JOINT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE debate -
Wednesday, 22 Oct 2008

Business of Joint Committee.

Vice Chairman (Deputy Michael McGrath)

The first item is the minutes of the meeting of 3 September. Are they agreed? Agreed.

On matters arising, members will recall that at the last meeting they considered COM (2008) 396 which was referred to the committee for written observations. The committee agreed to await a response from the Department of Finance for its views on certain credit and insurance companies being able to avail of the new statute for the European private company proposed in this regulation. The Department has confirmed that it foresees no problems from a prudential perspective with this proposal. The committee may also wish to note that this proposal was referred to the Joint Committee on Enterprise, Trade and Employment. It has supplied written observations, a copy of which has been circulated. It is proposed the committee writes to the Joint Committee on European Scrutiny stating it has no further observations in this matter. Is that agreed?

Deputy Seán Barrett

Was the last meeting on 3 September?

Vice Chairman

The last meeting was a select committee, so the last full meeting of the joint committee was in early September.

Deputy Chris Andrews

There have been ongoing media reports about individuals falsifying documents when making applications for funding to banks. What is the extent of this? At a time when the financial markets are under pressure and the banking industry is going through a difficult time, it is important that all measures are taken by the lending institutions to ensure there is no falsifying of documents. I know the Financial Regulator and the Irish Credit Bureau examine documentation presented to them. Perhaps the committee could ask the Irish Credit Bureau to report on the procedures that it uses in administering applications and checking documentation. Criminal elements, it appears, are involved in this. If we could have greater scrutiny and maybe the Financial Regulator or the Irish Credit Bureau could explain——-

Vice Chairman

Thank you, Deputy. It is more appropriate for any other business but I will be lenient and allow you to raise it.

Deputy Chris Andrews

I am taking advantage of your leniency.

Vice Chairman

It is up to the committee to make a decision on that.

Deputy Chris Andrews

Is this the appropriate committee to raise this issue? I will leave it in your hands.

Vice Chairman

Leave it with us and we will revert to you on it. Thank you very much.

The next item is correspondence from the Department of Finance with minutes attached relevant to a meeting with the national development plan central monitoring committee on 21 November 2007 as requested by the joint committee. The committee agreed at its last meeting to have a meeting on economic development with a focus on the national development plan and regional development. Does the committee wish to prioritise this meeting?

Deputy Richard Bruton

It is only the minutes, not the actual report.

Senator Feargal Quinn

What does prioritise mean in regard to other items?

Vice Chairman

It is an issue that Deputy Bruton raised and we were awaiting the response. If he wishes to press ahead with the request for a meeting we will have to see if it can accommodated.

Senator Feargal Quinn

My query really was with the word "prioritise". Does it mean that if we do not prioritise it falls off the agenda?

Vice Chairman

No, it means it might not be the next thing to happen.

Deputy Richard Bruton

It is just a report of a meeting. Do we have the monitoring committee reports on the projects?

Vice Chairman

No, they do not have that report.

Deputy Richard Bruton

It is meaningless discussing minutes of a meeting which is commenting on a report we have not seen. Unless we get more meaningful documentation, I doubt it would be worthwhile having a meeting at this stage. It seems to me we ought to be getting the full report. That was the undertaking given by the Minister.

Deputy Seán Barrett

The principal officer of the NDP secretariat stated on 1 September he would send on the minutes of the May meeting as soon as they had been finalised. What is going on here? How long does it take them to write up minutes? After four months the minutes are not available.

Vice Chairman

I expect the minutes have not been approved because they have to wait for the next meeting to approve them. They would have draft minutes but I doubt they would be willing to circulate them.

Senator Feargal Quinn

It sounds outrageous. We may not have worked in August but we were certainly around in June and July. If they had not finalised the minutes of a meeting in May by September, it seems rather late.

Deputy Richard Bruton

The correspondence states the central monitoring committee has been given draft templates in respect of most sub-programmes. This is the basis on which they are evaluated. If we are not getting access to those templates, it is meaningless to send minutes of meetings. I think we should write back to our friend and say we want timely presentation of the actual report and templates so we can make some meaningful input into the discussions.

Vice Chairman

Is that agreed? Agreed.

The next item is the timetable for the Finance (No. 2) Bill 2008. It is proposed to note this. Is that agreed? Agreed.

The next item is an acknowledgement letter of correspondence relating to the transfer of pension funds. This is related to other correspondence. Deputy Burton raised the matter of the transfer of pension funds of certain bodies to the State. She suggested the committee hold a meeting concerning the issue and the committee would agree to seek clarification from the Department in advance of making a decision regarding such a meeting. Does the committee wish to seek a meeting?

Deputy Richard Bruton

The key issues will be around the deployment of the moneys that are taken into the Exchequer. It is understandable to bring under-funded pensions, in which the State has acted as guarantor, within the Exchequer. The main issue is the size of the assets and liabilities and the extent of the gap.

In turn we need to know what the State is going to do with the assets it takes on. One imagines they should be put under management in the National Pensions Reserve Fund. Then there is the issue of how they are to be treated from the viewpoint of presenting Government accounts. It would be a misleading representation of Government accounts were they to be presented as if they were revenue with no regard to the fact that there are liabilities matching them. I get the impression that is the way it will be presented in the Exchequer accounts. It gives the appearance that we have cracked part of our borrowing problem, which is misleading. Obviously I have not spoken to the trustees so I do not know whether they are satisfied about this transfer. The impression one gets from the letter is that they probably are because otherwise their pensions are underfunded.

It seems to me we need to know how they are going to be used, and perhaps an official would say that is a matter for Government. However, I do not agree with the presentation in the accounts. I honestly believe people would rightly think this was a funny money presentation of the accounts, as it were, if it purported to be a saving on borrowings when in fact equivalent liabilities were being taken on. This is ultimately determined by EU policies but it seems bizarre they effectively should be ignoring the liabilities the State is taking on.

Vice Chairman

Does the Deputy suggest we should seek responses on those points by way of written reply?

Deputy Richard Bruton

I suspect it is in the political arena, given that it probably will be a Government decision on how it will treat the money. The committee might invite the Minister in for a discussion. Perhaps Deputy Joan Burton should be present when we make a decision.

Vice Chairman

Will we defer a decision? If Deputy Burton comes in, we can revert to it. Otherwise, we shall defer it to the next meeting, if she is present.

We shall move on to No. 154, an invitation from the Construction Industry Federation to attend a breakfast briefing on 7 October. This was circulated by e-mail and it is proposed to note it.

No. 155 is a brochure for an economic development conference in Dublin Castle on 19 September, which again was circulated by e-mail. It is proposed to note it.

No. 156 is a letter to the Information Commissioner, which was copied to the committee, from an individual requesting access to personal data under the Data Protection Act 1998 and the Data Protection (Amendment) Act 2003. It is proposed to note it.

No. 158 is a letter from an international tobacco manufacturing and wholesale company, seeking to meet the joint committee to discuss plain packaging on all tobacco products. This matter is not within the committee's remit. It is proposed that it be forwarded for the attention of the Joint Committee on Enterprise, Trade and Employment and that we write to the individual to advise him of same. Is that agreed? Agreed.

No. 159 is an e-mail from an individual enclosing two articles by him published in Irish newspapers calling for the implementation of the Kenny report recommendation on the pricing of building land. It is proposed to note it.

No. 160 is the October-December 2008 edition of The Bridge, Industry and Parliament Trust’s quarterly magazine, which it is proposed to note.

No. 161 is a European Commission statement welcoming the bank guarantee scheme in Ireland. It is proposed to note it.

No. 162 is an invitation to attend a meeting of the EMPA economic committee in Istanbul on 24 and 25 October 2008, which has been circulated by e-mail in advance of the timeframe of the meeting. It is proposed to note it, but it is open to any member to attend. It is too late, I am told, as it is only a few days away.

Senator Feargal Quinn

Do we reply out ofcourtesy thanking them for the invitation or do we just ignore it? I know it does not say RSVP but from the point of view of good manners, should we not thank them in reply, indicating the e-mail has been circulated?

Vice Chairman

We can ensure that happens in the future. No. 163 is a European Commission table on state aid, giving an overview of national rescue measures and deposit guarantee schemes, which it is proposed to note.

No. 164 is a letter from an individual commenting on the budget, which it is proposed to note. For clarification, do we reply and acknowledge? We do. We shall reply and acknowledge that the committee has noted the contents of the letter.

Explanatory memorandums of statutory instruments SIs 361 and 370 to 380, inclusive, of 2008, have been circulated. Under its orders of reference, the committee has the power to select and consider statutory instruments made by the Minister for Finance and laid before both Houses. I take it the committee does not wish to consider these statutory instruments. Is that agreed? Agreed.

A letter from the Joint Committee on European Scrutiny dated 23 September regarding decisions taken by the committee encloses for our information COM (2008) 549, a proposal for a Council directive amending the structure and rates of excise duty applied on manufactured tobacco. It is proposed to note this. There is a letter on decisions taken by the Joint Committee on European Scrutiny on 7 October enclosing for our information COM (2008) 458, a proposal for a Council directive on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities. It is proposed to note this. Is that agreed? Agreed.

The next item is the consideration of the work programme. The Joint Committee on Finance and the Public Service is empowered, in accordance with Standing Orders 83(8) of the Dáil and 70(8) of the Seanad, to engage the services of persons with specialist or technical knowledge to assist it in considering political matters. A draft request for tender has been prepared to provide expertise to the committee to prepare for future meetings on the Credit Institutions (Financial Support) Act 2008 and scheme, and this has been circulated. The guidelines state that supplies of contracts between €5,000 and €50,000 in value may be awarded on the basis of responses from at least three service providers — known as selective tendering. As of yet, the cost of expertise is unknown, but given the above thresholds, it would be prudent to request three quotations. Decisions are required regarding two aspects. One is the list of people we are inviting to tender. Three names have been suggested by committee members.

Deputy Richard Bruton

Is the document here and are the names in it?

Vice Chairman

No, they are not. Three names have been suggested today, but we can add to them. Alan Ahearne, Ray Kinsella and Patrick Honohan have been suggested, and in addition, the secretariat received correspondence when the committee was first formed from Dorgan Associates, economic and management consultants, asking to be considered for future consultancies. We shall propose that they be included and it is open to members to add any further names, as they wish, to be invited to tender to provide this expertise in our future deliberations on the Credit Institutions (Financial Support) Act and related matters.

Deputy Seán Barrett

Would it be a good idea to insert an advertisement in the newspapers advising the public that we are about to consider this and seeking submissions? I have come across one person who was in a very high position in one of the major banks and who is retired. This is a man with wide experience as a chief economist who could give the committee an insight into what is happening and may be in a position to make a submission. There are people such as this who might be able to give the committee useful information. I am not asking anyone to breach confidence but rather to draw on his or her experience in the context of what is happening. It is a source of information that is never tapped. People change positions and are never asked for their opinion again. Very often they could provide valuable advice. For the sake of the cost of an advertisement in a newspaper, it would be worthwhile considering telling people what we are about to do, to see if they wish to make a submission.

Senator Feargal Quinn

How do we go about finding those who are competent? That is exactly the point made by the Deputy. I do not know whether an advertisement should be placed in the newspapers, but it seems there are suitable people available. There may be another formula for doing this.

Vice Chairman

The purpose of such an advertisement would be to invite people to provide information and comment on——

Deputy Seán Barrett

If we tell the people what we are going to examine, we can ask them to send any comments they wish to make to the clerk to the committee. They may have views, not all of which are taken on a professional basis. If the committee subsequently feels like it, we can always invite them to give evidence. I have seen this happen at other committees.

Vice Chairman

The Deputy's suggestion has merit. We might be likely to elicit a huge number of individual responses outlining their experiences in dealing with the banks, which may not be such a bad thing. We would then have to go through all of them and decide if we wished to invite certain persons who made submissions. We just need to think the matter through.

Deputy Seán Barrett

We would not have to invite everybody. We could state in the advertisement that we were about to consider certain issues and that those with professional experience and who may wish to make a submission were invited to do so. That is all. We would not have to commit to inviting them or adhere to what they would say. We are not looking for those with a gripe against the banks. We are looking for people who can offer advice on how to deal with the problems that we have experienced.

Deputy Richard Bruton

We would need to specify the job a little more clearly.

Vice Chairman

The terms of reference have been circulated.

Deputy Richard Bruton

I see them here.

Vice Chairman

We will look at that matter because if we are placing an advertisement in the newspapers——

Deputy Richard Bruton

That is not sufficiently clear. It states we have agreed to hold a series of meetings to consider issues surrounding the recent enactment of the Credit Institutions (Financial Support) Act 2008. We need to be more specific. We will want to talk to someone from the Department of Finance who will probably end up being the Minister rather than officials about the detail of the scheme. There are many empty boxes in the scheme. What were the policies on directors, dividends, bonuses and pay? It was an enabling Act. The committee will want to look at the schemes when they are made. We will not have the details of the individual schemes, but I presume we will be able to receive an indication from the Minister or his officials as to how they handled the empty boxes. There will be issues of pay, oversight, charges, the role of directors and the independent observers on committees. We will want to tease out these issues. We will then want to call in the Financial Regulator to ask him to explain how he intends to oversee all of this, what his capacities are, his powers, staffing arrangements and ability to enforce it.

The committee will want to look at the issue of capital adequacy, although everybody is dancing around it. The ante has clearly been upped across Europe, where one is talking about 9%-10% reserve ratios, while Ireland is still talking about an 8% figure. In time we will have figure out how banks in Ireland will bridge that gap. At that point we will want to talk to the banks. If it falls to the State to do this, it seems the Government expects the National Pensions Reserve Fund to step up to the mark. We will want to talk to officials from the fund to see how this fits in with its mandate and its understanding of the matter.

These are the streams to our investigation. To be professional about all this, we should sign off on these streams before we go looking for consultants who might not have made the most impressive submission because they did not see the work programme in which we wanted to engage. To be fair to the consultants and ourselves, we need to do a spec of what it is we intend to do over a series of meetings. That is the basis on which they tender. They will tell us about their expertise such as whether they worked for the Financial Regulator and so on. What we have here is too general. We have not specified in enough detail what the task is for it to be ready to go to tender.

Deputy Seán Barrett

My suggestion was not contradictory. I was not talking about the person who would be appointed as a consultant, but rather the follow-on and information flow. We will be bringing this matter to the full committee on an ongoing basis. I respectfully suggest we appoint a sub-committee which would meet outside normal meetings and draw up the terms of reference. The spokespersons for the three main parties and the Chairman could agree terms of reference and I would be happy with what they would do. If they want the approval of the committee, they could bring the issue back to us.

Vice Chairman

Is it agreed in principle that we set up a sub-committee to hold these hearings, but first to agree the precise terms of reference? We should look at——

Deputy Richard Bruton

I do not think the sub-committee would hold the hearings.

Vice Chairman

I meant the terms of reference.

Senator Feargal Quinn

It is essential that something like this happen, but I would hate to see a delay. It is the sort of thing that could be done in one meeting. If one was running a business, one would not take steps like this without making sure one got the best person and best value. This could be done in one meeting of the sub-committee.

Vice Chairman

The clerk has just advised me that if there is to be an official sub-committee, we must follow procedures.

Deputy Richard Bruton

We can do it informally.

Vice Chairman

We can do it informally and the get the spokesperson and the Chairman to agree the terms of reference.

Senator Feargal Quinn

It does not have to be a sub-committee.

Vice Chairman

The purpose of the get together will be to agree the terms of reference. We have a draft which has been circulated.

Deputy Richard Bruton

We will agree on what we hope to do. We can then agree the terms of reference for a consultant.

Vice Chairman

That is fine. Consideration of the suggestion with regard to a public advertisement will take place afterwards, as will the appointment of a consultant.

Senator Marc MacSharry

I find it amazing how difficult it is to get something done and how unwieldy it has become. In an effort to be transparent, it takes one month to appoint a consultant and a sub-committee. We do not know how long it will take the sub-committee to do things when procedures are to be followed. If we could do all of this today, that would be beneficial. We can move forward, rather than putting things off for another three or four weeks until another meeting is held.

Deputy Richard Bruton

I made a suggestion with regard to a spec. The problem is that we do not have representatives from some of the other parties present.

Senator Marc MacSharry

That is their problem. We were all notified about the meeting. In the committees or boards on which I have served we dealt with the agenda before us on the day and made decisions. If there were actions to be taken, we divided them among the members of the committee, went off and did them.

To the extent the Chair is agreeable, we should not defer this matter to the next meeting of a sub-committee. If decisions can be taken today, let us proceed and take them as opposed to saying it is a great idea, that we should elect a Chairman of a sub-committee in order that by July 2022 perhaps we might have made some progress. The situation is evolving so quickly——

Deputy Richard Bruton

It would be normal in such a situation that the Chair would have a proposal that would be presented.

Senator Marc MacSharry

There is a proposal.

Deputy Richard Bruton

I am not happy with it.

Senator Marc MacSharry

That is fine. We now have a counter-proposal. Let us today integrate what Deputy Bruton needs to add rather than setting up a sub-committee which would be unwieldy and take one month to be approved.

Deputy Richard Bruton

It would not.

Senator Marc MacSharry

To the extent it is possible, we should consider the Deputy's proposals, add it to what is in place and move on.

Vice Chairman

The clerk will contact those concerned today with a view to setting up a meeting tomorrow, if that is agreeable. The Chairman is not present today.

Senator Marc MacSharry

In general, to facilitate a quicker process, these considerations could, as Deputy Barrett said, be dealt with by a sub-committee which would come back to us to explain the terms of reference and how we would proceed and it would be for us to say "Yea" or "Nay".

By the way, we all receive the mail which shows all the correspondence received by the committee. While I am sure there is a procedure to have this approved, I suggest there is no necessity to go through items of correspondence one by one at the beginning of each meeting on the basis that everybody has had the opportunity to read them in the first place. If there was something new or if a member wanted to raise an issue arising from correspondence, he or she could do so. Anything else should be taken as noted. These meetings would be more penetrative in what they could deliver rather than being unwieldy and achieving nothing more than lengthy minutes for the stenographers to record.

Vice Chairman

While that is a fair point, the committee must formally record the correspondence received. Whether it is just noted or responded to, it must be recorded.

Senator Marc MacSharry

The terms of reference need to be changed to improve matters.

Vice Chairman

Perhaps. It is agreed that the clerk will contact everyone concerned and that the meeting will take place tomorrow. We will agree on the terms of reference, discuss the procedure for the appointment of expertise to the committee and also deal with the proposed advertisement——

Deputy Seán Barrett

If the sub-committee comes up with terms of reference for the advertisement, it should proceed. I would have no difficulty with this. I have full confidence in the sub-committee's ability to draw up the advertisement for a consultant. It should get on with it. I do not see why the Chair must wait a fortnight to come back to us to have it approved. If this is done tomorrow and the advertisement is placed on Friday, I will be perfectly happy.

Vice Chairman

The clerk will circulate the outcome immediately following the meeting tomorrow.

Deputy Seán Barrett

That is not necessary if we authorise the sub-committee. It should get on with it.

Senator Feargal Quinn

We could almost have a one-person sub-committee.

Vice Chairman

It is open to the committee to agree to give complete trust and power.

Deputy Seán Barrett

It should get on with it. I am confident we would not improve on it.

Vice Chairman

Is the proposal agreed to?

Deputy Richard Bruton

To ensure we have the riding instructions clear for whoever will be on the sub-committee, are we placing an advertisement for a consultant or for public submissions?

Senator Feargal Quinn

I thought it was for a consultant.

Vice Chairman

It was for a consultant only. Deputy Barrett has suggested an advertisement to invite submissions on the issues we will be——

Deputy Seán Barrett

Once we are up and running.

Vice Chairman

The priority is to have the expertise on board, as we agreed at the last meeting.

Deputy Seán Barrett

That is fine by me.

Vice Chairman

These are complex issues. It was agreed at the last meeting that we had to get somebody in urgently prior to holding hearings.

Deputy Richard Bruton

I presume the sub-committee will be at liberty to send the advertisement to the people suggested here in order that at least we give them the opportunity to tender. They look to be good——

Vice Chairman

Absolutely. The sub-committee is free to add names if it wishes. It has that power.

Senator Marc MacSharry

Reference was made to the parameters involved and the responsibilities of the consultant. Obviously, there needs to be a degree of changeability within the role. If there are certain duties we would like the consultant to perform, the advertisement could reflect this.

Vice Chairman

There are two draft travel reports, the first of which concerns the EUROFI conference on 11 and 12 September. A draft report on the conference on EU priorities and proposals from the financial services industry for the ECOFIN council which I attended on behalf of the committee has been circulated for consideration by the committee. Is the report approved? Approved. There is also a draft report on the meeting of finance chairpersons held by the French National Assembly which Deputy Bruton attended on behalf of the committee before the committee for consideration. Is the report approved? Approved.

The next full meeting of the joint committee is scheduled to take place on 5 November.

Deputy Richard Bruton

I suggest the sub-committee meet now. We appear to have a quorum. We could continue as a sub-committee and simply agree this matter.

Senator Marc MacSharry

In the interests of making progress, I agree, if it is agreeable to the Chair.

Vice Chairman

The Chairman is not present.

Deputy Seán Barrett

We have full confidence in the Vice Chairman.

Vice Chairman

I am happy to do so.

Senator Marc MacSharry

The reality is the Vice Chairman would be our spokesman if the Chairman was present.

Vice Chairman

As I would be involved in any case, I am happy to do so. Is it agreed that we meet immediately after this meeting? Agreed.

The joint committee adjourned at 2.55 p.m. sine die.