Financial Emergency Measures in the Public Interest (No. 2) Bill 2009: Report and Final Stages.

Before we commence I remind Senators that a Senator may speak only once on Report Stage, except for the proposer of an amendment, who may reply to the discussion on the amendment. Every amendment on Report Stage must be seconded.

I move amendment No. 1:

In page 9, to delete lines 43 to 46, and in page 10, to delete lines 1 to 17.

This amendment is opposing section 6 of the Bill. I can understand the rationale behind the text in question, which allows the Minister to exempt a particular class of public servants from the provisions of section 2. One would like to think the Minister would, in the new year, exempt large numbers of public servants from these cuts — I spoke about those earning under €20,000 and €30,000. However, it is clearly not the intention of the Government to do that. The problem I have with this section is that it leaves the power in the Minister's hands to exempt a public servant or group of public servants — which could be the Taoiseach or Ministers or, alternatively, some of the lowest income earners — from the cuts. It is up to the Minister to decide what that group or class of public servants are.

The other problem with section 6 is that it allows the Minister to modify the operation of section 2, which is the schedule of cuts, to make deductions to remuneration in such a manner as the Minister sees fit. One would hope this was intended to allow the Minister to modify section 2 to lessen the impact on public sector workers. The problem with section 6 — this is why I oppose the entire section — is that to support this, thereby allowing the final decision to rest in the Minister's hands without recourse to the Seanad or Dáil, we must trust the Minister. However, this country does not trust the Government because of the decisions it has made. We have seen that time and again as the Government has chosen the wrong options on many issues. This Bill shows how wrong it is and why we should not trust the Minister on these matters.

It is fundamentally a question of trust. Can we trust the Minister to modify section 2 to lessen the impact when we know it can also work in reverse? The Minister could also modify section 2 to deepen the impact. He could also exempt high-earning public servants if he felt it was just and equitable. What the Minister thinks is just and equitable may differ considerably from what I and the Opposition parties consider just and equitable. For this reason it is wrong to vest these powers in the Minister. While I understand it was probably put in the Bill to lessen the impact, it could also work in reverse, and we must trust the Minister to do the right thing. If we are to make any changes, whether to deepen or lessen the impact, it should come back before the Houses of the Oireachtas so it is properly discussed. Any exemptions or deepening of the impact should be debated in a democratic forum.

I second the amendment. This is important because it means the Minister may change how this legislation affects all workers or a group of workers in the Civil Service or public service.

I refer to the issue of the Taoiseach's remuneration which we discussed earlier. I thank the official from the Department of Finance for giving me additional information on this.

It occurred to me afterwards to ask whether this is watertight or whether a ministerial regulation or a statutory instrument is needed. Is there a requirement for a gentleman's agreement to make this work? Some concerns were raised by Senator Alex White on Committee Stage. While they have been clarified, I need to know whether a ministerial regulation or a statutory instrument is required to make this work properly.

The key is that the Minister has the power to alter the terms of this legislation affecting a large or a small group of workers without having to come back to the Houses of the Oireachtas. That is a significant issue and it should be opposed. No major changes should be made without the approval of the Houses of the Oireachtas.

Where exceptional circumstances are deemed to apply, the Minister can amend the regulations and, accordingly, make a decision to exclude a group of workers or amend the imposition of section 2.

I again ask that the Minister of State take note of the submission I presented to his officials on Second Stage concerning a company, the employees of which appear to be in no man's land in regard to the imposition of the possible pay cut. This company is operating commercially as a private company — 51% of it is owned by Teagasc while the remaining 49% of it is owned by the co-operative movement. The employees in question, unlike all public sector employees, were not subject to benchmarking and the associated pay increases. They have entered into some type of public sector pension scheme recently.

The case they have made would suggest they should not come under the terms of this pay deduction. I appreciate cases must be looked at on an individual basis. I note that under this section, one can make particular arrangements for cases. I ask the Minister of State to try to look sympathetically on the submission by this group of employees who are not public servants in the conventional sense and whose terms of employment and pay is quite different from normal public sector provisions.

When we speak in this House, it is important we speak accurately and take great care with the statistics we use. I took the opportunity of the break to contact the Department of Finance in regard to statistics used in the House pertinent to this section. According to the Department of Finance, the number of people who are earning more than €100,000 per year is not 15,000 but 9,000, some 6,000 fewer than was suggested. The figures given for Donegal were also inaccurate. It is very important to take great care to ensure accurate figures are used.

Section 6 provides a limited power to the Minister for Finance to exempt or vary the reduction in pay rates provided for in the Bill in respect of a public servant or group or class of public servants where exceptional circumstances exist relating to a condition or aspect of employment and a substantial inequity would arise as a consequence or because of an arbitration award the Government would normally be required to implement. A similar power was also included in respect of the pension levy but, to the best of my knowledge, that power has not been exercised to date.

It is important some discretion is available to the Minister to address the types of situations mentioned should they arise. It would be the Minster's intention to exercise this power very sparingly and only where it is just and equitable to do so.

In some ways, it is surprising that Senator Doherty would want to delete the section because one would assume he would want there to be instances where pay reductions could be moderated where an inequity would otherwise arise. At the same time, to do him justice, he does not interpret the section, nor do I, as allowing the Minister to exempt, say, large categories of lower paid workers. That is not the intention of this.

As was discussed at much greater length in the other House, in a public service which amounts to between 320,000 and 330,000 public servants, there is a large number of categories and subcategories where circumstances might be somewhat different. I suppose it is a safeguard clause in case a particular anomaly that has not been anticipated subsequently arises and it would give the Minister the power to deal with it.

Section 7 requires the Minister to report regularly on the entire legislation. Obviously, any report would have to include exercise of the discretion. I am quite satisfied that it will not lead to any abuse of power or the exclusion of any highly paid officeholders or public servants. It is not intended, nor does it allow for that. The situation is absolutely watertight in that regard.

Senator Bradford raised a particular place of employment. Earlier this year I had the pleasure of visiting and was given a detailed tour of Moorepark. It is a very fine establishment. Obviously, the Senator was referring to a subsidiary established by it. The key criteria is whether the employees are in receipt of a public service pension and, therefore, the pension levy and not benchmarking. Nevertheless the case presented to officials will be examined and he will receive a reply.

The Minister of State did not answer the questions I asked about whether a ministerial regulation was needed.

Public service pay rates and allowances normally are set out in departmental circulars. This constitutes a normal second part of notifying pay rates and will be done as part of the implementation of this Bill.

I thank the Minister of State for his reply. As I noted at the outset, I acknowledge the reason this section has been included in the legislation. Unfortunately however, this comes down to the issue of trust as this provision confers on the Minister the power to alter the relevant provisions dealing with the cuts and allows him to exempt groups. As I noted previously, the problem is that opinion polls indicate the majority of the people no longer trust the Government and do not trust the Minister to make the correct decisions, as was evident last Wednesday. On this basis, I wish to press the amendment.

I welcome Senator Hanafin's intervention because it is important to provide accurate figures. Senator Hanafin should ask the Minister whether he is correct because I am reading from a reply to Question No. 104 of 16 December by the Minister for Finance, Deputy Brian Lenihan, which shows that in County Donegal, 20,658 public sector workers earn less than €20,000 and 6,437 public sector workers earn between €20,000 and €30,000. The best information available to the Department of Finance and the Minister was contained in the answer provided to the parliamentary question.

It is important to have facts and for Members to base their information and opposition to this legislation on accurate facts. As for correcting me and stating I am misleading the House in respect of these facts, I am only misleading the House if I am incorrect on foot of the information the Minister for Finance provided to the Dáil on Wednesday, 16 December, in response to a parliamentary question in which he was asked for a complete breakdown of every pay grade of public sector worker. If I am to be corrected that there are fewer than 20,658 public sector workers in County Donegal who earn €20,000 or less, I stand corrected, but the Minister for Finance also must be corrected. As I stated in my contribution, I am sure the Department of Finance officials provided the Minister with the correct information, that he provided the Dáil with the correct information and that I am providing this Seanad with the correct information in this regard. Consequently, I do not believe the intervention by Senator Hanafin to be correct and I believe it was misleading this House.

Question put: "That the words proposed to be deleted stand."

This will be a manual vote because there is a problem with the electronic system.

The Seanad divided: Tá, 25; Níl, 17.

  • Boyle, Dan.
  • Brady, Martin.
  • Butler, Larry.
  • Callely, Ivor.
  • Carroll, James.
  • Carty, John.
  • Cassidy, Donie.
  • Corrigan, Maria.
  • Daly, Mark.
  • de Búrca, Déirdre.
  • Ellis, John.
  • Feeney, Geraldine.
  • Glynn, Camillus.
  • Hanafin, John.
  • Keaveney, Cecilia.
  • Leyden, Terry.
  • McDonald, Lisa.
  • Ó Brolcháin, Niall.
  • Ó Murchú, Labhrás.
  • O’Brien, Francis.
  • O’Malley, Fiona.
  • Ormonde, Ann.
  • Phelan, Kieran.
  • Walsh, Jim.
  • White, Mary M.

Níl

  • Bacik, Ivana.
  • Bradford, Paul.
  • Buttimer, Jerry.
  • Cannon, Ciaran.
  • Coffey, Paudie.
  • Coghlan, Paul.
  • Cummins, Maurice.
  • Doherty, Pearse.
  • Donohoe, Paschal.
  • Fitzgerald, Frances.
  • McFadden, Nicky.
  • Norris, David.
  • Phelan, John Paul.
  • Regan, Eugene.
  • Ross, Shane.
  • Ryan, Brendan.
  • Twomey, Liam.
Tellers: Tá, Senators Déirdre de Búrca and Camillus Glynn; Níl, Senators Pearse Doherty and Liam Twomey.
Question declared carried.
Amendment declared lost.

I move amendment No. 2:

In page 12, after line 30, to insert "No. 24 Anglo Irish Bank Ltd.".

I raised this issue on Committee Stage along with the matter — about which the Minister of State was not happy either — of the consultancy fees being paid on behalf of the State bank and other banks supported by the State which may be taken over yet. I was not happy with the answer the Minister of State gave on why Anglo Irish Bank is omitted from the Schedule. It seems that provision could be made under section 1(g) if it were taken to its fullest extent. It refers to a body other than a body specified or referred to in the schedule. Anglo Irish Bank could well become part of the Civil Service. I tabled the amendment to ensure there would be no ambiguity. Are other semi-State bodies excluded from the Schedule? I could not think of any but I presume that at this stage Anglo Irish Bank is a fully fledged semi-State body, unless it is not fully established as a semi-State body under some of the Acts passed over the years. If it has been fully established as a semi-State I am sure it should be included. Perhaps its omission was a typing error. On that basis I hope the Minister of State will clarify the position and accept the amendment if it is a semi-State body.

The Minister for Finance indicated he would speak with the semi-State bodies about competitiveness, which concerns wages and wage cuts. According to the Bill the list of semi-State bodies does not include Anglo Irish Bank and that discussion would not include it. The Minister of State told us Anglo Irish Bank is not part of the Civil Service and does not fall into the remit of Civil Service wage cuts or pensions. There is much ambiguity with regard to this in the Bill and I hope the Minister of State accepts the amendment.

I second the amendment. Will the Minister of State clarify the status of Anglo Irish Bank? Is it merely that the State is the only shareholder of a bank? Would it be the same as if the Government bought Tipperary Water, that it would simply own it as a company? Does Anglo Irish Bank have specific status in a way that the Government can manipulate it and affect how it is run?

To answer the last question first, its status is that it is a nationalised bank. It is not a public service body under section 1(g) or 1(h). It does not have a public service pension scheme. It does not need to be included for clarity’s sake. Its employees are clearly not public servants and there are all sorts of reasons — I do not wish to repeat what I stated on Committee Stage — including restructuring, security of employment and redundancy why it should not be treated or regarded as a public service body.

Amendment put and declared lost.
Bill reported without amendment and received for final consideration.
Question proposed "That the Bill do now pass".

Section 10(2) of the Bill states:

This Act shall come into operation on such day or days as the Minister appoints by order or orders either generally or with reference to any particular purpose or provision. Different days may be so appointed for different purposes or provisions.

On the day of the budget the Minister for Finance clearly stated that he wanted the drinks companies to reduce the price of drink and the wholesalers took him at his word. Some of the wholesalers are also manufacturers and they employ a considerable amount of people. Among the largest wholesalers are Britvic, Gleeson's and Comans. There are approximately 30 wholesalers in the country, including Stephen Walsh in Westport. Many of these wholesalers are under enormous pressure, going to banks to try to keep their overdrafts in place. In some cases their overdrafts have been reduced or halved. Britvic employs 800 people in Newcastle.

There is also Kiely's in Waterford.

A different Kiely's.

There is a list of them and they are under enormous pressure, particularly given the trade across the Border. They are keeping the show on the road. We are approaching Christmas and wholesalers have their stores and warehouses filled with drink bought at the original excise price. On the night of the budget, the Minister stated he wanted the price of drink reduced the following morning. The indications from the Revenue Commissioners were that more than likely the wholesalers would get a refund of the excise duty as happened in the 1980s when the drink was returned to the bonded warehouses and the price refunded. The small amount of money involved — between €5 million and €6 million — is an enormous amount of money to those wholesalers, who employ about 3,000 people, to keep their show on the road. If some of those wholesalers go out of business, it will affect the competitiveness of the entire industry.

I urge the Minister of State to take the necessary steps to ensure they get the refund and keep their people employed. It will cost the biggest wholesaler €1 million, while it will cost €500,000 for the second biggest wholesaler. Britvic is a British owned plc that employs 800 people in this country. I am sure the management of that company in England is wondering what is going on here, where its warehouse is full of products at a particular excise duty and the Minister for Finance asks them to reduce the price at a cost of €500,000. I am trying to impress on the Minister of State the real urgency that exists to keep people employed in this sector, which is having a difficult time.

Notwithstanding the fact that this issue is not at the heart of this Bill, I am aware of the problem. Officials from one of the companies named by the Senator discussed the matter in some detail with me. In the spirit of Christmas, I will treat what he said as a pre-finance Bill submission and it will be considered on its merits in that context.

Question put.
The Seanad divided: Tá, 25; Níl, 18.

  • Boyle, Dan.
  • Brady, Martin.
  • Butler, Larry.
  • Callely, Ivor.
  • Carroll, James.
  • Carty, John.
  • Cassidy, Donie.
  • Corrigan, Maria.
  • Daly, Mark.
  • de Búrca, Déirdre.
  • Ellis, John.
  • Feeney, Geraldine.
  • Glynn, Camillus.
  • Hanafin, John.
  • Keaveney, Cecilia.
  • Leyden, Terry.
  • McDonald, Lisa.
  • Ó Brolcháin, Niall.
  • Ó Murchú, Labhrás.
  • O’Brien, Francis.
  • O’Malley, Fiona.
  • Ormonde, Ann.
  • Phelan, Kieran.
  • Walsh, Jim.
  • White, Mary M.

Níl

  • Bacik, Ivana.
  • Bradford, Paul.
  • Burke, Paddy.
  • Buttimer, Jerry.
  • Cannon, Ciaran.
  • Coffey, Paudie.
  • Coghlan, Paul.
  • Cummins, Maurice.
  • Doherty, Pearse.
  • Donohoe, Paschal.
  • Fitzgerald, Frances.
  • McFadden, Nicky.
  • Norris, David.
  • Phelan, John Paul.
  • Regan, Eugene.
  • Ross, Shane.
  • Ryan, Brendan.
  • Twomey, Liam.
Tellers: Tá, Senators Déirdre de Búrca and Camillus Glynn; Níl, Senators Maurice Cummins and Liam Twomey.
Question declared carried.