Dáil Éireann díospóireacht -
Wednesday, 10 Dec 2008

Vol. 670 No. 2

Leaders’ Questions.

Deputy Enda Kenny

I wish to return to the problem arising from the total recall of bacon products which has become an unmitigated disaster. Pig farmers and processors are not to blame for this crisis. It has happened because an illegal substance found its way into the human food chain from a facility licensed by the State. The Government decided on Saturday on a total recall of product. There is no back-up plan to give effect to that decision. When an emergency plan kicks in for a local authority the various State agencies know what they must do.

In this case processors are not back at work, 6,000 workers are on protective notice and housewives all over the country are faced with imported bacon from Denmark, Holland and Great Britain in retail outlets. There are no Irish bacon products on sale two weeks before Christmas. The situation is well known to the Taoiseach. He knows the scale and extent of the problem but the Government has not made a decision that would allow processors to return to work in their factories.

There were 16 hours of talk yesterday and some progress was made. I would like the Taoiseach to tell the House this morning, in the interest of housewives who want to stock up this weekend or next week, workers who are on protective notice and the dole, processors who are not the cause of this problem being able to put their plants back in operation and pig farmers whose stock is ready for entry to the processing plants what will be decided. If the Government knows the scale of the problem why has it not made a decision and given processors the opportunity to return to work, with or without European assistance?

The Taoiseach said yesterday that this was not ruled out by Europe; I understood it was. I would like the Taoiseach to tell us the consequence of the plan he has put in place and what decision has been made on allowing processors back to work, bringing the industry back into operation and allowing Irish products to be on Irish and foreign shelves this weekend.

Deputy Pádraic McCormack

Hear, hear.

The Taoiseach

Discussions between the Government and the Irish pig processing sector adjourned early this morning and resumed at 10 o'clock this morning. Progress was made during the discussion and I remain confident of achieving an outcome which will facilitate the early resumption of processing. There is no lack of urgency on the part of the Government; it is acutely aware of the impact the suspension of slaughtering has had on hundreds of producers throughout the country and thousands of workers whose jobs have been compromised by recent events.

The Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, is centrally involved in the discussions and I am available at all times to assist in every way I can. Everyone has an interest in the resumption of slaughtering. Producers have thousands of animals ready for slaughter this week and processors have domestic and international markets to fill. The Government wants to see this significant sector operating at full capacity and the thousands of jobs in the sector secured.

The discussions have considered a number of possible approaches to provide support for the sector. The involvement of the Minister and I is a clear indication of the Government's commitment to achieving a solution and is recognition of the value of the sector. We are conscious of the importance of the pig sector to the Irish agrifood industry and its contribution to the wider economy. Our priority is for processing to resume as a matter of urgency. If agreement on an aid package is reached slaughtering could recommence shortly thereafter.

The European Food Safety Authority is preparing its scientific assessment of the risks to human health of the possible presence of dioxins in pigmeat and pigmeat products from Ireland. It will also evaluate any risks posed by the presence of contaminated pigmeat products from Ireland in composite foods. We expect this assessment to be published today. It will provide a great degree of clarity on the secondary processing sector. The question of liabilities arising there is something that is central to what we are trying to achieve in the urgent ongoing discussions.

Deputy Pádraic McCormack

They are fine words. What does the Taoiseach think himself?

Deputy Enda Kenny

That does not——

Deputy Pádraic McCormack

It should have been given to one of the Taoiseach's juniors to be read out.

Deputy Dermot Ahern

God help Ireland if they were in power.

Deputy Enda Kenny

I welcome the announcement that there will be a report from Europe today on secondary processing. The Taoiseach's response does not deal with the primary problem. He pressed the crisis button, decided on a total recall and has no plan to back it up. Can he tell the arrangements for the transport of product in retail outlets and supermarkets? What are the transport arrangements for product from processors? What are the arrangements for rendering this product? What transport and rendering arrangements have been made for products in retail outlets and processing units abroad? What decision has been made about organic pig producers who never use meal and are entirely separate from this?

If money is a problem — I understand there is a gap in the discussions between the Department of Agriculture, Fisheries and Food and the Government — they know what the problem is. Money will be received from Europe or it will not; it has no legal basis. There was no assistance given in the Belgian case a number of years ago. Whether that applies or not the system has ground to a halt because processors are unable to process product. That can only be started if they deal with the financial pressure caused by disposal, rendition, cost, transport and the opportunity to get back to work. There are 6,000 people employed in the processing industry, 2,000 of whom are on protective notice or on the dole. Housewives all over the country want to buy Irish produce, but every supermarket contains only Danish, Dutch and British bacon for sale. Sows will not wait because nature takes its course, so they have got to get into these processing plants.

What decision has the Government made on the big picture? I do not want us to get locked down on details. The Government should have been able to press a crisis button on Saturday and have a clear plan to deal with the consequences. That is not happening, following 16 hours of talks last night. I hope that this is sorted out by lunchtime today. If the Taoiseach and his Ministers want to see this production line in operation, then he should make the decision to ensure that it happens. He has the authority, the opportunity and the scope to do that, whether or not he gets any assistance from Europe. This crisis erupted because an illegal product found its way into the human food chain from a facility licensed by this State. The problem was not caused by farmers, processors or consumers. These groups want to see the production of high quality products, of which we have always been proud. However, the Government is responsible for the current delays in the system, under the polluter pays principle. We need to have that rectified and the Government is the agent in place to do that.

Will the Taoiseach instruct the Minister for Agriculture, Fisheries and Food to set out the Government's overriding ambition? We want to see processing plants operating to full capacity. If the Minister so directs, that can happen today and those workers on protective notice can get back to work. Hundreds of thousands of consumers can then buy Irish pork products and An Bord Bia can lay out its strategy for the restoration of consumer confidence in this product at home and abroad. The Taoiseach needs to take decisive action quickly.

Deputies

Hear, hear.

The Taoiseach

We took the decisive action over the weekend. If his position is that we should have taken into account commercial considerations at the same time as dealing with the primacy of the consumer issue——

Deputy Enda Kenny

I did not say that.

An Ceann Comhairle

Let the Taoiseach finish, without interruption.

The Taoiseach

If that is his position, then he has changed his position.

(Interruptions).

Deputy Enda Kenny

That was my position yesterday. I accept the evidence of health experts.

The Taoiseach

If the Deputy did, then——-

An Ceann Comhairle

This is completely contrary to standing orders. The Taoiseach must be allowed to reply.

The Taoiseach

If that is the Deputy's re-established position this morning upon inquiry, then clearly the action that had to be taken was precisely the action that was taken. The consequences that arise from that is the issue with which we are now contending.

Deputy Michael Creed

Then deal with it.

The Taoiseach

We are dealing with it. In dealing with it, the question is about getting the processing industry and those who supply it back into production. It also raises the responsibility we have to assist that process in a way which ensures that the taxpayer is asked to make a contribution that is commensurate to what we can achieve, without leaving the taxpayer open to contingent liability. That is the responsibility of the Government. If it were simply a matter of instructing people to go back into production, that would have happened before now. We are determined to work with the processing industry to find a solution that is consistent with all of those legitimate requirements.

The European Union issue is something I have raised in respect of aids to private storage. I had a telephone conversation with the President of the European Commission this morning at 7.30 a.m., while the Minister has spoken to Commissioner Fischer Boel, and we have outlined the extent of the issue that is facing this sector of the economy and explained the need for the Commission to see in what way it can assist. The Commission will obviously continue to investigate that matter. That in no way takes away from the work this Government is doing to make sure we try to get this matter resolved as quickly as possible. Yesterday evening, last night and again this morning, we have seen very detailed discussions taking place, dealing with all of the issues mentioned——

Deputy Enda Kenny

I thank the Taoiseach.

The Taoiseach

——and how the logistics of this can work. We are doing it without the Deputy's prior advice.

(Interruptions).

Deputy Dinny McGinley

The Government should be ashamed. It has the country bankrupt.

An Ceann Comhairle

Let the Taoiseach finish.

Deputy Noel J. Coonan

The Taoiseach should look behind him, his backbenchers are not impressed.

The Taoiseach

In regard to a key matter raised by the Deputy, it is open to the local authority veterinary service and the departmental veterinary service in respect of any producers or processors of meat in the organic or other sector to have the source of their supply certified and product available and marketable for sale at any time, and that is ongoing.

A Deputy

What about the jobs in Edenderry?

Deputy Michael Ring

Another fine mess the Government has got us into.

Deputy Mary Coughlan

Some day the Deputy will believe himself.

Deputy Michael Ring

It will not be long now. The Tánaiste and her colleagues should enjoy it over there, because they will not be back in the Dáil the next time. The people are waiting for them.

Deputy Michael P. Kitt

The Deputy will be in Europe by then.

An Ceann Comhairle

Side bar discussions are not allowed on Leaders' Questions. I call Deputy Gilmore, without interruption.

Deputy Eamon Gilmore

Last Monday, 37 cases were brought by banks and building societies for the repossession of homes. If there were 37 cases before the courts, it is fair to assume that several hundred homes have been repossessed without having to go to court. Meanwhile, the Department of the Environment, Heritage and Local Government published a report yesterday showing that the number of people on council housing waiting lists has increased by 30% to 60,000. This increase occurred in the three years up until March 2008, which is the time before the major job losses occurred. These were the three best years for house building in Ireland, when one would have expected a significant return of houses under Part V of the Planning and Development Act 2000.

This is probably the biggest social ticking time bomb in this country. If 2008 was the year that saw 100,000 people lose their jobs, then 2009 is shaping up to be the year when people's homes are repossessed. There is already evidence of cases being brought by building societies to put people out of their homes. It does not have to be like that. There are ways in which arrangements can be made so that for the duration of the recession, people can at least stay in their own homes. The biggest fear people have — bigger than the fear of losing their jobs — is of losing their homes. It is crazy.

Banks and building societies are repossessing homes they cannot sell in this market. If a bank manages to sell a house, it will not recoup the amount of money the house was bought for. When a house is repossessed, the family concerned ends up on a council housing list. It will have to be allocated a house by a local authority at some stage, or paid rent allowance to rent a home somewhere else.

Will the Government come up with an approach to ensure that people can continue to live in their own homes while they are getting through the two, three or four difficult years that are ahead of us? Those whose homes are being repossessed now will be back on their feet again within a couple of years. All that is required is an arrangement whereby one's mortgage can be suspended and rent allowance can be applied to the home one is living in. Perhaps the rules of the mortgage interest subsidy scheme, which have not been changed for some time, can be revisited. It may be possible to apply shared equity through local authorities. Arrangements need to be put in place, through the State or lending agencies, to assure people that they can stay living in their own homes. It looks likely that a slew of people will be taken to court in 2009 to have their homes repossessed. We need to ensure that people are not put out of their homes, as that would require the State to pay them to live somewhere else, in effect.

The Taoiseach

The Government is proactively seeking to safeguard the interests of households that are experiencing difficulties in making mortgage payments as a result of circumstances beyond their control. Our priority is to ensure, as much as possible, that mortgage arrears do not result in legal proceedings seeking home repossession. The Government has insisted that banks participating in the guarantee scheme confirm their compliance with the Irish Banking Federation's code of practice on mortgage arrears. That detailed and robust code has been operated successfully by banks in Ireland since 2000 on a voluntary basis. The primary purpose of the code is to take every possible step to avoid recourse to repossession proceedings. The code states clearly that in normal circumstances, the lender will not seek repossession of a property until every reasonable step to agree an alternative repayment schedule has been exhausted.

The Deputy spoke about the need to modify repayment schedules to meet new circumstances. I remind him that approximately 7,000 people avail of the mortgage interest supplement scheme. Some 70,000 people are catered for under the rent supplement scheme. The banks are bound by the federation's code of practice, which I have mentioned. Approximately 50 houses were repossessed by mainstream lenders in 2007. More recent statistics on court proceedings involving house repossessions indicate, as the Deputy suggested, that there has been an increase in the number of repossession applications to the courts. Most applications are being made by sub-prime lenders, rather than mainstream banks that have adopted the code of practice on mortgage arrears.

I am concerned about the extent to which some non-mainstream lenders are having recourse to the courts and seeking orders for house repossessions. It is important for the Financial Regulator to urgently explore with such lenders, in the context of the implementation of the requirements of the consumer protection code, the steps that are needed to minimise court interventions that are ultimately not in the interests of lenders or borrowers. There is a strong case for extending the code of practice on mortgage arrears to the small number of mortgage lenders that are not subject to it at present. I will ask the Minister of State with responsibility for housing to take that matter up as a matter of urgency. The Money Advice and Budgeting Service, which has 53 local offices, continues to advise and work with clients on the restructuring of payments. That local resource is open to everyone. I have made the points I wanted to make in response to Deputy Gilmore's question about the repossession schedule.

Deputy Eamon Gilmore

With respect, the Taoiseach has given us a commentary on what is happening. The codes of practice to which the Taoiseach referred were drawn up during normal times. These are not normal times. Many people have lost their jobs over the last year. Many more people are facing the prospect of losing their jobs or their businesses. They are stuck with mortgages that, in many cases, they cannot afford to pay. The mortgage subsidy scheme needs to be updated. Under the present rules, if one half of a couple is working 30 hours a week, and possibly earning a very low income, the couple is not entitled to the mortgage subsidy. That needs to be revised. There is a certain irony in the Taoiseach's suggestion that people go to the 53 Money Advice and Budgeting Service offices throughout the country. Does he not recall the announcement by the Minister for Finance on budget day that the service is to be absorbed into the community information centres? The Government has decided to rationalise an agency that needs to be accessed by people who are in trouble.

Deputy Mary Hanafin

Absolutely not.

Deputy Eamon Gilmore

The Government has decided to emasculate the service.

Deputy Mary Hanafin

The Deputy is completely wrong.

Deputy Eamon Gilmore

I am not asking the Taoiseach to ask the banks and building societies to change their codes of practice. On behalf of the Government, he should take action. A scheme to give families a guarantee that they will not lose their homes needs to be brought before the House by the Minister of State with responsibility for housing, the Minister for the Environment, Heritage and Local Government or the Minister for Social and Family Affairs. There is no point in telling families that they should take their chances in court. Such people often end up spending more money on legal fees, to defend court actions for repossession being taken against them by building societies like Start Mortgages, than the amount of the arrears on their mortgages. This real problem is beginning to surface in the courts. There is evidence to suggest that many of these cases are backing up. We will see many more of them in 2009.

The Government should not be required next year to take emergency action to deal with this problem, which is staring it in the face. It can take action now to prevent the pain that families would have to endure if attempts were made to repossess their homes in 2009. The Government should change its housing policies, the mortgage subsidy arrangements and the rent allowance regime. It should enter into an arrangement with the banks, to which it has provided a guarantee, to ensure that the mortgages of people who find themselves in trouble can be suspended for two or three years while such people get back on their feet. Such an arrangement would make economic sense for the State, the lending agencies and the families concerned. The Government should take action now. Contrary to what the Taoiseach appears to be suggesting, it is not merely a question of encouraging the lending agencies and pointing those who are in trouble in the direction of the offices of the Money Advice and Budgeting Service. Many such offices are likely to be closed some time next year anyway.

The Taoiseach

The Deputy was making some good points, but he concluded with a facetious comment. The fact is that the common management of the Money Advice and Budgeting Service will remain in place. Front line services will not be affected in any way. I did not suggest that the service represents a panacea in this instance. It is important to make people aware that an objective service is available to help them. My own knowledge of these matters indicates that many people are being assisted by the service on a daily basis. People in certain circumstances are getting very good mortgage deals with lending institutions. The Deputy should not be facetious. The service has a role to play. It is playing that role. It does not cover all of the issues. As a local resource, it is providing practical answers to people in an accessible and speedy way.

I have indicated that the Financial Regulator has been instructed to consider whether the consumer protection code, which has been in place since 2000, can be extended to lenders in the sub-prime sector who are going to the courts to seek repossession orders as a first resort, rather than as a last resort. It is clear that when insecurity arises in respect of people's job prospects, they discuss such matters with banks at their own initiative. Banks are having to make suitable arrangements to ensure people can repay their mortgages. As I have said, the Minister of State with responsibility for housing is examining all issues to determine how the Government, in addition to offering the protections that are already in place, can be of assistance in this regard.

On changing housing policies, the Minister of State with responsibility for housing has been quite innovative in trying to increase the options available for those who wish to access social and affordable housing. Regarding building, I understand 14,500 households in need of social housing had their needs met last year alone, which is important. I also recognise that up to 45% of those on waiting lists are single-adult households. There are also people from our immigrant community who require housing, which is a new factor and component behind the growth in some of these categories.

Despite the difficulties in the finances, more than €1.5 billion of Exchequer funding is being provided this year to ensure that we support social housing activity in 2008, which will provide more than 9,000 new dwellings in the course of this year. The Minister of State with responsibility for housing has also introduced changes to roll out further the rental accommodation scheme, meeting the needs of households currently in receipt of long-term rent supplement under the supplementary welfare allowance scheme. He has been very proactive with homeless groups in trying to deal with the long waiting lists in that area through a far better interaction between the Department of the Environment, Heritage and Local Government and local authorities in getting people into homes. I believe the initiative he will start at the beginning of next year will produce some important results in that area. He has also provided for a long-term leasing arrangement for local authorities, whereby vacant houses on the market at present can be obtained by local authorities and provided for long-term lease.

Deputy Emmet Stagg

That is what happens if they lose the house. I am asking what the Government will do to stop them losing the house.

An Ceann Comhairle

Allow the Taoiseach to finish.

The Taoiseach

The Deputy should check the record of the House. Deputy Gilmore inquired about the rise in the waiting list for social housing. In his supplementary question he also asked me to indicate what changes in housing policy we are making to adjust to these new realities. I am simply pointing out what those are.

Deputy Eamon Gilmore

Those are not changes. It is as you are.

The Taoiseach

It is not as you are. The new incremental purchase scheme has also been introduced, which works with the Affordable Homes Partnership and others, who have made some very good proposals on shared equity to ensure that people who are in rental accommodation at present could get onto the ownership ladder in accordance with and as appropriate to their own particular needs.

Deputy Kathleen Lynch

The Government is pulling out the plug instead of turning off the tap.

The Taoiseach

Under the development plan over the next seven years we intend to meet the needs of some 100,000 households in all of these categories. Housing remains a priority of our capital investment programme. I believe €1.5 billion this year and commensurate money next year is an indication of our determination in not only working with the industry, but also bringing about certain changes in how schemes operate, to provide the greatest level of choice so that social housing is not just a question of waiting lists for local authority builds, but is also using the capacity in the private sector through these schemes for people on social and affordable housing lists to access homes more quickly than would otherwise be the case.