I welcome the Minister of State, Deputy Patrick O'Donovan.
Commencement Matters
Tourism Industry
The Minister of State is very welcome to the House. Given his place in the heart of Ireland, I think he will have a good feel for the ways in which we may be able to improve the domestic tourism market. I look forward to hearing his views on the matter.
I am primarily concerned with the possible negative impacts of the Brexit vote on the domestic tourism industry. The key objective of the Government's tourism strategy, People, Place and Policy-Growing Tourism to 2025, which was launched last year, is to use Government policy in an effective way to combine Ireland’s key attractions of people and places to maximise the tourism industry. While I am a little biased, I suggest there is no better example of the success of this approach than the introduction of the Wild Atlantic Way in my native county of Kerry. This tourist trail, which stretches from Donegal to west Cork, has revitalised tourism along the western seaboard. I am delighted that the Government intends to commit an additional €100 million in capital funding to take the Wild Atlantic Way to the next level with the creation of blueway and greenway routes and the development of the rural walks scheme.
There is no doubt in my mind that in recent years, the Government has been very positive and proactive in promoting this island and all it has to offer. The increased revenue from tourism is evidence of this. However, all of this success now faces a real threat as a result of Britain's decision to leave the European Union. Naturally enough, our proximity to Britain makes it our biggest tourism customer. Hundreds of thousands of British visitors travel to Ireland all year round.
In recent weeks we have seen sterling take a hammering in the markets and, indeed, it crashed to a new 31-year low, dipping below $1.28 at one point in Asian trading. We have all seen the volatility in trading and while there remains a shroud of mist with regard to Britain's leave negotiations, there will continue to be uncertainty in the markets when it comes to sterling. That is why I am raising this matter. I believe it is vital the Government have a contingency plan in place to protect the domestic tourism industry when we are confronted with a fall in sterling. As I mentioned, we have done exceptionally well in promoting Ireland abroad, but we need to safeguard the good work the Government has achieved with a clear-cut plan to protect Ireland's tourism industry in the aftermath of Brexit.
I wish the Minister of State well. Given his geographic position, I am looking forward to an improvement for places that need further improvement. We are lacking hotels and hotel bedrooms and need more infrastructure. I look forward to hearing the Minister of State's views on the matter.
I thank the Senator for raising this important issue. I take issue with his suggestion I have a bias in this regard. The Cathaoirleach and I know that the Senator suffers from a large amount of bias when it comes to this subject because the tourism product begins in Killarney and ends at the River Feale, as far as he is concerned. Nonetheless, he is entitled to his views in regard to his native county.
The Minister of State also has a fondness for the River Feale.
Absolutely. I thank the House for giving me the opportunity to speak on this important issue, particularly in regard to Ireland's response following the British decision to leave the European Union. In terms of overseas visitor numbers, Great Britain has consistently been Ireland’s most important overseas market. In 2015, which was a record year, over 3.5 million visits were made from Great Britain to Ireland, representing 41% of overseas visit numbers and accounting for 23%, or almost one quarter, of total tourism revenue.
As the House will know, Tourism Ireland, an all-island body set up as a result of the Good Friday Agreement, is the agency responsible for the inward marketing of Ireland. As recently as last week, I had a discussion with Tourism Ireland to better understand where that agency is positioned in terms of dealing with the fallout from Britain's decision to leave the Union. It is too early to form a judgment on the overall impact of the UK referendum result, but there will be some short-term implications. These are likely to be centred on the possibility that consumers in the UK will be more cautious with their discretionary spending due to the volatility with sterling, which may impact outbound tourism generally from Great Britain. A second short-term issue is the impact on the prevailing exchange rates between the British pound and the euro. In terms of the outbound Great Britain market, it should be noted that the relative reduction in the value of sterling will have similar implications for all eurozone countries.
On the Senator's last point, the very strong tourism performance of the last two years - last year was a record year - has fed through into increased prices for visitor accommodation, particularly in Dublin and in other key tourism destinations. I met representatives of Fáilte Ireland last week in regard to the constraints that are becoming increasingly apparent in the Dublin accommodation market. Up to now, British visitors were somewhat insulated from the full impact of these increases due to the strong value of sterling. With the recent currency adjustments, the full extent of the price movements will now be more apparent for British visitors. Therefore, there is an opportunity for tourism accommodation providers to match prevailing prices to the new market environment and ensure Ireland’s competitive position is maintained. If I could get one message out from the Seanad today, it is a very clear and succinct message to Dublin hoteliers and the Dublin industry, in particular, that this is something about which the Government is very concerned.
In the short term, there are no changes to how people can travel between Ireland and the United Kingdom and the Government will be doing its utmost in future discussions to maintain the common travel area which has in place since 1922. With regard to the longer term, the programme for Government commits to implementing the policy referred to by the Senator up to 2025 and achieving the targets for Irish tourism within it. Even prior to the referendum result there was a commitment in the tourism policy to prioritising tourism marketing efforts towards those markets providing higher revenue returns. However, the British market will remain of significant importance to Irish tourism product in the future and I believe Ireland’s excellent tourism offering will ensure that we continue to perform strongly in that market.
As I said, Tourism Ireland is closely monitoring the situation and due to meet tourism industry representatives later this week. I will keep in close contact with Tourism Ireland and continue to meet its representatives to keep abreast of proceedings. In the longer term we will work closely with other Departments, particularly the Department of Foreign Affairs and Trade and the economic Departments. I am anxious to take on board the views of the Members of the Oireachtas. I know that Senators have a very strong tradition of using the Seanad effectively to sound out issues of importance to the State, in particular longer term projects. I encourage the Cathaoirleach and the Senator to consider the possibility, when the Seanad reconvenes in September, of a longer term discussion on the challenges facing the tourism industry, particularly in the context of the outcome of the UK referendum.
An bhfuil tú sásta, Senator Killarney?
I think the Cathaoirleach and the Minister of State are both biased. In any case, I am very grateful for the Minister of State's response. I note particularly what he said about the Dublin hotels, which is a very relevant point. Perhaps by increasing their competitiveness they might make up for the fall in sterling. I hope sterling improves and perhaps it will down the line. In the meantime, hoteliers could help and I hope they will because they will not want to lose the business. They could match that fall and still give value for money. I very much welcome what the Minister of State has said overall and look forward to further progress and growth.
Parking Charges
I thank the Minister of State, Deputy Helen McEntee, for coming to the House. I ask for a review of parking charges at HSE hospitals across the country to ensure low-cost parking is available to patients and visitors to the public hospital system. I also ask if any single organisation has a contract with the HSE to charge for parking and-or clamping on hospital grounds. Will the Minister of State inform us of the cost of such contracts and make a statement on the matter?
I spoke about this issue in a different context prior to getting elected to the Seanad in my role as secretary of the National Association of General Practitioners. I felt many patients were attending hospitals unnecessarily for investigations that could happen in the community. Various investigations into hospital car parking fees have shown a severe lack of consistency in the rates being charged across the country. To give some examples, there is a charge of €3 per hour at the Mater hospital, with a maximum charge of €15 per day; it is €2.70 per hour at Cork University Hospital, with a maximum charge of €15 per day; it is €2 per hour at University Hospital Galway, with a €9 daily rate and a rate of €30 for one week; and at University Hospital Kerry, the first 20 minutes is free, 20 minutes to one hour is €3 and there is a €12 daily rate.
As the House can see, due to the lack of regulation, there are vast differences across the State. Going by the above figures, the average daily rate is €10 or €70 per week. This is a lot of money for many families and particularly for long-term patients. I appreciate that many hospitals have special consideration for people who require longer term parking, but there are also many instances where hospitals are not identifying people in need of special discounts.
This unpopular charge is generating millions of euro of income for hospitals. For example, Cork University Hospital was the highest earner, collecting over €2.8 million last year from car park fees, working out at an average of €8,000 per day, University Hospital Waterford collected €1.48 million, Wexford General Hospital collected €700,000 and Our Lady's Hospital for Sick Children collected €349,000. These fees are causing increased distress to the sick and their relatives and are an active deterrent to people visiting hospitals. Those who have long-term illnesses may need to spend several hours in a car park and it is, in effect, a tax on a sick person. There are certain hospitals which add to the distress by imposing clamping fees, but the release charge also varies and can be as high as €120 in some hospitals.
My colleagues throughout the country have brought up this issue time and again. For example, Councillor Norma Foley, a Fianna Fáil councillor in County Kerry, has said it is no longer simply an issue for the people visiting the hospital, but one for the entire community surrounding the hospital. In housing estates in the vicinity of the hospitals residents are struggling to get parking at their houses as a result of the area being overrun with traffic. There is a knock-on impact as a result of the fees.
Some people have tried to justify the charges with the argument that they are necessary to deter motorists who are working or shopping from using the car parks for free at the expense of spaces for patients and visitors. If this is the case, then the costs should be nominal. Could we consider a flat nominal nationwide fee? Could we have a barcode system whereby if a patient receives an outpatient appointment, at the bottom of the letter a barcode could facilitate access to a car park and give the patient two or three hours of free parking while attending the hospital?
I thank the Senator for raising this issue which I am taking on behalf of my colleague, the Minister, Deputy Simon Harris, who apologises for not being here.
I will set out the background. In the past decade parking charges have been introduced in many hospitals. It is important to note that these parking charges form part of a series of measures to ensure the operational costs of providing parking services do not impact negatively on a hospital's overall budget. As we are all aware, there is a considerable and increasing demand for parking services at hospitals. Consequently, the costs associated with providing these parking services are significant. This is especially the case when we take into account the initial capital costs of purchasing or renting parking areas, the cost of developing extra parking spaces, the need to provide and upgrade security systems in hospital car parks, as well as the cost of staffing and general maintenance of parking services. I imagine we would all agree that it is important that the cost of providing parking services for visitors, staff and patients does not impact on a hospital's budget for providing health services.
The HSE has advised that it does not have a single contract to provide parking services at all hospitals. Instead, each hospital has a unique arrangement which reflects its specific circumstances. For example, Children's University Hospital, Temple Street, the National Maternity Hospital and Mercy University Hospital, Cork, do not provide public car parks. Furthermore, some hospitals such as St. Luke's Hospital, Rathgar; Merlin Park Regional Hospital, Galway, and Mallow General Hospital, do not charge a car parking fee.
I am advised by the HSE that a number of hospitals use parking revenue solely for maintenance and reinvestment in parking facilities, including repayment of loans obtained for upgrading such facilities and investment in security. The remainder of hospitals use parking revenue to cover the cost of parking services, with any additional income being used to contribute to the general hospital budget or to fund research or specific patient facilities. I am aware that those hospitals which charge parking fees are cognisant of the financial implications of parking costs for patients and their families. Consequently, hospitals have introduced a maximum daily fixed parking charge, thus capping this expense. While there is no national HSE policy governing car parking charges, the HSE advises me that it keeps hospital parking charges under review. In that regard I advise the Senator to send specific recommendations directly to the HSE or the individual hospitals.
Is the Senator satisfied?
I welcome the response of the Minister of State. I highlight the fact that we need an alternative and fairer system. Vulnerable patients are being penalised unfairly, especially elderly patients who may need to visit hospitals for outpatient appointments on a frequent basis. I will follow up with the HSE on introducing a flat nominal fee throughout the country.
Public Sector Pensions
I welcome the Minister of State. As this is my first time to address him since his elevation, I congratulate him. It is great to see him here.
We are here to talk about pension abatement. Contrary to popular opinion, workers employed in the public service pay for their pensions and have a legitimate expectation and right to receive the associated benefits when they retire. The Public Service Pensions (Single Scheme and Other Provisions) Act 2012 was introduced for new entrants to the public service from 2013. The Act implemented a number of reforms of public service pensions, including the extension in section 52 of the basis of pension abatement or reduction for rehire of pensioners in the public service from the date when the Bill was commenced.
The object of pension abatement was to ensure the rate of pension, when added to the rate of pay or fee for work in the public service carried out by a retiree from the public service, would not exceed the salary earned pre-retirement by that person. Given that many senior public servants opted to avail of the various deals under the Croke Park, Haddington Road and Lansdowne Road agreements it was understandable that some methodology would be put in place to ensure a person with a large pension could not benefit in retirement by being rehired or by re-entering the public service. In particular, there was a concern at the time that Secretaries General, assistant secretaries general, principal teachers and various other senior staff who went with lucrative pensions and lump sums would not be rehired immediately and benefit from both a pension and a new salary. However, the latent effect of the 2012 Act has been to penalise a small number of pensioners, while many others enjoy their pensions and their new jobs in public service. In truth, the pension abatement scheme is riddled with unfairness and inequality. For example, workers in the health service who are re-employed by the HSE are not subjected to any abatement simply because they are agency workers. The former Minister for Public Expenditure and Reform, Deputy Brendan Howlin, explained how this could happen in July 2013. He said that where a private agency employs an individual, the HSE contract is with the agency, not the individual.
To highlight the unfairness, I will set out an example involving two public servants who have retired from a security-related post at the age of 58 years. Both still have considerable working life left in them - I imagine the Minister of State will agree with that much. Let us suppose their pre-retirement salary was €45,000 per year. They both now have a pension of €22,500. Let us suppose both are then offered positions in different public hospitals and the salary for the new job is €45,000. Person A who went to the job by way of an agency gets a €45,000 salary and a pension of €22,500 as a result of being an agency employee. Person B is hired directly by the hospital. However, because the salary is now €45,000 his pension is totally abated because he cannot earn more or benefit as a result of pension abatement. This is totally unfair. Only a small number are affected by this because most staff rehired to the public service come through agencies.
We have frequently heard from Governments in the past that the pensions of former Taoisigh and Ministers are subject to property rights and cannot be touched. The argument is that the relevant people have earned them and paid for them and that they belong to them, yet this does not apply when we are discussing people in the public service who retire on relatively meagre pensions and seek to re-enter the public service or are offered jobs because they have particular expertise. The financial emergency measures in the public interest legislation was brought in to cut all pensions. The pensions we are talking about have already been cut by the State. The people concerned are entitled to retain their pension in full. This must be dealt with in the forthcoming budget. It is grossly unfair that a small number of people suffer total abatement of their pensions, while others, in particular, those in some of the more lucrative jobs, can earns vast sums of money, as well as their pensions.
I thank the Minister of State for coming to the House. Thank you for your forbearance, a Chathaoirligh.
I thank the Senator for his good wishes. I have become familiar with this House in recent days because I have been here a good deal.
I am taking this matter on behalf of my colleague, the Minister for Public Expenditure and Reform, Deputy Paschal Donohoe, who is unable to be with us and sends his apologies.
I thank the Senator for raising this issue. Abatement in the public service is intended to ensure that when retired public servants who are in receipt of a public service pension are reappointed to the public service, the associated pensions are reduced in order that they receive no more than the pension and pay they would have received if they had continued to serve in their former posts.
The practice of abatement goes as far back as the Superannuation Act of 1834. The principle of abatement predates the financial crisis and is not considered a financial emergency measure. The universal application of abatement was not introduced via the FEMPI legislation but rather as part of the Public Service Pensions (Single Scheme and other Provisions) Act 2012. With the introduction of the 2012 Act, the application of abatement was widened. Previously, abatement generally applied only where the pensioner returned to work in the same sector or scheme from which the pension was drawn. The principle of abatement was not consistent in its application across sectors. Now, following the introduction of the Act, the principle of abatement may be applicable in respect of any public service employment obtained by a public service pensioner. For example, a retired teacher going to work in a local authority, a retired Deputy securing a public service post, or a retired garda going to work in a third level college will all be subject to the principle of abatement. This extension of the principle of pension abatement to the entire public service was provided for in section 52 of the 2012 Act.
While more pensioners are, in principle, exposed to abatement under the 2012 Act, the issue of whether abatement actually occurs in an individual case and its extent, that is, whether the pension is fully or partially abated, depends on circumstances and in certain scenarios no abatement will apply. I am satisfied that the measures taken in the 2012 Act were progressive, fair and necessary. The extension of abatement across the public service was appropriate as a modernising pension reform, and it represents a suitable and measured response to legitimate public concerns about simultaneous payment of pension and salary in the public service. In exceptional circumstances, the legislation also allows the Minister for Public Expenditure and Reform to remove any doubt or question arising in the application of abatement and to waive the abatement provision in limited circumstances.
I thank the Minister of State for the reply. The truth is that I could bring in a list of people who have retired from the public service in education, health, the Garda, the Army and various other places, many of whom are back working in the public service through agencies and are suffering no abatement whatsoever. Then there is a small number who came directly into a public service job and they are being abated. That is grossly unfair. It is a fault in the legislation. The former Minister, Deputy Brendan Howlin, is right: because the people in question are working for agencies, their pensions cannot be touched, but because some poor unfortunate takes a job directly, his or her pension can be affected. I appreciate that the Minister of State is here answering for the Department, not on his own behalf. The Department has to look at this issue. We either apply abatement uniformly across the board, irrespective of who the employer is, or we abate nobody. It is one or the other. We have to make this fair and equitable, which it is not.
I again thank the Senator for raising his concerns about this issue. I will bring his concerns about how pension abatement should affect everybody across the board and the examples he has highlighted to the Minister for Public Expenditure and Reform, Deputy Paschal Donohoe. However, as I stated, we believe the extension of the abatement to the public service, as provided for in the 2012 Act, was an appropriate measure. It represents a suitable and considered response to legitimate public concerns about the simultaneous payment of pension and salary in the public service. The Minister is satisfied that the abatement of public service pensions which is what the Senator is talking about, as provided under the terms of section 52 of the 2012 Act, is lawful, fair and necessary. However, I will bring the Senator's concerns about the issues raised to the Minister.
Banking Licence Applications
I appreciate the opportunity to address the House. On a procedural note, I would appreciate it if the Cathaoirleach looked at allowing five or even six Commencement matters to be raised. I know that a number of Senators have raised this matter with him already. I submitted it for discussion a number of times before it was accepted for inclusion in today's proceedings. While I do appreciate it-----
The Senator might convey to his colleagues in the Fine Gael Party that the reason it is not possible is that most Senators do not obey the eight minute rule. Yesterday is an example. The overall time taken by one of the Senator's colleagues in raising a matter and the Minister's response was 14 minutes. If we were to take five 14-minute matters, it would affect the Order of Business, which would be difficult. I have looked at that matter, but the real problem is that Senators do not respect the rule.
I appreciate that and will do my best to stay within the time allowed.
I am speaking in general.
The reason I raise this point relates to the aftermath of the Brexit decision earlier this month. We know all too well - we have discussed it in the House - that Brexit will be difficult for Ireland in economic terms, but there will be a few small possibilities, particularly in the area of financial services. The area with which I am concerned is passporting. Current EU laws allow European banks to operate branches in the United Kingdom that do not need to be separately capitalised from the parent company abroad. Non-EU banks can use their subsidiary to sell services to clients across the European Union. However, it is looking increasingly likely that the United Kingdom will lose access to the EU market as it will not accept EU laws on freedom of movement.
I was very interested to read a report prepared for Deutsche Bank earlier this month. It has already looked at the scenario and assessed that financial services institutions are already looking to passport into other EU countries, with Barclays and Bank of America Merrill Lynch in particular looking at Dublin, and J. P. Morgan also looking to move elsewhere, moving up to 6,500 jobs at the same time. The reason this is so important is that in order for companies to do this, they require a banking licence.
I am worried that the waiting time many institutions are facing to get a banking licence in Ireland is proving to be prohibitive. The Minister can correct me if I have got the timeline wrong on this, but like France, with whose capital, Paris, Dublin competes as a financial sector, expected decisions on applications in Ireland are currently taking, on average, 12 months. However, in other competing jurisdictions such as in Frankfurt in Germany and Luxembourg, it is down to just six months. I have received contact from a number of leading companies and financial institutions which, in the wake of Brexit, have been seeking to relocate their operations to Dublin in order that they can passport to the wider European Union. They have been put off by the expected delays and lack of flexibility from the Central Bank. I appreciate that our system, as it is, is not a bad one and that there is a reason for the way our processes work, but it could be greatly improved. If we are to capitalise on Brexit where we can, efforts need to be made to reduce these times to ensure we are not losing out on potential jobs and revenue.
I thank the Senator for raising this issue. I appreciate his concern on this and would like to pass on the apologies of the Minister for Finance, Deputy Michael Noonan, who has an important meeting this morning and asked me personally to take this matter on his behalf. I assure the Senator that I will discuss his concerns with the Minister at a later date. I will outline to him the review of the application process for companies applying for a banking licence.
The primary responsibility for the authorisation of banking licences and its decision process rests with the Central Bank of Ireland and the European Central Bank. They are two very important bodies that make decisions on banking licences. One cannot do it without the other. Both bodies are statutorily independent in the carrying out of their functions and have specific missions. Given the Central Bank of Ireland was established by the Oireachtas, I want to reference its core mission of "safeguarding financial stability and protecting consumers”. That is something we should all remember. This mission requires it to ensure every bank operating in Ireland meets certain minimum standards and codes of practice before it can be deemed eligible to carry out its activities.
In order to be of assistance to Senators, I will very briefly set out the process for a bank seeking authorisation. More detailed information is set out on the Central Bank’s website, including guidelines on required information and the authorisation process.
In summary, the principal stages in the authorisation process are as follows: exploratory phase; the submission of an application and its assessment by the ECB and the Central Bank; and a decision by the ECB on whether to grant a banking licence.
The exploratory phase is the important first stage. Applicants should demonstrate familiarity with all statutory and non-statutory requirements applicable to credit institutions in Ireland. These requirements include a knowledge of key codes of conduct such as those on mortgage arrears and business lending to SMEs which provide vital protections for consumers. If the applicant is satisfied that the proposed business model meets the requirements, he or she should arrange a preliminary meeting with the Central Rank. If compliant, the applicant submits a proposal for authorisation which the Central Bank will review in detail. Following this review, it will provide a preliminary view on whether the applicant should pursue the application for authorisation. If the applicant proceeds with a formal application, the ECB will perform a detailed assessment and further detailed assessment work will also be performed by the Central Bank. I must stress that given the risks and complexities of operating a bank, there are numerous issues to be considered as part of these assessments, including the structure of the bank and its organisation and management, including key personnel, which is extremely important. Also important are the risk oversight mechanisms and its capital, funding and solvency projections, among many other areas.
When the review of the application has been satisfactorily completed, the ECB will make a decision on whether to grant a banking licence. Such a licence will only be granted where both the ECB and the Central Bank are satisfied that the applicant complies with the authorisation requirements. The Government is fully aware of the possibilities and opportunities arising from firms and funds potentially seeking to locate in Ireland. In this respect, the Central Bank has confirmed to the Minister of State, Deputy Eoghan Murphy, that it is committed to providing a clear, open and transparent authorisation process which, importantly, is open to all applications. In assessing such applications the bank will ensure a rigorous assessment against regulatory standards so as to continue a high and consistent level of consumer protection.
The Minister for Finance is fully aware that this authorisation process takes time, but we have learned all too well about the consequences of having a light touch regulatory regime. It may be of interest to the Seanad to learn that a number of recently authorised firms have informed the Central Bank that they would be uncomfortable with the operating environment in Ireland if the authorisation process was too speedy or insufficiently challenging.
I appreciate the response of the Minister of State. I agree with him on the need for licences to be granted in a transparent and, most importantly, rigorous manner. We have learned lessons from having a light touch regulatory regime. I ask the Minister of State to convey my fear to the Minister for Finance that we are missing a trick, especially in the light of Brexit. I will give one anecdotal example. Not long ago representatives of a very large multinational company came to see me and a colleague. They told us they had exhausted the process, having gone back and forth to and from the Central Bank for a period of up to four years. Ultimately, the company was able to complete the entire process in just ten weeks in Luxembourg and as a result 150 jobs were lost to this country. There are briefings in financial institutions which warn companies which are looking to relocate from London to expect delays in Ireland and that there are other options available in competing jurisdictions, be it in Frankfurt or Luxembourg.
I know where the Senator is coming from and agree with him that there will be opportunities for Ireland post-Brexit. Obviously, the Department of Finance is monitoring the position very closely. We must, however, learn from what happened during the downturn in the economy and the lessons from having a light touch regulatory regime in the banking sector. The Minister for Finance is in constant touch with both the Central Bank and the ECB. We have regulations in place and must learn from what happened in the past. As the Senator outlined, I am sure the Minister is committed to making the most of the available opportunities for financial institutions and that Ireland is ready to avail of them with the proper scrutiny and regulation. The Senator has made a very good point, one that I will convey to the Minister. I again thank the Senator for raising the issue.
Sitting suspended at 11.15 a.m. and resumed at 11.30 a.m.