Vol. 645 No. 1
1 Deputy Eamon Gilmore asked the Taoiseach if all fees and costs arising from the McCracken tribunal of inquiry have been discharged; the reason token amounts remain in the Estimates of his Department under this heading; and if he will make a statement on the matter. [29416/07]
2 Deputy Enda Kenny asked the Taoiseach the costs that have accrued to his Department in respect of the McCracken tribunal; and if he will make a statement on the matter. [30766/07]
3 Deputy Enda Kenny asked the Taoiseach the cost which accrued to his Department in respect of the Moriarty tribunal since 1 January 2007; and if he will make a statement on the matter. [30767/07]
4 Deputy Caoimhghín Ó Caoláin asked the Taoiseach if all fees and costs arising from the McCracken tribunal have been discharged; and if he will make a statement on the matter. [30968/07]
5 Deputy Eamon Gilmore asked the Taoiseach the costs which have accrued to his Department in respect of the Moriarty tribunal up to the latest date for which figures are available; if an estimate is available of the expected final cost; and if he will make a statement on the matter. [31971/07]
I propose to take Questions Nos. 1 to 5, inclusive, together.
The total cost to date of the McCracken tribunal is €6.56 million. A token provision for 2008 was made to cover potential claims arising from the McCracken tribunal. Two of the parties who were granted representation before the tribunal have not yet claimed their costs. The Chief State Solicitor's Office has no method of estimating how much the claims might amount to, should they ever be submitted. However, it cannot be assumed that these parties will not claim their costs at some future point. They are entitled to these costs and prudent provision must be made in the Estimates.
As regards the Moriarty tribunal, the total cost incurred by my Department since 1997 up to 31 December 2007 was €30,466,497. For 2007, up to 31 December, the figure was €4,154,564. It is not possible at this stage to estimate the final costs.
I understand that the amount in the Estimates for the McCracken tribunal is €1. Presumably, the two witnesses or participants in the tribunal are likely to claim a bit more than that if they claim. Is there any estimate of what the likely claim for costs will be?
According to reports prior to Christmas, Judge Moriarty was planning to publish his report in January. However, there has been some speculation that some of those referred to in the report may take legal action to block its publication. What does the Taoiseach know about the publication of the Moriarty tribunal report and when we are likely to see it?
Over the Christmas period, the Taoiseach and some of his Ministers were very vocal about the costs associated with tribunals. Will the Taoiseach confirm that legal costs — the scale of fees with lawyers — were set by his Government?
The figure of €1 is present in the Estimates to keep the subhead open pending whatever might happen in respect of the two outstanding claims. Due to the passage of time, there is some thought that these may not be claimed although the two parties are entitled to claim them. A case arising from the beef tribunal is before the courts where the State is arguing that the Statute of Limitations applies. The Office of the Attorney General would be of the view that it would apply where a similar situation arises. Until that situation is clarified, the token provision remains. It will remain until that case is dealt with. If the case is dealt with successfully, we will probably remove it from the Estimates but it remains there pending the resolution of that case.
In respect of the Moriarty tribunal, I do not have a date. It has been the view for a considerable period of time that Judge Moriarty wants to complete this work and his fine report. Obviously, there are considerations around some legal actions. I have no more information on those than Deputy Gilmore. I understand that Judge Moriarty hopes to conclude it as soon as he can. Obviously, he must take some of those considerations into account and that is the only issue outstanding.
Following the work done by the former Minister for Finance, Charlie McCreevy, some years ago, a number of the tribunals did not move to the new cost structure. Hopefully, 2008 will see the tribunal into the Donegal case and the Moriarty tribunal come to an end. We did not change the cost structure, including that for the Mahon tribunal, because of the time involved. They were set by the Government but we want to bring them all to a conclusion based on the fee structure put in place. Those fee structures are different because some of the tribunals moved to the new fee structure while others did not. For future tribunals, we have laid down a new structure which is very different from and less costly to the Exchequer than the higher structure.
The Taoiseach makes it sound like the tribunals decide what they will be paid. Will he confirm that it is the Government, specifically the Attorney General, which agrees the scale of fees with the lawyers at the various tribunals? I will return to the Mahon tribunal. In 2004, the then Minister for Finance, Charlie McCreevy, described the scales of fees then applying as astronomical and said that the gravy train had gone on long enough. He announced new scales of fees which would apply specifically to the Mahon tribunal and, I think, to the Moriarty tribunal at that stage. There were various stages by which these scales of fees were supposed to come into effect, for example, the autumn of 2004 and February and September of 2006.
On each occasion that these new scales of fees were supposed to come into effect, the Government changed it and allowed the existing fees to continue. It is the height of hypocrisy for Ministers to bellyache, which they have done for the past number of months now, about the fees paid to lawyers at the Mahon tribunal when the Government set those fees. Will the Taoiseach confirm to the House that the legal fees being paid to lawyers at the various tribunals were set and approved by the Government?
The answer to that question is a simple "Yes". All fees have been negotiated and arranged by the Government. The point I was making related to when the former Minister for Finance, Charlie McCreevy, and the then Attorney General set about negotiating new fee structures with the tribunals. We had about eight tribunals in one form or another pursuing different investigations at that stage. In the case of some tribunals that were near an end, they allowed the fees to remain while they wrapped up. There was a view in those that remained on the highest structure that their end was imminent, which is why they allowed the fees to remain as they were.
The new fee structure has been implemented for a number of tribunals, some of which have come to an end, while the Breen and Buchanan tribunal has only begun. The new fee structure is in place for those tribunals.
Has there been any recovery of costs in respect of the McCracken tribunal, given that some of those interviewed were less than comprehensive in their co-operation with the tribunal? What efforts have been made and what recovery has been brought about? Is there any report on that?
In respect of the Moriarty tribunal, I did not catch the clarity of the Taoiseach's reply to Deputy Gilmore. The tax business of the two principals dealt with by the Moriarty tribunal was dealt with while the tribunal was carrying out its work. I did not catch what the Taoiseach said with regard to his business with the Revenue Commissioners while the Mahon tribunal is ongoing. What is the view of the Taoiseach on that?
I remind Members that the Taoiseach is only responsible for the costs associated with the tribunal and the questions tabled refer to that matter. It is not appropriate for a Taoiseach to answer detailed questions on the report or questions personal to him, other than those that fall within the remit of his Department. I must point that out.
Regarding the McCracken tribunal, the total cost is €6.56 million to the best of my knowledge. That is the gross cost, as far as I know none of the individuals involved has engaged in netting off any return figure. If that is incorrect I will advise Deputy Kenny.
If it is incorrect the Taoiseach can let me know.
I do not think it is because I have answered this question before. I will have that checked.
To clarify the other issue again, it is possible that the Revenue Commissioners can resolve this ongoing matter at any time. If I stated that it would be resolved at the end, I should not have said that.
Does the Taoiseach still agree with his statement, at the time of the publication of the McCracken tribunal report, that "the acceptance of large gifts or payments or personal benefits in a surreptitious manner or the large scale evasion of tax and exchange control regulations by even one or two senior serving politicians or members of Government is deeply damaging to trust in politics"? There has been much criticism by the Taoiseach and other Ministers of the Mahon tribunal for the scope of its investigations, its duration and cost. There is a credibility deficit because there are pertinent questions about many other tribunals but we have not heard these criticisms of other tribunals in which the Taoiseach was not directly involved.
Regarding costs, can the Taoiseach clearly and exactly spell out the steps that have been taken and the measures introduced to reduce the cost of tribunals, especially the exorbitant daily rate paid to counsel?
The new rates or set fees paid to a senior counsel will be based on the current annual salary of a High Court judge, plus 20% in respect of pension contributions. Related payments will be paid to other legal staff, including barristers and solicitors. The new measures will drastically reduce the legal costs of new tribunals or those existing tribunals that have already changed and where the new rates will apply from a future date. The new rates represent less than 40% of the maximum current rate paid to the counsel of tribunal inquiry. The rates are at a different level to what has been the case for the past ten years. Does that answer Deputy Ó Caoláin's question?
Regarding the Taoiseach's position at the publication of the McCracken tribunal report, I cited what he said at the time.
That is still my view.
Regarding criticisms of the scope of the investigations, the duration of the Mahon tribunal and its cost, many of these questions are also pertinent to other tribunals yet there is not the same focus from the Taoiseach or his Ministers. The Taoiseach has answered in part, referring to what has been done or what was proposed in respect of the curtailment of costs of tribunals. The Taoiseach signalled the introduction of new daily rates applying to counsel, which were subsequently deferred, deferred again and are not applied in critical cases, including the Mahon tribunal. In 2004 I noted that the Minister for Finance indicated that the cost to date of all inquiries, completed and current, was then some €440 million. Can the Taoiseach indicate the updated figure? What do we know of the overall outlay of the State commitment, not only what is paid but what has been clocked up and will be due for payment in the future? I fear the figure will have more than multiplied the €440 million indicated by the then Minister for Finance in 2004.
On the general point, the Commissions of Investigation Act sets out clearly the best consideration of how we should deal with these issues in the future. With the new fee structure, that would make a dramatic change to the speed and type of investigation and how issues are dealt with.
Personally and as Taoiseach, I have appeared before the children's abuse tribunal, the Moriarty and Mahon tribunals and possibly another but I cannot remember which one. The point has been made about the length of time that passes from urgent business to the end date. Regarding the issue that we will debate later, collusion, a point made by all relatives is that they do not want the State to get into a long process. They want to focus on the issue that can be dealt with in a number of months, without building up major costs to the State.
To the end of 2007, the total cost to the Exchequer of completed and sitting tribunals of inquiry and other public inquiries is €323.17 million, not including the third party costs that will emanate.
The Minister indicated a figure of €440 million in 2004. There is a major discrepancy and I am sure none of the counsels has paid a refund or returned moneys to the State. How can the figure be smaller today than what was indicated previously when a gap of four years applies?
Did the figure given by the Minister state the cost?
He stated that the cost of all inquiries, completed and current, was €440 million.
Was he not including projections for third party costs?
I will not discount that at this point. I must revisit what I have looked at.
I am excluding third party costs.
Is there an indication of what that figure might be?
An awful lot.
Pursuing the issue of costs, the lower scale of fees was announced by the then Minister for Finance, Mr. Charlie McCreevy, in the summer of 2004. He promised that they would come into effect in September 2006. In July 2006, the Government made a decision, announced in a one line statement on 13 July 2006, that the existing level of fees would continue for both the Moriarty and Mahon tribunals. What was the cost of that decision? If that decision had not been made and the lower fees had applied, how much would the State have saved in fees?
It is 40% of the costs.
It is obviously not 40% of the full €300 million.
No, it will be 40% of the fees element.
We are talking about several tens of millions of euro which resulted from a Government decision to continue with the existing level of legal fees. However, over the Christmas, a parade of Ministers made out the levels of fees paid to the tribunals had nothing to do with them when they had agreed to keep them at that level.
My next question is on the recovery of some of the moneys paid out and some of it yet to be paid out when the third party costs come to be assessed. Some time ago, the Government promised legislation on corruption and to establish an agency similar to the Criminal Assets Bureau, the purpose of which was to recover the ill-gotten gains of people who had either been paid bribes or benefited from corrupt decisions. Is it still intended to introduce this legislation? Is it intended to recover moneys from those paid bribes? Are there any plans to recover from those who benefited from corrupt decisions, such as landowners who had land rezoned as a result of a corrupt decision of a local authority? Is there any intention to introduce legislation which will recover some of the gains these people made in order to defray the considerable cost incurred by the taxpayer in the inquiries into these matters?
Two Bills on corruption are with the Department of Justice, Equality and Law Reform. One is nearly ready for publication but I am not sure of the status of the other. The Deputy will need to table a parliamentary question to the Department on that. It will be a matter, when the Bill is implemented, of what action will be taken on these matters.
It was decided in 2006 to leave the present legal teams intact so that it might bring an efficient end to the tribunals. If the legal teams were removed, it was felt some of those involved would vacate their positions and disrupt the tribunals' work. That is why the decision was made at that stage.
6 Deputy Enda Kenny asked the Taoiseach the projected cost to his Department of the implementation of the recommendations of the review body on higher remuneration in the public service; and if he will make a statement on the matter. [29745/07]
7 Deputy Eamon Gilmore asked the Taoiseach the posts within his Department, the Attorney General’s office, the Office of the Director of Public Prosecutions and the Central Statistics Office, that will qualify for the recent increases recommended by the review body on higher remuneration in the public service; the estimated cost of implementation of the increases to the personnel concerned; and if he will make a statement on the matter. [30823/07]
8 Deputy Caoimhghín Ó Caoláin asked the Taoiseach the estimated cost to his Department of the implementation of the recommendations of the review body on higher remuneration in the public service; and if he will make a statement on the matter. [30969/07]
I propose to take Questions Nos. 6 to 8, inclusive, together.
The Government decided the increases for political officeholders will be implemented on an extended basis, with 4% in September 2008 and half the balance in both September 2009 and September 2010. The officeholders concerned are myself, the Government Chief Whip, Deputy Tom Kitt, the Minister of State at the Department of the Taoiseach, Deputy Roche, and the Attorney General. The incremental costs arising are nil in 2007, €10,410 in 2008, €42,545 in 2009 and €76,493 in 2010.
The posts within my Department which have qualified for the increases recommended by the review body are those of the Secretary General, five assistant secretaries, my programme manager, two special advisers and the Government press secretary.
The posts within the Office of the Director of Public Prosecutions which qualify for the increases are the Director of Public Prosecutions, the deputy Director of Public Prosecutions, the chief prosecution solicitor and the professional officer grade II.
The posts within the Office of the Attorney General which qualify for the increases, excluding the Attorney General, are those of the Director General, the chief Parliamentary Counsel, the first Parliamentary Counsel, the deputy director general, five advisory counsels, grade I, and four Parliamentary Counsels.
In the Central Statistics Office, the Director General and two assistant director generals will qualify for the increase.
The pay increases will be implemented on a phased basis, over 18 months, as follows, 5% from 14 September 2007, the date of the report, or where the total increase is less than 5%, the full increase from that date, half the balance from 1 September 2008 and the remaining balance from 1 March 2009.
The estimated costs of implementation of the increases for the personnel concerned are set out in a table which I will circulate with the Official Report.
Approximately 1,600 public service posts are covered by the report. The level of increase varies from group to group and in several cases, no increase has been recommended.
The review body's recommendations are based on salary levels in comparable posts in the private sector. The salaries recommended are based on the lower quartile of private sector salaries and have been discounted by 15% to allow for the value of public service pensions relative to the private sector.
Neither I nor any of my Ministers has any involvement or in any way influences the workings of the review body. It has been the policy of successive Governments to accept the recommendations of this independent agency since its establishment in 1969.
Estimated costs of the implementation of the review body on higher remuneration excluding any general round increases awarded to staff during the period.
|
Name |
2007 costs |
2008 costs |
2009 costs |
|
€ |
€ |
€ |
|
|
Departmental staff |
33,477 |
114,895 |
130,096 |
|
Office of the DPP |
10,147 |
42,763 |
81,796 |
|
Attorney General's Office |
33,598 |
125,259 |
170,553 |
|
Central Statistics Office |
7,363 |
26,961 |
36,874 |
One matter that has stuck in people's craws is the method by which this recommendation has been accepted by the Government. The Economist recently produced a table showing that the Taoiseach is the highest paid Head of Government position in the western world. It is higher paid than that of the offices of the US President, the German Chancellor and the British Prime Minister. For a country with a population of 4.5 million, people are asking why the Government could take on these pay recommendations, particularly when there are concerns about the economy, loss and lack of confidence in it and pension provisions.
What positions in the private sector were those of Ministers compared to for these massive increases of €36,000 to €38,000? I admit they will not be accepted until 2010. However, how was a comparison arrived at that makes the Taoiseach the highest paid political leader in the western world and all his Ministers behind him accepting a €38,000 pay increase when workers are being asked to tighten their belts? Is it because the Cabinet has become so far removed from what is happening on the street?
The nurses had two serious issues prior to the general election concerning a percentage pay increase and a shorter working week. They were told the benchmarking process would deal with them. When they entered the benchmarking process, they were informed it could not deal with these issues.
The Taoiseach has set up a position where the next pay talks will be very controversial and difficult. Benchmarking, supposed to be the panacea for the nurses' particular problems, did not turn out that way. Despite the publicity of putting the increases aside until 2009 or whenever, the Cabinet has accepted these pay increases without any performance-related audit.
The other night on national television, the Minister of State at the Department of Health and Children, Deputy Devins, admitted he did not know how much money was allocated to the HSE for mental health care and was not in a position to get answers from it concerning this. Only recently, there was an unfortunate tragedy in which a young man was stabbed 80 times by a person who on three occasions sought and could not get admission to a psychiatric hospital. Due to a debate on a national radio programme, a person put up €100,000 for an operation for a young girl from County Cork, despite the existence of the National Treatment Purchase Fund.
What comparator was used to recommend the pay for the Taoiseach, the Tánaiste and Ministers increase by €36,000 to €38,000? Why was no performance audit built into these increases? Will the Taoiseach accept that by trying to get away with this, the next round of pay talks will be exceptionally difficult?
The Deputy made a number of points. I think I answered a lot of this in a Question Time back in November. I think Deputy Kenny knows most of the answers to the questions he has asked. There has been a review body for higher public servants, the Judiciary, the Garda Síochána and other senior positions, covering approximately 1,600 people, for the past 40 years. It used to report every five years. The last report, which was implemented, was in 1997. The Deputy's own Government made a decision to implement it. The increases were not very big. That was implemented the following year by a Government that I led. All of the increases over the 40 years have been implemented. They are phased by the Government, which is a practice that has been followed.
The same has happened in this case. The review body, which is independent of Government, examines and outlines its report. It has outlined the report. It has given the facts itself. It has outlined in detail the comparables and how they operate. The last benchmarking report was five years ago. The last report on this, was more than seven years ago. When it is implemented it will be ten years. It is double the length of the benchmarking report. That is a considerable factor. That apart, the increases recommended by the review body average 7.3%. They range from a number of posts, which receive no increase, to one post the pay of which was increased by 36%. That was the manager of Dublin City Council. For approximately half of those covered, the increase is 5.5%. They are Civil Service assistant secretaries and related posts, including university professors.
The Government decided to phase in the increases over 18 months. That was all of those increases. It decided to implement the part relating to it over a three-year period and not to pay anything until a year after the report was published. The review body's recommendations are based on comparison of the public service posts with posts in the private sector with comparable levels of duties and responsibilities. The recommendations are based on the lower quartile of the private sector rates. They have been further reduced by 15% to allow for the superior value of public service pensions relative to the private sector. Regarding members of the Government and other political officeholders, the review body considered that direct comparison with the private sector was not appropriate and that the salaries of senior public servants were a more relevant comparator.
It did not compare them with comparable posts in the private sector because it would have been too high. Any of the quartiles that were taken would have put my salary up at €600,000. I did not need that, I can tell the House.
The Taoiseach would have been in trouble then.
I would. It did not do that, thank God — and I would not have taken it. It related increases to private sector posts. In its only reference to my post, it stated that the Chief Justice should not be paid more so it put my salary at exactly the same as the Chief Justice. That was the comparable point — that the Chief Justice should not earn more or less that the Taoiseach. Whether it is right or wrong, I am just saying this is the job it did. It compared other posts. It did that independently with actuarial advice, using Hay Management Consultants.
The last review is now already ten years ago. The next review will probably end up in 2011 to come up in 2012. In fairness to the political system, it will not be a matter of concern for me then. The political system has been more than fair. The parliamentary question tabled by Deputy Mansergh showed the level of people in the private sector in the quartile that were way above this. That ran to several thousand of people. I accept there are pressures and that the November figures were not as good, which is why we put it back by a year and then phased it over three years. I do not think the Government has done anything other than take a reasonable view based on an independent report.
The implementation of previous reports was phased and this one is phased. We have never had as long a gap as the one leading up to this report — all of the others were five years and I think one was six. This one will end up being 11 years in the end. From the point of view of professional politics I do not think it is an unreasonable position. Of course on the benchmarking report, the review body stated that regarding any increase given in benchmarking for politicians, officeholders could not get the same increase. What happens then is that it is netted off. The increase given in the benchmarking report is not in addition to what was given in the review body report. Officeholders will not get that increase.
I will just make one point, which is outside what was asked in fairness to Deputy Kenny. Obviously I am deeply involved in the pay talks. It is not the case that none of the issues affecting nurses was dealt with. It looked at all the grades. There are 21 grades, 17 that were listed plus four grades, where it believed the nurses had a substantive case that justified it and they have been awarded increases under the benchmarking report.
We have had two reports on public sector pay, one by the review body on higher remuneration in the public sector covering, among others, the Taoiseach and Ministers. In his case it awarded an increase of €38,000 and in the case of some departmental secretaries it awarded increases of approximately €60,000. We have a second report for lower-paid people in the public sector, which in many cases does not award any increase at all. Is there not something fundamentally flawed and unfair in a system of pay determination, which results in those who are at the highest level of pay getting very substantial pay increases and those at the lowest level of pay getting no increase at all? Do we not have a problem of low pay? The reply to a parliamentary question tabled by Deputy Ciarán Lynch shortly before Christmas established that approximately 1.5 million taxpayers have an income of less than the €38,000 the Taoiseach will get as a pay increase.
I challenge the idea that public sector pay should be determined by reference to the private sector. What has been happening in the private sector for some time is that those at the top end of the pay scale are going into the stratosphere in pay terms. There are chief executives of corporations and companies being paid more than €1 million a year. It was recently reported that the chief executive of a bank was being paid more than €4 million a year. Surely it is not intended for the public sector to follow that model. If it follows that model those at the higher end will continue to rise and those at the bottom end will have their pay driven down. In any event no comparison of that kind can be made between those in employment where monetary reward is traded off for security of employment and those in much more exposed employment where monetary reward is much higher reflecting that insecurity. I would like to hear the Taoiseach's view on the matter because we are creating two societies — those who are very highly paid and those on low pay.
Broadly in the same vein, how does the Taoiseach respond to SIPTU, which has again pointed out that the trend within the private sector is for senior management grades to secure increases considerably above any relationship to others in middle management and all other worker levels within the private sector? Does he not accept that the broad majority of people and a growing number of people believe it is grossly inequitable and gross hypocrisy for Ministers and senior civil servants in the public sector to have their returns linked to this trend within the private sector, something that represents the greediest aspirations from within the private sector? Does the Taoiseach not recognise that there is great upset and hurt that, at the same time as seeing these recommendations regarding his own position and that of his colleagues, there are calls for pay restraint for ordinary workers? For many it is a case of limited increases not even holding with inflation rates but falling back. That is the reality for many people in employment today. I ask whether the Taoiseach is aware of this real concern. Does he not recognise that by his approach to benchmarking and the return for their worth and their labour to those in the public sector he is perpetuating an inequality and giving complementary endorsement to what is happening in the private sector?
I am not here to argue about the two systems. The review body dealing with pay for higher public servants and politicians, members of the Judiciary, those in local authorities and semi-state companies was established in 1969. No Government since then nor any of the affiliated groups has seen the need to change that. At the time people such as politicians, members of the Judiciary and senior people were considered to be managers somebody other than themselves, an outside body, was needed to examine the pay of the 1,600 people involved. The benchmarking process emanated from what was total dissatisfaction by the representatives of organised labour and of Government with the system of relativities. It was regarded as a poor system that created significant anomalies and industrial unrest. A better system was called for and the benchmarking system was invented as a result.
I remind Deputy Gilmore that his argument is precisely the argument made by Deputy Kenny against the system at the time. According to many, including Deputy Kenny who was not speaking for himself either, the first benchmarking report which was based on a comparable examination between the public and the private sectors awarded astronomical increases in the public sector, with an average increase of 9%. The increase, which ranged from 9% to 27%, was applied across all grades. It was seen as a gravy train for the public service. This time the increases have not been so large because the tightness in the labour market which was allowed for in the comparable study in 1999 was very different from that existing in 2007. The increases are smaller this time. That is a how the cookie crumbles. Those who set the rules must play the game by them.
There are two games though.
I admire the Deputy's position and I could also make that argument but they were the rules——
It is a fortune cookie.
——and the rules have not worked out as good this time as they did the last time. That is the position and if affects politicians and others. As TDs we decided to link ourselves to the principal officer grade and that does not show a 1.9% increase this time for most of the Members of the Oireachtas. That is the system that is in operation and it is considered to be a far fairer and better system.
Deputy Gilmore is correct on one point in that the top quartile in the private sector earns very large and incredible increases in pay. The Department of Finance reply to a question from Deputy Mansergh shows that several thousands of people are on enormous incomes. However, the benchmarking review body only deals with the bottom quartile, the bottom 15%, and it then discounts the pension. I do not think the body is being over-generous to the vast majority of public servants in the way it makes its calculations.
Written Answers follow Adjournment Debate.
