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Dáil Éireann díospóireacht -
Tuesday, 12 Nov 2013

Vol. 820 No. 3

Leaders' Questions

I will begin by expressing the sympathy of the Fianna Fáil Party and, I am sure, all Members of the House to the people and government of the Philippines on the disaster that has befallen them in recent days. It is heartbreaking to watch the reports of the national media on the scenes of devastation throughout that country. We are all thinking of the people there and of the many decent, hard-working members of the Filipino community working in this country. I commend the Government on its immediate offer of €1 million in aid. I urge the Tánaiste to investigate, as quickly as possible, the possibility of sending the rapid response unit to help in rebuilding that country.

Last week, the Central Bank published a report which indicated a huge increase in the number of people using licensed moneylenders. We are already concerned about the many unscrupulous unlicensed lenders working in this country. Across communities, the bulwark against these lenders is the credit unions. The Irish credit union movement has been diligent in combating such people, who charge exorbitant rates. Where banks have refused money to families and individuals, many have gone to their credit union where they found that the small sums of money they required to live on a daily basis were made available to them.

The circumstances resulting in Newbridge Credit Union being taken over by Permanent TSB are very unfortunate. There was something particularly unedifying in seeing the Central Bank go to the High Court on Sunday evening, which I believe was prompted by reports on the local radio station, Kfm, that this was going to happen this week.

The process has taken two years and has been inordinately expensive, costing upwards of €3 million. The end result is that the people of Newbridge have no credit union. Does the Tánaiste agree that the methods employed by the regulator and the Central Bank have been spectacularly unsuccessful? Will he confirm the Government's support and respect for and acknowledgement of the fact that the credit union movement throughout the country has delivered a great deal of vital support for communities?

Responding to a Topical Issue some time ago, the Minister for Finance, Deputy Noonan, indicated that 30 other credit unions may have been in trouble. In today's media, including the Irish Independent-----

I am sorry, but I ask the Deputy to conclude.

I will. In today's Irish Independent, Charlie Weston suggests that approximately 100 credit unions, some one in four, are in difficulty. Will the Tánaiste confirm that the Government's approach will be to ensure that, where credit unions get into difficulty, credit unions will be in place in local communities at the end of the resolution process to serve people's needs? Will the Tánaiste consider Newbridge specifically and ensure that the Financial Regulator and the Central Bank support the local community in its immediate efforts to establish a new and fully compliant credit union?

I join with Deputy Ó Fearghaíl, on behalf of the Government, in communicating our sympathy with the people of the Philippines, who are enduring a terrible natural tragedy. I acknowledge Deputy Ó Fearghaíl's welcome for the action that the Government is taking in providing emergency funding straight away in the form of €1 million through NGOs. We are also providing some practical assistance through tents, blankets and emergency facilities of that kind. We also have a rapid response core of technical people, which is ready to assist. We will work with the UN agencies to mobilise the greatest possible international response to that tragedy.

The Deputy asked me a number of questions arising from the action that was taken in respect of the Newbridge Credit Union. That action was taken in order to protect the members and savings of the credit union and to prevent a situation arising whereby the credit union would have to be liquidated. Other options had been looked at over a period of time, including the possibility of an amalgamation of that credit union with another credit union, but that did not work out.

The Deputy has asked me a number of specific questions and I want to answer them directly. First, on the Government's position in respect of the credit union movement, the Government supports the credit union movement. Credit unions in this country have provided great support to people. They operate with a not-for-profit ethos and on the basis of solidarity. I want to tell the Deputy directly that the Government continues to support the credit union movement. We back that in practical terms by having €500 million available in two funds to support the credit union movement - a fund that provides for restructuring of approximately €250 million and another fund for resolution of another €250 million.

Specifically regarding Newbridge, as the Deputy knows there were a number of exceptional circumstances in that case. The average loan issued by credit unions throughout the country is €7,764. There were 26 loans of an average €550,000 in Newbridge. There was one loan of €3.2 million, which was in excess of the Credit Union Act's restriction of a maximum of 1.5% of the total assets. Some 53% of loans exceeded five years' duration as opposed the maximum set out in the Credit Union Act of 20%. The Government would like to highlight its support for the future return of a credit union to Newbridge. We will work with people in Newbridge to that end.

The Deputy asked specifically about the reports in the newspaper about the number of other credit unions that may have difficulties. He mentioned a figure of one in four credit unions possibly being in difficulty and reports to that effect. There are 392 credit unions in the country. Based on the data submitted by the credit unions themselves, as of 30 September 2013 some 20 credit unions have reported regulatory reserves below the minimum requirement of 10% of assets. This gives rise to a capital shortfall in the region of about €11 million in total, but this has to be put in the context of the funds that the Government has made available of about €500 million. The Central Bank - this may be where the reportage has taken off - is working through a portfolio of approximately 100 credit unions on a case-by-case basis. This relates to issues that arise in those credit unions - levels of arrears, inadequate bad debt provision, high fixed asset to total asset ratios and other supervisory concerns. However, the actual number of credit unions that have reported regulatory reserves below the minimum requirement is 20 of the 392.

I thank the Tánaiste, as his response was in large measure positive. I take from his comments that the approach of the Government and the Central Bank will be to ensure that there will be credit unions in communities if changes have to be made on foot of resolution processes. I also thank the Tánaiste for indicating clearly that the Government and, I take it, the Central Bank will support the establishment of a new, fully compliant credit union in Newbridge. However, will he assure us that the procedures employed in Newbridge, which have been ongoing for 22 months at a cost of upwards of €3 million, resulting in there being no credit union to service the people of Newbridge, will be examined?

What is the position as regards the directors of the Newbridge Credit Union, who were subject to a gagging order, resulting in their being pilloried in the local and national press? They were accused of many things. They can now defend themselves and attempt to vindicate their good names.

What is the position on the building in Newbridge? Many people involved in the credit union movement across the country will wonder what will happen to their buildings if they become subject to the resolution process. The assets and liabilities of Newbridge Credit Union have been transferred to Permanent TSB. So be it, but what is the position on the building, which was built by, paid for and owned by the people of Newbridge?

The position in respect of Newbridge is that the assets and liabilities, excluding the building, have been transferred to Permanent TSB by way of the High Court order. In addition to that, the Governor of the Central Bank has requested a financial incentive of up to €53.9 million, which has been agreed to by the Minister for Finance. That money amounts to €23 million in cash up front to fill the hole in the balance sheet, restructuring and integration costs of €4.25 million, €2 million for other transferring liabilities and a risk share on the transferring loans whereby the State will absorb 50% of the losses where loans perform below their transfer values and 50% of the gains where they perform above their transfer values. If these loans were written off immediately with no recovery, it would result in an additional €24.7 million total cost.

Without the transfer to Permanent TSB, Newbridge would have been liquidated. There would have been a loss of €1.1 million in unprotected savings.

Other options were examined concerning Newbridge. As I mentioned earlier, there was the option of amalgamating with another credit union. The Central Bank also assessed other options, including the proposal by the Newbridge action group. That was rejected at the time because it did not provide a satisfactory solution to the capital deficit.

The Government will support whatever efforts are made to re-establish a credit union in Newbridge, whether that is a credit union from somewhere else establishing in Newbridge, or the local community establishing a new credit union there. We stand ready to support that because the Government has a strong commitment to the credit union movement and the work it does. We want to see successful credit unions and we hope that we will not have other situations like Newbridge.

Ar dtús, I want to join with the Tánaiste and an Teachta Ó Fearghaíl in expressing my solidarity with the people of the Philippines. Aontaím leis an Taoiseach agus leis an Teachta Ó Fearghaíl faoi na daoine bochta ansin agus cuirim fáilte roimh an tacú atá á thabhairt ag an Rialtas do na daoine sin.

Inniu tá ceist agam faoin aos óg agus an dífhostaíocht. Tuigim go bfhuil an Taoiseach i bPáras inniu ag bualadh le ceannairí ón Aontas Eorpach le fadhb na dífhostaíochta i measc an aosa óig a phlé, ach sa Stát seo tá an Rialtas ag gearradh siar agus ag déanamh ionsaithe ar sochair ár n-aos óg.

In October, the budget took almost one third of the jobs seeker's allowance from young people aged under 25. Benefits for 20,000 young people were cut by €44 per week. The Tánaiste claimed at the time that this was to encourage these young people to get back to work. He denied that this had anything to do with the Government's austerity policy and he committed to investing in the Youth Guarantee scheme to provide jobs, training and education within four months. A leaked document from the Department of Social Protection, however, has revealed that the Government will not keep to its commitments.

I am sure the Tánaiste knows that the International Labour Organisation has estimated that a decent youth guarantee, like the Swedish model, will cost approximately €6,600 per participant. Is the Government putting that sum into the scheme here to help unemployed young people? No, it is putting a miserly €260 into the pockets of each of these young people. Does the Tánaiste accept that the Youth Guarantee scheme is woefully inadequate and encourages youth emigration?

The 2014 action plan for jobs sets out seven priorities, none of which includes youth unemployment or youth emigration. Why is this so? If the Government is serious about the Youth Guarantee scheme and getting our young people back to work, why does the 2014 action plan for jobs not include youth unemployment or youth emigration as priorities to be tackled?

He is hoping they will be in Canada.

Why does Deputy Adams have such difficulty with the truth? Why does he get up and twist everything? We all know that there is a very big problem with youth unemployment in this country. That is why the Government has made tackling the jobs crisis - and youth unemployment, in particular - a priority. Happily, we are seeing some progress. At the height of the crisis in 2009, there were 83,000 young people unemployed. The figure is now down to 59,000.

It is far too high. That is why during the course of Ireland's EU Presidency we led a proposal to tackle the issue of youth unemployment in this country and across Europe, and agreed proposals for a youth guarantee scheme. In addition to agreeing the proposals, we went on to provide European money for the scheme. The original proposal was that this would be dealt with over a seven year period leading up to 2020, which was far too long. The problem of youth unemployment is here and we must address it now. That is why we front-loaded EU funding to 2014 and 2015 in order to deal with it.

In addition, we have provided for a range of initiatives which are being taken by the Government across the education and training areas. Youth initiatives include the JobsPlus and JobBridge schemes, Intreo and Momentum. A range of such measures are aimed at getting young people into employment. We have reduced the eligibility for getting onto JobsPlus from 12 to six months. We have also provided for an additional intake of 1,500 young people on the JobBridge scheme. We have ensured that there are an extra 1,000 places on the Tús scheme and we have ring-fenced a minimum of 2,000 places in the various Department of Education and Skills training schemes. We have made funds available for young entrepreneurs via the micro-finance scheme. In total, the specific provisions across these headings in the 2014 budget come to €46 million.

Tell that to Labour Youth.

Next year, there will be more than 20,000 places available specifically for young job seekers at work. That is in addition to the remaining 58,000 places which are available across the various initiatives we are taking. At the end of the day, the provision of places in training, work experience and education is about preparing young people to go to work. Ultimately, what is required is the generation of real jobs with good incomes and futures. That is why we are also succeeding on that front with an additional 3,000 jobs being created every month. I was at the opening of a company providing 100 of those jobs yesterday in the Dublin Docklands. The company has an online recruitment service and already employs 100 young people here, but it will employ an additional 100 people. We need more of that and are seeing more of that.

As far as the Government is concerned, there is nothing more important than the creation of employment and in particular the creation of job opportunities for young people. That is why the Taoiseach and the Minister for Social Protection are in Paris today to discuss this issue at a meeting convened by President Hollande.

Chubby Checker would envy the Tánaiste's ability to do the twist. He has refused to answer my question.

(Interruptions).

He did not answer my question. If the Tánaiste is as serious about youth unemployment as he says he is, then why does the 2014 action plan for jobs not include youth unemployment? Why has the Government not tackled youth emigration as a priority? During Ireland's EU Presidency the Tánaiste claimed that the Youth Guarantee scheme was one of his big ideas. Yet in the budget a miserable €14 million was put into that scheme, while it sliced €32 million from young people's income support. That is a net loss of €18 million.

The Taoiseach and Minister for Social Protection can pirouette around Paris to their heart's content but the fact is that the Youth Guarantee scheme is falling apart. Will the Tánaiste acknowledge that it will not bring forward the promised upskilling or the provision of employment and education opportunities for young people? If it is a priority, why is it not in the Government's jobs plan for 2014?

Where did Deputy Adams get the idea that it is not in the jobs plan for 2014?

The jobs action plan for 2014, just as its predecessor for 2013, is designed for, dedicated to and directed towards the creation of employment, including employment for young people.

It is all a dream.

Many of the jobs currently being created-----

They are in Canada or Australia.

-----in our economy are jobs that are being taken up by young people, for example, jobs in the digital sector. Many young people are employed in new types of employment being attracted into this country, including in the Dublin Docklands and in companies like PayPal in Deputy Adams' constituency. The Deputy should go and talk to those people and to others who are being employed. Many of the jobs being created in the new economy are jobs that, happily, are being taken up by young people. This is the reason the proportion of young people between 20 and 24 years of age in employment increased from 45.5% in the first half of 2012 to 47.6% in the first half of this year. This was the first increase in six years in this cohort of people taking up employment.

That said, we have a lot more to do. As I said earlier, approximately 59,000 of the people out of the workforce are under 25. We must get these people jobs or provide them with training or work experience.

The Government cut their benefits.

This is the objective of the youth guarantee and the direction of Government policy. However, we need to do more quicker. There is an urgency about this. As far as the Government is concerned, the sooner and the quicker we get young people into employment or appropriate education and training, the better. That is the direction of Government policy and the Deputy should support it.

I call Deputy Seamus Healy.

Communities across the country are convulsed at EirGrid's proposals to erect high voltage 400 kV overhead power lines. There is huge concern, frustration and anger at the Grid25 proposal across the Munster counties of Cork, Tipperary, Waterford and the Leinster counties of Wexford, Kilkenny, Carlow and Kildare. Thousands of people have turned out at public meetings. I congratulate the various action groups involved and thank the legendary Sean Kelly for his leadership on this issue. This is an intolerable proposal, which is and will be resisted.

Everybody accepts that this country must have top quality electrical infrastructure. What is at issue is the manner of the delivery of that infrastructure and the proposal in this regard, namely, the erection of 750 monster pylons along a 250 km route. These pylons will be 45 metres high, ten times the height of the average bungalow, and will be erected at 330 metre intervals. EirGrid has stated that where possible these pylons will be located 50 metres from houses. Residents along the route will have to live with these pylons 24 hours a day, seven days a week, 365 days a year for the remainder of their lives.

This infrastructure will blight the landscape for locals and visitors alike and will destroy our tourism industry. Some of the most scenic areas in my constituency of south Tipperary are affected, including the Galtee Knockmealdown Valley, the heritage town of Cahir, the Golden Vale into Clonmel, the Valley of Slievenamon, the Suir Valley into Faugheen and Carrick-on-Suir and on into Waterford and the Comeragh Mountains and its special areas of conservation and habitats. EirGrid is involved in a divide and conquer of residents along these routes, setting them against one another. It is setting neighbours against one another by offering compensation to some and not to others who are equally or more affected. Devaluation of properties and significant health issues are other reasons for opposing this project.

Best international practice is that these high voltage power lines must be laid underground and-or under sea.

I must ask the Deputy to put his question.

Denmark is a good example, but only one of many, where these lines are placed underground. This is obviously technically possible and financially feasible.

The closing date for submissions to EirGrid on this proposal is 26 November. I call on the Government to defer this closing date for submissions and to suspend this project pending the outcome of a comprehensive feasibility study, carried out independently of Eirgrid-----

The Deputy is way over time. Adhere to the Chair, please.

-----into the laying of these lines underground and under sea.

The development and upgrade of our grid infrastructure, including interconnection with neighbouring electricity systems, is necessary to drive regional economic growth and job creation. Grid25 is EirGrid's plan to develop and upgrade the electricity transmissions network. This project will take several years to complete and represents an investment of €3.2 billion. It involves extensive work throughout the country, including the construction of 800 km of new power lines and the upgrade of 2,000 km of existing lines, which, in effect, will double the size of the current grid.

The North-South transmission is a critical piece of infrastructure. Its absence is currently costing economies and consumers up to €30 million per annum. Without it, the system is more inefficient. The Government has made it a priority to retain the networks in State ownership as a strategic infrastructure and to ensure that they are developed and maintained in the interests of Irish citizens and consumers. It is also Government policy that infrastructure investment programmes are delivered in the most cost-efficient and timely way possible on the basis of best available knowledge and informed engagement of the impacts and costs of different engineering solutions.

Public acceptance and understanding of the need for new infrastructure is critical. A key part of developing this public confidence is that EirGrid should adhere to the highest international standards of safety, health, environmental and visual impact and technology choice. The planning process provides the framework for ensuring that necessary standards are met and provides in law and on a non-statutory basis that consultation with the public be built into that process. EirGrid must adhere to national and international standards on health, environment, biodiversity, landscape and safety as an intrinsic part of the environmental impact assessment and planning process. It is required to use the best available advice and expertise and to address and mitigate any human, environmental or landscape impact in delivering the best possible engineering solutions for our small and still isolated electricity system.

The Government does not have a role in directing EirGrid to particular sites, routes or technologies. This is a matter for EirGrid and the forward planning process.

What the Tánaiste had to say when in opposition was a lot different.

However, we do expect EirGrid, in making choices on technologies, routing and mitigation measures to take account of all relevant national and international standards, to follow best practice, to ensure value for money and to be informed by detailed consultation at local level. Structured transparent consultation and information-sharing will contribute to the delivery of proper mitigation measures, including the protection of landscapes and views and reconfiguring and rationalising existing networks.

Forget all the promises made.

Deputy Mattie McGrath's support for cannabis went down badly in Tipperary.

Deputy Rabbitte should crawl back into his burrow.

What we have heard from the Tánaiste is the usual EirGrid spin. The only consultation, if consultation there is, is in relation to overhead power lines. EirGrid is not prepared to consult on the issue of placing these power lines underground or under sea, which, as I said earlier, is already best international practice in this regard. There are significant health issues involved. National and international agencies have pointed to very serious doubts in relation to these overhead power lines. For example, the Irish expert report on the issue published in 2007 states that there is limited scientific evidence of an association between ELF magnetic fields and childhood leukemia and, that while this does not mean ELF magnetic fields cause cancer, that possibility cannot be excluded.

A question please, Deputy.

The International Agency for Research on Cancer states that these magnetic fields are possibly carcinogenic to humans, based on consistent statistical associations of high level residential magnetic fields, with the doubling of the risk of childhood leukaemia. In view of the fact that EirGrid cannot guarantee that there are no health issues involved in this, and in view of the fact that national and international studies raise serious doubts and health issues about these overhead lines, will the Government institute the precautionary principle? That principle has been adopted by the EU and the World Health Organization. Will the Government ensure that the EirGrid proposal to erect overhead high voltage power lines is cancelled and the transmission takes place through shielded lines underground and undersea, in accordance with best international practice?

The issue of whether the lines should be overground or underground arose previously in the case of power lines between Meath and Tyrone. In line with the commitment we gave in the programme for Government, on 5 July 2011, the Minister for Communications, Energy and Natural Resources announced an international commission of experts to review and report within six months on the cost of and case for putting underground all or part of the Meath-Tyrone 400 kV power line. After considering the merits of overhead and underground options, the report notes that there is no single right solution and that technical solutions must be project specific. The report did not recommend any particular technical option, but it did recommend against putting an alternating current cable wholly underground. It provided its expert views on the feasible technology options available for consideration for the Meath-Tyrone project, including high voltage direct current technology, given the changes in technology suppliers and costs in recent years. In that context, the commission estimated that the cost of implementing the project as a HVDC underground cable option would be three times the cost of the traditional overhead line option, while noting that cost estimates are always uncertain.

A number of national and international health and scientific agencies have reviewed more than 30 years of research into electromagnetic fields, and none of these agencies has concluded that exposure to EMF from overhead power lines is a cause for long-term adverse effects. In October 2005, the World Health Organization convened an international expert panel to review the scientific literature on the biological effects of exposure to extremely low frequency fields. In March 2007, the Department of Communications, Marine and Natural Resources assembled a panel of independent scientists to review EMF and radio frequency research. The position was restated again by the Office of the Chief Scientific Adviser in a report into possible health effects of exposure to electric and magnetic fields in July 2010. There is a quite a degree of both national and international reviews of the likely health effects, none of which reaches the conclusions Deputy Healy has put on record.

You get the advice for which you pay.

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