Other Questions (Resumed)
1Deputy Micheál Martin asked the Taoiseach the details of the issues he discussed at the meetings and or bilaterals he had when he attended the World Economic Forum in Davos, Switzerland; and if he will make a statement on the matter. [4761/12]
View answer2Deputy Joe Higgins asked the Taoiseach if he will report on his attendance at the Economic Forum in Davos, Switzerland, on the 25-29 January 2012; and if he will make a statement on the matter. [5174/12]
View answer3Deputy Gerry Adams asked the Taoiseach if he will report on his visit to the World Economic Forum in Davos, Switzerland [6461/12]
View answer4Deputy Gerry Adams asked the Taoiseach if he will report on his speech at the World Economic Forum in Davos, Switzerland. [6463/12]
View answer5Deputy Gerry Adams asked the Taoiseach the bilateral meetings he held at or on the margins of the World Economic Forum in Davos, Switzerland. [6464/12]
View answer6Deputy Richard Boyd Barrett asked the Taoiseach if he will report on the issues he raised at the World Economic Forum in Davos on 25-29 January 2012; and if he will make a statement on the matter. [6592/12]
View answerI propose to take Questions Nos. 1 to 6, inclusive, together.
On foot of an invitation from Professor Klaus Schwab, I travelled to Davos, Switzerland to attend the annual meeting of the World Economic Forum, WEF, from 25 to 27 January. The forum was attended by political and business leaders and heads of international organisations from across the globe. I participated in a series of discussions that focused on current economic, structural and political challenges and how they might be addressed in a more proactive and integrated manner. These issues were reflected in the overall theme of the forum - The Great Transformation: Shaping New Models.
On Wednesday evening, I attended a function hosted by Professor Schwab, executive chairman of the forum, and also attended by other Heads of Government and the business council of the WEF. The forum organises a series of formal interactive sessions for the participants. On Thursday afternoon, I participated as a panellist in a plenary interactive session, entitled "Rebuilding Europe", along with Prime Minister Katainen of Finland, President Komorowski of Poland and Danish Prime Minister Helle Thorning-Schmidt. This session, moderated by Mr. Lionel Barber, editor of the Financial Times, focused on the future of Europe and principally on measures to address financial instability within the eurozone area. The following day, I participated in a private discussion session on the prevailing global themes for 2012, including the fallout from the Arab spring revolutions of 2011, turbulence in the Middle East, global financial issues and employment, job creation and social stability.
While I was at the forum, I had a bilateral meeting with Prime Minister Helle Thorning-Schmidt of Denmark and later with Prime Minister Katainen of Finland. We discussed the current situation in the eurozone and progress in the negotiations towards the new intergovernmental treaty. I explained the issues that remained of particular importance to Ireland, including in respect of our bank-related debt. We discussed the growth agenda and I stressed the need to focus on growth and jobs. I briefed the Prime Ministers on the successful outcome of Ireland's recent EU-IMF quarterly review. I congratulated Prime Minister Thorning-Schmidt on her Government's successful start to the Danish Presidency of the European Union and I said that I looked forward to working with her and her Government over the next five months. I also updated both Prime Ministers on Ireland's current chairmanship of the OSCE.
On Thursday evening, I addressed a dinner organised by IDA Ireland and attended by senior executives of major international companies. I took the opportunity to convey the message that, as a result of the necessary economic adjustments we had made, Ireland was significantly more competitive as a location for doing business. I noted, for example, that the World Bank rated Ireland as providing the most supportive business environment in the euro area in 2011, while the IMD World Competitiveness Yearbook awarded us three firsts for 2011 - for corporate tax regime, business legislation for foreign investors and the availability of skilled labour. I conveyed the same positive messages about Ireland in a series of bilateral meetings with chief executives and other leaders of major multinational firms over the course of my time at the forum. The IDA event and these bilateral events were very useful opportunities for me to convey strong messages about the attraction of Ireland as a location for foreign investment, research and development and export-oriented operations.
The World Economic Forum provides an exceptional opportunity to interact with key opinion formers in the business world and I made every effort to take full advantage of it. I also met with President Martelly of Haiti at his request. He was on his way to Ireland for a private visit after the forum. I expressed our continued solidarity with the people of Haiti following the devastating earthquake of 2010 and noted the assistance that had been given by Ireland and the international community towards the recovery programme.
I thank the Taoiseach for his reply. He has been attending Davos for years and speaking at similar high-level events. It was the first time that a Taoiseach made comments that reverberated significantly and somewhat negatively at home. The main theme of the Taoiseach's public comments was that Ireland was doing better because of the 2011 budget against which he voted. That was fair enough. However, the main news at home was his unguarded comments regarding the Irish people. His press people were industrious afterwards in trying to clean up after his comments, but the bottom line is that he claimed it was the fault of people who had gone mad with greed. No doubt he will have prepared significant remarks. There has been an attempt to spin the issue with the usual political attacks, but let us put all of that aside for a moment. Does the Taoiseach accept that he might have gone too far in his comments? If he does not withdraw them, he must accept that he made one statement in his pre-budget television speech and stated the exact opposite in the Swiss mountains.
It was actually my first time to attend the World Economic Forum in Davos. I found the whole thing very interesting in the sense that it was a gathering of quite influential world leaders in business and politics. Those who have been attending it for quite a number of years may know of the opportunities that exist for meetings on a one-to-one basis, of which I had a number.
When I spoke at the panel discussion with the President of Poland, the Prime Minister of Denmark and the Prime Minister of Finland, I set in context what had happened to our country. It was not so much that the words used were associated with greed. I made the point that the amount of reckless lending that had gone on and the sort of system that applied - the more one loaned, the more one got in terms of remuneration and compensation - led to a point where the situation transformed into one in which property prices and lending policy became reckless. The result was that, when the bottom fell out of it, it devastated many people.
I would not say that it was the people from the Government who were very active here. There were some people on the Deputy's own side who were equally active. In that sense, I set out for an international audience the background to the situation that applied in this country in so far as the property bubble and property collapse were concerned. From this point of view, it was important to set that in context.
Ireland was always a model for other countries in terms of the judicious use of European funding and how to grow an economy. Obviously, that element of our economy was being driven by taxes from the property market. When that collapsed, it caused and is causing serious distress for a number of people because of the banking situation and the mortgage distress in which they find themselves.
May I ask a supplementary question?
I will revert to the Deputy.
I read the Taoiseach's Davos comments very carefully. Does he agree that he should apologise to the Irish people? It was not an awkwardly phrased sentence that meant something else. He stated that people simply went mad borrowing and the extent of personal wealth created on credit was done between people and the banks, a system that spawned greed to the point where it went out of control. Does he accept that no one could have interpreted these comments as doing anything other than applying to a substantial number of people and that they were made in an indiscriminate fashion? Does he not accept that he should at least clarify, if not apologise, to the suffering people of this country for heaping that insult on them on top of what they are undergoing as a result of the crash?
Does the Taoiseach not realise that, even more recklessly, for him to use words like those is to give justification to the European political establishment to insist that the Irish people pay tens of billions of euro to cover the bad gambling debts of European and other bankers? The Taoiseach gave the impression that the people were the ones who went mad and, therefore, it was moral that they should pay. Does he not understand how reckless these remarks were? Why did the Taoiseach not use the opportunity in front of the world's media to tell the truth?
The first debate at the World Economic Forum asked whether 20th century capitalism is failing 21st century society. The Taoiseach attended the forum alongside billionaire speculators from Goldman Sachs and the rest of the people whose greed over 20 years of unrestrained profiteering and speculation in the financial markets caused the global financial collapse. Why did he not use the opportunity to attack that system and those individuals for their responsibility for a crisis that has caused endless suffering around the world, and even more so in our country? Does he agree that he lost a great opportunity?
No, I do not. I made my point already. Perhaps the Deputy does not move out of Dublin as often as he should because if he did so he would be aware that thousands of people came home from work in the evening to find letters from their banks approving loans of €10,000, €15,000 or €50,000 and asking them to come in and collect the money. Perhaps he is not aware people who bought not one or two but 10 or 12 apartments over their mobile telephones at the height of the rush of property acquisitions. Perhaps he is not aware of the consequences in terms of ghost estates and other symbols around the country.
I understand that the Deputy is speaking from his own narrow focus but I used the limited time available to me to speak with at least seven or eight chief executive officers of international businesses, some whose companies are located here and others who have since decided to propose further investments in this country or are considering investing. This is a matter of jobs, confidence, hope and opportunities for the future. I used these face-to-face meetings to express the view that the Government is making serious decisions in the interest of the country. What we offer as a package in terms of tax, technology, talent and track record is second to none. Evidence of this can be found in the continuous stream of decisions to invest in this country, including one last week relating to a firm that employs 1,400 people in the Deputy's constituency. That is what we need for the future and it is where the future lies. This is why it was important to speak directly to these individuals when I had an opportunity to express confidence in the facilities and packages that Ireland offers in respect of investments from which jobs can be attracted and developed.
I could not meet everybody who was in Davos because it was attended by several thousand people from all over the world, but I met a significant number of influential individuals, both politicians and business people. These business people include some who were happy with the investments they have made in Ireland and who continue to espouse that cause strongly and publicly in the world's media, and others who are considering serious and substantial investments in our country. I am sure the Deputy supports that work and will also support the investment and jobs that result from it. Although I had not previously visited Davos, I realised there are strong reasons for taking the opportunity to meet face to face with serious investors and serious players.
I hope the Opposition will be third time lucky in giving the Taoiseach an opportunity to clarify his remarks and set the record straight. I regularly travel out of Dublin. I will visit Castlebar next Friday morning to launch a defending rural Ireland campaign. If the Taoiseach is available he will be welcome to listen -----
Where are you launching that?
I do not know the exact venue but I will send the details to the Taoiseach.
Does the Deputy not know Castlebar?
I know Castlebar well but not the particular venue. I understand it will not be a big venue.
The Taoiseach stated that people went mad borrowing in a system that spawned greed, went out of control and led to the crash. The people were at fault. He and I recognise that there were people who bought a number of apartments but the people who were most offended by his remarks are those who borrowed money to buy a home. They did not go mad. They borrowed not out of greed but to provide a home for their families. Many of them were cajoled to borrow large sums of money to buy homes during boom times. The prices of these homes had been driven through the roof because the policies of successive governments encouraged property speculation. The only reason I raise this issue is because the Taoiseach said in his state of the State address that the people were not at fault.
That is correct.
In Davos he said that people went mad borrowing. I do not want to be provocative but the Taoiseach should acknowledge that the people did not cause this crisis. He knows that and he has said as much on numerous occasions. All of us say things that are inappropriate or do not properly summarise our thoughts at any given moment. We all have slips of the tongue. My concern is that the Taoiseach's failure to clarify his remarks means that he meant them. This may be an insight into his belief that the Irish people, or at least the people of this State, had a collective burst of madness and were fickle and gullible. It was not the gombeen men and the greedy bankers and developers who were at fault, it was the ordinary people for being so immature. I respectfully ask the Taoiseach to set the record straight by making it clear that he does not believe ordinary people caused this crisis.
I certainly do not, and I said clearly in my state of the nation address that the people were not responsible. The people were the victims. I never said that all of the people went mad borrowing. I made the point against the background of explaining matters to an international audience. When I see the letters that were sent to students to offer large overdrafts or the incentives given to persuade people to take out loans on their houses to spend €100,000 on furniture, €50,000 to tarmacadam the drive and another €50,000 for the BMW, I am reminded that people were the victims of an incentivised scheme which spawned a sense of greed among those in higher echelons. The more they lent, the more they got. The implications of that are still being felt by responsible people in the banking system, who are also the victims of public retribution because of the sins of others and the policies that were in place. Deputy Adams quoted me accurately on this occasion.
I always do.
I stand over what I said in my state of the nation address in terms of the people not being responsible. Many people became victims of an incentivised scheme where they were seduced into borrowing easy money on the assumption that it could all be paid back. The difficulties in repaying the money were created when the bottom fell out of the construction industry because the economy was being driven by a Government that relied on taxes coming from property. That was unsustainable and now we know. This Government has had to make the decisions that will rectify that situation and I am glad to say the country is headed in the right direction.
I met the CEO of Citibank's operations in Europe, the chief executive of Liberty Global, the chief operating officer of Facebook, the chief executive officer of the New York Stock Exchange, the chief executive of the EMC corporation, the chief executive of Adobe Systems and the chief executive of Medtronic among a number of other serious business people. These companies employ thousands of people in Ireland and the satisfaction they get from the talent and productivity of their workforce, as well as the reputation of each individual workforce as part of the country's brand, is very high. A number of those and others consider investing in Ireland. At the IDA Ireland function I attended there were half a dozen or a dozen people who had no association with Ireland but are now being followed up with in respect of what we offer in terms of talent and a package in regard to tax, technology and a track record. I hope that brings about job opportunities for young people in a range of areas in the future. Please God it will.
The Constitution has today forced the Taoiseach and his Government to hold a referendum on the brutal austerity agenda that it and our EU-IMF overlords have been inflicting on the people. That has happened despite the Taoiseach's-----
We are discussing the World Economic Forum.
These are directly connected.
Where?
I will explain if the Ceann Comhairle gives me a chance.
The record is stuck.
That has happened despite his best efforts behind the backs of the people to avoid a referendum. The question relating to Davos is whether the stock in trade of the Government is being two-faced and duplicitous when it comes to saying one thing to the people here and saying quite different things when talking to the high and mighty in Davos or in the European Union. On the one hand the Taoiseach told the people here he did not blame them and that they were not responsible for the economic crisis. Then he told people in Davos - in many cases precisely the people who helped cause the economic crisis and were guilty of all the greed he mentioned - that people went mad borrowing. He did not say that some people went mad borrowing. He did not say that a few super-rich people went mad borrowing. He did not say that the cronies of Fianna Fáil went mad borrowing.
Can we have the Deputy's supplementary question?
He said that people went mad borrowing. Is there not a consistency in the Taoiseach's behaviour which is that he says one thing to people abroad and a different thing to people here, whether it is on trying to avoid a referendum on the austerity treaty or on whom to put the blame for the current economic crisis? Was it not a treacherous thing to say given that on that particular day an all-party delegation, including members of the Taoiseach's party, the Labour Party, the Fianna Fáil Party and Independents, made the case to the Bundestag finance committee that ordinary people in this country were not responsible for the economic crisis and that there should be debt relief? On that very same day the Taoiseach made a statement to this-----
We are on Question Time.
-----gang in Davos blaming ordinary people, fundamentally undermining our case to get a write-down on the debt that has been unloaded on the backs of ordinary people because of the gambling and speculating of international financial institutions and bankers in this country.
That cuts no ice here. Some of these international audiences are not aware of the history of the historic party of Fianna Fáil. It was important to explain the context in which this property collapse took place. If the Deputy reads his English, he will notice I did not say "all of the people" were responsible. In fact in my state of the nation address I said that the people were not responsible. I have pointed out to Deputies Martin and Adams how the incentivised scheme in banking regimes fired out money left, right and centre without it even being requested. Of course the Deputy does not want to accept that. On the panel discussions in which he has participated he has failed pathetically to explain what he is on about except that he keeps coming up with the recurring words of "austerity", "hardship", "overlord" and others.
That is what ordinary people are feeling.
Perhaps he should travel out from his lair in Dún Laoghaire and go to meet the people.
I have been doing that.
He would find that the pragmatism of the people is very clear.
They are not too happy in the Taoiseach's neck of the woods.
They know how these problems were caused and know what it takes to sort them out and are prepared to do that. If Deputy Boyd Barrett were speaking to any of those serious businesspeople considering investing in our country, I wonder what he would say to them. Would he say "Take up your bed and walk"? That seems to be what he seems to say here consistently. I cannot recall him making one constructive suggestion about employment in his constituency or in any other constituency.
Public works programmes, as I have said many times.
He should be very careful of that.
We have spent 26 minutes on the subject of Davos. It is up to the Deputies if they want to continue. There are other questions to be answered. I call Deputy Martin if he has a genuine supplementary question - no statements.
I have a supplementary question which I signalled. I acknowledge that Davos represents a very important networking event. I had the privilege of attending it and I know that some of the events there broaden the mind and broaden the horizons if one is prepared to be open and listen to what people have to say. It is a good networking event with people who can create many jobs in the country.
There is a big debate globally on whether capitalism is in crisis and whether the financial model that has governed in recent decades is in crisis. The Financial Times has been running a series for some time on the topic. There was considerable debate at Davos on the big issues. The origins of this crisis, which has been called the great recession, are much more profound than people sometimes care to admit in the domestic political arena for obvious political reasons. Mistakes were made here and I have acknowledged those and so on. However, the fundamentals of the crisis go back some time, particularly to the establishment of the euro and the flawed nature of the euro design. There were also the events after 11 September 2001 in the US and what the Federal Reserve did. Essentially in the developed economies across the world cheap money became available, which fuelled bubbles across Europe.
At Davos, with the exception of Chancellor Merkel and a handful of other European leaders, everybody agreed that Europe had not adequately addressed the economic crisis and particularly the eurozone crisis. That was the general consensus external to Europe and in many European areas as well. Economists, journalists, business executives and world leaders at Davos all said that the core flaws in the eurozone have not been addressed and there is a great threat to the international economy as a result.
Could we have a supplementary question?
Does the Taoiseach accept that such a consensus emerged from the discussions at Davos? If he listened to those, are they reflected in any of the Government's policies, particularly in the context of the fiscal treaty?
I was not able to attend many of those discussions which took place in break-out rooms. I participated in a panel discussion about the European issue with the Prime Minister of Finland and a representative of the Polish Presidency. I attended a lunch where people were allocated indiscriminate tables where there was a discussion on the issues of the Middle East, including north Africa, Iran and Iraq, the global perspective on the emergence of new economies in the Far East, South Africa and Brazil, and the implications for other countries. The rest of the time was taken up with face-to-face meetings with individuals. I did not have an opportunity to sit in as a member of the group in those general discussions that took place in particular rooms.
It is perfectly clear in what the Deputy says that the financial crisis had its roots in the millions of sub-prime mortgages in the United States, the application of light-touch regulation and how rating agencies allocated a number of these financial instruments and continued to allocate them very high star ratings and then it collapsed. As the Deputy is aware, billions of dollars worth of those found their way into the European system and the domino effect played its part here. The conclusions of Davos for me were certainly in the context of the connections it was possible for Ireland to make. I genuinely believe that a range of those people look at our country now in a different way than they did previously. They see the results and they know that a solid start has been made although there is a long way to go. It was important that I had the opportunity as Taoiseach to talk to some of those people face to face. I am unsure whether I will be invited back again. I made the point to the professor that I found the exercise very interesting and fruitful. This has grown over 20 years from a small gathering in the beginning until it exploded into something of a world forum. Following the Global Irish Economic Forum last October there is a suggestion that Ireland should host a Davos-type conference for those involved in creativity in the theatre, acting and so on in 2014. This could have implications for the good of the country as well. That is where it was . I did not have the chance to sit in at the general discussions, except for the panel discussion and the discussion in respect of the world economic situation, which I was happy to participate in and outline our view at as a member of the eurozone.
7Deputy Gerry Adams asked the Taoiseach if he will report on the costs of the Communications Section in his Department; and if he will make a statement on the matter. [5109/12]
View answerThe cost for the communications unit in 2011 was €221,340 with €98,579 being a direct cost to my Department and the balance being paid by three other Departments. The cost for 2011 represents a reduction of 9% on the 2010 cost, a reduction of 16% on the 2009 cost and a reduction of 36% on the 2008 cost. This has been achieved through greater efficiency in the operation of the unit and the application of Government policy on reducing staff numbers.
The unit provides a media information service to Ministers and their Departments. It furnishes news updates and transcripts which ensure that Departments are kept informed in a fast and efficient manner of any relevant news developments. In this way Departments are able to provide a better service to the public.
I thank the Taoiseach for the answer. How many people work in the communications unit in total, including the Government information service, the website www.MerrionStreet.ie, the Taoiseach’s press office, speechwriters and so on?
The editor of www.MerrionStreet.ie is an assistant principal officer in the Department of the Taoiseach. Two editorial assistants work on the site as well. One is an executive officer recently recruited following an interdepartmental competition. The second is a journalism graduate currently employed on a contract basis. My Department recently advertised this post through the Public Appointments Service on www.publicjobs.ie. Following interviews, the position will be filled at executive officer level with a starting salary of €27,000. Ongoing technical maintenance and support is provided by the information technology unit of the Department of the Taoiseach with support from an external web services company on an as-needs basis.
If the Taoiseach does not have the answer, perhaps he could send it to me. I am trying to get a sense of the total number of people working in the communications unit.
I believe I have given that to the Deputy. If that is not it, I will provide an update for the Deputy. The editor is an assistant principal officer. Two editorial assistants work on the site as well. One is an executive officer and the second is a journalism graduate. That position has been advertised on www.publicjobs.ie. It will be filled at executive officer level with a starting salary of €27,000. If they need information technology services, they come in on an as-needs basis. If that is not the right number, I will have it communicated to the Deputy.
We will move on to question No. 8.
I have one quick question.
That is it. The question has been answered. We are only depriving ourselves.
Will the Taoiseach explain why he has kept the unit in existence having spent nine years attacking it?
We have elicited the information.
He kept calling it a propaganda fiction.
That is grand. Thank you.
He demanded its abolition for nine years.
There you go.
It is a fair question.
I spent a few years at that, I must admit.
This is Question Time. We are eliciting information. That is the whole idea of Question Time.
It is a fair question. The question sought a report on the costs.
If you get the information there is no need for a supplementary question.
I am curious about why www.MerrionStreet.ie is being used by the Government every day.
Curiosity does not come into it. I am in the Chair trying to give everyone a chance to get their questions answered. There are other questions.
We are not into propaganda.
We are not into gossip.
It is about quality information, not propaganda.
It is not propaganda.
All changed, changed utterly: A terrible beauty is born.
8Deputy Gerry Adams asked the Taoiseach the number of occasions that the Economic Management Council has met since the Christmas recess. [6184/12]
View answer9Deputy Gerry Adams asked the Taoiseach if the Economic Management Council has any plans to meet again with the Irish banks. [6187/12]
View answer10Deputy Micheál Martin asked the Taoiseach if the Economic Management Council has met recently. [8002/12]
View answer11Deputy Micheál Martin asked the Taoiseach the number of times the Cabinet Committee on Climate Change and the Green Economy have met in the past year. [10752/12]
View answer12Deputy Gerry Adams asked the Taoiseach if he will report on the meeting between the Economic Management Council and senior executives in the Irish banks on 21 February. [11164/12]
View answerI propose to take Questions Nos. 8 to 12, inclusive, together. The economic management council has met eight times so far this year, most recently on Tuesday, 14 February. Since the economic management council has the status of a Cabinet committee, the confidentiality of discussions at the management council are protected by the Constitution. In line with long-standing practice, it is not appropriate to answer questions about proceedings at the council and the agendas of future meetings.
Members of the council met with representatives of the three largest banks last Tuesday, 21 February to discuss a range of issues of concern, including small and medium enterprise lending. This follows up on a similar meeting held on 9 November last.
The Cabinet committee on climate change and the green economy has met twice in the past year, on 30 June and 20 December 2011. I expect this committee to meet on a regular basis as we develop policies to meet our challenging emissions reductions targets for the period to 2020.
There is a problem with the way these questions are grouped. I asked three questions. I am particularly interested in trying to get some sense of the meeting between the economic management council and the senior executives of the banks, particularly relating to the issues of citizens on variable rate mortgages who are in deep economic distress at present. Last week the chief executive of the Bank of Ireland was quoted as saying that it might further increase interest rates to protect the bank from the impact of the Government's new personal insolvency legislation. The Taoiseach did not answer that question. He made no reference to the banks in his answer. The families in mortgage distress are looking to the Taoiseach to ensure the banks reach sustainable agreements with them. Will the Taoiseach take up this and give us an answer on it?
The Taoiseach said that the council has the same status as a Cabinet sub-committee and that under the Constitution it is not appropriate to give details of its meetings. Surely that is simply an excuse. Is the Taoiseach suggesting he could be jailed or that it would be a constitutional offence? Is the Taoiseach a member of a slightly constitutional party? It strikes me that the information should be available in the interests of transparency. The Taoiseach has said many times during a long career in the House before he became Taoiseach that he wanted transparency and sought to reform politics. However, we are trying to get some details from him and he maintains that he cannot tell us anything.
My first question was about the banks. The Taoiseach is aware of how many people are in mortgage distress. Did the Taoiseach raise this with the banks? Was the Taoiseach successful in getting them to reach sustainable agreements with struggling mortgage holders?
It is important to distinguish between a meeting of the economic management council, EMC, and a meeting between the council and a group or organisation. The EMC is a sub-committee of the Cabinet. Essentially, its purpose is to deal with issues that will, if approved at the EMC, go on to be raised at Cabinet and dealt with in the same way as other issues brought to a Cabinet meeting. The EMC has met the banks on two occasions. The first meeting was on 9 November. The other meeting took place last week on 21 February. Meetings took place separately with Ulster Bank, Bank of Ireland and Allied Irish Banks. The issues raised included SME credit, mortgage credit, mortgage arrears strategies and so on.
The kind of issues that were raised concerned how banks are ensuring the targets they have set out will be met and practical initiatives to assist SMEs access credit. As the Deputy knows, both pillar banks said they intend to lend €3.5 billion in new lending this year. The meetings were very constructive and there is a realisation that banks must get back into the business of explaining to people that they are open for business. I had the opportunity of launching a small enterprise yesterday in the west, which had secured a loan from Allied Irish Bank. That enterprise is taking on 15 new employees and hopes to grow the business over the next period. The issue of SME credit was also raised and the willingness of the banks to implement and support the Government's initiatives set out in the action plan, for instance, the micro-finance agency, a partial loan-credit guarantee and access to the credit review office, which has done a remarkable job. In that context, the Minister of State and the person with responsibility for the banking sector in the Department of Finance were in Cork yesterday and are in Waterford today talking to businesses and banks about that access.
Deputy Adams raised the issue of mortgage credit and asked how banks are ensuring that credit is available to support the Government's important budget initiative. We asked what checks and balances are there to ensure the conditions that apply to mortgages are fair and balanced and not unduly restrictive, whether banks are monitoring the different outcomes between regions and the movement of houses in the north west or the west, the south west or the south east as against the Dublin area. They have all that evidence and we are eager that they will support the mortgage interest relief initiative. With regard to mortgage arrears strategies, the banks are setting out to deal with issues on a case by case basis, taking into account the Keane report, personal insolvency and how best to implement a strategy of dealing with individual cases where circumstances are always different.
One of the issues that came to light is that there is a significant number of small and medium enterprises where the principal person is working hard at driving the business but when the accountants do the books at the end of the tax year, there is often no projection for cash flow for the period ahead. Clearly, in the past when businesses approached banks seeking loans, the approach was based on property assets and the like and money was made available on that basis. However, valuations are much lower now and that no longer applies. Where no cash flow projections are available, this makes it difficult for banks to lend in the circumstances. Therefore, where this applies within the small and medium enterprise sector, it must be rectified so that when people look for loans and opportunities the application will be turned around quickly.
We asked questions about what leverage and authority local bank managers have and what was the level of the loans with which they could deal and whether they could deal with unstructured loans of up to €50,000. We asked what the position was in respect of bigger loans and whether they had to revert along the line and how fast applications could be turned around. They pointed out there was a single application form and that they were interested in getting out among the community again to talk about the capacity of the banks to lend and the availability of moneys.
We also discussed the question of the quite substantial deposits flowing back into banks, which are a signal and sign of confidence returning. The meetings were, in that sense, constructive. The point was made that the boards have changed, personnel have changed and banks are anxious to get back into the business of being available to the people to lend under proper conditions and to have a thriving banking system and economy.
Due to the manner in which the Taoiseach responded, I may have stumbled upon a way to get him to answer the question I asked. I asked him about families in mortgage distress and he responded about credit for small and medium businesses. Perhaps if I had asked him about credit for small and medium businesses, he would have answered my question about families in mortgage distress.
I accept the point the Taoiseach made about the small and medium business sector and the need for credit for that sector. The theory now is that the people now own the banks. This cost €60 billion of taxpayers' money. The Central Bank revealed that 107,708 mortgage holders were in serious distress at the end of 2011. This means that 92 families fell into mortgage distress every day towards the end of 2011. In other words, almost 100 families fell into mortgage distress every day from September to December 2011. My question is straightforward. Did the Taoiseach raise the issue of the need for the banks to reach sustainable agreements with these struggling mortgage holders? Either he did or did not. If he did, what was the banks' response?
Of course we raised the question of distressed mortgages with each of the three banks. They have set out their strategies, which are parallel to the decisions taken by Government but these strategies will have to be discussed individually because the circumstances of each case are always different. I pointed out to them that as part of the measures taken in budget 2012, mortgage interest relief was increased to a 30% threshold for first-time buyers who bought between 2004 and 2008. This was a core commitment in the programme for Government. I also pointed out the additional measures that exist to assist people in difficulty with meeting their mortgage repayments. In the majority of cases, there is no intention of doing anything other than bringing about a solution whereby people can continue to live in their homes. There are a very small number of hopeless cases in the context of being able to achieve a resolution.
The Deputy is aware the banks have been recapitalised so as to be able to meet the circumstances that will apply in a number of distressed mortgage cases and they are aware of that. The revised code of conduct in respect of mortgage arrears came into effect on 1 January 2011, just over a year ago. Compliance with that code is mandatory on all mortgage lenders registered with the Central Bank and I raised questions with regard to implementation of the code. With effect from 30 June 2012, lenders must have the required systems in place and must have the trained staff necessary to support the implementation of the code. As the Deputy is aware, the code sets out the framework with which lenders must deal with regard to borrowers in arrears or in pre-arrears.
We also discussed the implementation of the Keane report, which made ten recommendations. The Personal Insolvency Bill, which is complex legislation, is currently going through the Oireachtas. We are also dealing with non-recourse to judicial decisions. I hope that the parallel steps being taken by the banks, the implementation of the Keane report and the consequences of the Personal Insolvency Bill will bring about a sense of relief for many mortgage holders with difficulties. The over-riding intention is to bring about a solution for those people so that they will not lose their homes, will receive some relief in terms of repayments and come to an agreement between themselves and the lender as to how best to achieve this.
I expect to have discussions with the banks again in a couple of months so as to review progress both in respect of lending figures and with how they are getting on with the extent of arrears and distressed mortgage holders they have on their books.
I submitted two questions, one on the economic management council and the other on the issue of climate change and the green economy. However, that second question has somehow got mixed up with the four questions on the economic management council.
The people are very angry about the banks. In particular, given the recapitalisation, the people are angry the banks are not doing what the Government and others have said the banks will do or should be doing. I have made the point previously that there is a disconnection between the articulation of issues here and what is happening on the ground. People we meet on the streets and at our clinics say that what is going on is crazy. The situation in relation to mortgage interest arrears is getting worse. There has been no alleviation of the stress people are under. If anything, the strain is getting worse. There is no sense that the banks are responding in the spirit of the recapitalisation agenda. The entire approach to saving the banks was predicated on ensuring they would be in a position to meet the needs of the economy and the people. That is particularly true of the mortgage arrears issue. I remind the House that issues of mortgage difficulty and impairment were taken on board when the banks were recapitalised.
I heard what the Taoiseach had to say about micro-enterprises. People who have been in business for a long time are still contacting me to say their companies have been denied working capital. Many jobs are riding on the sustainability of the companies in question. I am talking about small businesses that have had good experiences in the past and business people who have not done anything untoward or been in any great difficulties. They are now finding it hard to access money, however. Regardless of all the big documents and action plans for jobs, the fastest way to create jobs is to provide for a meaningful system of access to credit for people and micro-enterprises. Mortgage arrears issues also need to be dealt with comprehensively and decisively because they are having a detrimental impact on families and households. This problem is acting as a drag on the economy by dampening consumer demand and sentiment. People are not prepared to spend money in the absence of clarity on mortgage arrears issues. I ask the Government to take on board the proposals we have made in that regard. The decisions of the debt settlement office should be binding on the banks. We can no longer let the banks make decisions on what they will and will not agree to. They are not responding to the sentiments that are being articulated here and across the country.
The Deputy is absolutely upfront here. Umpteen cases of people who cannot access credit - they have been turned down by their banks - have been brought to my attention. When they are asked about making an appeal to the Credit Review Office, some of them say they do not want to get into a bad situation with the local bank manager with whom they are dealing. When one talks to the banks, one is told that some businesses come in without a projection of what their cash flow might be. Previously, one could be sure that the banks would give it out against the property. It is fair to say this is a central issue in this regard. Small businesses around the country are willing to borrow for employment and export purposes. Enterprise Ireland is pushing very hard for new entrepreneurs, new innovators and new developers to get into business. Such people require financing. Yesterday, for the first time in a while, I spoke to a bank manager who had given a loan to a small business. The business in question is taking on 15 new employees and hopes to expand further in the coming period. It is important for that manager and his colleagues in the bank to be able to say publicly that they believe in a business and are prepared to lend money to it. That will reassure anyone who is listening that the bank is open for business and offering packages to those who are interested.
I am not a proponent of the banks. I have had strong differences of opinion with them. As Deputy Martin is well aware, we need a banking system that actually works. Bank managers should be authorised to do the job they are supposed to do, in conjunction with business people. They need to manage mortgage distress and arrears and facilitate business opportunities. If we do not have thriving small and medium sized enterprises, we will never have the kind of country that Deputy Martin and I know we can have. The banks have told us at the economic management council that their own credit and micro-finance operations are proceeding in parallel with what the Government is doing. They are engaging in discussions with people who have distressed mortgages, in line with the Keane report and in the context of the personal insolvency proposals.
The meeting I have mentioned was constructive. Representatives of a number of banks from various parts of the country gave evidence to the effect that there are signs that things are beginning to move in some sectors. There is a very long way to go. I have heard reports that suggest the housing floor has not yet been reached. People will wait for a further period to see what happens. In the recent past, I have met a number of solicitors who have finalised transactions regarding the sale of houses. I hope the banks will be willing to come back in again in a couple of months to review the progress that is being made. I hope the House will have made further progress with the implementation of the Keane report and the personal insolvency legislation. We want the banks to sit down with people who have mortgage arrears to decide how to work this out. The banks are aware that they have been recapitalised to deal with significant numbers of such cases.
Does Deputy Martin have a question on the climate change committee?
Yes. The Taoiseach said he might meet the banks again in a couple of months. I think he needs to meet them far more urgently. I would meet them in the next week or two to get something sorted.
There was a meeting today, actually.
I am concerned about the Government's lack of enthusiasm for dealing with the climate change issue, the environment generally and the green economy. These are serious issues.
They are.
They will not go away.
The Deputy is right.
It may be politically expedient in the short term to put them to one side. I do not get any sense that the Government is engaging with the fundamental energy and climate change challenges that will face this country and the world as a whole in the years ahead. The fact the Cabinet sub-committee has met on just two occasions is a manifestation of the Government's inertia on these issues. It is failing to engage with them.
As the Deputy is aware, the Minister for the Environment, Community and Local Government is directly responsible for the issue of climate change. The Minister announced last November, in conjunction with the publication of a review of national climate change policy, that an independent study would be carried out by the secretariat to the National Economic and Social Council. The study will inform policy development in this regard. On 23 January last, following engagement with the Joint Committee on the Environment, Transport, Culture and the Gaeltacht, the Minister published a work programme setting out the steps and milestones for the development of national climate policy legislation. That work programme covers the next 18 months. A process of public consultation will take place in the first half of 2012. The initial report of the NESC secretariat on potential climate policies and measures will be completed by the end of June and published in the second half of the year. The heads of a climate Bill will be developed and, following Government approval, will be considered by the joint committee by the end of 2012. The 2012 final report of the NESC secretariat will be considered by the committee in the first half of 2013. The work programme we have set out contains a number of milestones. We hope that process will conclude with the heads of the Bill having been considered by the committee by this time next year.
What role, if any, will the economic management council have in the implementation of the jobs programme that was announced by the Government recently? Will it have an overseeing role? Will various agencies of the State have to answer to it? How will the economic management council supervise the achievement of the target of creating 100,000 net jobs by 2015? As that has not been clarified, I ask the Taoiseach to do so now. What is the Government's estimate of the number of jobs that will be lost in the meantime? If the Government has a net estimate for job creation, such a figure must be known to it as well. Everybody considers that in the-----
The lips of the Minister for Education and Skills have not ceased to move since we started Question Time. That leads me to believe he might be playing the role of a political ventriloquist today.
I ask the Deputy to proceed. We are over time.
I will not be so impolite to say what that might make the Taoiseach. Many people consider that several billion euro of the bailout money to the banks was related to difficulties with household mortgages which the banks have not reflected in their policy of writing down debt. Is this the Taoiseach's understanding? Surely the alternative to having unfortunate people dragging mountains of debt around, with the accompanying stress and with unsustainable mortgage repayments, is that the mortgages should be written down to the current level of value of the house and in this way get rid of that overhang and allow people to spend their money in the real economy which would help to create jobs.
Deputy Higgins is actually putting forward a proposition which is unusual for him.
It is not unusual at all.
I thank him. As regards the mortgages situation, I have responded to questions from Deputy Martin and Deputy Adams. I refer to the range of issues in the Keane report, the consequences of the passage of the personal insolvency Bill through the parliamentary process and the fact that the banks have been recapitalised and, in a number of cases, they have the opportunity to write down mortgages by sitting down with each individual client borrower. The difference is between those who cannot pay and those who will not pay. However, having had discussions with the banks, I hope they will move on and make a real impression by releasing that pressure valve which exists in the case of so many people.
In reply to the Deputy's point about the jobs action programme, this is being overseen by the Department of the Taoiseach along with the Department of Jobs, Enterprise and Innovation. Assistance in this work has been provided by two experts who have joined the Department of the Taoiseach from Forfás for the work of monitoring and overseeing the programme. The Department of the Taoiseach and the Department of Jobs, Enterprise and Innovation will publish a report on the implementation of the action plan and the matters being dealt with. The agencies associated with individual Ministers and their Departments will respond by 9 March 2012 to a letter they will receive from the Department of the Taoiseach on this matter. The first quarter of the year will see a range of initiatives being implemented. I am launching an initiative next week entitled Succeeding in Ireland. This will provide an opportunity for the diaspora in America or Australia or wherever to be associated with the opportunity to recommend propositions for job opportunities. On each of those occasions I expect the quarterly published report can be debated in the House so that Deputies can give their views on whether the initiatives are bearing any fruit and whether the programme is up to date. I intend to see that the programme is implemented and Secretaries General, Ministers and the chief executives of the agencies involved will all receive this in writing and will be given the timelines within which they must respond.
Written Answers follow Adjournment.
