Ceisteanna ó Cheannairí - Leaders' Questions

Last week, two things happened in the world of high finance which caused understandable public outrage. First came the announcement that the Government will again allow the payment of outrageous bonuses to elite staff at AIB, a bank bailed out by the Irish people, as the Taoiseach will recall. Then, we had the news that 16 employees at Davy, many of them senior executives, had broken the rules, broken the regulations, for personal financial gain. The toxic culture that brought this country to its knees a decade ago, it seems, is truly alive and well. People now ask themselves, correctly, are we back to the beginning. Here we go again.

Let us look at the facts. This Davy scam was uncovered in 2014. It has taken six years to get to this point and still no individuals have been held to account. Those who were responsible continued to play a dominant role in the financial sector throughout those six years. Tá an Banc Ceannais ag lorg cumhachtaí breise ionas go bhféadfaidh sé déileáil leis seo le breis agus trí bliana anuas ach ní dhearna Fine Gael ná an Rialtas aon rud chun freagra a thabhairt ar na glaonna seo. The Minister promised legislation to allow senior executives to be held to account before the summer of 2019. We are two years on and still nothing. Let us face it: this recent scandal is not an isolated event. Look at the tracker mortgage issue. That impacted on 40,000 people yet nobody has been held to account.

Perhaps there is little wonder at that when we consider the revolving door between the financial industry and politics, a door that just keeps on spinning, where we see Ministers of State seamlessly move from politics to jobs in high finance. One day, their job is to hold the financial industry to account and, the next day, they are in fighting the corner of that industry as lobbyists. Indeed, it is only when a record fine was issued by the Central Bank against Davy last week that things moved on a little bit. It was only public anger that brought about resignations at Davy.

At the weekend, we had called on the NTMA to drop Davy as the primary dealer in Irish Government bonds, and I welcome that that has happened. However, this decision and the fine are corporate sanctions. Not a single individual from the 16 executives has been held to account. The Minister for Finance, Deputy Donohoe, said yesterday that all those responsible have left the firm but that is not really accurate. They have left one cog in the corporate structure but they remain directors in key parts of the overarching organisation. Last week, the Taoiseach told the Dáil that the fine would impact on behaviour in the financial sector. Does he still hold that view, given the Central Bank has stated and set out how Davy frustrated its investigation at every turn? We still do not know who most of the 16 rule-breakers are. I am not asking the Taoiseach to name them but we need to know where they are now and where they work now. Do any of those involved hold positions in Government Departments or in banks in which the State has a stake? Does the Taoiseach know? Has he looked into this? Can he tell the Dáil what legal consequences those involved will face? Does he accept that they should be independently investigated?

For years, the Tánaiste and the Minister for Finance have sat on legislation to hold individual financial rule-breakers to account. This has to end. Will the Taoiseach commit to enacting such legislation?

I thank the Deputy for raising what is a very important issue. The behaviour by Davy executives was absolutely unacceptable and, I think, reveals an appalling culture of greed, and has damaged the reputation of the financial services sector in this country. Executives in business or in financial services should never put personal gain above their duties and responsibilities. I think the NTMA made the right decision in regard to its relationship with Davy and in severing that in respect of the issuing of bonds. I would say, in the context of the NTMA decision, that is exactly the consequence that I had in mind when I made my comments. A Central Bank investigation will have an impact but it is absolutely unacceptable, first, that this has been ongoing since 2014 and that the executives sought to frustrate the efforts of the Central Bank and of the regulator to get to the truth of this issue, and to bring this issue to a conclusion. I agree with the NTMA in terms of withdrawing Davy’s authority to act as a primary dealer for Irish Government bonds. That was the correct decision and the NTMA will no longer be doing business with Davy.

On the issue of individual accountability, the Central Bank does have extensive powers to sanction individuals who are involved in the management of financial services firms and who breach financial services legislation. That said, we believe the existing financial legal framework to hold individuals responsible for their behaviour needs strengthening and, in the programme for Government, provision has been made for the introduction of legislation in regard to a senior executive accountability regime, SEAR, to deliver heightened accountability in the financial sector. The Government will be publishing the heads of that Bill soon. That, in itself, will drive further positive changes in terms of culture in the financial services industry and enhanced accountability, while simplifying the taking of sanctions against individuals who fail in their financial sector roles.

Davy has said it no longer employs any of the 16 individuals involved in that 2014 transaction and that it will appoint a third party imminently to conduct a review of the findings of the Central Bank. Clearly, Davy has an awful lot of work to do to rebuild public trust.

Deputy McDonald's party is making a point about strengthening regulation and I agree with that but the Deputy needs to practise that as well. She has been unwilling to answer questions about the party's own financial culture. She has accepted it is the wealthiest political party in this country. It accepted a €4 million donation from the estate of Englishman William Hampton into the party's accounts in the North of Ireland, when it was bequeathed to Sinn Féin in the Republic of Ireland. This donation was more than 1,600 times the maximum allowable donation under Irish electoral law. That was a shady enough transaction to make even a stockbroker blush. These are issues that the Deputy needs to deal with too when we are talking about wider financial probity and accountability. Seanad Éireann has spoken in that regard.

With regard to further actions in terms of Davy, it is open to the Office of the Director of Corporate Enforcement, ODCE, to become involved here and also, potentially, other bodies as well. I do not want to prejudice further developments in regard to either the individuals concerned or this issue in terms of any further investigations that might or might not take place. Obviously, that is a matter in the first instance for the Office of the Director of Corporate Enforcement. We are committed, in the programme for Government, to the introduction of a senior executive accountability regime. Over the last decade alone, there have been 100 pieces of legislation and regulation introduced to underpin and strengthen the regulatory framework insofar as it pertains to financial regulation. The culture has been one of unacceptable greed, manifested in this deed, which I strongly deplore.

Anyone who hoped that the toxic culture of greed and personal gain had been banished from financial services - from the upper echelons and the elites of financial services - had their eyes opened again last week.

Davy has made it clear that this culture is alive and well. People who imagined that the culture of acquiescence in all this on the part of Fianna Fáil and successive Governments had been banished have had their eyes opened by the Taoiseach's response this afternoon. The fact is that this behaviour has been acceptable to successive Governments, which is why it has happened time and again. That is the reason there is no mechanism, as has been called for by the Central Bank, to hold senior executives to account. It appears now that it is only when there is pressure on the Taoiseach that he will concede that it is necessary. Where are these wrongdoers?

Thank you, Deputy.

Do they work in banks or in Departments? Will the Taoiseach join me in stating that Davy bringing in a third party to carry out an investigation of these matters is wholly unacceptable and insufficient and that it ought to be the Central Bank that sets the terms for such an investigation and oversees it? We need full transparency here.

We absolutely do. There is no acquiescence. This Government has been in office for nine months. It made it clear in the programme for Government that it would introduce legislation to strengthen this area, particularly regarding accountability for senior executives in the financial area. That will happen and heads of a Bill are being prepared in that regard.

The Deputy's party cosies up to high finance as well. There is only one party here at this stage that travels the world cosying up to high finance and big construction companies to raise funding and so forth. The Deputy is eager to brand other parties in this regard.

We had not been in power for ten years. We came into office with other parties in this Government about nine months ago. Those are the facts.

We all know the facts.

The bottom line is that the Deputy cosies up to high finance, in the United States and elsewhere, when it suits her. She sells and tells a different story there. It is likewise in terms of accountability in respect of issues pertaining to financial matters in the North and so forth.

Thank you, Taoiseach. Your time is up.

She tells a different story. She does not deal with it or account for it. She can be absolutely sure that nobody in the Government in any shape or form-----

Ding dong, the time is up. Wrap it up now.

Everyone in the Government condemns what has happened here. We are absolutely determined-----

Please, the time is up.

-----that the proper regulators deal with it in as effective and strong a manner as possible.

Thank you. I call Deputy Naughten.

On Monday evening, Professor Philip Nolan said there had been indications in the previous ten days of accelerated progress in suppressing the virus. This resulted in a collective sigh of relief across the country and, in particular, among front-line healthcare workers. These people are mentally and physically exhausted as a result of the third wave of Covid-19 infection, which far exceeded the previous waves in hospitalisations and deaths. Now that the third wave is being suppressed, we must consider two actions for all front-line healthcare staff.

First, we must provide staff with time off because exhausted healthcare staff are a recipe for mistakes. We must recognise that this time off is imperative for their health. Second, we must give proper recognition to staff at the front line in the battle against Covid-19. For example, the Scottish Government is paying every NHS worker a bonus of £500. When I raised this with the Minister for Public Expenditure and Reform, Deputy Michael McGrath, last month, he stated that the Taoiseach noted on 10 February that the Government would respond to the extraordinary efforts of front-line healthcare workers once the pandemic is behind us. All front-line workers, including those in other essential services, should receive an acknowledgement of their work throughout the pandemic from their employers. In particular, I believe that now is the right time for the Government to recognise the work of all front-line healthcare workers. Many doctors, nurses, healthcare assistants, cleaners, porters and others place themselves at risk by going to work every day to keep us safe and to care for those who are seriously ill. These healthcare workers have worked long hours in extremely difficult circumstances through three waves of this pandemic. They have been selfless and the country owes them a debt of gratitude.

On Leaders' Questions last July, I said to the Taoiseach that if it was not possible to reward healthcare workers with pay increases or some form of bonus system, the minimum we should offer them is additional paid leave. It would be time to spend with their families, with whom they may have sacrificed precious family time, or time to recover from the physical and emotional tiredness they undoubtedly must be feeling. The Taoiseach was generous in his response stating:

The Government will examine the Deputy's suggestion and proposal. ... I am conscious of the point the Deputy raised and the importance of recognition of people who went to exceptional lengths to help people on an individual basis and, by so doing, helped the country at large to get through this crisis.

In the spirit of the Taoiseach's response last July, I sincerely ask him not to postpone this much-needed recognition until the end of the pandemic, but instead to move on the need for the recognition of healthcare workers now.

I thank the Deputy for raising an important and worthy issue. I too acknowledge the extraordinary work done by front-line workers, in particular, in the battle against the pandemic. That was vividly illustrated in a recent RTÉ programme through the stories and journeys that both patients and front-line healthcare workers went through in the latest wave of the pandemic, which was a severe wave that impacted very significantly on health, the severity of illness and mortality. We are very mindful of that, and the Government intends to recognise the front-line healthcare workers in respect of the extraordinary contribution and commitment they have made to the fight against the pandemic.

The precise mechanisms and manner in which this will be determined will have to be worked out in consultation with the social partners, while also bearing in mind some key workers in the private sector who have made an outstanding contribution as well, particularly in periods of severe lockdown. We want to do this in a non-divisive way and to consult the partners, perhaps through the Labour Employer Economic Forum, LEEF, to discuss this further and get it right. I acknowledge the point the Deputy is making and the Government is on the record as saying that this is something it intends to do. We want to acknowledge the very strong contribution that has been made, particularly by front-line healthcare workers.

I caution that we are by no means out of this pandemic. Already, I detect that people are getting a sense that because the numbers are coming down, we are somehow emerging from it immediately or something similar. The hospital numbers are still higher than they were at the peak of the second wave. The variant is the big problem. Community transmission is still at between 11% and 15%, which is high. Close contacts and the spread of the disease are much more prevalent now. It is more transmissible because of the presence of the B117 variant. We cannot lose sight of that because if we let this go, the virus will continue. We must be very careful. We are making very good progress against the pandemic in terms of the strategy of getting the numbers down, especially the hospital numbers. They are coming down. The number in intensive care units, ICU, is coming down, as are case numbers. Remarkably, the vaccination impact has been extraordinary in hospital and nursing home settings, but we must stick with it, especially in the coming weeks, to get the numbers further down.

The Taoiseach is correct that we are not out of the woods yet and that we have to stick with it, but we also need to plan for post-Covid times. While we all hope that the current wave of infection that is now dissipating will be the last, we also know that it will take years for the country, and the health service in particular, to recover. Waiting lists are, quite understandably, at record levels. We need practical measures to relieve pressure on elective procedures and on accessing tests and diagnoses quicker.

Now is our opportunity to reconfigure our health service. This must be done using Sláintecare as the template and by directly engaging with staff at the front line who know what the problems are and how to relieve them. Simple measures can be taken such as replacing clapped out CT scanners in the likes of Portiuncula University Hospital and other diagnostic machines across the State at a time when we have an underspend within our capital investment programme, or by providing expanded sterilisation facilities in order that we can utilise the fully staffed surgical theatres such as those at Roscommon University Hospital. These simple steps can make a real difference to our waiting lists.

We should also acknowledge that the Minister for Public Expenditure and Reform has secured with the social partners a public service agreement in the past few weeks that further reflects our acknowledgement of those working in the public service and the commitments that have been made. Very significant resources have been made available to the health service by the Government in the budget. Up to 16,000 additional staff are now targeted for recruitment over the pre-pandemic levels to embed reforms in our health service that would outlast the pandemic and in order that the lessons learned in our health service during the pandemic will be sustained in the time ahead. The deal with the private hospitals, for example, will continue to make sure that we can catch up on non-Covid care with regard to diagnostics, procedures and operations that had been affected negatively as a result of the pandemic itself. Embedding and implementing reform across the health system, and ensuring it aligns with the Sláintecare programme, is key and is provided for in what has been an unprecedented budgetary allocation, for Covid-related issues and for non-Covid issues.

In 2017 the Rural Independent Group brought forward a motion calling on the Government to honour the commitment in the programme for Government to reform the fair deal scheme by removing discrimination against small businesses and farming families and to introduce a reduced charge on the farm or business assets. The purpose of the motion was to remove the uncertainty for farm families and the self-employed and to protect the future viability of the farm or business asset for future generations.

Since that date almost four years ago, there have been endless and empty commitments made regarded the introduction of this urgent legislation to ensure these reforms happen. Not a single one of these commitments has materialised to date. Farming families and small business owners are being led up the garden path. Among the most recent of these commitments was a commitment from the Taoiseach in the Dáil last summer. At that time, the Taoiseach said that legislation would be brought forward in the autumn session around September 2020. I continuously followed up with this, such as in July and September last year. At that point, I was told by the Tánaiste that the legislation would be brought to the Dáil before Christmas. Since then nothing has been done. There is delay after delay. It is unacceptable and is causing a huge amount of worry and distress for farming families and small business owners.

Within the past few days I have received a reply to a parliamentary question from the Minister for Health, who told me that he has met with the Attorney General to discuss this very issue. Yet, no date or timeframe has been set and people are being left high and dry. Yet again, it is a disconnect between rural Ireland and urban Ireland and this Government, which does not stand over a commitment it made to rural Ireland.

While there is ongoing and active engagement, it is just not enough. These reforms need to see the light of day. They need to be done urgently. I stress this point to the Taoiseach. I reiterate it is almost four years since commitments were made. This is the reason, as the Taoiseach might understand, there are suspicions among people. People may believe there is a legal or financial roadblock. We need honesty here today. We need to let people know what is happening in order that they can plan accordingly. We also need to set a date. Will the Taoiseach tell us, specifically, if there are obstacles? Will he identify what they may be?

I am sure the Taoiseach will appreciate that the repeated failure to bring forward this legislation is creating a frustrating level of uncertainty for farming families and small businesses to endure, particularly as it was the recognition of inequalities within the current system that drove the need for these reforms in the first place. Four years is too long and I again appeal to the Taoiseach to make sure a date is set, that these reforms happen, that he honours the commitments made, including those made in the programme for Government.

I thank the Deputy for raising this important issue. Since the Government was formed, the programme for Government contains a very clear commitment for the introduction of this fair deal legislation, particularly insofar as it impacts on family farms and small businesses. The Government is disposed to bringing in this legislation. It is on the legislative priority list for drafting. The drafting is being finalised and I have been informed that it will be possible to bring it to the Dáil before the summer recess. I will go back to double-check this with the parliamentary draftsman, with the Attorney General and with the Minister. I am just as determined to get this legislation passed as anybody. Obviously we want to get it right as well. I understand that in previous years, the delay in the legislation coming in was to do with issues around the precise nature of the legislation and what it would and would not include. We are giving this priority. It needs to happen and we are committed to making sure that it will happen.

I thank the Taoiseach for that response. I welcome that the proposed legislation is on the priority list. At this point, however, when people such as farmers and small businesses are in more financially precarious situations than they were in 2017, there is a need to provide a date. We need a solid date provided at this point. We have waited for far too long. Farming families are under tremendous pressure, between Brexit and everything else that has impacted upon them. They are struggling to pay bills for loved ones in nursing homes. We need to make sure they are provided with a date at this stage. My Rural Independent Group colleagues and I have been bringing this up for too long. We hear that it will happen by autumn recess or summer recess or before Christmas. The people out there are hearing the same thing. It is not good enough. A date must be provided.

People are under huge financial pressure. I know that farming families are also under pressure with new regulations that are coming in with regard to the prescribing of animal medicines. I call on the Government to rectify this and make sure that it listens to the agri-merchants, and that farming families are not expected to carry that burden as well as the current burden they carry due to the delay to reforms on the fair deal scheme.

I accept the basic principle the Deputy articulates on the need to bring in this legislation and especially how the ongoing situation has a negative impact on family farms. Farming is under pressure because of Brexit and Covid, as is the general economy. The Government has introduced unprecedented interventions in the economy to support incomes and to support business across the board.

Considerable work has been done on this detailed legislation. I will revert back to the Deputy on the timelines for its introduction. We want to have it published and introduced into the House before the summer recess and certainly after Easter.

With announcements in recent weeks about Ulster Bank withdrawing from Ireland and Bank of Ireland closing branches, there is an opportunity for the thriving credit union and post office networks. In Donegal, Ulster Bank is closing five branches and Bank of Ireland is pulling out of another five towns. I have talked to a number of local credit unions across Donegal and they are seeing an increase in people moving their deposits to those credit unions. However, credit unions are hamstrung by regulations on deposits, which sees them limiting deposits because they are forced by Government policy to make a loss in the context of holding people’s money. This was to shore up the balance sheets of banks during the crash and now continues to facilitate the banks to the detriment of credit unions. It is as if the Government has something against people exercising control over their own decision-making, especially when it benefits communities directly. Credit unions need to be able to lend out to communities the money they take in. That is how it works.

Since the enactment of the Credit Union Act 2012, credit unions' cost base has risen dramatically from less than 20% of their total income then to more than 80% now in some cases. There are also reports of increasing and ongoing pressure from the Central Bank to add even more regulatory compliance staff and costs. These costs are unsustainable and will put many local credit unions out of business.

Staff of the Central Bank are not accountable to any body or agency for their actions. I am told that credit unions need legislation appropriate to their members' changing needs. Currently, all responsibility lies with credit union directors and CEOs to develop and deliver services to members, and rightly so. However, the Central Bank then has the authority to block, frustrate or veto any such services or initiatives. I am told that, in effect, credit unions have been given the responsibility to deliver those services with zero authority to do so. The feeling in some credit unions is that the Central Bank favours banks and that it is intent on building up the profits of the banks while embedding regulatory costs which reduce the surplus of credit unions. Apparently, the Central Bank has indicated that every credit union should expect that members will not be paid a dividend or interest rebate for the year 2020. There has been a reported exodus of experienced volunteers from credit union boards because of what is deemed to be relentless, restrictive and excessive governance regulation by the Central Bank. It is feared that if such micromanagement continues many small-medium sized credit unions will be lost in the next few years.

I have also recently highlighted the stark housing problems in Donegal. Credit unions have been offering a viable solution for investment in social housing for years but a decision from the Department is still outstanding. It is not as if there is any urgency in addressing the housing crisis, I suppose.

Bank of Ireland has organised an exclusive contract with An Post. However, credit unions are not allowed to explore the possibilities in this regard. Will the Taoiseach now expand the remit and autonomy of credit unions? Credit unions are member-owned and have been the lifeline of a large number of communities over many years. Why would he allow the Central Bank to squeeze some credit unions out of some localities? What will he do to stop that?

As a lifelong member of the credit union movement, I am strongly supportive of any measures we can put in place to support credit unions and the role they play in communities across the country. The credit union movement has made a distinctive and outstanding contribution to Irish society and has enabled many working families to progress in life because of the service that credit unions have provided.

I understand the basic thrust of what the Deputy is saying with regard to the perception of credit unions vis-à-vis the Central Bank and the regulator. That is not something that began today or yesterday, it is an ongoing perception and sense that credit unions have. On the other side, regulation is important. Regulation is there to protect the public, members of credit unions and people in general. Getting the balance right is the issue.

The Ministers concerned will continue to focus on this matter in order to see if we can facilitate greater capacity for credit unions to provide services over and above those they currently provide. I am very aware of the current difficulties and challenges, with very significant deposits, significant costs, some of which are regulatory embedded costs, and real difficulty in the marketplace in terms of getting a return.

In the context of housing, my understanding is that it has not all been one-sided traffic and that there needs to be a meeting of the ways in respect of this issue and the utilisation of some of the resources credit unions have in terms of their availability for social housing and financial support for the provision of housing more generally. That is an issue the Ministers for Finance and Public Expenditure and Reform have been working on for quite some time.

In the context of Ulster Bank's decision and the decision of Bank of Ireland, there are real issues there for towns the length and breadth of Ireland, for rural areas, particularly in the context of Ulster Bank, and for the Border region and the north west.

In the context of the post offices, a number of Ministers are working together to see what we can do to underpin and strengthen the post office network in terms of the consolidation of Government offline services and determining the degree to which we can utilise that network in towns across the country to support Government. The latter would, in turn, be of benefit to post offices in terms of financially underpinning them and giving greater stability and sustainability to the network.

The world is changing, as is the world of banking. The Government, along with local communities, needs to engage in finding new ways to inject new life, activities and services back into towns. That is something on which we are very focused.

I thank the Taoiseach for his response. I know he is involved in and supportive of the credit unions. However, it is about getting the balance right. I do not believe we have ever got the balance right. It has all been geared towards the banks. Even in his response, the Taoiseach talked about building up the post offices but it is building them up to provide bank services for Bank of Ireland and Ulster Bank. Why are we not building them up to provide for services for our communities? That is vitally important.

While it is important that the Government has an independent body, namely, the Central Bank, to regulate the credit unions, we can set the agenda in terms of how it goes about that. That is very important and we need to do that. For example, the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach reported that the common bond structure is essential for the credit union movement. Why can all credit unions not introduce debit card services and build their services in that way?

The industry funding levy is to be increased in stages up to 50% by 2022 but the Irish League of Credit Unions highlighted in 2020 that this is "a tax on social capital and a levy on volunteers". We could reduce that also. That is what we should be doing to encourage credit unions to develop.

First, it is a valid point to make and to pose the question whether we have the balance right in respect of the relationship between the credit union movement and the regulator and the range of services that credit unions are permitted and not permitted to provide. It is a fair point and one that requires continued focus and reflection, and some action taken on it also. I accept that point and the Government will engage on it.

Second, in terms of the post offices, the Deputy may not have picked up on the final point I made relating to that. It is not just about banking services provided through post offices, it is about Government services provided through post offices and whether there is additionality in that respect, particularly in terms of offline Government services, to allow us to enable and utilise the post office network to provide additional services of that nature to the public in locations across the country. That is something the Government is considering. The Cabinet discussed the matter during the week. As already stated, the world is changing and the world of banking is certainly changing and technology is having an impact. We need to redefine the range of services and the level of Government supportive intervention in towns across the country.