supplying the drug free of charge and, as a consequence, these patients are now faced with financing the drug themselves if they wish to continue with this drug treatment.

The HSE has statutory responsibility for decisions on pricing and reimbursement of medicinal products under the community drug schemes in accordance with the provisions of the Health (Pricing and Supply of Medical Goods) Act 2013.

The HSE received an application for the inclusion of fampridine in the GMS and community drugs schemes. The application was considered in line with the procedures and timescales agreed by my Department and the HSE with the Irish Pharmaceutical Healthcare Association, IPHA, for the assessment of new medicines.

In accordance with these procedures, the National Centre for Pharmacoeconomics, NCPE, conducted a pharmacoeconomic evaluation of fampridine and concluded that, as the manufacturer was unable to demonstrate its cost-effectiveness in the Irish health care setting, it was unable to recommend the reimbursement of the product. The report is available on the NCPE's website.

The HSE assessment process is intended to arrive at a decision on the funding of new medicines that is clinically appropriate, fair, consistent and sustainable. In these circumstances, the HSE has not approved the reimbursement of fampridine under the community drug schemes, including the long-term illness scheme.

I understand that studies are ongoing to assess the wider impact of fampridine on both walking and quality of life for persons diagnosed with multiple sclerosis. The account the Deputy read out demonstrates a very real human situation. The description of the very real circumstances faced by the individual concerned was very eloquent. The studies to assess the wider impact of the medicine in question are ongoing. The results of these studies will contribute to the evidence base demonstrating the clinical effectiveness of fampridine that can be used to support future applications for its inclusion on the lists of reimbursable items supplied under the community drugs scheme. In this context, it is open to the manufacturer, at any time, to submit a new application to the HSE for the inclusion of fampridine on the community drug schemes.

I understand the manufacturer has indicated to the HSE that it intends to submit a revised application for fampridine. The HSE will then reconsider the application in line with the agreed procedures and timescales for the assessment of new medicines.

Deputy Brendan Griffin

I thank the Minister of State for his response. I welcome the indication from the company that it is trying to submit a new application to the HSE. However, time is of the essence as the end of June is not very far away. My concern, which I am sure is shared by the Minister of State, relates to the individuals whose supply is running out. The lady in Galway, to whom I spoke last Friday and whose testimony was quite similar to that of the man from Wexford, stated she was without her drugs for a very short period when she realised the consequences. She did not feel the drug was making very much difference in her life until she went without it, at which time she regressed very quickly. When she went back on the drug, she was able to do things she was not able to do when off it.

Can the Department take a proactive approach to this and engage immediately with the drug company to try to find a resolution to this matter? One particular chain of pharmacies is offering the drug mark-up free but it is still beyond the affordability of many. We must bear in mind also that people in the circumstances described have considerable expenses in addition to that of the drug. Providing the drug at an affordable rate or free of charge would be of some help, although it would not fix everything financially.

Would it be unprecedented for the Minister of State to engage directly with the company given that there is a specific problem for the people to whom I have referred? Can something be done more quickly than normal given the human cost associated with the people in question not being able to have their drugs?

Deputy Alex White

Although I believe it would probably not be appropriate for a Minister to engage directly with the company, I understand and accept very much the force of what the Deputy states in respect of the case in question. The only way the process can be triggered is for the manufacturer to submit a new application. I do not believe that has happened yet but I understand it is to happen. I will certainly give any undertaking I can to the Deputy and the House. As I said, the HSE will reconsider the application. It has to go through particular procedures in regard to balancing the efficacy of the drug against the cost. That process must be engaged in on behalf of the State. It is often very difficult when somebody is in a very particular human situation and in need of the support of a particular medicine or drug to address the opposite side of the case, that is, the fact that the drug must be assessed for efficacy and that this must be balanced against the cost. The drug in question is the subject of some comment — I do not know whether I should describe it as controversy — in the United Kingdom owing to an assessment by the National Institute for Care and Excellence, NICE, the equivalent of our assessment organisation. This is a live issue. It may be of some comfort to the Deputy to know that I will do everything in my power to ensure that once the process is triggered by an application, it will be expedited by the HSE so the matter will be addressed and dealt with as quickly as possible.

Register of Electors Administration

Deputy Tony McLoughlin

I thank the Office of the Ceann Comhairle for affording me the opportunity to raise this issue with the Minister for the Environment, Community and Local Government, Deputy Phil Hogan. Members will be aware that persons not on the voting register may apply to register on the supplementary voting register up to 15 days before polling day. Sundays, public holidays and Good Friday are not counted as days for this purpose. I am aware of recent abuses in this regard that occurred in the local electoral area in my constituency. Persons were added to the register through the supplementary registration system and assigned to vacant addresses. I am confident these people switched their votes from their home areas to the area in question to support a particular candidate, despite the fact that, in reality, they never lived there, nor will live there in the future. Any person who applies to register to vote through the supplementary register should be required to forward with his application a document with proof of address. This could be a bill, bank statement or other evidence normally required to prove one's address. This move would stamp out the abuse which I believe led to up to 20 to 30 people voting in a particular electoral area when they should have registered elsewhere.

The second issue I wish to raise is the application process for persons who seek a postal vote because of their occupation. In the Ballinamore municipal electoral area of County Leitrim during the recent local elections, 406 applications were received for postal votes. The vast majority were received for reasons associated with people’s occupations. Of the 406 applicants, 368 voted, with 365 casting a valid vote. I am still asking what happened to the remaining 40 plus.

I believe a number of applications came from people who were living and continue to live in Australia, Canada and the United States. It is clear that these people did not make the applications themselves and that the applications were made by people acting for a particular candidate in the local election area. With regard to one candidate I know who delivered the unmarked ballot paper to the returning officer, the parent of the applicant was bewildered and could not understand how his or her son could have a postal vote considering that he has resided in Australia for the past two years.

I am not advocating that we suspend postal votes for persons who cannot vote due to their occupation but proposing that the Minister review the application process and ensure that a garda or authorised local government official will personally witness the application by a person rather than allowing an application form to be sent in from nowhere.

Why did 40 applicants in the Ballinamore area of County Leitrim not proceed to cast their votes?

I can only suspect that once the list of voters was published and the Garda authorities were notified, attempts by some persons to vote on behalf of others did not go ahead. I urge the Minister to review these two issues and consider changes to prevent the abuse of democracy that may have happened at May's local elections.

Deputy Phil Hogan

I thank Deputy McLoughlin for raising this very important issue, which is of interest to us all. In law, the preparation of the register of electors, including the supplement to the register, is a matter for each local registration authority. It is their duty to ensure, as far as possible and with the co-operation of the public, the accuracy and comprehensiveness of the register. It is also important that all eligible voters are enabled to vote whenever there are elections or referendums. Eligible voters who are not on the register may apply for inclusion in the supplement to the register. In order to be able to vote at any impending elections or referendums, a person must apply for inclusion in the supplement no later than 15 days before the next polling day, excluding Sundays and public holidays. As Deputy McLoughlin noted, each application for inclusion in the supplement must be signed in the presence of a member of An Garda Síochána from the applicant's local Garda station. The garda must be satisfied as to the person's identity before signing the application and may request identification.

Some 3.2 million voters were on the register of electors at the recent elections. This included 59,758 names added by way of the supplement to the register in advance of the elections. I am conscious of the frustration of many electors who find they are not on the register of electors when they go to a polling station and, of course, there are others who are on the register of electors who are unexpectedly there.

In regard to the supplement to the postal and special voters' lists, I was satisfied to have the opportunity last year to include a provision in the Electoral, Local Government and Planning Development Act 2013 to allow more time for making an application for inclusion in these lists in advance of impending elections and referenda. Previously, it was a requirement that all such applications had to be made in the two-day period after the making of the relevant polling day order. This was unnecessarily tight in the case of referenda and presidential, European and local elections. Under new arrangements applications for inclusion in the supplement to the postal and special voters' lists can now be made up to 22 days before the next polling day.

Returns received from registration authorities by my Department indicate that 9,278 names were included on the supplement to the postal and special voters lists in advance of the recent local and European elections. These, of course, would already have been on the register of electors.

I agree with Deputy McLoughlin it is a matter which is a constant source of frustration to participants in the electoral process as well as voters themselves. I am, of course, anxious to make the necessary changes in the short term to ensure that in future elections we will be able to tighten up the process and eliminate some of the anomalies that are identified by Deputy McLoughlin.

Deputy Tony McLoughlin

I thank the Minister. In the review that will take place, I ask that presiding officers in the local authorities are the ones called upon as they are the people on the ground. In a review situation, I believe they should be consulted at local authority level because they are hands-on and know exactly what is happening. While I welcome the Minister's statement, it is vital a review takes place in regard to the anomalies that exist at present.

Deputy Phil Hogan

I have listened with interest to the points made by Deputy McLoughlin. I assure him I share his concern about some of the anomalies that are cropping up too frequently in elections, particularly the need to identify the people who are registering, either directly in the formal electoral register process or through the supplementary register. We are looking at the use of PPS numbers as one of the initiatives which is often suggested to improve the register. While PPS numbers or any other unique identifier could assist the registration authorities in ensuring the register of electors is as accurate as possible, there are a number of issues that crop up and which we will have to consider before we go down that road.

I also remind the Deputy that the programme for Government commits us to the establishment of an electoral commission, and we are going to establish that electoral commission in 2015. This matter will be addressed by the Houses of the Oireachtas in appropriate time for them to make these suggestions again. Hopefully, we will be able to reflect the concerns the Deputy has expressed. We will be glad to enlist the support and experience of the local authorities and the presiding officers in the various polling stations throughout the country in order to find what is the best way to ensure we have a good register of electors in which people can be confident. They must have the confidence that what is in the register of electors and the voters registered there is fair and as accurate as possible. These are the matters that will be appropriate for consideration by the electoral commission in advance of the next general election.

Banking Sector

Deputy Michael McGrath

This is the first time I have faced the Minister, Deputy Noonan, across the floor of the House since he made the statement about his medical condition. I genuinely want to wish him all the very best in his recovery.

The issue I raise concerns the sale by one of Bank of Ireland's largest shareholders, Wilbur Ross, of his entire shareholding in the bank, and in particular the implications that may have for the State's continuing shareholding in the bank, which now lies at approximately 14%. Obviously, the headlines are being dominated by the handsome profit Wilbur Ross made on the financial investment in Bank of Ireland. I will not pass judgment on that issue because, back in the summer of 2011, there was not exactly a queue of international investors willing to invest in Irish banks. He took a punt, took a risk, and it has certainly paid off handsomely for him. It is for other market analysts to assess whether the appropriate price was paid at that time.

The decision he has made to sell his entire shareholding in Bank of Ireland does, of course, raise some concerns, given it comes on the eve of the first European-wide stress tests, and Bank of Ireland is one of the banks to be covered by those stress tests. Today, I spare a thought for the many thousands of ordinary shareholders in Bank of Ireland, who lost everything on their investment in its shares and, indeed, the shareholders in the other banks, who also lost everything prior to the virtual collapse of the banks and their share prices back in 2008.

The issue I want to focus on primarily is what are the implications for the State in terms of its 14% shareholding in Bank of Ireland. Clearly, given that over recent months a large stock of Bank of Ireland shares has been traded on the open market, I assume this has the direct effect of making it far more difficult for the State to dispose of its shareholding on the market if that is what the Minister was minded to do at this point in time, and, therefore, the sale of Wilbur Ross's shares will inevitably result in a delay in the State's disposal of its shareholding in Bank of Ireland.

What is the Minister for Finance's position as shareholder in Bank of Ireland on behalf of Irish taxpayers in terms of the disposal or retention of that shareholding for a period of time? In the context of the Government's efforts to secure retroactive bank recapitalisation, what is the position in regard to our shareholding in Bank of Ireland and also in regard to AIB? Is the Minister actively pursuing the option of disposing of some of our shares to the European Stability Mechanism, for example, in order for it to hold those shares and to have the result of essentially reimbursing Irish taxpayers in full or in part for the investment that was made in the Irish banks at the time the recapitalisation of those banks took place?

Given the very significant transaction which has taken place today - the disposal of Wilbur Ross's entire shareholding in Bank of Ireland - and despite the bank's description in 2011 of him and the other investors at that time as being long-term value investors, clearly that has not proven to be the case. His focus as an investor is on distressed assets, and he has worked the markets very well in this case and made a handsome profit.

My focus is on the State's position in respect of our 14% shareholding, the impact of today's transaction on that and the Minister's attitude to the retention or disposal of those shares.

Minister for Finance (Deputy Michael Noonan)

I thank the Deputy for raising the issue and for his personal good wishes to me. As the House will no doubt be aware, it was announced yesterday evening that a significant shareholder in Bank of Ireland, Wilbur Ross and Co, was selling the remaining 1.8 billion shares it held in the bank by way of a placing in the market. Subsequently, it was confirmed this morning that Mr. Ross's shares have all been sold at a price of 26.5 cent per share generating proceeds of €475 million. Mr. Ross has now sold his entire investment in the bank and will now step down from the board of Bank of Ireland.

It is worth recalling that the State secured this investment for Ireland at a time when few other investors were prepared to invest. The State has benefited from the large private sector investment in Bank of Ireland. This investment reduced the risk the taxpayer had to take on board back in 2011 to support the banking sector at what was a very difficult time for the State.

Ireland is now in a completely different place. Slowly but surely our reputation has been restored and Mr. Ross's investment has been followed by billions of euro worth of investment from others into Ireland, particularly in the past 12 months. There is no doubt that this investment in 2011 was a significant boost to the Irish economy and garnered investor confidence in the recovery. As a result of the billions of euro in investment secured since 2011 we have managed to remove significant risks to the Irish taxpayer.

The liquidation of IBRC has been very successful with 90% of the assets being sold to private investors to date. NAMA has attracted significant investment and the chairman informs me that it will have repaid 50% of its senior debt by year end - two years ahead of target. Investment interest in Irish assets remains strong, our credit rating has been upgraded by all the rating agencies. For example, we are now rated A by Standard & Poor's.

The recovery in the bank's share price since mid 2011 has benefited the taxpayer directly in a very tangible way. The recovery enabled the State to exit its coco and preference shares in the bank at a profit while our remaining equity investment is worth €1.2 billion. As I said last December, when one includes the income received by the State for the guarantees it provided, the State has recouped a net positive cash return of over €1 billion from its overall support and investment in the bank and this is before one takes into account our remaining shares.

Bank of Ireland is now profitable and generating capital while I am pleased to say that our investment in AIB is also making similar progress. The State remains an important and supportive shareholder in the bank and we will manage this investment in the best interests of the taxpayer. How does this particular transaction influence our investment? It is certainly encouraging that such a significant amount of shares could be sold in the market and it fully removes the perception of an overhang from Mr. Ross. This is, after all, the third successful placing of shares in the bank in the past six months so it really demonstrates a continued very strong interest in Irish assets.

It also improves the depth and spread of shareholders in the bank which augurs well for when we decide to sell some or all of our stake. I note the comments from Fairfax Financial Holding's CEO, Mr. Prem Watsa, one of the other investors from the 2011 consortium, about him being a long-term shareholder in the bank. That should help minimise any short-term indigestion in the market for the shares in the coming weeks. Finally, when it comes to our remaining shares, we will bide our time and I have no current plans to start selling down our investment.

Deputy Michael McGrath

I thank the Minister for his response. I accept that overall, the State will have made a profit on its rescue of Bank of Ireland a number of years ago. That is to be welcomed. I wish that was the case in respect of the other banks but that is certainly not the position at this point in time.

I will take the Minister up on his observation regarding the comments from the CEO of Fairfax Financial Holdings, Mr. Prem Watsa, about him being a long-term shareholder in the bank. I remind the Minister that Wilbur Ross said something similar about three months ago when he sold many of his shares in Bank of Ireland. He put on the record then that he had no intention whatsoever of selling the remainder of his shareholding so we must take some of these statements with a pinch of salt. These are investors who will sell at what they regard as the opportune time to maximise the return they get from their investment. It is the Minister's job as the guardian of taxpayers to ensure we are getting the best return as a state for our investment in Bank of Ireland. I accept his statement that we will bide our time. I would interpret that to mean that there will certainly be no short-term sale of the State's shareholding in Bank of Ireland.

I expect that it would certainly not be in advance of the ECB stress tests which will take place over the next number of months but I would like the Minister to comment on the ongoing efforts by the Government to secure retroactive recapitalisation of the banks. The Minister is pursuing that at European level with his colleagues on Ecofin. Where does that negotiation effort sit alongside the Minister's decision-making strategy concerning Bank of Ireland and the other banks? We want to ensure that the Minister is getting the best return possible for the shares we currently hold in the banks but we also want to ensure that our European partners step up to the mark and fulfil their responsibilities relating to the two year old commitment in respect of the separation of banking debt from sovereign debt.

Deputy Michael Noonan

Investors buy shares to make money. They do so to avail of a dividend or, alternatively, capital gains. With distressed assets, investors usually go in for the capital gains that may accrue. It is worth pointing out that the purchasers of the shares this morning are also private investors so there is no diminution of the private investor share. It has just moved from one single investor to a number of private investors who paid what they thought was value in the market at 26.5 cent per share. One can debate whether or not 10 cent was a very low price on offer in the first instance but it went from 10 cent on the open market to 8 cent and stayed there for about six months. At one period, it traded at 7 cent. If anybody is very wise in retrospect, they should have been wise at the time, bought the shares at 8 cent and made even more than Mr. Ross made on the transaction.

In talking about retrospect capitalisation, the Deputy is really stitching a major issue on to the tail end of a debate on a Topical Issue. If he raises it in the next round of finance questions, we could have a full discussion on it but we do not really have time to do this issue justice today. It is still being pursued.

Dáil Éireann debate - Tuesday, 10 Jun 2014