Written Answers Nos. 96-106
96. Deputy Michael McGrath asked the Minister for Finance if protocols exist between his Department and the covered banks for to addressing a deficit on their employee pension schemes; and if he will make a statement on the matter. [9521/13]
View answerThe relationship between the Department and the covered banks is governed by the Relationship Framework Agreements which are published on the Department of Finance website at http://banking.finance.gov.ie/presentations-and-latest-documents/ . These provide that the State will not intervene in the day-to-day operations of the banks or their management decisions. These decisions are taken by the board and management of the individual institutions. I must ensure that the banks are run on a commercial, cost effective and independent basis to ensure the value of the banks as assets to the State, as per the Memorandum on Economic and Financial Policies agreed with the EU Commission, the ECB and the IMF.
Decisions in relation to the pension schemes of the Banks are matters for the Boards of the institutions and the independent trustees of the individual schemes, having due regard to legal requirements under the Pensions Act. Given the importance of pension deficits to the evolution of bank capital under the forthcoming new Capital Requirements Directive and Regulations, my officials pay close attention to developments in this area.
97. Deputy Michael McGrath asked the Minister for Finance the implications for the credit standing of mortgage customers of IBRC arising from recent problems in respect of deduction of mortgage payments; the actions that have been taken to rectify the situation; and if he will make a statement on the matter. [9522/13]
View answerI have been advised that following the appointment of the Special Liquidators certain IBRC bank accounts were closed and some borrowers direct debit payments were not processed as normal. I am advised by the Special Liquidator that they are doing everything they can to address this issue without delay but it is likely to be early next week before it is fully resolved. Borrowers have been notified that the outstanding payment will be processed through the new accounts in due course and that the Special Liquidators will notify them in advance of this. The Special Liquidators have confirmed that the payment will be processed at no additional cost, penalty or expense to the borrower and that their credit rating will not be impacted as a result of the payment not being processed as normal.
98. Deputy Michael McGrath asked the Minister for Finance if he will take into consideration the impact on mortgage customers and the variable rate charged on their loans of a sale of the IBRC mortgage book; and if he will make a statement on the matter. [9523/13]
View answerI am advised that the Special Liquidators are still in the process of devising and implementing a sales process in respect of IBRC’s assets. As this sales process has not yet commenced, the Special Liquidators are not in a position to comment or speculate on the impact this may or may not have on the borrowers concerned or the rates charged by the eventual purchasers of those assets.
99. Deputy Michael McGrath asked the Minister for Finance his views on the comments by German Bundesbank President Jens Weidmann regarding the revised arrangements in respect of the promissory notes; and if he will make a statement on the matter. [9524/13]
View answerAs the Deputy is aware the transaction was unanimously noted by the ECB Governing Council, as indicated by President Draghi on the 7th February. Furthermore on the 18th February President Draghi stated that the promissory note deal was a positive step for Ireland. I welcome the outcome of the ECB Governing Council meeting earlier this month and I am not concerned that the transactions accompanying the liquidation of IBRC, involving the exchange of Promissory Notes for Government bonds, is in breach of any Articles of the Treaty on the Functioning of the European Union. The Central Bank of Ireland has carefully examined the legal and financial issues involved in the transactions and is satisfied that there is no such breach.
The Irish Government fully understands the need for the ECB to ensure it is operating within its mandate. As outlined by the Central Bank of Ireland on the 7th of February, “the bonds will be placed in the Central Bank of Ireland’s trading portfolio and sold as soon as possible, provided that conditions of financial stability permit. The disposal strategy will of course maintain full compliance with the Treaty prohibition on monetary financing.”
The Central Bank of Ireland has undertaken that minimum of bonds to be sold in accordance with the following schedule: €0.5bn by the end of 2014, €0.5bn per annum from 2015 to 2018, €1bn per annum from 2019 to 2023 and €2bn per annum from 2024 onwards.
100. Deputy Michael McGrath asked the Minister for Finance the total redundancy payments made to employees of IBRC under schemes offered by the firm; the number of employees concerned; the terms offered; and if he will make a statement on the matter. [9525/13]
View answerFollowing the liquidation of IBRC, employees will be entitled to apply for a statutory redundancy payment, a payment in respect of accrued but unused annual leave and a statutory notice payment, subject to the limits prescribed by statute. As the Deputy can appreciate it will take some time to process the forms associated with the above payments and therefore it will be some time before the Special Liquidators will be in a position to provide the information.
101. Deputy Michael McGrath asked the Minister for Finance if consideration had been given prior to the decision to liquidate IBRC for the company to pay a dividend to the State from the annual interest it received under the promissory note arrangement as a means of reducing the annual cost associated with it; and if he will make a statement on the matter. [9526/13]
View answerPrior to liquidation, IBRC maintained a buffer above minimum capital requirements which allowed it to operate in a manner that met the objective of working out its loan book. Conditions in relation to distributable reserves, as set out in the Companies (Amendment) Act 1983, restricted the ability of IBRC to make dividend payments.
Importantly, the decision to liquidate IBRC was based on a number of factors including removing IBRC from the financial landscape, ending the need for exceptional liquidity assistance in the Irish banking system and the inherent risk associated with short term borrowings which had to be rolled over on a fortnightly basis. The liquidation of IBRC has significant benefits for the State as it goes a long way towards addressing the systemic liquidity issue in the Irish banking system and substantially improves the debt position of the State; spreads the cost of the promissory notes from a weighted average life of c. 7-8 years to c.34-35 years at a lower funding cost for the State, resulting in significant annual interest savings; means a reduction in the underlying deficit of c.€1bn per annum in the coming years, reducing the forecast deficit by c. 0.6% of GDP annually; will reduce the General Government debt over time; and will materially improving our ability to regain access to the bond markets and exit the Troika programme.
102. Deputy Michael McGrath asked the Minister for Finance if he will consider applying to clients of Irish Bank Resolution Corporation the same criteria for applications for rent abatements as is currently applied by National Asset Management Agency; and if he will make a statement on the matter. [9527/13]
View answerAs part of the role of the liquidators, the assets of IBRC will be valued independently before being sold. Any assets not sold to third parties (including loan counterparties and other financial institutions) at or above the valuation price will be sold to NAMA at the independent valuation. Where the assets are acquired by NAMA then normal NAMA policies and procedures would apply including their guidelines on rent abatements.
103. Deputy Seamus Healy asked the Minister for Finance in view of the recent resignation of a senior official (details supplied) who was head of shareholder management unit in his Department to take up a senior position at Bank of Ireland and his possession of vital up-to-date information which might be of advantage to the now privately owned Bank of Ireland and its North American investor, the fact that the current Government had agreed to the sale of over 35% of BOI to North American investors for €1.1 billion though the State had invested circa €5 billion in BOI and now holds a mere 15% share of ownership, less than half that owned by the North American investor, the possession by the senior official of knowledge of the affairs of competitors of BOI, including the State-owned Allied Irish Bank and Permanent TSB which may be of advantage to BOI, the prohibition on senior civil servants taking up employment in private sector for 12 months after resignation from the public service to avoid such conflicts of interest, the fact that the senior official in question was employed by the National Treasury Management Agency and seconded to his Department, if he will state if the senior official concerned and-or the section of his Department of which he was head was involved in any way in the process that led to the sale of 35% of BOI to the North American investor in Summer 2011 whether by advice or otherwise; if he will extend the 12-month stay on senior public servants taking up employment in private sector employments to those on secondment in order to preclude conflicts of interest; and if he will further extend the same 12 month stay to senior employees of the National Treasury Management Agency. [9532/13]
View answerThe Civil Service Code of Standards and Behaviour contains provisions regarding acceptance of outside appointments and of consultancy engagement following resignation or retirement. The code does not apply to directors or employees in State bodies in the wider public service. I am informed by the National Treasury Management Agency (NTMA) that NTMA employees have notice periods of one or three months and six months in the case of the Chief Executive. All NTMA employees are subject to section 14 of the National Treasury Management Agency Act 1990 which prohibits an employee from disclosing any information obtained while carrying out their duties as employees of the NTMA. NTMA employees are also subject to the Official Secrets Act. Contravention of the NTMA Act and the Official Secrets Act is a criminal offence and that the prohibition on disclosing confidential information applies indefinitely and extends to former employees.
I understand the Chief Executive of the Agency is reviewing NTMA policy in this area.
The following information was provided under Standing Order 40A
The Civil Service Code of Standards and Behaviour contains provisions regarding acceptance of outside appointments and of consultancy engagement following resignation or retirement. The code does not apply to directors or employees in State bodies in the wider public service.
I am informed by the National Treasury Management Agency, NTMA, that NTMA employees have notice periods of one or three months and six months in the case of the chief executive. All NTMA employees are subject to section 14 of the National Treasury Management Agency Act 1990 which prohibits an employee from disclosing any information obtained while carrying out their duties as employees of the NTMA. NTMA employees are also subject to the Official Secrets Act. Contravention of the NTMA Act and the Official Secrets Act is a criminal offence and the prohibition on disclosing confidential information applies indefinitely and extends to former employees.
I understand the chief executive of the Agency is reviewing NTMA policy in this area.
The official concerned was the head of the NTMA banking unit when I welcomed the successful conclusion of negotiations with a group of investors on 25 July 2011 who, subject to appropriate regulatory clearances being obtained, had committed to buy up to €1.123 billion of the State’s shares in Bank of Ireland. In that capacity, the official was involved, in conjunction with my Department, in the sales process.
104. Deputy John Deasy asked the Minister for Education and Skills if he will expedite new technological universities in view of the fact that our intake of skilled ICT workers from overseas will increase from 700 to 1,900 in 2013. [9413/13]
View answerAs you are aware, I endorsed the framework for system development laid out in the National Strategy for Higher Education to 2030 which outlines a developmental pathway towards designation as a Technological University for merged institutes of technology that seek to apply. The implementation process of this is well underway. The Landscape document published in February 2012 lays out a clear four stage process and criteria for institutes of technology who wish to apply for designation as a technological university. The process for designation is designed to ensure educational quality, objectivity, international expertise, fairness and transparency. The first stage requires institutes of technology to submit a formal expression of interest in merging and seeking designation. The Higher Education Authority are considering proposals and their advice on system configuration later this year will include their advice on the progress of institutes of technology interested in seeking designation to the second stage of the designation process.
The joint Government-Industry Action Plan, which I launched in January 2012, has been developed as a direct response to specific ICT skills shortages. The Plan outlines a range of short, medium and long term measures to develop a sustainable domestic supply of high quality ICT graduates to support the further expansion and development of ICT sector and support innovation and growth across other sectors of the economy. As part of the plan earlier this month I announced the roll out more than 760 places under the second phase of the graduate skills conversion programme. The places, which are available on 15 programmes in public and private higher education institutions around the country, are targeted at graduate jobseekers who want to acquire honours degree level programming skills for employment opportunities in ICT. These new places are in addition to the more than 700 places that were rolled out under the first phase of the programme in 2012. The majority of 2012 participants are now completing work placements and will be graduating over the next few months.
The Plan has helped to raise awareness of employment opportunities in ICT and there was an increase of 20% in CAO first preference applications and an increase of 10% in acceptances for level 8 Computing courses in 2012. There was also an increase of 35% in the numbers of students taking higher level maths in the Leaving Certificate following the introduction of bonus points in 2012. Other actions provided from in the Plan are also underway including the establishment in January 2012 of a high level Academic Industry Foresight Group, chaired by the Chair of the HEA and with strong industry high level industry membership.
105. Deputy Terence Flanagan asked the Minister for Education and Skills the steps he is taking to ensure that Student Universal Support Ireland applications are being processed as efficiently as possible; and if he will make a statement on the matter. [9323/13]
View answerOfficials in my Department have confirmed with Student Universal Support Ireland that in the case of the student referred to by the Deputy, his student grant application was appealed to the appeals officer in SUSI and the original decision was overturned. The student's application was reassessed and on the 8th February 2013, a request for further documentation was issued. When the requested documentation is returned the student will be notified directly of the outcome.
106. Deputy Bernard J. Durkan asked the Minister for Education and Skills if he will review the application for a higher education grant in the case of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [9438/13]
View answerThe decision on eligibility for new student grants is a matter for Student Universal Support Ireland (SUSI). Officials in my Department have confirmed with SUSI, that on 13th February 2013, a request for further documentation was issued to the student referred to by the Deputy. When the requested documentation is returned the student will be notified directly of the outcome.
If an individual applicant considers that she/he has been unjustly refused a student grant, she/he may appeal, in the first instance, to SUSI. Where an individual applicant has had an appeal turned down, in writing, by their awarding body, and remains of the view that the scheme has not been interpreted correctly in his/her case, an appeal form outlining the position may be submitted by the applicant to the independent Student Grants Appeals Board.
