The first item on today's agenda is the minutes of the meeting of 20 May 2004. The draft minutes of the last meeting of the joint committee have been circulated. Are they agreed? Agreed. Are there any matters arising from the minutes?
Draft Work Programme, 2004.
Item No. 4, on AIB and the letter from Mr. Michael Buckley——
I will deal with that under correspondence to which we will now turn. There are a number of matters under this heading. The first concerns AIB. Following the last meeting, the Clerk to the Committee wrote to the chief executive of AIB conveying the committee's disappointment that he had not acceded to the invitation to attend today's meeting. A reply from Mr. Buckley has now been circulated, in which he reiterates his position that, for reasons given, it would be more useful and appropriate for the meeting to take place after the conclusion of the independent investigation. He states the only issue is timing. In his reply last week, he expressed his willingness to meet the committee from early July onwards. Before inviting comments, I remind members that they should not comment on, criticise or make charges against a person outside the committee or the Houses. Senator O'Toole indicated that he wanted to express a view on the AIB correspondence.
I am unhappy with this because we were prepared to deal with it without compromising the investigation. It now appears that no matter what we do at this point, we cannot have the people in question in attendance before the middle of June.
I want the committee to consider where exactly it stands on the issue of compelling people to appear before it. As it happens, this is dealt with under the legislation the Government is proposing to amend tomorrow, the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses Act) 1997, which allows the power to compel witnesses to attend or produce papers and documents to be conferred on committees. Two steps have to be taken for this to happen. One step is such that a motion has to be passed by both Houses enabling the legislation to apply to the relevant committee. It currently applies only to the Committee of Public Accounts, but it can be applied to any of the committees.
Before the committee can activate its authority in this regard, it must put its case to the compellability sub-committee, which is a joint sub-committee of the Committee of Public Accounts. It must argue to this sub-committee why it requires somebody to appear before it. I am labouring the point because I want to outline the steps involved. The committee must have an enabling motion passed by both Houses — the Government has to bring this through — and then the committee must make its case to the compellability sub-committee stating why it requires witnesses to appear before it with documentation and papers. In the real world it would not be possible to do that in the timescale to which we were trying to adhere.
I believe we have been treated with some contempt on this issue. Regardless of whether this view is correct, it is certain that we have shown ourselves to be somewhat toothless without the compellability power. We are at the grace and favour of those we have asked to appear before us. Therefore, we should now initiate the first step to seek to have compellability as a committee. This would allow us to initiate the process of compelling witnesses afterwards. Until we do so, we cannot seek to compel anybody.
I would like the committee to take a decision today to seek from Government the power to compel witnesses. I accept that it will not apply in the case under discussion. That is why I was trying to consider it as a matter arising from the minutes. The matter no longer concerns AIB specifically because we could not possibly honour the timescale in the short period between now and the conclusion of the internal investigation.
I propose that we seek to have the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses Act) 1997 applied to this committee to enable us to compel witnesses.
Without specifying the witnesses?
We cannot do it at this point. The only time one specifies witnesses is when one has already acquired the general power to compel them. When this is acquired, we must go to the compellability sub-committee regarding each specific case.
I have no problem with introducing compellability powers for the committee. Let us be honest and state that, under the proposal of the chief executive of the AIB, the bank will probably appear before the committee voluntarily before it does so by means of the approach Senator O'Toole is proposing. One of the problems is that governance, including that of the Oireachtas, has failed in that we did not have compliance requirements on the bank. We did not have penalties in place for some of the offences in question, nor did we have enforcement systems in place. As a result, the enforcement agencies is not in a position to take action.
AIB has agreed to enter into what I regard as a fair process of investigation. Last week, we were trying to put a ring fence around that investigation and pursue the issues of public policy, namely, the compliance systems the bank had in place, the internal audit systems and the consumer codes that were in operation. I would still have preferred to move ahead and investigate these issues.
Given the letter from AIB, we will probably have to accept that unless we have legal advice from our own legal adviser, we will not be able to proceed as we would have wished. I asked last week that we get legal advice from the Oireachtas legal adviser. Will the Chairman state if this advice was sought? If so, what does it tell us about our powers? We have to be conscious of the Supreme Court ruling that an inquiry by us cannot reflect adversely on individuals and that we have certain legal constraints. We have a duty to have a fair process. Rather than getting annoyed with the AIB, we need to consider what kind of hearing would not be unfair, obtain the necessary legal advice and make a sober decision on the basis of that advice, bearing in mind that while the bank is saying it is unwilling to attend at present, it is not refusing to come at another time.
We need to take a step back and obtain proper advice so we can proceed along a path that is wise and proper when handling this issue. As someone has said, one could say almost anything about the banks at present and get an audience. We must take a slightly different view and ensure that we act fairly and correctly given the powers and responsibilities of this committee regarding public policy.
It is most regrettable that Mr. Buckley has again chosen to use the regulatory authority's on-site inspection and investigation as a crutch in some way. There was no question that his attendance at this committee would compromise that investigation or on-site inspection. It is open to interpretation as to what messages the two letters signal to the committee and what they signal in terms of wider accountability. While the bank has agreed to meet the committee, the time at which it wishes to do so is being determined outside the committee's remit. As a consequence, the currency of the issues — the inspection part — will have declined somewhat. Many of the salient and important questions we wish to raise are of an immediate nature. I am open to any of the suggestions which have been made. I recognise the reality that the AIB will not come and meet us tomorrow as requested by our initial invitation. As Deputy Richard Bruton said, the earliest expectation we now have is that laid down by the AIB and not by agreement with the committee, which is most disturbing.
In regard to the proposition to proceed with compellability, I am open to the argument and do not have a difficulty with it. However, it may also take its own time. I am not completely familiar with the procedure involved, although Senator O'Toole has given us a cursory outline of the stages which have to be gone through to reach that point, and I would be interested in having more information about it. The best I can do is record that I am deeply disappointed. I view the AIB response as disingenuous. I have no doubt that there is no connection between the ongoing investigation and our request for the bank to attend here. There is no conflict involved and AIB could well have presented itself before what is an Oireachtas committee. Given that fact, the request to it deserved a more positive reply.
I am not sure I share the mature reflection on this of some of my colleagues. I see it as a simple and uncomplicated matter. This is a committee of the Oireachtas, which has asked AIB to come before us and AIB has told us to go and jump in a lake. The committee asked the bank again and received the same reply and the reasons do not hold any water. I do not share my colleagues' view that we would be compromised by even asking the bank about the present difficulties. One of the problems with Oireachtas committees is that they are, partly because of the conservative nature of the membership and partly because of their structure, very slow to respond to immediate issues in the public arena, such as this incident. It is not just this committee which suffers from this difficulty.
We should introduce compellability, not just for this but future occasions. I do not share the view that it will be necessarily out of date. I do not know how long this investigation will take. We are told it will take until some time in June but investigations of this kind have a habit of going on and seeking postponements for various reasons. Therefore, we should take compellability powers. The committee must be relevant but it looks pretty stupid when AIB tells us it will not answer any questions for reasons which hold no water. There would be nothing wrong with having a full investigation into what had happened on behalf of the public in parallel with one which happens to be going on behind closed doors. I do not see what is compromised in any way by that.
The findings of what is called the independent internal investigation at AIB and IFSRA will be independent of what happens here. If they are different findings, so be it, but they are unlikely to be and these issues should be open to the public. However, we are now saying that we will allow an investigation to go on behind closed doors and then discuss its report. We have every case for asking AIB to come before the committee to answer the same questions in public rather than in private. The very least we could do is take on the power of compellability. We are now looking rather weak by falling back on legal advice and broad principles. We should be far more aggressive in this matter.
I apologise for my late arrival. I was at another meeting.
We have to make a reckoning of this issue in the context of a number of points. First, this committee lacks powers to compel AIB and in that context I support Senator O'Toole's proposal to the committee and Senator Ross's point. The committee is not in a position to compel AIB which means that the kind of public accountability and scrutiny to which AIB ought to be subject is not capable of being enforced by this committee, which is regrettable. The bank is making a mistake by deciding not to come before this committee and I regret Mr. Buckley's reply. In the long term interests of the bank and its desire for good corporate citizenship and behaviour, it is a wrong decision by its most senior management.
Second, and more importantly, I and other members of the committee received a letter sent to the chairman from Dorothea Dowling, the chairperson of the Motor Insurance Advisory Board, in which she raises extremely important questions in regard to banks in general about the rates of commission being charged on insurance products. She makes reference in her letter to the fact that a higher rate of commission is charged on new policies, as distinct from annual renewals of either existing or increased sums insured. Her letter goes on to state: "For some insurance products, the commission rates on new sales are very significant and substantially higher than on the annual renewals. You may recall that this lead to a "churning" scandal some years ago with life insurance and related products."
Ms Dowling is one of the most respected figures in the area of regulation as it applies to financial services and related products from the insurance industry. This letter shows the need for a serious question and answer session with AIB, and possibly with other banks, as to how they advertise the pricing of the range of products to their different customers — not just personal but business customers. For these reasons, including this letter which I assume the Chairman will discuss separately, we need to talk more to the banks.
We had a long presentation last week from Mr. O'Reilly from IFSRA. He made a fine statement which, as a former lecturer, I would award a grade A on an MBA programme in terms of the argument for ethical banking. However, where does that leave us? The presentation did not answer any of the questions I and other members of the committee put to him in regard to whether the Central Bank had previous knowledge of some of these issues. He assured us that all files were passed from the Central Bank and the Director of Consumer Credit to IFSRA, which had sight of them. However, he did not tell us whether some of these issues had been raised.
He did not respond when I asked him about two further areas in respect of time-charged services provided by AIB and commissions and charges on products such as the establishment or re-confirmation of a loan, in regard to which I gave him some examples. I also asked Mr. O'Reilly if any settlements had been made by the Central Bank or the Director of Consumer Affairs when they held the brief to customers who may have complained about such charges. Mr. Reilly answered "yes" and referred to the bank's blind spot in regard to some customer issues. However, we did not receive any comprehensive reply and many of these questions were entirely without prejudice to the current forensic examination which is ongoing. The committee must give some consideration to where we stand in terms of what IFSRA had to say.
The fourth element in our consideration today is that last Wednesday, the Minister came into the Dáil for Report Stage of the IFSRA Bill with significant amendments which Deputy Bruton, myself and I presume other spokespersons on finance had been advised of on Friday afternoon. These amendments significantly change the architecture of the Bill, which is complicated legislation. One amendment ran to 15 pages and was circulated with two pages of notes from the Department of Finance. This committee examined the Bill on Committee Stage but I wonder if AIB, and perhaps the banks in general, is washing its dirty linen before the sanctions regime comes in. Is IFSRA being utilised to some extent to have a clean sheet before a sanctions regime is imposed? I do not know the answer to that question but it is one this committee ought to consider.
AIB has gone through a difficult period over the past few weeks. Credibility is vitally important in the area of finance but there is a good explanation in the letter we have received. Two weeks ago the bank came out with its hands up and said it was guilty. We must be fair. There is a fair process of investigation ongoing in the bank. It has appointed an independent investigator, although I do not know whether that is on the insistence of the Department of Finance or IFSRA, but I do not see the need to compel AIB in any way. It has been fair in its letters to us and has said it is available to come here when its investigation is complete. In any jurisdiction or court of law, one would get a fair hearing and time to prepare documentation. I understand the report will be published and at that time we will have an opportunity to accept or reject it. If AIB was hiding something or if it did not come out and act in a reasonable and fair way I would have a different view but we have to be fair and let the processes that have been put in place proceed.
There is much more at risk from this situation than what we are investigating if we continue to persecute the banks. We are inclined to persecute the banks, especially Irish banks. Professor Kinsella made a very good case for examining and changing the situation on radio the other morning. I would like the committee to get a transcript of that recording because it was of an independent person making a point. The bank is being fair with us, and in any situation one would be given time.
We should make up our minds about this letter today. Regardless of what is being said, we should either admit that we jumped the gun on this issue and created a situation where AIB will be compelled to come before the committee or we did not. What have we got to gain from that? Are we saying we jumped the gun and that we should not have considered compelling AIB to come before us within a week of the committee having its first meeting on this issue? If we still believe AIB should come in, what have we got to gain from that?
AIB's responsibilities are clear. They are to its shareholders and customers. I read the letter sent to us and apart from one paragraph, which appears to be legally written to cover it in terms of its responsibilities, the only other issue raised is timing. The letter states that a discussion at this stage would run the risk of affecting the rights of individuals. What rights of individuals would be affected by the bank appearing before an Oireachtas committee? How will people's rights be affected if AIB is asked to come before an Oireachtas committee? That matter should be clarified. AIB should be asked what it meant by that statement.
The third point of the letter is easy to understand. It states that AIB representatives before the committee would have to have the benefit of the considerations made by the AIB board. It is clear that whoever represents AIB before the committee will be more concerned about what the AIB board has to say than what we may have to say. These people are employees of the bank and it is the shareholders and customers they are concerned about.
We should put other business aside and make up our minds on this issue. Has this committee jumped the gun in requesting AIB to come here or should we discuss this letter and make up our minds as to whether we will leave the matter aside for a month or two? Alternatively, should we decide not to accept the points made in the letter and compel AIB representatives to come before the committee as we have requested? We should deal with that issue alone.
I wish to make a few observations as Chairman of the committee.
On a point of information, there is a votáil in the Seanad. If it was a Dáil votáil, Chairman, you would call for a suspension of the sitting. This is a joint committee. Should we not accord both Houses the same respect?
It is a fair point.
We still have a quorum and nobody has indicated——
In fairness to the committee, any time we have asked for an adjournment for a votáil it has always been agreed to, but Deputy Ó Caoláin is right.
It is a matter of practice.
Can we have a ten minute adjournment?
We will suspend to allow the Senators participate in the vote.
Sitting suspended at 3.35 p.m. and resumed at 3.55 p.m.
What is the timeframe on this meeting?
The meeting started at 3 o'clock and will finish at five o'clock at the latest, if not earlier.
I must leave at 4.30 p.m. because the Attorney General has to brief me on the——
In regard to the specific item we are discussing, the letter and the response from AIB, I wish to make a few observations. A number of members of the committee have suggested getting both the Dáil and the Seanad to go down the road of giving us powers of compellability. As indicated, that process could take some time.
I wish to make some points in regard to the letter from AIB. It has said that it would prefer to wait until the conclusion of its inquiries. IFSRA is involved in the inquiry. A delegation from IFSRA was here last week, which did not compromise its inquiry. On a directly related issue, the Governor of the Central Bank, John Hurley, has agreed to meet the joint committee next Tuesday. We had hoped he would be here today but he away on official business. We will meet him next Tuesday and will discuss the whole issue that we discussed with IFSRA the last day. I do not believe his attendance before the committee compromised that investigation.
If IFSRA continues to do its work there will always be issues for it to examine and investigate in the financial services sector because, if not, what is it doing? While AIB has its own timing issues, we as a committee have our timetable. Nothing we have been talking about is sub judice or before tribunals or anything of the kind. I do not see any conflict there.
We have received two letters from senior executives of AIB. Mr. Dermot Gleeson is a relatively new Chairman of AIB and he should be appraised that at its earlier meeting, members of the committee referred to cultural issues in AIB, starting with the ICI debacle; the DIRT settlement — the biggest settlement by any organisation in the history of the State; the Allfirst issue; the foreign exchange overcharging; the mortgage protection policy issue highlighted in the Tallaght Echo last week; and now the overcharging in regard to certain trusts. Every other day in the past week a new issue has appeared to arise. I do not think it will ever be possible to say when these matters have been fully investigated, and we cannot hold off indefinitely.
The board of AIB should consider whether it is helping the bank and the banking industry by refusing to appear before a committee comprising of Members of the Oireachtas. Whether AIB like it or not, members of the public are speaking about the issue, and they might do themselves some good by coming here and putting their case. I do not see how refusing to come here helps their case. They are competent, capable people. We are meeting the Governor of the Central Bank next Tuesday and I suggest that, in the interim, we write to Dermot Gleeson along those lines, saying that our committee is considering the issue of the compellability route and that we would like a response from him, as Chairman of the board, by next Tuesday.
A Deputy
Sorry, Chairman?
I propose highlighting the issues I have just mentioned in a letter to Dermot Gleeson, the Chairman of the board of AIB, and suggesting to him that we may consider the question of compellability. Ultimately, it will be the two Houses of the Oireachtas, not this committee, which will decided on this aspect although it will be for this committee to initiate a process. While we are coming to a final decision on asking the two Houses to take this approach we could hear from Mr. Gleeson. We are due to meet the Governor of the Central Bank next Tuesday at 2 p.m.
When I made my proposal on this matter I made a very clear distinction which I wish to maintain. We have been shown to be as impotent as eunuchs here. We issued a letter which has been ignored with the result that we are now operating at the pleasure of AIB. It is dictating our agenda. It has won the battle. I agree with your proposed letter, Chairman, but I do not see it as being related to the now well illustrated need for this committee to have the powers of compellability. Whatever happens with AIB, even if it agreea to appear before the committee next Tuesday, it has now been proven to us that we need the power of compellability to do our business.
I support the proposed letter to Mr. Dermot Gleeson, but the two issues are separate. They separated this week. I do not want us to be in this position in another six months with another request involving another party who procrastinates while we wonder what it is going to do. It diminishes the role and reputation of the committee and is unnecessary. I would like us to go down the compellability route. That is crucial for the committee to do its work.
In order to begin that process, we do not have to mention AIB. It has nothing to do with AIB. It is simply concerned with the first enabling process under the 1997 legislation to give us the right to compel the appearance of witnesses, documents and papers. That power can then only be used in a specific case, such as that involving AIB. We then must go through a separate procedure afterwards. This needs to be done.
I second Senator O'Toole's proposal but I want to divorce that from consideration of the AIB issue. When the Central Bank and Financial Services Authority of Ireland Bill 2003 is passed there will be a very large and expensive regulatory architecture for banks and providers of financial services, including insurance companies. It will cost them a great deal of money to pay for IFSRA. Issues like this will arise from time to time.
The committee has heard the comments by Dr. Westrup regarding the lack of powers of oversight of this committee. Senator O'Toole has correctly identified the absence of the power of compellability although I recognise that putting the compellability powers into train would take some time. The AIB issue may be resolved before that. In the context of the new regulatory architecture, if this committee is worth anything it should embark on that procedure now. It is separate from the AIB issue. I understand that Senator O'Toole has put a formal motion to that effect which I now second and I wish it to go before the committee.
Has it ever happened before that somebody has refused to appear before an Oireachtas committee?
I want to put the record straight, also for Deputy Twomey's benefit. We wrote inviting the bank to attend but we did not invoke any legal or statutory power to compel it. It was an invitation to attend. AIB said it will attend but not until at least July. That is our difficulty.
I support Senator O'Toole's motion.
Do we have the right to maintain that a delegation from the bank should appear before the committee forthwith?
We must decide that.
I support the suggestion that this committee have the power of compellability because on the radio Mr. Buckley's refusal to comment on this matter gave the impression that he might refuse to appear before an Oireachtas committee.
At the earlier meeting of this committee I said we were here to protect consumers and members of the public as this issue affects them and us. This committee must have effective powers to help the public.
I second the Chairman's proposal that the committee write to Mr. Gleeson on the lines he has indicated. That is a logical step following Mr. Buckley's two refusals to meet until a later date. There must be some means of progressing this matter and there must also be a way of addressing Mr. Buckley's snub to the committee. This is an appropriate step for us to take. I was unclear as to the means of giving the committee the power of compellability, but that has now been clarified.
Does this require consideration by other committees? Are there other factors involved? This has just been put to me and while I have no less enthusiasm than my colleagues in ensuring that this committee can perform with teeth, other aspects occur. Is this an opportunity for the legal advisor to the House to give a wider opinion? I am in favour of the proposal but would like more information on the methodology. For example, should the committee act alone or should this matter be examined in the wider context of Oireachtas committees etc.? Although there are many questions they should not delay the proposition. It will take time but I would be no less enthusiastic to see the project under way immediately.
Perhaps I am in a minority of one here. AIB has broken the law on at least two occasions. It has failed to comply with its obligation to keep its charges within notified levels and it has broken consumer credit law in that it failed to notify some of its customers of details of the products for which they signed and ensure that they had the opportunity to understand what was involved and the charges subsequently deducted from them. This committee is not a court of law. We propose to ask AIB to come in here and answer questions about offences. I believe that both of these incidents are offences. One is an offence for which the Government provided no legal sanction. Nonetheless, it is a breach of the law. In the second case it seems that there are legal sanctions and issues in this investigation that may lead to the courts having to rule.
I agree that we need compellability powers, to be able to investigate matters of public policy and call in the banks to account for things when we look at compliance requirements and many other issues. However, we need to be able to exercise those powers prudently. I am not happy that this committee has received any legal advice about this. I believe the bank has broken the law and we will question it about issues that could subsequently emerge in other fora where it will defend its case. That is a recipe for us to stray into forbidden territory. It would be prudent to seek the advice of the Oireachtas legal advisor before we write to either of the chairmen or again to the chief executive. That is why we have a legal advisor.
I requested at the last meeting that we have a report from the legal advisor at this meeting. We do not appear to have such a report but we should not fly blind on this. That is not to say I disagree with compellability or that the banks should not be excoriated for their failures on consumer protection but we must be prudent in our approach to this work. I urge caution because this is an important committee with important work to do and we should not do it in a way that others might perceive as merely responding to the public outcry. People are angry but we must make sure that anger does not lead us to do things that may compromise the best way to address these issues of major public concern.
This goes back to my original point that we are again almost admitting that we jumped the gun the first time if we now say that we need legal advice before we can call in the bank. We should try to decide on this because we have discussed it for over an hour. Will we write to the banks requesting that they come in or will we wait until July? We are talking in circles at this stage.
I understand Deputy Bruton's points and I would not disagree with them. My point is — this can be included in the letter to the chairman if necessary — I want to find out what are the bank's procedures for compliance, how robust are they and how are they carried out, the structure of corporate governance within the bank, the role of the non-executive directors, how often they meet on their own, and whether non-executive directors meet with the auditor or the internal auditor.
I also want to know to whom the internal auditor reports. I want to know the areas covered by the audit of the company, the connection between the external auditor and other aspects of the bank's operations. I can continue with 20 or 40 more questions, none of which need at any time refer to any particular issue, though I agree with Senator Ross about issues we could also discuss without creating any difficulty. I want to know these things. It will require us to have heard from the bank before the report is issued when we can then check to see if everything matches up.
The bank's internal auditor reported to its board on what was going on years before this issue became public. The bank ignored that report. I want to know what is happening today. What is the current role of the internal auditor? I want to look at the theory of the bank's corporate governance, to see how its culture is dealt with at board level, below board level and by senior management. There are many different issues we can deal with, and that is why we should be talking to the bank's representatives.
We cannot spend all day on this issue. I do not always agree with Deputy Richard Bruton but I agree with the remarks he made today. Common sense must prevail. Mr. Buckley has not refused to appear before the committee. He has asked for time, and we should be big and honourable enough to agree to that. Otherwise we are being unfair. Many investigations are underway. The Competitions Authority is currently looking at the banking sector. Its report is imminent. We should have its interim report for consideration. We are entitled to see it and should insist on getting it.
I do not always disagree with Senator O'Toole. He has gone deeply into this matter. The Companies Acts and other similar legislation is or relevance to this area. I complain, as do other Deputies, about being over-regulated. We are moving very much into the bank's business affairs. The competition element arises, and if we go too deeply into matters we will destroy that element and ruin the entire system. The bank has broken the law, admitted it, apologised and has done what it can about the situation. We are spending too much time on this issue and not being fair. We are talking about banks, but it is only AIB we are hitting hard. The group has a major stake in society, involving pension funds and so on, and if we continue as we are doing we will destroy the system. Corporate governance is one thing, but Senator O'Toole has unfairly delved into a series of issues.
These are not business issues. They are the same issues which every bank should be considering and I have the same list of questions for all. Last week I said that the amendments to the Central Bank and Financial Services Regulatory Authority of Ireland Bill, to which Deputy Burton referred, should not have been necessary if we did our business properly six months ago. The situation is still not right. That legislation should contain a requirement on directors of listed companies to sign off at the end of each year that they have been compliant with all the laws of the land. The auditor should also be required to sign off on that. These are very open issues and there is a lot to be done. If we return in six month's time and someone else refuses to meet us, we will be asking why. It is in our own hands. Let us at least start this process of compellability. Deputy Ó Caoláin makes a valid point in saying that other committees should be informed that we are discussing this matter, and that they might also wish to do so.
The legislation in this area is comprehensive and much of what Senator O'Toole has asked for is already provided for. Auditors cover those areas. It is not right to ask an organisation whether it meets without management or directors. No law demands that. We are moving into the domestic affairs of business when we ask it.
There are two separate issues here. I agree with Senator O'Toole regarding compellability of witnesses. As we do our work, we will go into the area where we will need to have witnesses attend. Regarding AIB, it is clear from the letter that management will appear before us. I urge caution. Let us not be too hasty in trying to drag management to the committee. We have a lot of work to do and can get on with it while we are waiting for the various reports to be issued. We will meet the bank representatives in July and do our business then. There may be a little bit of playing to the media in all of this.
The question of compellability and any ongoing investigations into AIB are two separate issues. We should proceed with compellability. I will repeat what I said earlier. We had a number of broad general policy questions to ask. I asked a number of questions last week about internal audit, the bank's audit committee at director level, and external auditors. Contrary to what Deputy Ned O'Keeffe has said, in the legislation recently introduced the internal audit function is strictly optional, whereas in practice in any financial institution I have worked in, the internal audit function is critical. It is the first line of defence both for the bank and its shareholders against fraud but also for the bank's general application of rules and regulations which may ultimately protect the consumer.
Those questions stand independently of any investigation into specific allegations. They are fair and reasonable questions for this committee to put to any of the financial institutions at any stage it chooses to. IFSRA representatives attended our committee meeting last Friday and I put a number of specific questions to Dr. O'Reilly. I asked him what the Central Bank knew about allegations of overcharging with regard to AIB or its products or services. He told the committee that IFSRA had inherited all of the files of the Central Bank and of the Director of Consumer Affairs. Some of these allegations go back a number of years to when the Central Bank was responsible and to when the Director of Consumer Affairs was responsible.
In terms of oversight — not in terms of nitty-gritty examinations — we are entitled to ask. Dr. O'Reilly did not answer our question as to whether complaints been made at any stage to the Central Bank. I also asked if settlements were made in any case to aggrieved customers, either individuals or commercial customers with regard to possible cases of mis-charging or over-charging by the banks. Those questions stand.
Today we have a very significant letter from Dorothea Dowling.
I am cutting the Deputy off. We are confining the discussion to AIB and will deal with the other matter separately.
I will return to AIB.
Stick with AIB.
I asked those questions last week. What we got from IFSRA was a presentation.
We know. We were present.
We did not get detailed answers to some of the questions which arose as a consequence of the discussion. We will have more questions to ask of the Governor of the Central Bank when he attends the committee meeting next week.
Fine.
There is nothing to preclude AIB and some of its senior management from coming in here to give us an overview of the type of regulatory corporate governance that AIB and its board currently employs, and how it is addressing defalcations which may have occurred in the past. They are the central issues and they have nothing to do with the detailed questions regarding a particular investigation.
I want to get a clear decision on the two separate issues. Regarding compellability, I propose that for next Tuesday we get legal advice from the Parliamentary legal adviser. Only the Committee of Public Accounts has standing powers of compellability. The Dáil and the Seanad have agreed that with several committees operating, they may or may not choose to give one committee in isolation a power not conferred on other committees. Can we agree to get legal advice from the Parliamentary legal adviser regarding the compellability steps required? I have no intention of going down any road without receiving legal advice at the outset.
We agree.
I have no problem with that.
The topic is closed. We will get that legal advice by next Tuesday. The next issue is our response regarding AIB. Do we propose not to respond at all and allow matters to run to July? I do not intend to issue a third letter to Mr. Buckley. The only issue is whether we write to the chairman of the board. Is that agreed?
We should not write until we have legal advice on the nature of the hearings that we would be holding, given that the bank, by everyone's admission, has broken the law on at least two occasions. We would be going over that ground. I would prefer, before any such letter is sent, that we have the view of a legal adviser. I had thought that we would have it at this meeting. I made such a request at our last meeting.
I want to clarify that. The Deputy raised this matter at the previous meeting and again today but nothing was agreed. It was suggested we obtain legal advice but at our last meeting it was decided to write again to AIB.
I did not think it overruled that view.
That was the route that we took.
We do not require a legal opinion to reflect the annoyance of this committee at Mr. Buckley's second rejection of our request. The chairman of the bank should be informed that its chief executive officer has taken such a position regarding the committee. Earlier Deputy Nolan referred to the role of the media in the run-up to elections. Oireachtas committees do not get media attention. That is not a factor here. Following a sane and sensible request, this Oireachtas committee has now been rejected a second time. It should be brought——
This is make or break for the committee.
We should proceed with the letter. There is no conflict in doing that with receiving a legal opinion.
Otherwise we will have deliberated for two hours and decided to do nothing. It is crazy. It makes us look totally stupid.
Can we get agreement that we are writing to the chairman of the board of AIB to reflect the issues? We do not require legal advice to write such a letter. We will get legal advice on the issue of compellability by next Tuesday.
Yes. Could the Chairman phrase the letter in the strongest possible terms with no mealy-mouthed stuff? We are very angry as a committee.
This was clear at our first meeting.
When the letter is cleared by the Clerk and myself, we will circulate it to members for their information. The next topic has already been mentioned. It concerns an e-mail message from Dorothea Dowling, who suggested several issues that we might usefully discuss with AIB. I suggest that the committee thank Ms Dowling for her contribution, note its contents and bear in mind the points raised when we meet AIB.
I wish to make a separate suggestion. Dorothea Dowling has produced a significant body of work on consumer protection and insurance costs in this country. If someone such as she writes to us with a series of suggested questions, which we may wish to ask AIB, other banks and IFSRA, we should write in the context of our ongoing inquiry into banks. We have not produced that report. We should write to AIB but also to IFSRA and the Irish Banks' standing committee and ask them if they have a response to the questions, which are very important, including the commission rates. I am particularly concerned about Ms Dowling's reference to and recall of the churning scandal. As I am sure the Chairman is aware, that involved customers of a bank being directed to a fresh product and churned or rolled over into a new one, as a consequence of which the person may incur the new product fees, which may be very high. I am not a lawyer, but I understand that it has been outlawed in several jurisdictions, and I would take very seriously Ms Dowling making a direct reference to it. Perhaps the media will now investigate this for us, as usually happens, and tell us about it. It is totally separate from anything else that has been said to us. It is legitimate for us as a committee to put Ms Dowling's questions to IFSRA and the banks' standing committee, which is the overall body for the banks.
What is the banks' standing committee?
The Irish Bankers Federation.
The Chair asked last week about the nature of our relationship with IFSRA.
We will write to IFSRA, the Bankers Federation and AIB.
I would like a fuller submission from Dorothea Dowling. Clearly, there are supplementary issues. I know that it has already come up in the public domain whether advisers within banks are bound by the same obligations as other advisers. There are many issues here on which we ought to get a briefing.
In seconding that, I want to state that I am vice-chairman of the Personal Injuries Assessment Board, of which Dorothea Dowling is the chair, but I have not discussed this matter with her.
We will write to Dorothea Dowling asking her to provide any further information that she might have on that topic. The next item of correspondence is a letter.
What is the decision?
The decision is to send a copy to AIB, the Irish Bankers' Federation and IFSRA.
What about the other banks? Why single out one over the others?
We are sending it to the Irish Bankers Federation, which covers all banks.
I am not worried about IFSRA, but the Irish Bankers Federation should deal with the matter on principle.
I have mentioned AIB because at the head of Dorothea Dowling's letter, she has as a subject heading "AIB and credit protection insurance". AIB and IFSRA are the two institutions specifically mentioned. There is a general reference to banks, but those are the two institutions specifically mentioned in her communication.
Let us send the letter to all the banks.
Dorothea Dowling's letter is grand, but she is on the band wagon if she mentions AIB.
We will send it to the Irish Bankers Federation and IFSRA. The next item of correspondence is the letter received from the Office of the Ombudsman. I hope that members have had an opportunity to consider it. In the light of previous correspondence we asked the Office of the Ombudsman to set out details of any cases where a recommendation by the Ombudsman had been rejected. The reply is comprehensive and I suggest that we note it.
Is this not in the context of another item of correspondence before us?
It is referred to.
Whereas this is not. It refers to the series of letters from a man in County Wexford.
The agenda before me does not refer to this letter. The enclosures did not include one from the Ombudsman.
There is a provisional and a revised agenda.
That item has appeared on the agenda regularly with correspondence to and fro. I suggest that the Chairman and a member from each side of the committee meet the person to ascertain the position. One person could go from the Government side and one from the Opposition side. They could accompany the Chairman. It is an ongoing matter and the person is now lobbying members of the committee. I was not at home when he telephoned and I have not returned his call, since I do not know what to do with him.
I ask the members not to mention the person by name. He should be referred to as the writer of the letter.
Is the Chairman accepting my suggestion?
Others have indicated that they wish to speak. We will decide shortly.
I apologise for mentioning the name to identify the connection with this correspondence. I do not agree with Deputy Ned O'Keeffe that we need meet the correspondent. As I said at the last meeting, he is pointing to the absence of power on the part of the Office of the Ombudsman to compel public bodies to respond or act in a particular way.
This is the information we sought from the Ombudsman. We are familiar with the position of the Revenue Commissioners, which has been addressed previously by the committee. Our focus should be on the principle of the issue rather than the specifics of the case that has been presented. I do not believe the committee can deal with the specific case, but we should address the principle of it. We should meet the Ombudsman and her officials, to find out how they view proceedings as regards the extension of powers to that office to compel the Revenue Commissioners et alia to act following such a determination.
I understand legislation is pending to enhance the powers of the Ombudsman. I have not had sight of the heads of a Bill. Nevertheless, we should inform ourselves of the views of the Ombudsman as regards an extension of power to allow her to determine what action must — not should — be taken as a result of a determination by her office. That is important. That is how we should deal with this correspondent's interest.
I want to bring this matter to a conclusion. I will read the relevant two paragraphs in this letter and thereafter I will make a proposal. The letter, from Mr. Pat Whelan, director general of the Ombudsman's office, states:
The committee is also familiar with the details of the case, which we are now referring. Following the Revenue's rejection of one of the recommendations, the chairman of the Revenue Commissioners and the Ombudsman, Kevin Murphy, held discussions, which resulted in a compromise settlement which the Ombudsman put to the individual concerned; and this was accepted by him. Thus, the Ombudsman brought to a conclusion the process set out in section 6 of the Ombudsman's Act for dealing with Revenue responses to his recommendations.
The committee is already aware that the current Ombudsman, Ms Emily O'Reilly, fully supports the position adopted by her predecessor in this case. She has written to the gentleman in question in the past week, advising him that as far as she is concerned the case remains closed and she has no further role in it.
I propose we write to the effect that the committee has no further role in this matter and advise that the man has other legal avenues open to him if he is not happy at the way he was dealt with by the various arms of the State.
I do not know who is this person. He has made a number of attempts to speak with me which I have not accommodated. I presume other members of the committee have also been approached. To me there is something wrong in a situation where the Ombudsman makes a determination and the body concerned — the Revenue Commissioners in this case — takes a contrary view. It is not unlike the situation we have been discussing. It is concerned with the question of compellability in terms of undertaking a specific function under the direction of the Ombudsman. I take the view that the Ombudsman should have that power. The office was set up by the Houses of the Oireachtas in order to make an independent determination in such matters. If a party to any given dispute being adjudged by the Ombudsman reserves to itself the right to reject that determination and determine its own position, without any opportunity for redress or rebuke, as appropriate, that is wrong. The office of the Ombudsman should have that power of compellability.
We should not drop this matter because there is a principle involved. Whatever the detail of the correspondent's case, a determination was made and it has not been honoured. That is the factual position. The rights and wrongs of it are neither here nor there. There is a principle here and we cannot allow a precedent to be established in this regard. All of the other cases, as indicated in the letter to the committee from the director general, show that following further consultations amicable conclusions were reached. I do not know whether undertaking further consultations and reaching amicable conclusions is the way to do the business. If the Ombudsman has a function to perform, carries out an assessment and reaches a determination I believe that should be accepted by both parties to the process. They entered into such an arrangement with the Ombudsman and they should accept, honour and respect the determination. That has not happened and I have no doubt there will be replication of this if we do not address the substantive issue.
The Deputy is talking about addressing the principle, not the specific case.
That is correct.
I am trying to close off this specific case. We can take the principle forward.
The principle will address the individual case, because it should be retrospectively applied. That is my view. I see no other way for the committee to address it. We can exhaust ourselves writing on this. It is fair and honest to say to the correspondent that an impasse has been reached, but that the committee recognises, however, that an issue is involved and that there is a shared majority view on which a determination has been made. We should not let it drop. I would like to see it further explored with the Office of the Ombudsman as regards what it believes should happen in this instance.
The Ombudsman comes before the committee, regularly, each year and we will put that question directly to her.
We should do so because legislation is promised. Let us inform ourselves in advance of that because it is something we may want to write into the legislation and argue for in the intervening period. I would not like the correspondent to think that we have closed another door on him. To be fair to people we should say the committee recognises a principle is involved here and is prepared to address it.
The Ombudsman has made her view clear on the matter Deputy Ó Caoláin has raised. She says the Ombudsman's recommendations are not binding on the public body. This is one of the office's great strengths and not in any way a weakness. It allows the Ombudsman to operate pragmatically, flexibly and informally and to avoid legalistic and adversarial approaches to the courts. It is clear what the Ombudsman's answer will be when we ask whether she believes her recommendation should have the force of law. We ought to ask the question to perhaps elucidate on why she takes that view, but we cannot hold out a hope to the correspondent that the committee's investigations will produce a different outcome.
On that issue tens of thousands of cases have been dealt with successfully or concluded to some extent by the Ombudsman. I do not believe we should seek to change the entire modus operandi of the Ombudsman’s office because of one particular letter. We may have different opinions on that. It is for further discussion. I want to conclude on this because this letter keeps recurring.
The committee has responsibility for finance and Revenue. Why not call the chairman of the Revenue Commissioners?
We have spoken directly to the chairman. I, as Chairman, have spoken to him.
Has he appeared before the committee?
The chairman wrote to the committee.
Why not bring him in? We bring in other people, so why not him? This is not the first case in which he has not adhered to the Ombudsman's decision.
I am fearful of giving a false impression to the correspondent that this is somehow going to change matters. Ultimately, if he is not satisfied with how the State authorities dealt with him, he can go to the courts. There is always that option. The committee is not a second avenue of appeal. We are not the appeals office for the Ombudsman or the Revenue Commissioners. I would be loathe to go down that road. He has legal options available to him at all times.
We are the policy makers.
However, we do not implement or enforce policy.
Is this an affordable option, given that the Revenue Commissioners withheld so much of what the Ombudsman determined was due?
I propose that we write stating that the Ombudsman has written to him in the past week advising him that the case is now closed and remains closed and she has no further role in the matter. I do not want to undermine the Ombudsman by offering people who are unhappy with her decision another avenue of redress. If it is an issue for future legislation, that is fine, but the system seems to work in 99.99% of cases.
I would like to explore with the Ombudsman the points that Deputy Bruton has highlighted from her correspondence.
We will.
It is important that we are even handed. We have spent an hour and a half discussing a financial situation. It appears that Revenue may do what it likes, but the Ombudsman adjudicates on cases. Every authority within the ambit of the Act adheres to the Ombudsman's decision. In this instance a statutory body does not agree with it and is riding roughshod over the system. Revenue cannot be let off scot-free. The Chairman cannot ignore that fact if we are to be even-handed. We play on a level playing pitch. In view of this, the Chairman of the Revenue Commissioners should appear before the joint committee.
Deputy O'Keeffe and I share a common concern on this case.
Do members of the committee wish to meet in an informal manner the gentleman who wrote the letter and to outline to him how we view the current situation?
I do not believe that would assist the resolution of the issue.
The matter is over.
This person has more than adequately communicated his case. We need, however, to address the issue he raised. I suggested the Ombudsman investigate it. Deputy Ned O'Keeffe suggested the Revenue Commissioners should be questioned. If that is the Deputy's proposition, I have no problem in seconding that we ask the Revenue Commissioners to come before the joint committee. To drop the issue would send out a message that the individual is relatively powerless.
I suggest that if people want to talk to the Revenue Commissioners, we adopt the same process as in the AIB case, that is, the Chair writes to the Chairman of the Revenue Commissioners advising him of the further correspondence and asking for his comments and if there is a mechanism to deal with this issue.
With regard to our work programme, I proposed that the committee consider the cost of tax breaks. Deputy Ó Caoláin seconded the proposal. In that context I look forward to the Revenue Commissioners appearing before the committee. I see no reason that this item could not also be dealt with as part of the schedule of the meeting.
I do not believe a joint committee of the Oireachtas should be involved in tax cases of individual taxpayers. I have spoken to the Chairman of the Revenue Commissioner as a result of being requested to do so, and in an earlier letter, he states that in the event, the discussion yielded a compromise solution. The taxpayer concerned asked the Ombudsman, having agreed the compromise solution, to expedite the payment, which was done and the cheque was issued within nine days. Both the senior officers are final in their position on these matters. They are both satisfied that the taxpayer agreed to the decision. I have spoken to the Ombudsman and the Chairman of the Revenue Commissioners.
That is valuable information. Could we have a written comment from the Chair on the letter to the Revenue Commissioners?
We have the letter and it was circulated. I will have it recirculated. I propose we write to the gentleman concerned stating that as a result of the Ombudsman's letter and the letter from the Revenue Commissioners, the joint committee cannot take the case further, but that we will raise the general principles with the Ombudsman when she comes before the joint committee. We will state also that if he is not happy, he, like all citizens, has the right to engage a legal team to address it for him. I wish to finish with this correspondence.
I support that.
Precedent and practice is very important. I understand there was a case involving the Revenue Commissioners some time ago where they did not pay up initially but did so eventually. As I see it, the Revenue Commissioners are acting outside the law.
Let me clarify the matter for the Deputy. At the end of that case, the Ombudsman was satisfied that the response of the Revenue Commissioners was unsatisfactory and laid a special report before the Dáil. In this case, the Ombudsman considered that the compromise was not an unsatisfactory response and decided against laying a report before the Houses of the Oireachtas. The Ombudsman was satisfied with the compromise. The Chairman of the Revenue Commissioners was satisfied also and at the time, the taxpayer was satisfied and accepted it and asked that his cheque be issued as quickly as possible. Subsequently, he probably felt he could have done better and is now not happy. The case was dealt with satisfactorily. I am proposing to write to the gentleman on that basis.
We have another important meeting at 5.30 p.m.
The last item of correspondence is from the Joint Committee on Education and Science which has sent us a copy of an e-mail from the German embassy to the effect that a delegation of five members of the sub-committee on cultural and media of the German Parliament is to visit Dublin in June and the delegation is interested in discussing a number of specific issues, among which within the remit of the committee are the information society, including the world summit on the information society. The delegation wishes to arrange meetings with this and two other committees from the afternoon of Wednesday, 23 June to the afternoon of Thursday, 24 June 2004. The joint committee is scheduled to meet on 23 June, although it should be noted that this will clash with questions to the Minister of Finance. Does the committee wish to accede to the request for a meeting and to schedule it as part of our normal meeting at 3 p.m. on 23 June? Will we agree to meet the group first? Agreed. Will we agree to include it as an item on the agenda of our regular meeting on 23 June 2004?
I do not think we have done enough work on the information society to be particularly helpful to the delegation.
Members of the committee made a trip in order to concentrate on that issue. I am sure the members who made the trip will be very informed and keen to share their knowledge with the delegation. It is agreed that we will meet the delegation at some time on 23 June 2004, perhaps a half hour before or after our meeting. We are scheduled to meet Mr. John Hurley at 2 p.m. next Tuesday.
We have not addressed item 3 on the agenda. Deputy Ó Caoláin and I have made submissions ——
We could leave that until next Tuesday.
I propose that we accept the prioritisation set out in both our submissions of an examination of decentralisation as the next business for the committee.
On the work programme, Deputy Richard Bruton had listed the following items for consideration: Financial services regulation; decentralisation and the financial procedures in the Department as illustrated by the PCW report on the Office of Public Works. Deputy Ó Caoláin had indicated that the sequence of work he proposed, after our discussion on banks and charges, in which we are currently engaged, was as follows: Decentralisation; tax relief on investments of certain kinds of property and other reliefs; and the potential of the euro on the economic life of the State. Other members had indicated——
Freedom of information is topical. It was raised in questions to the Taoiseach. I would like to see that debated.
Since the idea of decentralisation was mooted and because many Deputies here will be affected by it in their constituencies, I asked for a report from the Department on any difficulties that occurred with previous acts of decentralisation. We still have not received any report at committee level even though we have asked for it three times since the Finance Bill was published. Not one Department has replied to our query on whether any difficulties occurred. I am very supportive of decentralisation and I know that Deputy Bruton is opposed to it, but this request was made to give us an idea as to how sustainable it is.
As we did not conclude how we are to structure the discussion on decentralisation, we have not yet issued the letters. When we decide on the structure of our discussion, we will take that on board.
I have already spoken of the cost of various tax reliefs and their implications for the tax system. We should schedule some work for after the local elections on 11 June, agree on what we will do and get some help on the background material. I have no difficulty with any of the suggestions and a number of them are my own. However, we are also facing into next year's budget as soon as the elections are over. If the work is to be meaningful, we have to look at our parliamentary schedule. I have raised the tax issue for the last two years. We need a detailed discussion on how to proceed with that.
The Dáil will go into recess on 8 July. Can we meet two or three days a week for that month? We can get the programme out of the way then.
If we are to be serious about these issues, such as tax, decentralisation and FOI, we need to note down the list of areas identified. I spoke some time ago about inviting in parties to the decentralisation process. We should have a two day hearing on decentralisation in the public interest. That should involve calling in Mr. Flynn and examining the CAF system and an invitation to the public service unions as they and their members are most affected. If a representative number of public servants who may not be members of unions also wish to make a case, that is fine by me.
However, we know the main parties to the decentralisation process. In Dublin a huge amount of distress is being caused to families in certain age categories and with certain lifestyles. My own view on decentralisation is that people are broadly in favour of the overall principle, but families are very reluctant to move when one spouse has job commitments and they might have teenage children. The whole thing has been sold as a bonanza for civil servants to sell their houses in Dublin and buy a cheap house in the country. However, it is a big task for those who have spouses with commitments in Dublin and who have children. I was Minster of State in the then Department of Social Welfare when Fianna Fáil and Labour were in government together. Decentralisation to the northwest took place at that time but it proceeded on a voluntary basis. There was a rush of interest from 25% of the staff from the northwest and then it stalled. Further offers were made based on promotional opportunities and following that a deal was made for surplus local recruitment.
As finance spokesperson for my party I want this issue examined. We have no cost implications if the decentralisation programme is undertaken on the scale referred to by the Minister. Furthermore, Professor Edward Walsh, who holds views on a number of issues with which I would not normally agree, spoke in apocalyptic terms of the impact of this on the integrity of the public service system in Ireland. If we want to work on this, we must do a serious job and identify the parameters involved. I am sure there are those who argue for decentralisation to specific areas where they see it happening quicker and more logically than would be the case in other areas. For example, some small units of high specialisation are being decentralised but given that it is a voluntary process, it is very difficult to know what jobs can be left to those specialist people who remain in the greater Dublin area.
We were all asked to prioritise from the extensive list of topics on the proposed work programme. I would like to be able to deal with many of the remaining points on the list. My view is that as decentralisation is a matter of great interest it should be addressed by the committee. I am open to Deputy Burton's suggestion that it be deferred until after the local elections in order to take a serious look at it. In the meantime, we can identify the key players we have to meet.
I referred earlier to the tax relief on investments in certain kinds of property and other reliefs. I am interested in pursuing that because following a parliamentary question I tabled prior to the budget last year, the Minister was unable to indicate the cost of this to the Exchequer. That was a major admission.
I propose we take a decision on this. This was the sole item on the agenda and I requested it. I was told it would be taken first and we must take a decision without any more deferrals.
I understand there is a proposal to deal with decentralisation. It is a matter common to two Deputies, who have prioritised it in accordance with the committee's request. I support the suggestion that we proceed with the decentralisation issue.
Is there a proposal——
Deputy Bruton proposed it and I seconded it.
Is there a proposal that we have a two day session immediately after the local elections to deal with decentralisation?
I oppose that.
The range of persons that I have indicated——
There are four who support the proposal and one who opposes it.
Will I call a vote?
The Chairman does not have to call a vote. It is up to a member to press for a division.
I think a majority of the committee has carried it.
I oppose this because it is a political matter.
With due respect to Deputy Ned O'Keeffe, I have asked that this would happen after the local elections. That removes a large element of the political football.
It has only been announced. We should---——
The question is that the joint committee meet for two days as soon as is practicable after the local elections to discuss the issue of decentralisation. However, I will suspend any division on this question until after the Dáil division.
Sitting suspended at 5.00 p.m. and resumed at 5.20 p.m.
Question put: "That the joint committee meet for two days, after the local elections, in early July, to consider the question of public service decentralisation."
The Joint Committee divided: Tá, 6; Níl, 8.
Tá
- Bruton, Richard.
- Burton, Joan.
- McGrath, Paul.
- Ó Caoláin, Caoimhghín.
- O’Toole, Joe.
- Twomey, Liam.
Níl
- Cregan, John.
- Fleming, Seán.
- Hoctor, Máire.
- Lenihan, Conor.
- Mansergh, Martin.
- Nolan, M. J.
- O’Keeffe, Ned.
- White, Mary.
Question declared lost.
Are there any other items for discussion?
Is this the level of accountability that Fianna Fáil now believes is adequate for a decision that, to quote Dr. Ed Walsh, "could have potentially seriously damaging effects on the performance of the public service"? This decision was slipped in under the cover of the budget to avoid the requirement to circulate a memorandum to Departments for comment and to avoid any scrutiny in the Dáil and in this committee. The joint committee should tease out these steps to evaluate their wisdom. We should make sure that any damage that might be done is addressed. Fianna Fáil is ramming this measure through to prevent any scrutiny. It is a sad day for the Oireachtas and particularly for the Chairman who has tried to champion proper scrutiny by this committee. We are taking a step back into the Stone Age. It is the sort of thing that people got used to in the past, but in a modern democracy one does not make decisions about matters as important as this in that sort of whimsical way.
The Deputy is overcompensating for his opposition to benchmarking.
The Deputy is the champion of Dáil reform, yet he is making sure that there will be no discussion on a matter of great importance to the State.
I opposed the proposal by the Opposition Deputies because it is clear that the Opposition is trying to scuttle the decentralisation plan and deprive rural Ireland of new offices and new people. That is why the Opposition is upset.
Nonsense.
Just because I did not shout, I am still entitled to due recognition when I have raised my hand to speak. I put a proposal to you, Chairman.
Sorry. I have called Deputy Ó Caoláin.
I am sorry but I had my hand up before Deputy Ó Caoláin.
I have called Deputy Ó Caoláin.
I had my hand up.
I have called Deputy Ó Caoláin.
The custom on this committee has been that the Chair calls Deputy Richard Bruton first and myself second, as the representative of the Labour Party.
I have called Deputy Ó Caoláin.
I had my hand up continuously from the time I entered.
I have called Deputy Ó Caoláin.
It was also my motion which was for discussion.
I am rotating it from Government to Opposition.
It was for discussion before the committee.
I am rotating it from Government to Opposition. I will call you after Deputy Ó Caoláin.
Do you think you can operate with a jackboot, Chairman?
No. I call Deputy Ó Caoláin.
Is that the new idea of Fianna Fáil?
I call Deputy Ó Caoláin.
Is that Fianna Fáil's new idea?
Deputy Ó Caoláin.
That is an appalling comment.
Senator White is very concerned about civil and political rights in Colombia. Could she not defend our civil and political rights on this committee?
(Interruptions).
I call Deputy Ó Caoláin.
Senator White seems to be most concerned about overseas events.
Deputy Ó Caoláin has been called. I will come back to the other Deputy.
I refute Deputy Ned O'Keeffe's assertion that the Opposition is opposed to the decentralisation project — far from it, in fact. No participant in this committee's deliberations in recent months could forget the message of the Combat Poverty Agency's representatives, who told us that the smallest tranche of decentralisation on the list — scheduled for the town of Monaghan and involving 25 persons in total — would not happen. They told us in no uncertain terms that the project would not happen, and gave us one or two reasons for that, yet it is the smallest commitment in the long list presented by the Minister for Finance. The people directly involved told this committee that it would not happen as the Minister had prescribed it. This committee should follow up on that statement. We need an opportunity to scrutinise what is involved, along with all the other elements, including the reasonable questions that have been posed by other Deputies, which merit a response.
I do not wish to see obstacles put in the way of the decentralisation proposals. As my colleague, Deputy Twomey, said, we would like to see the project being properly established and steered forward. We would like to have seen real consultation taking place prior to the announcement, but that did not happen. We would like to see decentralisation proceed on a voluntary basis, which, clearly, it cannot, if it is to fulfil the Minister's expectations and his fear of Madame Guillotine descending on the Government parties by 31 December 2006.
This committee is entrusted to deal with matters relating to finance and the public service. However, under the Chair's direction, Fianna Fáil has just decided to deny not only the committee's right but also its obligation to address matters concerning the public service. This is the most significant issue currently facing the public service but, as a result of this vote, we have been denied the opportunity to debate it here. What are the Government representatives afraid will emerge from such deliberations and our engagement with representatives of people who will be directly affected by the decentralisation proposal?
Chairman, you have censored an Oireachtas committee and denied its clear and stated function to ensure proper public scrutiny of all matters pertinent and relevant to its terms of reference. This is the most important issue currently facing the public service sector and this committee has a responsibility to address it. It is no coincidence that the matter was highlighted among the three priority issues tabled by the only two Deputies who made a submission in accordance with the committee's decision made at its last meeting.
This decision questions the purpose and usefulness of this committee's role. We have wasted an entire meeting addressing items of correspondence at great length. Before we could get to the substance of the agenda, which was long delayed and stalled, we have now exposed that the Fianna Fáil members did not wish this matter to be addressed at all. That is the reality. They talk about a work programme. We can have no work programme with this type of approach on the part of the Fianna Fáil members on this committee.
I deeply regret the position that you have taken, Chairman, because I have respected you in your role. Your fairness has been evident to me on many occasions but in this matter you have taken a complete about turn. You know it and the weight of it is upon you.
It is of course a matter for this committee to order its priorities for discussion and while we try to proceed by consensus, it is not always the case that the Government and Opposition will be completely agreed on priorities. None of us is against some discussion about decentralisation at an appropriate point but calling for the joint committee to meet for two days after the local elections is trying to push it into a central position in our deliberations which is not warranted.
We in Fianna Fáil are much accused of breaking election promises. This is an election promise that is being kept and there is a clear mandate for it. I refer everyone to the Fianna Fáil manifesto which spoke about decentralisation in precisely the terms in which it is now being put forward, which is, that priority would be given to substantial towns that had difficulty attracting industry, and that is exactly what it is.
I speak as somebody who has been a public servant. Where a Government goes to the electorate and wins a clear electoral mandate to carry out a policy, then in my opinion it is the duty of civil servants to carry that out, obviously, in circumstances like this, taking account of individual circumstances and exceptions, but it is not open to them to oppose the policy in principle.
All the Opposition parties represented here have, in different constituencies around the country, broadly and warmly welcomed decentralisation and I do not appreciate the way the leadership of the Labour Party, in particular, has rubbished the concept. It is extremely conservative to suggest that we do not need decentralisation. It does not surprise me coming from somebody like Professor Edward Walsh, for whom, as a former president of a university, I have great respect but who does have in some respects a very conservative orientation.
We are all supposed to be committed to equality and balance, and not to allow one part of the country to get much wealthier while other parts are left behind. The decentralisation announcement has been a huge boost to confidence. In Tipperary town, without a single job being transferred, there have been several important investments announced on foot of the confidence created by decentralisation. I will not be part of a guerrilla warfare campaign against decentralisation. People will want to know before the local election, but particularly before the next general election, what is the real attitude of the parties opposite to decentralisation.
They will not even let us have a debate.
I wish to finish my point.
Of what are they afraid?
(Interruptions).
We are having a bit of a debate now, are we not?
Senator Mansergh is in possession.
We will want to know what is their stance. If, at the time the next general election is called, there are still parts of the programme that need to be carried out, as will probably be the case, will it be carried through, will it be rescinded or will it be stopped? I have been around the system long enough to remember that in 1981, and again 1982, decentralisation programmes were cancelled by Fine Gael/Labour Governments when they came to office. I am glad we are having some discussion on it.
Why did the Senator not vote for an open debate and a proper scrutiny of the proposal? He wants to ram the proposal through.
It is not right that a political guerrilla war campaign be carried out against decentralisation. It is an enlightened project. It is nonsense to suggest that government cannot be carried out efficiently following its implementation. I want to see it discussed in a more balanced way and to see Fine Gael and the Labour Party clearly indicate if they will carry on the commitment to decentralisation or——
There has been no scrutiny, yet the Senator wants us to commit to something that his party will not let the House examine.
——tear it up at the first opportunity.
Such hypocrisy.
It is deeply regrettable that Senator Mansergh, as well as talking a great deal of hot air, was not party to the discussion——
The Deputy knows nothing of that.
It sounded like hot air to me but it may have been more meaningful to him. He was not party to the discussion on the committee's programme of work which took place here about an hour ago. I, along with various other members of the committee, have put forward suggestions at numerous meetings on the committee's programme of work. We were having a discussion about those items which would be selected. Both Deputies Bruton and Ó Caoláin had listed decentralisation. I put forward a modest proposal to the Chairman as to how we might proceed after the local elections so that we could have a rational discussion of a matter, which is not simply an element of Government policy, and indeed of the policy of almost all the political parties in this House, but which also has significant personal implications for 10,000 civil servants and their families throughout the Dublin area.
Is the Senator suggesting in his rather elevated tones that it is wrong to look at an aspect of Government policy and to ask for examination of the broad details of the costings and implications, including those for the individuals to be affected by the decision? Is the mere questioning of Government policy to be ruled out, as it has been so arrogantly by Senator Mansergh? I am surprised at Senator Mansergh. Normally we see the softer and more caring side of him, particularly in his columns in various newspapers. We have probably just seen the impact of seven years in government when one begins to believe one's own propaganda and that anything one says is as should be done.
For the benefit of the Senator, I will repeat what I proposed. I proposed that some time after the local elections in June the committee should conduct a broad two-day discussion on the implications of the Government's decentralisation proposals. I suggested a number of items. They were enthusiastically endorsed by the Chairman, Deputy Fleming, who subsequently reversed his position. I believe the Chairman endorsed what I was saying because I set out to be fair and it made sense. I suggested that we should invite in a number of people who had an involvement in the process of decentralisation. Senator Mansergh might be interested to know that the first person who I proposed be invited to make a presentation to the committee was Mr. Flynn, whom, I understand, has played a central role in the Government's development of its proposal of decentralisation.
I also suggested, as I have before, that a select representation of the public service unions should be invited to make a presentation. As I understand it from reading the newspapers, some public service unions are very enthusiastic about it, while others are opposed to it and have a number of problems which they want discussed. I also suggested that the costs of the decentralisation project should be subject to examination, and its impact on public service should be examined. I suggested that Professor Edward Walsh, a person with whom on many occasions I would disagree politically, or some similar person should also be invited.
Professor Walsh has addressed issues in regard to the integrity, cohesion and effectiveness of the Civil Service. As I understand it, he has proposed that decentralisation itself should be focused in regard to a number of areas. If it was not, perhaps, for the thought of the coming elections causing a rush of blood to Senator Mansergh's head, he would see that the kind of proposals that I outlined for the discussion were reasonable and balanced in regard to the pros and cons.
I put it to Senator Mansergh that I raised another question on which we are entitled to an answer. Throughout the Dublin area — I see Deputy Conor Lenihan is present — there are public servants and people working in public bodies who work in specialised areas. We have been told by the Government that this process is voluntary. When I was a Minister of State in the Department with responsibility for social welfare, I was part of overseeing the first and very successful extensive decentralisation of the Department to parts of the north west. My record in regard to that process stands.
The process was ultimately slow but, in the long run, quite successful because it was entered into very carefully by the then Labour-Fianna Fáil Government, which is not a characteristic shared by the current proposal. Perhaps Senator Mansergh might care to think about the fact that I have received representations from people with specialist jobs in various public bodies around the greater Dublin area who have been told that this process is voluntary and are being asked to apply to the CAF process. However, their spouses have jobs and commitments and some, for instance, have teenage children. I may have remarked that if members of the committee know how to persuade teenage children to do something when they have quite settled lifestyles to which they are attached in regard to their schooling and friends, there is nothing wrong with us giving some consideration to the impact of this proposal on families.
I understand that there are something like 10,000-15,000 families in the greater Dublin area who will be affected by this proposal. Some of those families, as the Minister for Finance has suggested, stand to benefit by reason of cheaper house prices in the countryside. However, I have been approached by people who suggest that the families will break up because they cannot get either their spouse or, in particular, their teenage children to agree to this forced dispersal.
Is Senator Mansergh saying to me that it is now the policy of Fianna Fáil to refuse a standing committee of the Dáil in this manner? This was the major announcement by the Minister for Finance in the budget. Senator Mansergh is now saying that Fianna Fáil should use the jackboot to refuse to allow a two-day structured discussion of the pros, the cons and the difficulties arising from decentralisation.
I regret that the Chairman allowed himself to be reversed by his party colleagues because he enthusiastically endorsed the proposal which was put forward and to which members of the committee agreed by way of voice vote. I have spoken briefly to Labour Party colleagues with long——
Deputy, you have repeated something about me three times. I have no idea what you are talkng about. You put your proposal——
When the proposal was put you said you were——
I said that we had a proposal and that I was putting it to the floor.
You voted in favour of it, Chairman, and put up your hand.
I did not.
Sorry, Chairman, but you put up your hand, unless the people on this side of the table are blind. You had your hand up. Your two party colleagues then told you something but you said, "No" and indicated that the proposal was carried. Deputy Bruton then said that a votáil had been called in the House, and when Deputy O'Keeffe confirmed that, you, Chairman, then said that a votáil had been called. When you returned to the committee you reversed your position. It is a humiliation to do that, but furthermore——
I reject everything said and I will check the tape. There is no truth whatever in that.
I am advised by my colleagues in the Labour Party, who have long experience of committees here, that it is extremely unusual to see what has just happened with regard to an area of a committee's work which is part of its primary role being refused. It is an amazing reversal and makes a joke of the work of this committee. For you to allow yourself, Chairman, to be used as a patsy is a disgrace.
I will ignore that comment.
You have decided, Chairman, to put the issue to the committee and the committee has voted accordingly.
The Deputy was not here and does not know what he is talking about.
I resent the Deputy's remark because I was following the whole matter on the television. I want to put straight a very important point. This matter was put to the electorate in a manifesto and is now being delivered. It was put to the Dáil in the budget speech and the Dáil voted solemnly for the proposal.
On a point of information, there was no motion and no vote whatsoever in the Dáil on this issue.
The proposal itself formed an integral part of the Budget Statement made by the Minister for Finance, Deputy McCreevy.
It was not voted on.
It was put to the people in an election, put to the people in a budget and put to the people in a Dáil vote. It is a Government decision which is now being implemented. It is being implemented by——
When was it put to a Dáil vote?
It is being implemented by one of the foremost trade unionists in this country, Mr. Phil Flynn, who, ironically——
The Deputy has not been listening.
——is a former vice chairman of Deputy Ó Caoláin's party. If Phil Flynn was still a member of Sinn Féin he would be leader of that party and we would not have to listen to Deputy Ó Caoláin at all——
Nothing underscores more the fact that the Deputy does not know what he is talking about. He is only a blatherer.
The Deputy is one of the greatest blatherers and hot air merchants in this House. He should listen to what some of his own party colleagues say in private about him. The Deputy seems to be the only thing holding back the Sinn Féin movement at the moment.
(Interruptions.)
This proposal has been put together very carefully and has been put to the people. It is odd that the Opposition parties in this committee and in the House are trying to send mixed messages on it——
The Deputy did not come in before the vote was called. He came in only as voting fodder. He does not know what went on.
Deputy Gay Mitchell opposed this measure——
Is Deputy Lenihan convenor of this committee?
No.
Has he a paid position on this committee? He never attends.
The Deputy is misinformed again. If one is on a committee one should check out the membership before making wild statements. That seems to be Deputy Burton's stock in trade——
(Interruptions.)
I did not interrupt Deputy Ó Caoláin when he spoke, and he had plenty of time to speak and verbalise on the issues. What I am saying is simple. This is a voluntary package. People can voluntarily decentralise to Departments that are being moved outside Dublin if they so wish.
Why no scrutiny?
Deputy Burton has used the misleading phrase "forced dispersal".
Deputy Lenihan has articulated outside the House the way this Dáil has fallen into disrepute because it does not debate or examine important issues of public interest, yet he is now party to jack-booting this through with no scrutiny.
There is no forced dispersal here——
What do they have to hide?
——but there is the very serious business of negotiation. It is wrong on a moral level for this House to be conducting a two-day debate.
Government decisions are sacred and we ought to genuflect before them.
No, it is as invidious as it is for the Dáil to continuously discuss issues such as national pay talks, for instance, while those talks are in progress. The Dáil has a role in debating the final result but it is invidious to do otherwise, as invidious as trying to hold a debate in the Dáil or in a committee in the middle of the negotiation on the Good Friday Agreement. The principle of trying to interrupt discussions and serious negotiations on a voluntary project is wrong.
A new version of democracy. Once the Government makes a decision there can be no further discussion.
There is nothing voluntary about it.
The Dáil should not be used as an instrument to destroy delicate discussions and negotiations currently in progress.
Contempt for democratic representation.
Fine Gael's contempt for this process is clear. Fine Gael has two views on it. Deputy Gay Mitchell in Dublin has one view and Fine Gael at large has a different view.
Deputy Lenihan is a hypocrite.
The Fine Gael and Labour Party approach to this matter is hypocritical.
This is being read wrongly. The reason members on this side are totally disgusted with this decision is that we support decentralisation. I support decentralisation.
Oh yes.
What does Deputy Lenihan mean by that?
He does in theory but not in practice.
The Deputy may have an opportunity to explain that later.
He is like the Mayo doctor.
Deputy Lenihan is making things up. He is showing by what he is saying that he knows that what just happened here was totally wrong. He is making personal remarks about me that he knows nothing about. He should issue an apology in that regard.
Now they are walking out.
I do not think so.
They would not even wait to listen to Deputy Twomey.
That is Fianna Fáil.
Deputy Twomey has the floor.
We might as well put on the record that this vote has left the issue of decentralisation very much up in the air and gives an impression that this committee is covering something up. This committee has voted not to discuss something that is on its own work programme. I do not know where this leaves us as a committee and whether the committee has voted to disband itself. Since discussing the Finance Bill 2004, decentralisation has been one of the topics on our work programme.
Chairman, you never objected.
A number of members have made decentralisation an issue. Deputy Ó Caoláin and I cannot wait for decentralisation to come to our constituencies. We involved ourselves in the issue at this committee so that we can oversee its streamlined implementation. We have raised questions about what problems were encountered in the past so that we can go back to our constituencies and tell people where the process may slow down or speed up.
Up to this point we fully believe decentralisation would be implemented. We believed it was a serious Government commitment. However, members of the Chairman's party, Fianna Fáil, have voted against a proposal that this committee discuss the matter. It is only eight mouths since the policy was announced and we were looking for some initial way of finding how it will progress over the two years.
The committee has now voted against discussing it. This is an amazing position for a committee to find itself in. Only an hour ago we were discussing the banks — who is coming in, who was accountable and who is supposed to represent them — and taking exception to the fact that Mr. Michael Buckley of AIB had indicated he would not attend the committee next week but might do so in a month or so. We said he is treating the committee with contempt and treating us like fools.
However, we then went on to vote against discussing something on own work programme. That is balderdash. We cannot have members from the Government parties, and even from the Opposition side who are pro-decentralisation question a range of people as that would indicate that members of the committee do not have the intelligence to properly discuss the matter. What happens if some other issue turns up in the future? We have just voted ourselves out of existence. We have no credibility. When delegations from the banks appear before the committee they will be able to say they should not have to answer difficult questions given that the committee votes against discussing its own work programme.
Chairman, you need to revisit this with the people who proposed the vote, otherwise there is no point in any of us coming to this committee to discuss any serious matter. We can discuss a few Mickey Mouse issues just to give ourselves a pat on the back, which is what we are all about, but we might as well forget about anything that is important.
The question, on which we voted, was that the joint committee meet for two days after the local elections in early July to consider the question of public service decentralisation. The proposal was defeated. It is still on our work programme. We merely decided not to discuss it for two days immediately after the local elections.
What if it was phrased differently?
We are in favour of discussion but not yet.
Would you support it if it was a one-day debate?
No, not as the first item on the work programme.
You are trying to spirit your way back into your hole.
The joint committee adjourned at 5.55 p.m. until 2 p.m. on Tuesday, 1 June 2004.