: I draw attention to the fact that the members of the committee have absolute privilege but that same privilege does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.
Taxi Hardship Panel: Presentations.
I have circulated copies of my speech to members. I propose not to read through it but to take some comments from it.
Members of the committee will be aware that in November 2000, in response to a High Court judgment, certain new regulations were made. At that stage a number of mitigation measures which followed on from taxi liberalisation were announced by the Government. These included a tax relief scheme by way of capital allowances for the capital cost of the licence and an administrative refund scheme to help address the high taxi licensing fees payable to certain local authorities.
In February 2002 the Government decided to establish an independent three-person taxi hardship panel. The members were asked to prepare a report in general terms on the nature and extent of extreme personal financial hardship experienced by individual taxi licence holders arising from the loss of income as a direct result of the liberalisation of the taxi licensing regime on 21 November 2001. The panel also sought an estimate of the number of individual licence holders involved. The panel was also asked to prepare a report on the likely financial implications and to determine criteria for assessment of extreme personal financial hardship. No initial parameters were imposed on the panel regarding recommendations it might make.
It was made clear at the outset that there was no question of payments or compensation being made to the holders of taxi licences on 21 November 2000 for any perceived loss of value. Taking that route would undermine the established legal position in a number of High Court judgments going back to 1992 and would create a dangerous precedent in liberalising other industries. It would also have a knock-on effect with regard to regulatory regimes generally across the board beyond the taxi industry.
The panel received 2,006 submissions. It did much work. It met taxi representative groups and individuals who made submissions and it went about its task very professionally. The panel then made certain findings and recommendations. It first decided that the submissions received fell into nine categories, six of which the panel assessed as including people who had suffered extreme personal financial hardship. It went on to recommend that a scheme be put in place to provide tax free compassionate payments to people in those categories, ranging from €3,000 to €15,000.
Under any scheme, applications should be tax compliant. To qualify for the payments, the onus will be on the applicants to substantiate their claims of hardship. That was where they felt the responsibility lay. The best estimate of the panel at that time was that the total claims from any scheme should not exceed €15 million.
On 17 December 2002, the Government approved the publication of the report of the taxi hardship panel. To make progress on it before the establishment of the Commission for Taxi Regulation, it was decided not to await the appointment of the regulator before making payments, but to press on more urgently. For that reason, Area Development Management Limited, or ADM, was appointed to administer and manage the taxi hardship payments scheme in accordance with that Government decision and process payments as quickly as possible.
The content of the application form came about after several in-depth discussions between the Department, ADM and taxi representative groups. Application forms were issued to persons who had made submissions to the taxi hardship panel. Newspaper versions appeared on 6 November 2003 and the conditions and criteria were laid out there. The time taken to process applications and make payments depends on the completeness of the information and the supporting documentation in the case of individual applications. That is the main issue. Newspaper advertisements were placed once more on 27 February 2004 and on that occasion a closing date of 30 April 2004 was put in place for the receipt of applications.
Payments made under the scheme started in December 2003. I understand from ADM that it had received a total of 1,811 applications by 6 May 2004. A significant number of those - approximately 500 - were received in the week before the application deadline. Payments by 7 May amounted to €8.02 million to 663 qualifying applicants. ADM is processing the remaining applications as quickly as it can and I have asked it to do so.
There is a FAIR representative here today and I compliment it on its determination and work. I have never doubted its sincerity. It has made a very strong case for many years. FAIR asked the EU committee on petitions to carry out a fact finding mission to Ireland. It came to Ireland for two days on 3 and 4 April in connection with taxi liberalisation. I met a delegation from the committee on 4 April and outlined to it the background to all this, explaining that, based on legal precedent, a situation could not be allowed to develop where the State would be required to compensate as such - I use "compensate" in its legal sense - for open market licence values that might have existed before liberalisation.
The EU committee on petitions did not provide me with any detailed analysis as such of the taxi situation in Ireland after liberalisation, but it made three recommendations arising from its earlier studies and fact finding mission. The first was that the proposals of the taxi hardship panel be reviewed by the Oireachtas Joint Committee on Transport and the Minister for Transport in the light of the petitions committee's report. From those two reviews, new proposals would go to the Government. The second recommendation was that urgent consideration be given to reimbursing the full costs involved in the acquisition and payment of taxi licences before November 2000. The third recommendation was that the regulator be appointed without delay. Those were the three main recommendations that the committee made on its visit on 3 and 4 April 2003.
I have no proposals to make payments over and above those recommended by the taxi hardship panel. Legal principle set down in court decisions dating from 1992 means, as I explained to the committee, that I cannot enter into the area of compensation as such. That situation has been explained several times. I have no proposals that the Government reopen either the terms of the taxi hardship panel report or the Government's decisions in that regard. There are over 1,000 individual claims for damages or compensation for financial loss before the courts arising from the October 2000 High Court case.
I shall summarise the Government's point of view. Taxi liberalisation arose directly from a High Court decision. Other court rulings made it clear that the State could not get into the business of compensation for legal reasons. As I said, over 1,000 claims are still before the courts. At the time, certain refunds of licence fees and the introduction of a scheme of capital allowances were introduced to mitigate the hardship caused. The Government set up the independent taxi hardship panel in 2002, which I thank for its work. It went about a very difficult job in a very professional and proper manner. The Government accepted the recommendations of the panel and it is now implementing them as a matter of urgency. Payments are being made. I mentioned that €8 million had been paid to over 600 people. As many as 1,800 applications have arrived. The payments are compassionate in respect of extreme personal financial hardship, and the Government has no proposals to reopen the panel report in that regard, but will press ahead and make the payments as quickly as it can.
I introduced a new taxi Bill last year, the first legislation aimed at helping modernise a very important industry. I understand the pressures and difficulties experienced by members of the profession - both taxi drivers and drivers of small public service vehicles generally. I will make every effort to work with the industry to continue to bring about higher entry standards. The appointment of the regulator should happen within weeks. The Civil Service and Local Appointments Commissioners have identified a taxi regulator who must now give notice and go through certain formalities. We can do that soon. Other changes are afoot and we will get on with them. Apart from the legislation, which helps to give the industry a shape for the first time, changes were made regarding requiring receipts to be issued, which will help the consumer, the wearing of seat belts, tax clearance certificates, identification and entry standards. All those issues are being dealt with and the regulator, when he or she takes office, will further deal with them.
I thank the Chairman for giving me this opportunity. We are trying to build a professional taxi industry. The Government appreciates that those in it must make a good living. They must be able to provide for their families and ensure that they can see a future in the industry for themselves. The more that we can grow the market of cab culture to ensure that more and more people want to jump in a taxi, the better living there will be for everyone in the business. At the same time, we must balance that with the needs of the consumer. I see no contradiction. Ultimately, what is good for the consumer is good for the taxi industry. That is what we want to achieve and the very fine people who work in the sector deserve our continuing support to build a professional taxi industry. We also appointed the taxi advisory council, which has now had several meetings. We are beginning to make progress.
Has the Minister examined the question of people who bought taxi plates at the height of the market before deregulation and then after deregulation sold their houses in Dublin and had to move to Kildare, Meath or other surrounding counties to clear the debt incurred by those plates?
Will the Minister clarify the position as regards the regulator? We are getting many queries and there is much pressure on the committee in this regard. There is considerable anxiety among taxi drivers as regards the regulator and what is happening.
I echo the Chairman's second comment as regards the regulator. There is considerable concern that the regulator is not in situ at present. Perhaps the Minister could come back to us in some detail as regards that question. Dublin City Council has collected €43 million since the market was liberalised, which is a significant amount of money. The Government seems to make the point every time this is raised to the effect that, as regards licences, a value was perceived prior to deregulation that may or may not have applied. However, is it not the case that the Revenue Commissioners and the Department of Finance had put a value on these licences, whether in regard to probate tax, inheritance tax, etc? In the light of the fact that the Department of Transport is claiming there was no intrinsic value to these licences and the Department of Finance is asserting the exact opposite, has he had any discussion with the Minister for Finance as regards the refunding of moneys paid over in probate tax, inheritance tax, etc?
Regarding the European Parliament report, what action has the Minister taken to implement any of its recommendations? None seems to have been implemented. Is he prepared to implement any of them? If not, why not, because this seems to be a critical issue? As the Chairman commented, many people are being asked by Area Development Management, ADM, to provide evidence as regards where they obtained substantial loans to purchase a taxi licence. Most of these people got loans against their mortgages, not against a taxi licence. For them to provide evidence that they purchased taxi licences from the remortgaging of their homes can be extremely difficult. It now seems that ADM, having circulated application forms, is moving the goalposts after they have been returned with regard to the criteria of eligibility. Is it acceptable to have anomalies such as a taxi driver who paid €127 for a wheelchair licence and can claim up to €13,000 while someone who paid €100,000 for a licence can claim up to €12,000? There appear to be great anomalies within the report of the hardship panel. Has the Minister any intention of addressing them?
What is the point of the Minister being here this morning? His comments show he is failing to engage in any real way with the whole issue of taxi driver hardship. He has made a number of statements that are absolutely meaningless. He said he never doubted the sincerity of the FAIR group. If he never doubted its sincerity, why did he not take on its concerns? Basically, he has strung along this group and the taxi unions for a number of years by pretending to be concerned and to engage in this issue. He pretended he would do something about it, but he failed to tackle the real issues arising out of overnight deregulation.
All of us who are out canvassing at present come across taxi men who are in real hardship. I am talking about taxi men who have developed drink problems, for example, because of the pressure and likewise those whose marriages are under severe strain. Some have had to sell their cars to keep up the repayments on their mortgages. As the Chairman said, some have had to "downsize" and leave the Dublin area, moving out to places such as Meath, Kildare and so on. That is real hardship. There are umpteen families in that situation, where they are in crisis. The Minister has not provided a single piece of evidence today to show that he is remotely interested in their situation.
Overnight deregulation put the livelihoods of many people in serious jeopardy. The report of the hardship panel has done little or nothing to deal with the problems that have arisen for people who are in serious debt. The Minister said earlier that he understood the pressures on taxi drivers. What does that mean, exactly? I ask him to explain. For people with a loan of €100,000, who are trying to repay almost €1,000 a month, what does "understanding the pressures" mean? How does he suggest they come up with the money to make the repayments and provide for their families as well?
Some time ago when the hardship panel appeared before the committee and we asked for its rationale for the proposal to pay €13,000 to €15,000 to people in that situation, it was not able to explain it. It looked to the committee as if the figures had been plucked out of the sky. There was no basis for it, no actuarial studies. The panel was not able to defend the figures, other than to say these were arbitrary amounts that had been selected, I suppose to keep people quiet. Can the Minister explain how the hardship those people are experiencing may be alleviated by a payment of that magnitude? Is he prepared to do anything at all to relieve the pressures on those families?
I also want to ask about the report of the petitions committee. The Minister drew attention to the three recommendations it made and left it hanging there. Does he intend to anything at all about them? Will any of the committee's work make a difference to his thinking on this matter? It strikes me that he has not moved an inch in the past three years. The petitions committee went into this in considerable detail and made specific recommendations. What is his attitude towards these recommendations? Does he intend to do anything about them? Given the fact that the issue has not been addressed in any substantial way, is he prepared to meet the taxi interests again to examine what can be done about those people who are suffering real hardship?
On the Chairman's question about movement to Kildare and Meath, as part of its criteria, the ADM application process will examine all hardship claims and take a view on what they mean. It will certainly take the circumstances as described by the Chairman into account in its decision to make any awards.
Will the Minister explain how that will be done? What does "take into account" mean?
If the Deputy does not mind, I will answer the Chairman's questions and will come to her points in a moment.
That is a meaningless statement.
The Deputy should allow the Minister to finish.
I will come to the Deputy's questions shortly. The Chairman asked when the regulator would be appointed. A person has been identified and the offer has been made by the Civil Service and Local Appointments Commission. We are aiming at a July start-up date. A departure date is currently being negotiated in respect of the person's current employment. The recommendation is en route to me from the Civil Service and Local Appointments Commission for my agreement, which, obviously, I will give. The person has accepted the post.
In the absence of the regulator, those powers remain with me in the meantime. The taxi advisory council is making recommendations to me in the absence of the regulator. I have agreed to implement its three latest recommendations as regards seat belts and other issues to do with the taxi industry. That situation will resolve itself fairly quickly. We will then have a regulator, a taxi council and the Taxi Regulation Act 2003, which puts a modern framework in place for the future development of the industry.
Deputy Naughten asked about funds. Any funds received went to Dublin City Council. They have been used for staffing and other resource issues. I do not have an exact figure, but the funds did not come to the Department of Transport at any stage. Deputy Naughten asked also about the issue of probate. I do not have any proposals to ask the Minister for Finance to examine the situation, as I do not believe he would.
Does the Minister agree there is a perception that it is hypocritical that one Department may consider that it has no intrinsic value whereas another arm of Government is stating that it has intrinsic value. Is that not a blatant contradiction?
We are bound by the court decision which decided that one cannot have a quantitative restriction on entry to the taxi industry. The issue of intrinsic value is an interesting debate, but it does not get us anywhere. The court took the view that one can have a qualitative but not a quantitative restriction.
Does that have to do with the differentiation by Government?
It has everything to do with it because we are bound by that court decision.
Are the Revenue Commissioners bound by that decision and have they refunded money?
Everybody is bound by that court decision, not just the Government.
Will the Minister discuss the refund with the Minister for Finance?
Is the Deputy asking that the Minister for Finance refund probate tax?
Inheritance, capital gains and probate tax were all used in that calculation.
I will bring the Deputy's comments to the Minister's attention. I do not believe the Minister will refund tax paid.
Does the Minister see the contradiction in the point I am making?
I see the argument.
It is a blatant contradiction.
The overriding situation is the court decision. The Deputy asked also about criteria for eligibility. Again, that was laid down by the taxi hardship panel and ADM is implementing it. It is doing a very solid job in that regard.
That is a contradiction——
Allow the Minister to finish.
I have finished on this matter.
In his initial comments the Minister stated that ADM will take into account the issue of people moving from the city of Dublin to urban areas. When one considers the criteria applied by the taxi hardship panel, where one has to be earning less or have defaulted on a loan, in cases where people have moved from Dublin city to Kildare or Meath they would not be in either of those categories and, therefore, would not be eligible. How is there such a variation in the levels of compensation? For example, somebody who bought a licence for €127 is entitled to more compensation than somebody who bought one for €100,000. These are blatant contradictions that do not seem to be addressed in the hardship panel's report and the Minister seems to be turning his back on it.
At the end of the day the situation is that €15 million - it could go substantially higher than that - will be paid out to up to 50% of all the people who had taxis at the time of deregulation. I cannot put definitive figures on it today, but 1,800 people applied and we are working off a sum of €15 million. It will be substantially higher and it looks that up to 50% of 1,800 taxi drivers, that is, every second taxi driver, will be compensated. The average payment to date is approximately €13,000. I acknowledge that it goes nowhere near meeting the pressure they met, but at the same time we are dealing with taxpayers money and the figure could be substantially more than the €15 million to which I referred.
Everybody in the country would say they would prefer to do more, but the taxi hardship panel, which comprised highly respected competent people who know what is going on, were asked and they came back and recommended these figures to us. It was not a political decision to make these payments. Deputy Shortall likes to play to the gallery and play politics with me on these issues. I will not respond to that or to personal insults.
The Minister should be straight about it and tell people that he is not doing anything for them.
Allow the Minister to speak.
Why string people along?
Deputy, please allow the Minister to speak.
Deputy Shortall's style of politics is different from mine. I will not trade in personal insults. The point is that substantially more than €15 million will be paid out and every second taxi person will receive some compensation. The average payment to date is €13,000. Neither the Government nor I made these recommendations, but the taxi hardship panel, an independent body comprising highly responsible people, examined the situation and made recommendations which the Government accepted. We are making the payments as quickly as we can. The Government will introduce legislation, appoint a taxi council and will raise entry standards in order to put in place a modern taxi industry in order that we can grow the business and make it better for everybody in it. That is the road forward. ADM is a body that will do its best to make generous payments. Everything I have done has been to encourage it to be as generous as possible within the terms of reference.
In regard to the Deputy's question about the petitions committee, I met these fine people to discuss at length the issues and they recommended that their committee would review the situation and make fresh proposals to Government. They recommended also that I would review it and make fresh proposals to Government. It would not have made sense to reopen it because the Government had accepted the taxi hardship panel's report from three fine people, Mr. Bill Attley, Mr. Kevin Bonner and Ms Ann O'Riordan, who did a very good job. I am committed to that report and I stand over their findings in this regard. They called on me to appoint a regulator quickly, which we are in the process of doing, and said that the full costs involved in the acquisition would be repaid. I have explained where that fits into the overall situation because of the taxi hardship panel's report. It was not that I rejected it out of hand. I listened and talked to them.
The Minister also ignored them.
I did not ignore them. I met them and explained to them the legal precedent that there cannot be a legal duty to pay compensation. Over a period of two days they laid out their position and I laid out mine and I assumed we agreed to differ on it. That is the situation as I see it.
Most of my questions were asked and answered already. I understand it is entirely a matter for the court when the 1,000 or so cases come before it seeking compensation and that the brief of the panel was to consider cases of extreme financial hardship. However, was there any analysis of the report submitted to the Minister to see if it met the brief which I understand was twofold, first, to identify the nature and extent of extreme personal financial hardship and, second, the likely financial implications of the extreme financial hardship. I know that extreme financial hardship is a separate issue from compensation, which is entirely a matter for the courts.
In short, the Department of Transport's assessment of the report was that it met the criteria given by the Government. They explained their thinking very rationally throughout the report. However, we will substantially exceed their assessment of the cost at €15 million, but that does not take from the fact that they adhered rigidly to the criteria issued to them.
The Minister stated that he stands over the findings of the taxi hardship panel report, but that its overall scale of compensation was substantially miscalculated. He said the overall figure was substantially higher. Therefore, it miscalculated. Will the Minister tell us what is the estimated figure now?
Given that the Minister stands over the findings of the report, will he admit it is seriously flawed? For example, the level of compensation for widows is the same whether one has one dependent child aged 17 years or three dependent children under ten years of age, which is a significant discrepancy. To take another example, a 53 year old who bought a licence in 1999 might have a debt of €100,000 which must be repaid at €1,000 per month while another person of the same age may have bought a licence in 1992 for £50 and owes nothing. However, both would be entitled to the same level of compensation of €13,000. Can the Minister stand over a situation where someone who has generated a significant income since 1992 is entitled to the same level of compensation as someone with a significant debt? Can he explain this discrepancy?
Does the Minister accept that if a person has paid €100,000 for a licence and the industry is deregulated overnight, it is difficult to make a living for his or her family, let alone make repayments on a loan? Does the Minister accept that families in such situations are suffering extreme financial hardship? If so, what are his proposals to alleviate this hardship?
What are the Minister's views on the current state of the taxi industry? People might understand overnight deregulation if qualitative restrictions were also introduced on entry to the market. However, the Minister did not introduce such restrictions. In addition, there has been a long delay in appointing a regulator. The situation, therefore, is that anyone, even those of dubious character, can walk off the street and obtain a licence. We know that there is no system in place to check driver backgrounds and that a worrying number of assaults of various kinds have been carried out by taxi drivers in the past year because of the lack of quality control. There are also serious difficulties due to the poor standard of many of the vehicles being used.
Why has the Minister failed to move on the introduction of quality standards to maintain standards on behalf of the public in the main, but also to maintain standards in the industry in order that we do not have a massive influx of part-time drivers? There are now so many taxis in the city during the day that they are causing congestion while other drivers must work at all hours of the night to try to make a living for their families. Does the Minister think this situation is satisfactory and can he foresee it continuing? Has he any proposals to deal with the large number of part-time taxi drivers who are working to make extra money on top of their weekly income? Is it fair that those entirely dependent on taxi driving should be competing with part-time drivers?
I cannot provide the final figure asked for by Deputy Naughten, but he can probably do the sums himself. We paid out approximately €8 million to approximately 600 people. A total of approximately 1,800 applications were made. I cannot prejudge the assessment which ADM will make in regard to the remaining 1,200 applicants.
A back of an envelope calculation, at which I know the Minister is an expert, would give a figure of approximately €24 million, a sum the Department would be pencilling in at this stage.
As I noted, the Deputy is not bad at his sums and understands the situation. He also asked about the details of the report. Some members of the panel will give evidence when I finish and perhaps the questions could be addressed to them.
The Minister is the person standing over the findings.
The Government accepted the findings of the report on the basis that the panel did a professional job as best it could and made recommendations. The hands of panel members were not tied in any way and they were given a fairly broad brief. The bottom line in regard to the examples provided by the Deputy is that if people can demonstrate hardship to ADM in their application, they will get a good hearing. Demonstrating hardship is a multi-faceted procedure, not just a one off.
This brings me to Deputy Shortall's very valid questions. She asked whether it would be a case of hardship if someone had paid €100,000 for a licence before deregulation and the answer is that it would. However, it depends on the other means of an individual. If a person can demonstrate he or she has no money and a huge mortgage, then the payment of €100,000 for a licence before deregulation would constitute hardship.
Does the Minister accept the requirement to default on a loan is completely unrealistic? The last thing taxi drivers would do is default on a loan because they must have a good credit rating to survive. Therefore, many other things would go to the wall before they would default on a loan.
I accept that, but ADM will not just consider one column when assessing hardship. While someone who has paid €100,000 has a prima facie case for hardship, it must be asked what other means that person has available. If a person’s means are substantial, it is not a case of hardship.
Is owning a house a suggestion of substantial means?
I cannot discuss individual cases. As a general principle, it is hardship if a person has no other means having paid that sum of money for a licence. If a person has large other means, it is not hardship. It is in this area that ADM must make judgments.
What does the Minister propose for those who do not have other means?
That would be hardship and ADM would have to take that into account in making an award.
How will the proposed payment alleviate that hardship?
The report of the taxi hardship panel——
I am asking the Minister to answer. He has accepted the report. Can he explain how the proposed payment will alleviate the hardship?
I have explained that the Government's intention was to make some compassionate payments, not compensation, for deregulation, which has a knock-on effect on many industries. Other industries are deregulated regularly and legal issues arise from this point. I acknowledge that compassionate payments do not remove all hardship but they are intended as some payment towards the hardship. This was not part of the report of the taxi hardship panel.
Is there a case for increasing such payments?
I have made it clear that I am not in a position to reopen the report of the taxi hardship panel. The Government has accepted it and payments are underway. A scheme is in place——
The Minister is saying that the payments are satisfactory to deal with hardship in this situation.
I am not on "Morning Ireland". Can I just answer the questions? What was the Deputy's last question?
Is the Minister saying that the payments proposed under this scheme will alleviate the severe hardship that those with big loans are suffering at present?
The payments go nowhere near fully alleviating hardship and were never meant to do so. They are compassionate payments from the taxpayer, through the Government, to acknowledge that there was hardship. They are made on compassionate grounds towards the hardship as assessed by ADM in its professional assessment. Of the 1,800 applications, up to half will get some payment. To date, the average payment has been €13,000. I have acknowledged many times this morning that the payments do not compensate for the pressures suffered by some.
Is there any relationship between the level of payment and the level of hardship?
Yes, of course, that is what ADM will establish. It will assess the level of hardship and make payments under the taxi hardship panel's report.
Will the Minister answer Deputy Naughten's question? Why will the person who paid €127 for a licence get a bigger payment than somebody who paid €100,000 for a licence?
Members of the taxi hardship panel will appear before the committee in a few moments.
No, I am asking the Minister, who has political responsibility.
The Minister cannot give the answer.
He should not hide behind the report either.
He is not, but the Deputy is asking for specific details. The hardship panel can tell us how it came to reach——
It not a question of how much was paid for the licence. ADM will assess the level of hardship, not how much was paid for the licence. ADM has to look at the overall situation, assess the level of hardship and decide whether to recommend the maximum payment suggested by the panel. That is the issue. It is doing that day by day and so far €8 million——
The Minister did not explain the anomaly.
The Deputy's second question was about the current state of the taxi industry, assaults and so on. I have brought this matter to the attention of the Garda Commissioner and the Garda many times. The Garda vets all applications——
It is not happening. The Minister knows that perfectly well. Gardaí admit it themselves.
If the Deputy wants to make a statement to the Garda Commissioner that his people are not vetting taxi drivers, she should do so. My information is that the Garda Commissioner and his senior people are vetting taxi drivers' applications. They are required by law——
Even if the Garda refuse it, the courts will still grant a licence.
The Garda is required by the law of the land to vet taxi licence applications and it does that on a professional basis. If from time to time somebody slips through a net, that is a valid point. I take the Deputy's point in that regard. However, I believe the commissioner and his people are intent on making sure that there are as few lapses as possible.
It is of concern that people get through the vetting procedure and get a licence when they should not do so.
People get through the electoral process too. The odd one slips through.
This is a serious situation, especially if one is assaulted by a taxi driver who has been refused clearance by the Garda.
The Garda is required by law to vet applicants. The Garda Commissioner assures me that his people do that professionally and thoroughly. That is the only information I can give the Deputy.
What about the people who fail to get Garda clearance and still get licences because the courts award them? What is the Minister doing about that aspect?
That is our law. If one applies——
The Minister is responsible for the law.
——for a licence and the court of the land awards it, it is entitled to take all the circumstances into account. If a person stands in front of the court - I am not the judge and neither is the Deputy - and explains that he or she has been turned down by the Garda for this reason or that, all the circumstances are taken into account. The court may take into account, or not, that the person had been in trouble with the Garda and decide to grant him or her a licence. If the Deputy is recommending to me that we remove that power from the courts, I will consider it.
What is the Minister's view on the current state of the taxi industry?
That is one of the reasons it is so important. I am delighted the Minister has chosen someone as a regulator. We need a regulator as quickly as possible. Deputy Shortall mentioned some instances. The taxi unions are concerned about people who are involved in drug dealing getting a grip on the industry. A regulator can come back with recommendations, as Deputy Shortall said, about people who are slipping through the current system.
Deputy Shortall has a point. I have seen cases where people have slipped through the system. I have seen the courts make decisions which caused me to raise my eyebrows. I did not believe they were appropriate, from my perspective. However, it would not be appropriate for me to examine them. It would not be my duty. I saw a number of high profile situations, to which, no doubt, Deputy Shortall is referring. However, by and large, across the board thousands of situations are dealt with properly. I will review the legislation to see if there is any way the situation may be tightened.
If it is suggested that we remove from the courts, for example, the power to issue licences and leave it exclusively with the regulator, with no appeal to the courts, I can look at it. On the surface it does not seem like a good idea. I do not know if the Attorney General would permit me to make any such regulations, which might refuse a person access to a court. When it comes to a person's livelihood, he or she may need to go to court. Ultimately, we all need that protection where we are able to go to court in relation to regulations.
I agree with Deputy Shortall about the influx of part-timers to the business. I would prefer a corps of full-time taxi professionals. That is the direction in which I want the industry to develop under the new taxi Act and the regulator, as the Chairman said.
How does the Minister reconcile that with the fact that the situation has become completely deregulated? Everybody and anybody is in the business now. What is the point of saying that he would prefer if something happened while he has presided over a situation where there has been a massive influx? He allowed that to happen.
I did not allow it to happen.
He allowed it to happen through his failure to take any action——
Is the Deputy saying her side of the House would ignore the High Court judgment?
The Minister should stop hiding behind the High Court judgment. It is his responsibility to ensure there is proper regulation and control in the industry. It is over a year since the taxi regulator Bill was passed——
Is the Deputy recommending that in the face of the High Court operation I would——
——and he has failed to appoint a regulator. In the meantime he has allowed the industry to become completely downgraded, thus causing additional hardship for people.
The Civil Service and Local Appointments Commission has been engaged for six months in the process of finding a taxi regulator. I have full confidence in the commission to get that right. In July we will have the regulator the commission has recommended to me in place. It went through a process that did not work, presumably because of something to do with salary levels and so on. It increased the salary level and now a person has been identified and accepted the post. In the meantime the taxi advisory council has been meeting and has made a number of recommendations.
The way to handle the issues of part-timers and any disorder in the industry is to press ahead and implement the legislation, listen to the advice of the taxi council and get the taxi regulator to sign off on that as urgently as possible. That is the way forward. I see a good strong future for people in the taxi profession as we grow the business, which we will do, and it becomes more organised and structured. I want to see fewer part-time people in the business in the future. It is better to have professional people, working full-time.
As our time is restricted, we will take the last few questions before moving on to the next part of the meeting.
I want to ask the Minister two brief questions. First, I want to pick up on what he said earlier as regards the court decision on the issuing of licences. He said it was not appropriate for him as Minister to examine court decisions. I believe the opposite is the case. The Minister should withdraw that comment because it is imperative for him as Minister for Transport to review the decisions of the court. In the light of the fact that he has raised his eyebrows in respect of some of the court decisions, he should review them and consider if the legislation currently in place needs to be amended to ensure such cases do not happen in the future. This is the difficulty - no one, including the Minister, can stand over the taxi industry as it currently stands. The industry is going downhill rapidly because a regulator has not been appointed and the Minister has not felt it appropriate to examine some of the court decisions. That is where the difficulty arises.
I wish to refer to the Minister's comments regarding the payments which were recommended to him and the findings which he stood over. He said they were compassionate payments rather than compensation. In light of the fact that they are compassionate payments, will the Minister explain how a widow with a dependent child of 17 years of age is entitled to €5,000, whereas a widow with three or four children under the age of ten is entitled to exactly the same level of compensation? If these are "compassionate payments", the Minister should explain the compassion in the structure in the light of the fact that he stands over these payments.
I review court decisions from the point of view of policy. My comments as regards the issue Deputy Shortall raised refer to where an individual has had a licence refused and goes to court to get a licence. It would not be appropriate for me to review an individual licence application. I review all court decisions from the point of view of policy implications, but not individual cases.
The Deputy referred to the industry going downhill rapidly. I do not agree. There is great pressure but factors such as the quality of the people in the industry, the way they respond to these challenges, the new legislation, the regulator, the new taxi advisory council and the growth in the business as we put in more bus lanes to try to get taxis moving round the city and the country will encourage more people to turn to the taxi business as they see high quality entry standards developing and an increasingly high quality industry
Standards have not improved since deregulation.
I do not agree that it is going downhill rapidly. They are responding very well.
Standards have not improved since deregulation. That is the reality.
There is a new determination in the taxi industry to meet the challenges ahead. The talent and ability are there. It means that——
Quality has been undermined by the Minister's failure to take action.
Deputy Shortall has not proposed one action.
I have proposed quality standards.
Can the Deputy cite an example of these standards?
Entry standards are an example, where the Minister would set a standard for the quality of the car and the driving experience necessary in respect of full-time taxi drivers. Neither of these is being implemented.
The Deputy is suggesting we decide how old the cars should be.
The Minister should not play that game. I am talking about setting down quality standards which he has failed to do.
Can the Deputy give an example?
I have given the Minister an example.
Drivers should know how to get around the city. That should be a basic standard as it is in every other EU city.
That is in the Taxi Regulation Bill.
It is not in place now. The Minister does not hire taxis but in the real world people hire taxis and often the taxi driver cannot take them to their destination because he or she does not know whether it is north or south of the Liffey.
I spent 30 years hiring taxis. I know all about them. The Taxi Regulation Bill requires the regulator to put in place the type of standards to which Deputy Naughten and Deputy Shortall refer. I am not prepared to force them on the industry.
What is the point in talking about regulation when there is no regulator?
The regulator must take the advice of the taxi council, meet the industry and discuss with it what entry standards we can put in place. That is the way forward, not signing a piece of paper and throwing it at them.
There is a discrepancy in the treatment of dependants. How can the Minister square that circle? For example, four children under the age of ten are equated to one child of aged 17 where compassionate payments are concerned.
The Deputy must address those questions to the panel which he will meet soon.
The Minister stands over them.
The Government accepts that report in total. The Deputy can question the panel on how it arrived at that equation.
Two thirds of all the applications come from people over the age of 50 who have no pension. I hope we can make payments to them, however inadequate, as quickly as possible. There is obviously serious pressure in that area.
I asked the Minister earlier whether, in light of the ongoing hardship, he is prepared to sit down with the taxi interests and see what can be done about those people.
I have met with members of the taxi industry on many occasions. My door is open and I am available to meet them at any stage on any day they choose.
Would the Minister agree to meet them at this stage in the process?
If they want to meet me tomorrow, I will meet them tomorrow. I am happy to meet members of the industry. I have met them many times and will always be prepared to meet them and discuss with them either face to face or through the council all the issues that affect them as best I can.
I thank the Minister, Mr. Harper and Ms Kavanagh for attending and answering the committee's questions.
Sitting suspended at 10.45 a.m. and resumed at 10.50 a.m.
I welcome the members of the taxi hardship panel, Mr. Kevin Bonner and Mr. William Attley. I call on Mr. Bonner to make some opening remarks.
Mr. Kevin Bonner
I apologise for the absence of one member of the panel, Ann O'Riordan, who is unable to be here today because she is abroad. Having listened to the debate this morning, I wish to reiterate our terms of reference, which were to report in general terms on the nature and extent of extreme personal financial hardship that may have been experienced by individual taxi licence holders arising from loss of income as a direct result of the liberalisation of the taxi licence regime on 21 November 2002.
We were to include an estimate of the numbers of individual licence holders involved, the likely financial implications and the recommended criteria for assessment of extreme personal financial hardship under any subsequent proposed response by Government. Our report, which the committee obviously read, sets out what we did. It is our view of what was a reasonable response to our terms of reference, given that we could not make compensation payments for the loss of income due to deregulation because a High Court decision precluded us from doing so.
We identified different possible areas of hardship and our response was to make payments in each of those areas on a basis which we felt responded compassionately to the severe personal hardship involved. Some Deputies have raised the anomaly of people at the margin where one might do better than another who fulfils certain criteria. We tried to make the compensation system as flexible and simple as possible and in doing so arrived at those recommendations.
We completed this report in September 2002 to the best of our ability and presented it. We have had no involvement with this matter since then. I only learned this morning what developments have taken place since we delivered our report in September 2002.
Mr. Bonner was present when Deputy Shortall referred to compensation for people with loans of €100,000. There was a reference in the Minister's speech to a payment of €9,000 in the case of large loan repayments secured on the family home. Is that an average payment? What level of compensation would be obtained in a case such as that referred to by Deputy Shortall?
Mr. Bonner
We recommend a graduated system for large loan repayments. We recommended a payment of €6,000 where the minimum outstanding loan was €40,000. We recommended €12,000 for loans of €100,000. The intention was to grade payments to take account of that issue. We did not recommend the same amount for everybody. Payments depend on the size of the loans. There were obviously few loans of €100,000. Loans were graded from €40,000 up to €100,000 and the recommended repayments were between €6,000 and €12,000.
The overall figures are capped. These are the maximum amounts that can be paid out in any individual case and depending on the level of hardship, payments could be lower than those amounts. There will be a difference in the amounts paid to those with loans of €100,000 as opposed to those with loans of €40,000. Those with loans of €40,000 would get a pro rata percentage of €12,000. The basis for the report was cases of extreme financial hardship. However, there are grey areas and anomalies depending on where the level is set. I understand and accept that point.
Why is one child considered to cause the same financial hardship as four children? Regardless of age, the sum for dependants is fixed at €5,000. This appears to be a significant discrepancy within the report, especially in light of the fact that payments are made on the basis of compassion.
Coming back to the issue of someone who took out a loan of €100,000, does Mr. Bonner envisage payments being made to someone who has not defaulted on the loan? In some cases people are working additional hours. Therefore, they are not earning less than in the past, but their quality of life has been significantly degraded. Some people are experiencing extreme financial hardship trying to make repayments. The Chairman gave examples of people who moved from Dublin in order to clear part of their loan through the sale of their property. They now commute to the city which is causing them additional hardship. Are they entitled to the same level of compensation as someone who has defaulted on their loan?
Mr. Bonner
We did not say that a person had to default on their loan to get a payment. Payments are for people who took out loans for the purchase of a taxi. They must give some form of proof of receiving the loan. That provision will be implemented in a flexible manner because sometimes the loan might not be tied to a taxi. As members said, people are not given loans to buy taxis but the money can be given for something else. They would have to provide some proof. It is nothing to do with defaulting; if they took out a loan within the period involved to buy a taxi, then they were entitled to these payments. That is a fact. That is what we recommended. It has nothing to do with defaulting.
I agree with the Deputy regarding the first question. Our recommendation of €15,000 for people with dependants and €10,000 for those without dependants was a round one. One could grade that again from one to six dependants. We envisaged it for people with a number of dependants. If somebody has only one dependant and another has 17, good luck to them, they come within the terms of our recommendations. The recommendation was envisaged for people with a number of dependants but it could be further graded for implementation. The terms of reference were set out in general terms. Regarding compassionate payments, somebody who has dependants should get more than somebody without dependants. That is why we made the differentiation. There are always cut-off points, be it in regard to social welfare or taxation. Some people will always get more than others.
I welcome the panel members. Will Mr. Bonner confirm that he did not devise any formula for the payments? Will he also confirm that the decisions in regard to payments were not based on actuarial advice or that there was no actuarial expertise within the panel?
I would like to know the basis for the arbitrary cut-off regarding age. A 50 year old person with a wheelchair accessible taxi licence is entitled to a compassionate payment of €13,000, yet a person of 49 years of age and six months in a similar situation will only receive a payment of €3,000. What is the basis for that? Why was it not graduated?
I am concerned that there does not appear to be a relationship between the level of compassionate payment and the level of hardship suffered. Will Mr. Bonner explain how the severe financial hardship of a person with an outstanding loan of €100,000 would be alleviated by the payment of €12,000?
I apologise for leaving earlier. I do not know if I am repeating a question that has already been asked. It is in a similar vein to that of Deputy Shortall. I addressed a similar question to the Minister. There is a difference between compensation and making provision for extreme financial hardship. My understanding is that compensation seeks to put the aggrieved person back in the position in which he or she would be but for a particular event, in this case, deregulation arising from a High Court decision.
It is much more difficult to define payments made in cases of extreme financial hardship. Will Mr. Bonner outline the manner in which his committee set out its definitions? I apologise if this issue has already been covered. How did he seek to define what would alleviate extreme financial hardship? Does the provision of what would amount to 13 or 14 monthly repayments on a loan of €100,000 alleviate personal financial hardship? It might do so in the short term, but it would not address future difficulty when the hardship payment ceases, 13 months from the first date on which it was paid? To put it another way, when that payment is made, it can be used to meet approximately 13 months of repayments on the highest of the loans - €100,000. How does one relieve personal financial hardship thereafter? What steps were taken by the panel to define extreme financial hardship within the brief it was given by the Department?
Mr. Bonner
We recommended that payments be tax free. In gross terms, if they were taxed they would be worth a great deal more than the €12,000 - approximately €18,000 to €20,000. We were precluded from restoring people to the position they occupied before difficulties arose. There is a High Court judgment and we were asked to consider cases of extreme personal hardship. We tried to arrive at a way to measure extreme personal hardship. Gauging such hardship is quite a subjective matter. We met a number of people from each of the categories, we read hundreds of the submissions we received from individuals and, as a group, we discussed what would be a reasonable response to the extreme personal hardship that people suffered. We were concerned with identifying those who suffered such hardship and we went through the various categories in an attempt to do so. We then made our response. It may not be possible to do something like that in actuarial terms. We made our response as three individuals and we believe it was a reasonable response to the situation. Our response did not involve 100% or 50% compensation. It was designed to alleviate the extreme personal hardship suffered by people in individual categories.
The submissions we received appeared to indicate that those over 50 years of age were suffering or were beginning to suffer. As one gets older, it is more difficult to work. Someone in their 40s would be much more active in the labour market, has greater opportunities and, therefore, does not have the same potential to suffer extreme personal hardship. That is our view and it is subjective in nature. Others might take a different view and state that there should be no payments, that it was a case of caveat emptor because it was a free market and people had a choice as to whether to enter it. Unfortunately, some people were hurt. There are those who would say that the payments we made are reasonable while others would state that they are not enough. That was our view two years ago having read the documentation and submissions and speaking to Tommie Gorman, Vinny Kearns, the unions and FAIR.
We made up our minds, as three individuals, and that was the conclusion at which we arrived. It is open to the members of the committee to take a different view but that was our view at the time, as a group - Billy Attley, Ann O'Riordan and me. That was two years ago and we have not been involved since. We established the scope of the problem, identified those involved and estimated the cost in general terms. This information was set out in our report.
In hindsight, would Mr. Bonner say it was a wise decision to take a subjective view, particularly, as he stated, given that different people will take different views? People are suffering real hardship and might it have been better to obtain advice on this matter and devise a formula whereby there would be a direct relationship between compensation payments and the level of hardship being endured?
Mr. Bonner
We fulfilled our terms of reference, as they were set out and within a specific period, to the best of our ability. Regardless of how much objectivity is brought to bear or the number of criteria laid down, somebody must take a view. We took a particular view and we stand by it.
I thank Mr. Bonner and Mr. Attley for taking the time to come before the committee.
The joint committee adjourned at 11.05 a.m. sine die.