Priority Questions

Aviation Issues

Timmy Dooley


57. Deputy Timmy Dooley asked the Minister for Transport, Tourism and Sport the actions he has taken in relation to the allegations aired on Channel 4's "Dispatches" programme entitled "Ryanair: Secrets from the Cockpit". [41061/13]

The Deputy's question refers to allegations made in a Channel 4 programme on aviation safety. Aviation safety is overseen by the Irish Aviation Authority, IAA, a statutory body under the remit of my Department.  The IAA operates on the basis of EU regulations and is audited by both the European Aviation Safety Agency and the International Civil Aviation Organisation.  These audits ensure the IAA operates to the highest standards.

The IAA has confirmed that Ryanair, which is the airline against which the allegations were made, fully complies with all European and international regulations in all its areas of operations.  The authority has also stated that the safety record of the airline is on a par with the best in Europe and has issued a detailed rebuttal of the allegations made in the programme. Given the statutory responsibility of the IAA, it would not be appropriate for me to comment in detail on these allegations, except to say that I am satisfied they have been comprehensively addressed by the authority.  I will refer the Deputy's question to the IAA so that it can respond in more detail.

The Minister's reply does not adequately address the concerns arising from the allegations set out in this programme. Where any question is raised in regard to passenger safety there will inevitably be concern. Another cause for concern is the potential reputational damage to the airline in question as a result of the charges made against it.

I assumed the Minister would have initiated some type of action, as deemed appropriate by him, in order to ascertain whether there is, in fact, an issue in regard to passenger safety. The Minister, however, has indicated that he is taking the word of the Irish Aviation Authority on this point, which I accept.

Notwithstanding that, there is a role for the Minister in ensuring the publicity generated as a result of the allegations is not allowed to damage the reputation of the airline. This relates not only to the economic impact on the airline and the benefits that accrue to the State but the potential impact on tourism. I thought the Minister would take a more aggressive approach to dealing with the allegations in the programme.

I saw the programme and I understand the point the Deputy is making and his concerns. The Oireachtas has conferred on the IAA the job of being the safety regulator and it does the job very well. I am fully satisfied with the job the IAA is doing. It is audited by International Air Transport Association, IATA, and the International Civil Aviation Organisation, ICAO, so we know that the European and international safety bodies have audited the IAA and are happy with the job it is doing.

The specific allegations were that the Ryanair planes had inadequate fuel to complete flights safely. These instances were investigated by the IAA with the co-operation of the Spanish authorities. The investigations concluded the Ryanair planes had complied with the strict IATA fuel regulations and that the allegations were baseless. After the television programme aired, the IAA issued a press release on 15 August stating that Ryanair's fuel policy complied with European regulations. Ryanair has also issued court proceedings against the makers of the programme and against other media outlets and has secured the withdrawal of claims made by one of the outlets in the High Court in Belfast.

The Minister is not putting anything new into the public domain. The question I asked was what actions the Minister had taken, not what the IAA had done. I am satisfied with the actions and the approach of the IAA. Has the Minister met or sought to meet the IAA as a result of the allegations made? They are extremely serious allegations. If they are proven untrue, there is potential reputational damage to one of the most important companies in the State. This is not just because of the economic activity it generates within the State but the important role it plays as a connectivity provider and as a driver of tourism in the State. I thought it would be within the grasp of the Minister to recognise that and take appropriate action to protect the interests of the State in that regard.

I meet regularly with the CEO and the chairman of the IAA. I have done so on three occasions in the past three months. Aviation safety is always on the agenda, not only in respect of Ryanair but also other airlines. We certainly discussed this matter and I am satisfied that the IAA has carried out investigations and that the allegations are without foundation. I am also satisfied that the IAA does its job very well, as confirmed by IATA and ICAO. I see no reason to protest too much. We have nothing to hide and the allegations have been investigated and are without foundation. International bodies that audit the IAA are satisfied it does its job well enough for me to be confident that what it says to me is correct.

VAT Rate Increases

Sandra McLellan


58. Deputy Sandra McLellan asked the Minister for Transport, Tourism and Sport the potential ramifications for the tourism and hospitality sector of an increase in VAT above the current 9% tax rate; if his attention has been drawn to the potential that this would have for job losses; if he has engaged with the tourism industry regarding same; and if he has had any discussions with the Department of Finance regarding the VAT rate and retaining it at its current level. [41172/13]

This question is about the VAT rate for the tourism and hospitality sector. I am very conscious that the tourism and hospitality industry would like to see the 9% rate continue throughout 2014 and beyond. I am supportive of retaining a reduced rate but I am conscious that this can only be justified on the basis of clear evidence of the impact of the reduction and in light of the overall budgetary position.

In that regard, the Minister, Deputy Varadkar, and I have been in touch with the Minister for Finance, who is responsible for taxation policy, advising him of the benefits that we believe have accrued as a result of the initiative and advising him that, in our opinion, there are very strong economic grounds for maintaining the 9% rate. Our officials have since met with the Department of Finance, as recently as last week, to point out the positive outcomes from the initiative and to make a case for the maintenance of this reduced rate. That said, I am conscious that proposals to maintain the 9% rate will have to be considered in the context of the challenges presented by the forthcoming budget.

There is major concern in the tourism and hospitality sector at the prospect of VAT rates being increased from the current 9% to 13.5%, a substantial increase. I have been lobbied, as has the Minister of State, by the tourism and hospitality sectors in this regard. They make a good case.

It is the view of Retail Excellence Ireland that far from raising revenue, reversion to the higher rate of tax will cost the Exchequer some €173 million and perhaps as much as 13,500 jobs. Has the Minister of State, Deputy Ring, met many of the tourism and hospitality bodies and can he outline the nature of these discussions? I am glad he stated that he has met the Minister and outlined the case to him because Deputy Ring was keen earlier on in government to emphasise the importance of the reduction to the 9% rate.

According to a recent report, the change in VAT has cost the State €88 million in net VAT receipts. However, according to the Department of Finance assessment of the success of the intervention, the employment gain equates to €261 million in increased Exchequer employment taxation receipts and social welfare savings.

I am sorry, I must call the Minister.

I will just conclude. When the VAT receipts reduction is deducted from the employment gains, the net impact to the Exchequer is a benefit of €173 million annually. Does the Minister of State accept these figures?

First, I take this opportunity to compliment the Minister for Finance, Deputy Noonan, who two years ago was brave enough to reduce the VAT rate, from 13.5% to 9%. People forget that in those very serious economic times he had the vision and foresight to do so.

I hear people talking and I have met the hospitality sector. I have met the publicans and the hoteliers and, of course, they all want the VAT rate to be left at 9%. I have full confidence in Deputy Noonan. He will do right by this sector. He did so in the past. As I stated, the rate came down, from 13.5% to 9%, when people were only looking for a rate of 11% or 12%. I compliment him on that. From that, we have created more than 10,000 new jobs. I would be hopeful that Deputy Noonan will be in a position to leave it at 9%, but that is a matter for himself.

I thank the Minister of State for his answer. I understand he is favourably disposed to the need for the lower rate to be maintained but I hope for the sake of the tourism sector that he will be able to attempt to persuade the Minister that this should be the case.

Deputy Noonan is a good Minister. He is one who knows what is happening on the ground. He certainly responded in the past when the circumstances were even more difficult and I hope he will do the same again. Since then, Germany, France and Switzerland have reduced their VAT rate because they see how important tourism is to the economy and the country. The fact that the sector could create 10,000 jobs has proven that this has worked.

On what the Minister has done, there was a cut, we believe, of approximately €170 million rather than of the higher amount, and Deputy McLellan is quite correct in saying so. We also made a €50 million saving in social welfare where the unemployed came off the social welfare system and got jobs in the hospitality sector.

Deputy Noonan will do right by the country. I have full confidence in him. I had confidence in him when he went to Europe and got the deal for us and no doubt he will deliver on this one.

Appointments to State Boards

Richard Boyd Barrett


59. Deputy Richard Boyd Barrett asked the Minister for Transport, Tourism and Sport the position regarding the selection of the chairperson for Dún Laoghaire Harbour Company; the procedures followed and criterion applied for the nomination and selection process; his role in this process; and if he will make a statement on the matter. [41173/13]

The question is about the selection of a chairperson for the Dún Laoghaire Harbour Company.

The Harbours Act 1996 requires a statutory consultation before appointments are made to the port company boards.

On the appointment of the current chairperson, Mrs. Eithne Scott Lennon, I brought a memorandum to Government on this in July. Following Government approval, the chairperson designate was required to appear before the Joint Oireachtas Committee on Transport and Communications prior to the appointment being confirmed.

As the Deputy will be aware, requiring newly nominated chairpersons to appear before the relevant Oireachtas committee is in line with broader Government reform proposals in the area of State board appointments and Dáil reform. More than a dozen chairpersons under my Department's remit have appeared before the joint committee prior to their appointment. This, I believe, provides an excellent opportunity for the individuals in question to set forward their vision for the job and allows Members of the Oireachtas to raise any particular issues or concerns they may have before the appointment is formalised.

Other initiatives in this area include a public invitation for expressions of interest in serving on State boards. Furthermore, on the appointment of board members, including chairpersons, to the individual port companies, I issue them with a letter of mandate setting out the issues and priorities that they should have regard to in carrying out their functions subject to their fiduciary duties under the Companies Act.

Mrs. Eithne Scott Lennon appeared before the committee on 18 September last and I subsequently appointed her for a five-year period as chairperson of Dún Laoghaire Harbour Company on 24 September.

I have raised the issue of Dún Laoghaire Harbour Company on umpteen occasions with the Minister and I pointed out to him that there is nothing short of blue murder between the management and the employees.

Several employees are under disciplinary procedures as they are in dispute with the company over contracts. Some of them have written to the Minister looking for determinations on their contracts and they are still waiting for them. There are serious questions about, for example, the more than €40,000 in expenses paid to a former company director which was supposed to be returned. It is not known whether that money was returned. I refer to very serious questions about the €20,000 extra being paid in some sort of payment to the chief executive officer, with very spurious explanations from the company as to the reasons for the payment and the justification for it. The pension fund has significant problems and there are serious questions about the future of the harbour. Against that background and without wishing to cast aspersions about the individual concerned, does the Minister really think it is right and appropriate that an individual who is an insider was nominated by him? This person has been on the board of the company for years. I believe she was also on the audit committee which signed off on expenses which we now know should never have been paid-----

The Deputy should complete the question, please.

-----and on extra payments to the CEO which have not been fully explained and which the Minister promised would be investigated. These are very serious questions and it seems it would have been far more appropriate to bring in someone from the outside who could have independently investigated and adjudicated on very serious matters in the harbour company.

I appreciate that there are lots of issues facing the Dún Laoghaire Harbour Company, including the operation of the company, pensions and industrial relations which the Deputy has mentioned. As part of the Dáil reform procedures which are already in place, chairpersons are interviewed by the joint committee before their appointment by the Minister. The Deputy had the opportunity to attend that committee meeting in September, raise all of these issues and ask questions. Had the committee not been satisfied with the replies given, it could have made a recommendation that I not proceed with the appointment. The Deputy did not attend that meeting; he really should have been there. He had the opportunity to attend a dedicated session of the committee to raise these concerns directly with the chairperson-designate, but he did not do so.

When I asked the Minister about this matter, he said he would bring together the Deputies from the locality to discuss the issues involved. There was no prior consultation about the individual the Minister had nominated for the position. The nomination appeared out of nowhere of an insider who was a board member, was close to the existing management and was on an audit committee that had signed off on seriously spurious expense payments and extra payments to the CEO of the company. I am a member of two committees, the Joint Committee on Finance, Public Expenditure and Reform and the Joint Committee on Public Service Oversight and Petitions. I am not a member of the Joint Committee on Transport, Tourism and Sport and as a local Deputy, I was not specifically made aware that the nominee was to come before the committee. This is not an open and transparent procedure. I have tabled about 20 parliamentary questions seeking specific answers and investigations into payments, the pension scheme, the treatment of employees and the plans for the future of the harbour, but we are being stonewalled. An insider has been selected, someone who has been there all along. This is a selection without proper prior consultation on the nominees, what they stood for and what they had to say about these issues. It is not satisfactory.

The procedure is prescribed in the Harbours Act. The position was advertised on the worldwide web and a notice may have appeared in the newspapers. As required by the Harbours Act, nominations were sought from interested parties, including business groups and unions. The chairperson in question went before the committee. As far as I am aware, committee agendas are circulated by e-mail to all Members and they are published on the worldwide web. I do not know what additional transparency is required by the Deputy-----

The Minister promised to contact local Deputies.

The Deputy made a decision to attend a meeting which he regarded as more important. It is clear that other issues are more important to him than Dún Laoghaire Harbour Company, which I appreciate. Other Deputies from the constituency attended the session.

Public Transport Provision

Timmy Dooley


60. Deputy Timmy Dooley asked the Minister for Transport, Tourism and Sport his plans to privatise certain public transport routes; how this will improve services to commuters; and if he will make a statement on the matter. [41062/13]

The question relates to the future provision of public service obligation, PSO, bus services. The objective of the Government is to ensure a system of public transport throughout the country that is as efficient and as widespread as possible. The award of PSO contracts for the bus market falls under the remit of the National Transport Authority, NTA, which is currently considering how publicly subvented bus services can best be provided in the future. The direct award contracts for the provision of PSO bus market services held by Dublin Bus and Bus Éireann expire late next year.  The awarding of licences for the services thereafter is a matter for the NTA and not for the Government, but I have kept the Cabinet updated on the process.

Where the NTA proposes to enter into a further direct award contract or contracts for bus services, it is obliged to carry out a statutory consultation under section 52 of the Dublin Transport Authority Act 2008.  Under the legislation, if the NTA proposes to enter into direct award contracts, the relevant section states "it may only do so where it is satisfied that the continued adequacy of the public bus passenger services to which the contracts relate can only be guaranteed in the general economic interest by entering into such direct award contracts".  If it is not so satisfied, it must provide for some level of competitive tendering.  As I have explained, this is not a decision for the Government or for me.

The NTA is conducting its work in accordance with the Dublin Transport Authority Act 2008. Statutory consultations relating to the matter commenced on 11 September and will conclude on 11 October. The NTA expects to announce its decision on how it intends to proceed before the end of the year. It should be noted that it will be open to Dublin Bus and Bus Éireann to to bid for any routes or bundles of routes tendered. I envisage that tendering will enable the selection of the most competent tenderer, which can provide the public with the best service at the least cost to the taxpayer.

The most obvious question is whether this is the beginning of the privatisation of public transport in the State. The Minister is on record as showing some level of favour towards that particular process. I remind the Minister that during the course of a recent and ongoing dispute between Dublin Bus workers and management, a Labour Party Minister indicated that the announcement by the NTA was "unhelpful", although one might wonder why it would have been unhelpful at the time. Was it that there is an agreement within the Government that it intends to privatise public transport services on a wider scale but it wanted to resolve the issues at Dublin Bus first?

Has the Minister any concerns about the quality of service to be delivered? He is familiar with the privatisation of public transport services in other EU member states that have not gone terribly satisfactorily, from the perspective of either passengers or the states involved, because of cost. Will the Minister address those issues?

Lest there be any confusion, I should be clear that there is no proposal whatever to privatise Bus Éireann, Dublin Bus or Irish Rail. That is not on the agenda of the Government at all. There is already plenty of public transport provided by private companies across the State; for example, Transdev operates the Luas system very successfully and will serve 30 million passengers this year alone. There is also the likes of Aircoach, Matthews, Wexford Bus and many others. It is already the case that private sector companies provide public transport.

The NTA considered all kinds of model from around the world. In some cities they work well and in others they do not. We will certainly not go down the route followed outside of London in the UK, where depots and entire bus services were sold. That is not what is envisaged at all. Any tendering that may occur - although it cannot occur for a number of years - would be open to Dublin Bus, Bus Éireann or any other company and the contract would only go to the tenderer that could provide the best service. It is not necessarily about saving money but providing a potentially better service for people at the same price to the taxpayer.

The Minister is aware that allegations are being made about the inability of transport regulators to govern the way in which employees in private companies would be treated by way of wage agreements or the way in which they are expected to work. It is the case in other jurisdictions that where there is a drive towards profit by private companies that win contracts, there has been a deterioration in the level of service provided to the consumer. The long-term negative impact on public transport has proved extremely costly, as there had to be investment to encourage people to return to using public transport. There is deep concern that we could end up with a negative outcome from any tinkering with the current system.

It can have a knock-on effect on passenger confidence in the service and, ultimately, lead to a modal shift away from public transport, which would be damaging and regressive. I hope, therefore, that plans the Minister and the NTA have in this regard are properly scrutinised in advance to ensure we do not damage or undermine the high rate of participation and usage by consumers in public transport services.

Like many of these measures, if they are done right, they can work well, but if they are done badly, they can be a fiasco. The NTA's job is to make sure the tendering happens in an orderly and successful manner. It is not a secret to the Deputy that my party proposed that we tender for all services when the contracts end in 2014. That will not happen because this is a coalition Government, not a Fine Gael Government. What the NTA is proposing is minimalist. It is only 10% and two years away. If it was down to me, there would probably be much more happening, but there is not. That is the reality. The NTA is implementing legislation put through the Dáil by my predecessor, Mr. Noel Dempsey, for which the Deputy may even have voted.

Taxi Regulation Review Report Implementation

Thomas Pringle


61. Deputy Thomas Pringle asked the Minister for Transport, Tourism and Sport if he will ensure that existing taxi and hackney licence holders can apply to provide the rural hackney service; if he will ensure that new licences will only be considered in the event of a failure to get enough applications; and if he will make a statement on the matter. [41231/13]

The taxi regulation review report 2011 which was adopted by the Government contains a recommendation regarding the introduction of a local area hackney licence for rural locations meeting certain criteria. The objective of the licence is to facilitate low cost entry to the hackney market for transport provision in rural areas that, otherwise, would be unlikely to have such services. The report anticipates that the licence would have the following features: the area of operation would be limited; the need for a licence would have to be validated by a local community or business organisation; low entry cost for operators; drivers would have to be resident in the area in respect of which the need for the service has been identified and there would be no requirement to sit area knowledge tests; and the driver would not be allowed to ply for hire on public roads or at taxi ranks. However, the establishment of an approved "hackney stand" in an off-street area would be permissible.

In accordance with the Taxi Regulation Act 2003, it is a matter for the NTA to make regulatory provision for the grant of a local area hackney licence. I understand the NTA is considering the matter in consultation with the taxi advisory committee which includes representatives of the taxi and hackney industry. Matters such as those raised by the Deputy are still part of the discussions with industry representatives and no firm decision has been taken.

I raised this issue during Second Stage of the Taxi Regulation Bill 2012 before the summer recess. The Minister of State should ask the NTA to give serious consideration to this issue because a large number of taxi and hackney drivers are operating in rural areas, but they are struggling to make a living in the current climate. Introducing another licensing brand in the sector will make it more difficult for them to survive. The rural transport model that will be used to roll out the rural hackney service could avail of existing taxi and hackney licences to provide services and that would ensure fair play for everyone. The Minister of State has acknowledged the difficulties in regulating the new licence if it is introduced. Given that there are only 19 regulators throughout the State, the chances are that hackney drivers will operate outside their areas and that they will not be policed. It is important in the context of fairness to give existing licence holders the opportunity to tender for the new licences and if they fail to pick up the slack, consideration should then be given to new licence holders. Will the Minister of State ask the NTA to deal with that matter?

The Deputy and many others have raised this issue with me. There is market failure in rural areas as regards services and the provisions introduced through the legislation. The NTA regulations need to ensure an appropriate service in rural areas where there is market failure. I understand the Deputy's concerns and the NTA is going through a process with the taxi advisory committee to address them.

We are trying to ensure that services are provided in isolated rural areas for many of the reasons Members have raised with me and the Ministers responsible for other areas. It is critically important that that happens. I accept what the Deputy said about ensuring there is proper enforcement of the new rural hackney licence system. Given the provisions I included in the legislation, I am confident I can increase the level of enforcement.