The absence of Fianna Fáil Members on the backbenches——
There are only two of them left.
——speaks more eloquently than any testament I might give to the consequences of the reshuffle of the new Cabinet announced yesterday.
I wish Minister Tim and Minister Pat the best as they move to the table with added responsibilities.
It seems as if queues have become an essential part of life in Ireland today, be it queues for passports, queues to emigrate or queues to get into accident and emergency departments throughout the country. The only place it seems no queue is necessary is to get approval from the Department of Finance for pay increases in certain sections of banking and NAMA.
The Irish people have had enough. Some 800,000 people in the public and the private sector have taken serious pay cuts and some 200,000 people have lost their jobs. This morning Anglo Irish Bank announced that it is to give pay increases to its staff both here and in Great Britain. It said these staff are to be paid extra money because of extra responsibilities arising from redundancies. This cannot be justified.
It goes to the very heart of the lack of fairness in this society in Ireland today under Deputy Cowen's disastrous reign as Taoiseach with his Government. It goes to the very heart of that unfairness and it cannot be justified. We cannot expect the Irish people to accept that the only sections that can get pay increases now are either those involved in NAMA or those involved in this bank, which is to be rescued again at an inordinate price when it brings in its disastrous results next week. What the Taoiseach has done is to link these pay increases to a defective policy towards Anglo Irish Bank where the Irish public will be expected to bail them out again to the extent of possibly €20 billion. I ask the Taoiseach to justify in detail the reason he and his Government sanctioned wage increases for staff members in Anglo Irish Bank?
The issues the Deputy raises do not come up for sanction from Government.
It is a State bank.
The former leader——
These matters do not come up for sanction from the Government, as the Deputy knows or should know.
On the particular issue, the chairman of the bank in question outlined this morning precisely the position. There has been a reduction in numbers, extra responsibilities have been assigned to certain staff and there is a totally new management team in place. The board has the Government's confidence in seeking to de-risk the bank and it is important that there are people in situ who can do that. The chairman of the bank set out what was the position in relation to the matters raised.
Does the Taoiseach agree with him?
With respect, the Taoiseach is wrong. Section 50 of Statutory Instrument 411 of 2008 under the Credit Institutions (Financial Support) Scheme 2008 states:
A covered institution shall manage the business of its group at all times with a view to furthering the purposes of this Scheme and the Act of 2008. . . . . the Minister may require certain obligations of this Scheme, as he or she may specify in writing to the covered institution, to apply to the parent of a covered institution or any member of its group as a condition of benefiting from this Scheme.
The Government took specific powers to deal with wages in respect of higher levels in the covered institutions. Under this statutory instrument, which is part of the Bill passed by the House, the Minister took the authority to indicate in writing to a covered institution that if the scheme is being brought into disrepute, he can, in writing, instruct the covered institution in question to obtain and maintain certain obligations. I charge that under section 50 of the Bill, which went through the House and gave the Government authority to deal with the banks, the Minister for Finance is entitled to instruct Anglo Irish Bank, in writing as per this section, that these wage increases, which cannot be and are not justified, should not be paid. This is not the time to acknowledge increased responsibility with cash. This matter goes to the very heart of what is unfair in this country under the Taoiseach's style of government.
I charge that, under section 50 of the statutory instrument, where this scheme is being brought into disrepute in the eyes of members of the public the Taoiseach can instruct his Minister for Finance to require adherence to certain obligations. No wage increase should be paid in circumstances in which a defective policy will result in the Government asking the public to write a cheque the Taoiseach stated would be written irrespective of the size of the sum involved. Section 50 gives the Government authority and power in this matter and I ask the Taoiseach to use it. Wage increases in Anglo Irish Bank cannot be justified, are not justified and will not be justified by Irish people.
Anglo Irish Bank is being run at arm's length by the new management team and board. This is in line with best practice. A relationship framework is set out regarding what the Minister is responsible for and not responsible for in relation to the bank. In the area of remuneration the Minister approves any changes to general remuneration, the pay of senior management and fees to directors. As the staff affected by this decision are not senior management, decisions on their pay levels are a matter for management in the bank. Just as the Minister does not set the pay levels for a——
The Taoiseach should show leadership.
Just as the Minister does not set——
Please allow the Taoiseach to continue without interruption.
I will try one more time. Just as the Minister does not set pay levels for a substation chief in the ESB, neither does he set pay levels for a person who is in charge of information technology in a bank. That is in line with best practice.
The ESB is paying its way.
The board and management of the bank have a serious job of work to do. They are getting on with that job and seeking to de-risk the bank. We need people in the bank to do the job. The chairman set out in detail this morning what are the circumstances in relation to these matters. The relationship framework sets out the position.
Does the Taoiseach agree with the chairman?
The Minister's powers in this matter are set out in the statutory instrument.
The Taoiseach should be a leader.
No substation manager in the ESB is responsible for the collapse of the Irish economy, nor is the ESB responsible for the collapse of Irish banking. Anglo Irish Bank was at the heart of what went wrong in Irish banking and the economy and we ended up with the State having to take ownership of the bank.
I was surprised to learn yesterday that 70 staff in Anglo Irish Bank had received a pay increase. How much of a pay increase did they receive? I presume that since this matter became knowledge yesterday some inquiries have been made of a bank that is owned by the State as to what level of increase was granted.
Even if there was never a provision in the banking legislation to allow the Government to take action on this matter — there is such provision — does the Government not have a policy on pay in what is broadly described as the commercial State sector and, if so, does this policy not apply to Anglo Irish Bank, as it presumably applies to every other State body? What is the Government's position on the making of pay increases in Anglo Irish Bank.
With regard to the financial results of Anglo Irish Bank, the report for the 15 month period ending December 2009 was expected at the beginning of March 2010 but has not yet been produced. When will it be produced? Since the State owns the bank, will the Taoiseach indicate, at least in ball park figures, what is the extent of the losses incurred by the bank for the 15 month period in question? According to newspaper reports, the bank lost €14 billion in the period and we are informed its losses will be the highest ever reported by an Irish company. Will the Taoiseach confirm that the figure of €14 billion is the extent of the losses? If they are even remotely in that territory, will he try to explain how a company incurring losses of that magnitude can give an increase in pay to its staff?
It is best practice.
Will the Taoiseach give some indication as to how much further Irish taxpayers will be asked to dig into their pockets and how much more they will pay over to a bank which has apparently decided to give a pay increase to its staff?
On the issues related to the annual report, it will be a matter for the bank to publish the report in due course. As the Deputy stated, the report is imminent. On that matter, the Minister for Finance has indicated he will come to the House with a full indication of Government policy on any decisions that have to be made and recapitalisation proposals that have to be considered in due course.
As I stated to Deputy Kenny, the pay increases are a management matter. The bank has a totally new management team and board.
Losses of €14 billion have nothing to do with the Government.
As I stated, extra responsibilities have been given to some specialist staff in the bank. I do not have the details of that, which is a matter for the management and board of the bank. The issue, from the Government's point of view, is that in respect of what emerges as a result of what has happened in the bank, we want to ensure the taxpayer is protected to the greatest possible extent.
Is the taxpayer protected?
That is the whole focus of the management and board of the bank. The board enjoys the confidence of the Government in seeking to do this serious task and the chairman set out the position this morning.
That is an incredible reply. I asked for simple information, namely, how much are the pay increases, how much losses Anglo Irish Bank has made, even in ball park terms, and how much more will we be asked to put into the bank. The Taoiseach indicated that we will be given this information in due course and that pay and other issues related to the bank are matters for its management and board as if this were some perfectly functioning, prosperous, profitable company doing its business. This is the zombie bank, the rotten apple at the heart of what happened in the Irish banking system, which gave rise to the collapse in our economy, for which people all over the country have been paying for the past 18 months with their jobs, in their pay packets and living standards and in the quality of services being produced. This is not a matter for the management and board of the bank. This is a matter for the Government because it owns the bank.
The Taoiseach is head of the Government that now owns a bank which, having apparently made €14 billion losses in the past 15 months, has just announced it has given a pay increase to some of its staff. The Taoiseach cannot tell us the size of the pay increase and will not tell us the size of the losses, yet he comes into the Chamber and tells us that this has nothing to do with anything, it is a bank and, therefore, is a matter for the management and the board. This is of public interest.
I can refer to another provision so that the Taoiseach can do something about this, namely, the legislation that nationalised Anglo Irish Bank. The Anglo Irish Bank Corporation Act 2009 states the Minister may give a direction in writing to Anglo Irish Bank, requiring it to do, or refrain from doing, anything which, in the opinion of the Minister, is necessary or expedient in the public interest. Will the Taoiseach ask the Minister for Finance today to give a direction to this bank to refrain from paying these increases until we find out officially how much this bank has lost in the past 15 months and how much more of the taxpayers' hard earned money it will come back to look for and at least until the matter can be considered in the normal way? It is very easy to say it is a matter for the management and the board. The management and the board are not putting up the pony here. It is the taxpayer who is putting up the money for the losses and the extra pay. The Act that allowed the nationalisation of Anglo Irish Bank gives the Minister for Finance the power to give a direction in this situation.
I have a direct question for the Taoiseach. Will the Minister for Finance today give a direction to the bank not to proceed with those pay increases until, at the very least, we find out the full story about this rotten bank and the extent to which the taxpayer must pony up for it?
The Deputy is being very unfair to both the new management team and the new board in the bank who are acting on behalf of the taxpayer.
We own the bank.
May we hear the Taoiseach speak, without interruption?
We are acting on behalf of the Government and the taxpayer to ensure we seek to protect to the greatest possible extent the interests of the taxpayer in respect of how this bank has been downsized.
Deputy Joan Burton How do we know that?
That is the situation. The question here, as outlined by the chairman today, is that a small number of people have been given additional responsibilities, as a result of the present downsizing of the bank's staff by more than one seventh, in order to do the necessary work to ensure this operation discharges its responsibilities to the taxpayer.
Will the Taoiseach tell us what is so important about these people?
That is what is going on. If the Deputy is asking me whether we are going to have a situation whereby we express no confidence in the new board and management, that would be a recipe for chaos. I must ensure they get on with the day to day management of the bank.
How much is the increase?
Deputy Durkan, please.
They have explained there are 70 people in that organisation who are taking on additional responsibilities and they must get on with that operational job. What we must and will do, and what the Minister for Finance will do, is to come into the Chamber to explain exactly how we will restructure the banking system, including this bank, so that we can have a proper functioning banking system and deal with all the issues that people complain about, such as the provision of sufficient credit in this economy. That is the job we have to do.
The bank is not doing any business.