Dáil Éireann debate -
Tuesday, 14 Nov 2017

Vol. 961 No. 4

Leaders' Questions

Deputy Micheál Martin

The commission of investigation led by Mr. Justice O'Higgins was established to determine the veracity of very serious allegations of Garda malpractice made by Sergeant Maurice McCabe. Its establishment followed a long saga of harassment, poor treatment and attacks on the bona fides of Sergeant McCabe. When it emerged, following the conclusion of the commission of investigation, that the legal representative of the former Garda Commissioner was instructed to attack the motivation and integrity of Sergeant McCabe, people felt genuine shock and anger. That was not how it was meant to be. The O'Higgins inquiry was meant to be a new chapter in the way in which the allegations made by Sergeant McCabe were to be treated as well as in the way he was treated as a person. It was supposed to find out the facts of what happened and it was never meant to be an adversarial attack on his credibility and integrity as a person. We have now learned in various reports over the last number of days that the head of Garda HR was told "We are going to go after Maurice at the commission". It is also reported that a telephone call was made on 15 May from the former Commissioner to the Secretary General of the Department of Justice and Equality on the proposed legal strategy.

To be fair, Deputy Alan Kelly has tabled a number of parliamentary questions on this issue of the extent of consultation between the Department and the former Garda Commissioner, the extent and content of meetings and communications, if any, between the Department's officials and the former Commissioner and whether complaints were made to the Department about the legal strategy adopted and how it was adopted. In the normal course, questions like these should receive straightforward answers. The answer from the Minister for Justice and Equality, Deputy Flanagan, is classic in the sense that he answered a question which he was not asked and failed to answer the questions he was asked by Deputy Kelly. Deputy Kelly has followed up with further questions which are very serious in nature and to which the answers will be serious too. In the context of a Parliament like this, it is very strange that replies are not being given. In an interview at the weekend, the Tánaiste refused to confirm or deny whether she was aware of this adversarial approach being taken at the O'Higgins commission. The Taoiseach said at the weekend that he would speak to the two Ministers. Has he spoken to the two Ministers, what has been their response, and can the Taoiseach bring clarity to this issue? Did the Tánaiste know about the attack on the integrity and credibility of Sergeant McCabe as per the legal strategy of the former Garda Commissioner?

The Taoiseach

The first thing that should be recognised is that we as a Government are committed absolutely to establishing the facts around these matters and this very sorry affair. That is why we established a commission of investigation in the first place and a tribunal thereafter. I assure the Deputy that those of us here on the Government benches want to know, as much as anyone in the House, the full facts as to what happened here, why Maurice McCabe was treated as he was and whether there was a campaign of vilification led against him by senior gardaí or anyone else.

To answer the Deputy's question, I spoke to the Tánaiste yesterday. She is currently in the United Arab Emirates on a trade mission. She confirmed to me that she had no hand, act or part in forming the former Commissioner's legal strategy, nor did she have any prior knowledge of the legal strategy the former Commissioner's team pursued. She found out about it after the fact, but around the time it was in the public domain when everyone else knew about it as well. The current Minister for Justice and Equality was not a Minister in the Department at the time and he also had no hand, act or part in, or prior knowledge of, the legal strategy being pursued by the former Commissioner's legal team.

The Department of Justice and Equality is a big place with many different people in it but, as things stand, the Department has not been able to find any record of being informed before the fact of the legal strategy the Commissioner was going to pursue. It was told about the approach taken by the Commissioner's senior counsel but that was after the cross-examination had taken place. The Department was not in a position, after the fact, to express concerns about it or counsel against it. The Deputy claims there was a call to the Secretary General on the day of the cross-examination but we have not been able to confirm if that is or is not the case. I think that perhaps it is not and that the assertion may be false but I do not want to swear to it today or until I can find out for certain. There may well have been a telephone call from the Commissioner's office to the Department on the day but it is not unusual for the Commissioner's office to contact the Department of Justice and Equality.

The former Minister for Justice and Equality, Deputy Frances Fitzgerald, had no hand, act or part in the legal strategy and had no prior knowledge of it. She and the Department only found out about it after the cross-examination had already taken place.

Deputy Micheál Martin

The question relating to the phone call was tabled by Deputy Kelly but was not answered in the Minister's reply. It has taken quite a long time for us to ascertain that the Tánaiste did not have prior knowledge of the legal strategy. In the context of the commitment to establishing the truth about the engagement between the Department of Justice and Equality and the legal representatives or the Garda Commissioner, has the Department submitted all its documentation details of all the contacts between it and the former Garda Commissioner to the Charleton inquiry? The Taoiseach said the Government was committed to establishing the truth so I take it material has been sent by the Department to the Charleton inquiry on this specific matter.

The Taoiseach

The Minister for Justice and Equality informs me that he has written to the Ceann Comhairle this morning in relation to Deputy Kelly's questions and the Department will co-operate in full with any request for information received from the tribunal. I cannot tell the Deputy here today whether it has provided all the information asked for by the tribunal but it certainly will do so.

It is important to get the facts straight in relation to the terms of reference of the tribunal. The terms of reference of the tribunal, mandated to consider the questions put forward by Deputy Kelly, include:

To investigate contacts between members of An Garda Síochána and:

- Media and broadcasting personnel,- members of the Government,- TUSLA,- Health Service Executive,- any other State entities,

- or any relevant person as the Sole Member may deem necessary to carry out his work;

As the Department of Justice and Equality is a State entity it is covered by this tribunal and will co-operate with it in full.

Deputy Mary Lou McDonald

Two reports published this morning confirm what people have known for quite some time, that is, that the Government's housing policy is a catastrophic failure. The overriding message in the reports from Daft.ie and the ESRI is that accommodation has become unaffordable and supply is at an all-time low. As things stand, renting or buying a home is now beyond the reach of an entire generation. Rather than delivering opportunity, the Government's housing crisis has instead delivered extreme stress, depression and hopelessness for thousands of citizens, who work hard and who aspire to a better life but for whom there is very little reward.

Ten years ago, a couple would make sacrifices in their daily lives to save for a deposit for a home but today they make exactly the same sacrifices simply to meet the extortionate rent that is due at the end of each month, if they are lucky. Life goals that were once considered modest and common have all been made impossible and people have told me their relationships are cracking under the strain of the housing emergency.

For many people in their late 20s to mid 30s even the idea of starting a family now falls into the bracket of unaffordability. These are the very real human consequences for those struggling to get on the property ladder or struggling to pay their rent. This is the reality and we hear it every day. The damage that is being done to people, including to their mental and physical health, is devastating. They spend 40 hours a week at work, and some spend more, but they have precious little to show for it. They cannot build a future and they find themselves in an exhausting economic and psychological dead end. So much for a republic of opportunity. It is nothing but a dupe.

I suggest the Taoiseach needs to change track. Instead of trying to normalise homelessness in this State with crude statistical exercises he needs to implement policies that actually work. The Government must increase the supply of affordable housing and introduce measures to reduce the cost of purchasing or renting a home. Just so as the Taoiseach knows, affordable housing means properties at a sale price of between €160,000 to €260,000 in Dublin. This would meet the needs of households earning above the threshold for social housing but below the €75,000 a year mark. It would mean affordable rental tenancies with fair rent. We have repeatedly suggested some solutions that meet these problems. Will the Taoiseach today commit to introducing a new affordable housing scheme that delivers homes on a level that matches the scale of the crisis we face? Rather than throwing renters to the wolf of market forces, will the Taoiseach introduce legislation that delivers real rent certainty by linking increases to the cost of living?

The Taoiseach

The Deputy is very welcome back. I understand she was on a fundraising trip to the United States last week. I hope that went very well.

In terms of the two reports the Deputy mentioned, the daft.ie report and the ESRI report both add to our understanding of this issue and they are both worth a read and worthy of consideration. I had the opportunity on the way in this morning to listen to some experts on housing speak about the two reports on "Morning Ireland". They came from very different perspectives, from daft.ie, the ESRI and the Nevin Institute. They all agreed the fundamental underlying problem is a lack of supply and the fact we do not have enough houses, apartments and homes for a country with a rising population, increasing employment and changing demographics with more people in smaller households.

In terms of supply, we are increasing the provision of social housing. Between 2,000 and 3,000 social houses will be completed before the end of the year. This is a significant increase on last year and the year before. This will increase to approximately 4,000 to 5,000 next year. In terms of affordability, we have provided hundreds of millions for the local infrastructure housing activation fund, LIHAF, to make sites accessible and make it possible for developers to build on them. There is a requirement as part of this that a significant number of the units be affordable. We also announced in the budget the establishment of house building finance Ireland. This will make it much cheaper for builders to get finance. This will take some time to get up and running but will be up and running sometime next year. We have also increased the vacant site levy to punish people who hoard land. At Cabinet today, we decided to make an amendment to the Finance Bill to require the Department of Finance to produce a report on a vacant house tax and how this might work. This will be for the consideration of the Dáil. We have also fast tracked planning and we are changing the building regulations. We are seeing results. Planning permissions are up 49% year on year, commencement notices are up 45% year on year and next year we anticipate somewhere between 20,000 and 25,000 new homes being built, which is not enough but is a significant improvement on previous years.

The report on rent refers to rents advertised, so it does not cover the rent pressure zones.

As a result of the introduction of the rent pressure zones, 60% of renters now have rent certainty and rent control and cannot have their rent increased by more than 4% in any one year. That has given huge relief and security to people who are renting. The scheme has already been extended to Drogheda and parts of County Wicklow and may well be extended again.

Deputy Mary Lou McDonald

Last week, the Taoiseach had neither a definition of "affordable housing" nor any targets for the delivery of affordable homes. At the weekend, he deliberately used an out-of-date OECD report to try to play down the scale of the homelessness crisis we face. He has said that he has read today's reports and that they "add to our understanding of this issue". We would have found it more comforting if he had told us that the reports have illuminated his understanding. Perhaps he just does not want to know. The figures demonstrate the root of our problem. The Taoiseach mentioned that, over three years, €1.1 billion is being dedicated to the help-to-buy scheme, the local infrastructure fund and House Building Finance Ireland. All of those initiatives are directed at private developers. By contrast, a mere €25 million be allocated over the next two years to build houses that are really affordable, such as those on sale in the Poppintree area of Ballymun. People like clerical staff and factory workers who are on average incomes can afford to buy such houses. The Taoiseach has performed an about-face. I have quite deliberately set out for him the human consequences of the catastrophe people are facing. I hear these stories and I am sure he hears them too. I hope they are adding to his understanding and informing his position. Will he dedicate more money to the construction of truly affordable housing? Will he introduce a new scheme that will meet this crisis head-on in real terms? Is he open to that?

The Taoiseach

Nobody in this House has a monopoly on compassion. Everyone in this House has friends, family members and constituents, hosts constituency clinics and understands the problems being faced by individuals. We all know that homelessness is a stain on our society. We all know that the millions of people who are not directly affected by it are angered by the injustice of it. We understand the wider issue of young people working, saving up and trying to afford to buy their own homes for the first time but not being able to do so. I remind Deputy McDonald, who asked about my definition of "affordable housing", that the definition she uses is from 2011 and was stood down some time ago. The OECD report I quoted was published in 2017.

Deputy Eoin Ó Broin

It uses figures from 2015.

The Taoiseach

The numbers used by Deputy McDonald are from 2015. The report to which I refer is from 2017.

Deputy Eoin Ó Broin

It uses figures from 2015.

The Taoiseach

Context does matter, so I should mention that I used that report specifically in response to a question about Ireland having one of the highest homelessness levels. While I have heard people debating statistics for the past two days - I have no interest in debating statistics, by the way - I have not heard anyone repeating that assertion because, of course, it is not true, particularly on the basis of-----

Deputy Dessie Ellis

How many people here have died as a result of homelessness in comparison with other European countries?

The Taoiseach

-----the OECD data or the FEANTSA data collected by non-governmental organisations such as the Simon Community, Focus Ireland, the Society of St. Vincent de Paul and the Peter McVerry Trust. We will dedicate more resources to the building of affordable housing. The local infrastructure housing activation fund is about making sites accessible so that builders can build affordable homes. The house-building finance initiative is about enabling builders to finance the construction of housing and making it cheaper to build houses so that there can be more affordable homes for more people.

Deputy Clare Daly

When the commission of investigation which ultimately became the Charleton tribunal was first discussed, Deputy Wallace and I sought to amend its terms of reference to include an investigation into the extent to which the then Minister for Justice and Equality had been briefed about Maurice McCabe. When the disclosures tribunal was established in March of this year, we wrote to Mr. Justice Charleton to ask him to investigate specifically under term of reference [h], which the Taoiseach quoted earlier, contact between An Garda Síochána and staff in the Department of Justice and Equality.

Anyone who is surprised that evidence of the involvement of the Department of Justice and Equality exists really has not been paying attention to what has gone on in terms of the crisis of policing in this State in recent years and its roots in the link between An Garda Síochána, the Department and the Minister, a link we sought to break in legislation designed to facilitate proper independent oversight, which, unfortunately, was not supported by the House. The real issue for the Taoiseach is not that the crisis will have a knock-on effect on the Department but rather why that information is being released now through the offices of his former Cabinet colleague, whose party supported Nóirín O'Sullivan 100% - not just in government but in opposition - when revelations in respect of her legal strategy regarding Maurice McCabe had been made. Critically, what is the Taoiseach going to do about this? He has fared pretty well out of Garda controversies but he is now the boss and this is solely a matter for him. He can either choose to be a pawn in the games being played by the warring tribes that exist within An Garda Síochána - with the Department of Justice and Equality mandarins in the background - or he can decide to take decisive action in the context of delivering a modern police service that the citizens and gardaí deserve.

Last week, senior Garda officers who attended a pre-retirement course were shocked to see none other than the acting Garda Commissioner amble in and sit down to listen to what was being said. They thought he was at the helm. This is the same acting Garda Commissioner whose report into allegations of Garda involvement in the heroin trade in the Minister for Justice and Equality's constituency has not been published for three and a half years. As a result, GSOC cannot publish its report because it was previously been prevented from attending the disciplinary action involving these gardaí and has been frustrated in trying to access files. How can there be change without accountability or effective oversight and how long is the Taoiseach going to allow this situation to prevail? The Commission on the Future of Policing in Ireland is flopping around on the outskirts coming up with nice jargon about new uniforms and new words. How in God's name will the chaos be stopped when there is nobody at the helm? What other company with 15,000 members of staff would not have a CEO in place? What job takes that long to fill? When is the Taoiseach going to call for the implementation of the Garda Síochána Inspectorate report and the filling of the vacancy for Garda Commissioner?

The Taoiseach

The process of Garda reform is much very under way. We have an acting Garda Commissioner, whom I met last week. He is not retiring and will be in place until we are in a position to recruit a new Garda Commissioner, which we intend to do as soon as possible. Discussions are under way with the Commission on the Future of Policing in Ireland and the Policing Authority to make that happen because it is important that we have a new Garda Commissioner in place sooner rather than later and that this individual will be able to bring in his or her own team. I do not think one person alone can change An Garda Síochána. When I was in Seattle the week before last, I had the opportunity to speak with Kathleen O'Toole who informed me about she reformed and modernised the police service in that city. She told me that it was somewhat similar to what we had in Ireland, with gardaí running IT systems and HR - things that policemen are not really best trained to do - and how important it was that the new Commissioner would be able to bring in his or her own team.

It may be worth informing the House that a memorandum was brought to the Cabinet this morning by the Minister for Justice and Equality to give the Policing Authority approval for the first time to appoint a superintendent of An Garda Síochána who is a member of the Police Service of Northern Ireland, PSNI. This is a very practical example of reform that is under way. For the first time, somebody from an outside police force - in this case, an officer from the PSNI - can be appointed to a senior position in An Garda Síochána, so that is an outside appointment to a senior position. I think we will see more of that in the weeks and months ahead.

I cannot answer questions on behalf of third parties who are not Members of this House or who formerly served here.

Such questions would have to be directed to them. We should be circumspect when commenting on matters that are before a tribunal. As parliamentarians, we need to bear that in mind when making public comment. We need to respect the role of the tribunal, which was established by the Oireachtas earlier this year. All sides of the House supported the establishment of that tribunal and all Members were given an opportunity at that time to contribute to its terms of reference. The Standing Orders of the House, as the Ceann Comhairle will know, preclude Members from raising matters that encroach on the work of the tribunal.

Deputy Clare Daly

We fully respect the work of Mr. Justice Charleton and the record will bear witness to that. We have been in contact with him. There is a crisis of policing in the State. A drowning man or woman will grab on to anyone to try to save him or herself. It could be a senior civil servant or a Minister. The question for the Taoiseach is whether it will be him. The Taoiseach's answer is not the answer he would have given when he was a Minister. The issue at stake is who will seize control. Measures such as the appointment of people from other police services have long been recommended by the Garda Inspectorate. We need the implementation of such measures. The Taoiseach will probably bask in the glory of his new leadership and the benefit it has brought to Fine Gael, which is the same party with the same members but which is perceived differently. Presumably a new leader for An Garda Síochána could be the transforming vehicle it needs because it needs something. What we have now is warring tribes in anticipation of the Charleton tribunal. If the Taoiseach honestly thinks that can continue until the commission on policing decides to give us an answer, possibly in a year's time, then he is more deluded than I gave him credit for previously.

The Taoiseach

The Deputy is absolutely right. I do not disagree with the analysis she has put forward. I am not sure I would go so far as to say there are warring tribes but I broadly agree with the solutions the Deputy has put forward and the change that needs to happen. I gave the Deputy an example of the change that is happening. For the first time, somebody from outside - a member of the PSNI - has been appointed as superintendent. That was agreed by Cabinet this morning. We also have a civilianisation process under way. The Deputy will be aware that a number of senior posts in the Garda are now being filled by civilians. We have the Policing Authority and the policing commission. We certainly will not be waiting for the policing commission to produce its final report before we recruit a new Garda Commissioner. We need a new Garda Commissioner and we need that person to be able to bring in people from outside the force to modernise and improve it and to bring it up to the standard we expect. It is not fully under the control of the Government. The Policing Authority has a role in it now. It is our intention as a Government to advertise for the position of Garda Commissioner before the end of this calendar year.

The Taoiseach: The Deputy is absolutely right. I do not disagree with the analysis she has put forward. i am not sure i would go as far as warring tribes but I broadly agree with the solutions the Deputy is putting forward and the change that needs to happen. I have the Deputy an example of the change that is happening. For the first time, somebody from outside - a member of the PSNI - has been appointed a sa superintendent. That was agreed by Cabinet this morning. We also have a civilianisaiton process under way. The Deputy will be aware a number of senior posts in the gardaí are now being filled by civilians. We have the Policing Authority and the policing commission. We will certainly not be waiting for the policing commission to produce its final report before we recruit a new garda Commissioner. We need a new Garda Commissioner and we need it to be able to bring in people from outside the force to modernise and improve it and bring it up to the standard we expect. It is not fully under the control, of the Government. The Policing Authority has a role in it now. We tiancicpate and it is our intention as a Government to advertise for the position of Garda Commissioner before the end of this calendar year.

Deputy Michael Lowry

I want to raise concerns regarding the operation of the Strategic Banking Corporation of Ireland, SBCI, which was set up by the House under the Strategic Banking Corporation of Ireland Act 2014. Under that Act, €1.24 billion was placed with the SBCI to finance enterprises that provide credit to small and medium-sized enterprises. The SBCI raised €1.24 billion, of which €525 million came from the State. By December 2015, €751 million in total had been approved to lenders by the SBCI, of which €675 million was allocated to AIB, Bank of Ireland and Ulster Bank. Only €235 million was drawn down and of that, only €172 million went into the market. Amazingly, the banks managed to retain €63 million, which improved the liquidity of their balance sheets. By the end of 2016, the banks had increased their retention of this fund to €112 million, which again improved the look of their balance sheets. By the end of 2016, 84% of money given out by the SBCI for so-called investment purposes went towards car leasing, hire purchase and property restructuring. This is asset-backed lending as opposed to what it was meant for, which is working capital lending. The purpose of this type of lending was never envisaged by the Act. According to the 2016 published accounts, which cover two years and four months of SBCI operations, 11% went to working capital and €27 million, or 5%, went to clear off the debt in Ireland of three foreign banks, namely, ACC, Danske Bank and Lloyds Bank of Scotland.

Also included in that €27 million was a figure for a further bailout of Anglo Irish Bank and Irish Nationwide Building Society. The main criteria for access to the fund were inconsistent and prohibitive. They set the bar so high that only the banks would be eligible. On closer scrutiny it is now obvious from responses to freedom of information requests that neither the banks nor the five other successful lenders met the qualification criteria as set down by SBCI.

Furthermore, the three main banks did not set up a special purpose vehicle, SPV, or produce projections as per the criteria. This resulted in no transparency as to where the money was going and the purpose for which it was used internally in banks. Apart from the three established banks funded by the SBCI, five other private non-banking companies were successful in securing SBCI funds. Of these five, four are only involved in leasing and property finance, and not working capital. Coincidentally two of the new non-banking lenders which received SBCI funding of €91 million are headed up by former senior executives of failed banks. One of these new companies was also handed an equity injection of a further €30 million by the NTMA, which is the parent company of SBCI.

From work by various accountants it is now apparent that the majority of companies in receipt of this fund are using the funds to improve the liquidity of their balance sheets as opposed to lending to SMEs. We need to establish if SBCI is operating in contravention to the Acts.

The Taoiseach

I thank the Deputy. He will appreciate that I am not au fait with the inner workings of the Strategic Banking Corporation of Ireland. I will certainly raise the matters the Deputy has raised with the Minister for Finance because it is essential that any public body should operate solely within the legislation passed by this House to provide for it.

The Strategic Banking Corporation of Ireland has a mandate to deliver access to finance for Irish enterprises, particularly SMEs, to correct failures in the Irish credit market while encouraging competition. The SBCI does not aim to maximise profits but aims to provide cheaper funding on better terms to small business. It began lending in March 2015 and from then until the end of June 2017 the SBCI has lent €855 million to 21,000 Irish companies employing 100,000 people. The average interest rate it offers is 1.15 percentage points lower than the average market interest rate on loans to SMEs.

All sectors of the economy benefit from SBCI financing, including manufacturing, agriculture, food, retail, health care, transport and construction. The majority of SBCI loans are used for investment purposes and SMEs supported by the SBCI are based in all regions of the company - some 85% of the lending has been to businesses outside Dublin.

It does not lend directly but does so through partner finance providers, known as on-lenders. It currently has three bank and five non-bank lenders. These are AIB, Bank of Ireland, Ulster Bank, Merrion Fleet, First Citizen Finance, Finance Ireland, Bibby Financial Services Ireland and FEXCO asset management. Some 23.2% of its funding has gone to the agricultural sector and, as I mentioned, 85% of it is outside Dublin.

Deputy Michael Lowry

There is unease over the lack of transparency of this scheme. There is a strongly held view in financial lending circles of favouritism towards the pillar banks and that the conditions of eligibility to the fund are structured in order to suit the big established players in the market - a view that the existing terms and conditions and format are anti-competitive and have a detrimental impact on those lenders which cannot reach the unrealistic and unobtainable criteria set out in the scheme.

In view of the enormous sums of money involved, representatives of the SBCI should be given the opportunity to appear before the appropriate Oireachtas committee to ascertain what oversight, measurement or assessment of the operations of the fund have been conducted by the Department of Finance and to find out what benefit has accrued to the SME sector. What kind of return is evident in terms of stabilising troubled small companies, protecting jobs and enabling growth in job opportunities in the SME sector? We need a review to understand if the SBCI is delivering on its remit generally. Is the State getting value for the expensive administration overheads of the SBCI?

The Taoiseach

In terms of the breakdown, the Strategic Banking Corporation of Ireland, SBCI, has committed €881 million to its on-lending partners. The vast bulk of that, €400 million has gone through AIB, followed by Bank of Ireland, €200 million; Ulster Bank, €75 million; Finance Ireland, €51 million; First Citizen, €40 million; Bibby Financial Services, €45 million; and FEXCO, €70 million. It is certainly the case that the bulk of the lending has gone through the very large pillar banks.

The Deputy's suggestion that the SBCI appear before the finance committee or another appropriate committee to account for itself and the work it is doing is an appropriate one. I see no reason that should not happen or that it would be unwilling to appear before the finance committee but that is a matter for the Chairman and members of that committee. I know the very thorough work it did around the tracker mortgages. I am sure it could do some good work around this as well.