Priority Questions

UK Referendum on EU Membership

Dara Calleary

Ceist:

19. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the implications for expenditure plans in 2017 and beyond of the result of the UK referendum on European Union membership; if he will emphasise growth-friendly projects in spending plans, particularly in the Border regions; and if he will make a statement on the matter. [20001/16]

I wish to tease out the implications for public expenditure plans and the capital programme of the Brexit vote and an anticipated slowdown in our economy, as well as the withdrawal of the UK from various EU programmes such as INTERREG.

Planning for the potential implications of the result of the referendum on the UK's membership of the European Union is particularly challenging. Until Article 50 is invoked by the UK, the precise timescale for the UK's withdrawal from the EU is not known. The economic impact of the UK's exit from the EU will also very much depend on the nature of the new arrangements to be agreed between the UK and the EU.

The Government has adopted a contingency framework, co-ordinated by the Department of the Taoiseach, to map out the key issues that will be most important to Ireland. Priority issues identified in the framework include UK-EU negotiations, British-Irish relations, Northern Ireland, trade, investment and North-South Border impacts. As outlined in the framework, the impact on enterprise and trade in Border counties will be monitored closely.

The summer economic statement, SES, published last month, sets out the Government's medium-term strategy for sustaining economic growth and for budgetary policy. The proposed budgetary strategy for 2017 is not expected to change materially following the result of the UK's referendum on EU membership. The majority of components feeding into the expenditure benchmark calculation for 2017 are included the European Commission's 2016 spring economic forecast and, based on the forecasts in the SES, the 2017 budgetary strategy is consistent with compliance with the balanced budget rule.

As noted in the summer statement, the Department of Finance will prepare a full macroeconomic projection in advance of budget 2017. The public capital plan published last September set out an Exchequer spend of €27 billion over six years. This includes key investments in transport, education, health and enterprise. In every part of the country where these are delivered, they will boost our competitiveness, sustain jobs and upgrade our social infrastructure.

The €27 billion plan was based on conditions and on economic growth figures which have to be reviewed in the context of the decision. It has been nearly two weeks since the British took their decision so is there to be any review of the growth figures? What will that review mean for the capital plan?

The European regional development fund has committed €240 million to the INTERREG programme from 2014 to 2020. I know a date has not yet been set and Article 50 has not yet been triggered but we have to assume that it will happen before 2020, if it is going to happen. In this context, has specific attention been given to programmes such as the Narrow Water bridge, the A5 and the Border programmes?

The pressure exporters are under following the weakness of sterling will impact on corporation tax and VAT returns. This may be a matter for the Minister for Finance, Deputy Michael Noonan, but what are the projections for both, going forward?

The Deputy's first question was on how the change in the UK's status will affect our economic projections.

The Deputy is correct. Two weeks have elapsed since the vote took place, but we have not seen a new Prime Minister elected in the United Kingdom, and it is only when a new Prime Minister is elected and his or her Government determines a negotiation strategy with the European Union that it will be clear what the relationship will be with the Single Market. The Bank of England and the Chancellor of the Exchequer, George Osborne, have made statements regarding what they will do to affect their domestic economy, but those statements were only made yesterday. The net outcome of all of that is the question the Deputy asked me regarding what the effects will be. To restate, we believe that it will not affect our plans for 2016 and 2017. Any effect on our medium-term prospects will be taken into account in the run-up to the budget in October, when we will give a further indication of where we stand, but the Minister for Finance, Deputy Noonan, has indicated that he believes the effect on national income growth would be 0.5%, with two different factors driving that.

I think I have 35 seconds left.

I did not start the clock on time, so your minute is up. You will be allowed to reply one more time.

Would you allow me to answer the second question the Deputy put to me, please?

You will be allowed to speak again, Minister. We have to keep to the time so that everybody gets an opportunity to speak.

I would make the point that it is not my fault that the clock started late. I am doing the Deputy the courtesy of trying to answer the questions he put to me.

You will have another opportunity to speak.

Has the clock started? I will give the Minister the chance to give a full response to that question.

The Minister committed to a review of the capital programme for 2017. Will that review now take account of the referendum decision and the particular impact that decision will have on specific parts of the country? Will it affect the entire country? I have already called for an all-Ireland response to it at local authority level, but a specific response will be needed for the Border region. In terms of the capital programme, will the Minister facilitate a review that will encourage employment-friendly projects in that region?

To go back to the earlier question the Deputy put to me, the effect will become clearer in the run-up to budget 2017. The summer economic statement outlined that the cause of any change in national income would be the change in our trading relationship with sterling and having a greater understanding of what the relationship would be between the UK and the Single Market in particular.

Regarding the earlier question the Deputy put to me on INTERREG and the PEACE programmes, whose importance he acknowledged, on the Friday morning when the result was announced, we contacted the Commission about this. I met my officials who have responsibility for that area, and tomorrow morning I am meeting the Minister for Finance in the Northern Ireland Executive, who has responsibility for these areas, to discuss the effect of the UK decision on the INTERREG and PEACE programmes. We remain committed to the commitments the Government has put against those programmes because, as the Deputy will be aware, the majority of funding for those projects comes from the European Union. It is a matter that we and the Northern Ireland Executive need to work through closely.

The Deputy asked me if the change in the UK's membership of the EU will have an effect on the capital plan. We have acknowledged that it will inject uncertainty into our medium-term prospects. The linear consequence of that is that it will have an effect on Government plans, but I have been very clear - the Minister for Finance, Deputy Noonan, has made similar points - that what we then need to examine-----

-----is our plans in the context of how they respond to what has happened in the UK. Capital investment to increase productivity and the growth potential of the economy is how we need to respond, and I will be taking specific account of the Border counties.

Lansdowne Road Agreement

David Cullinane

Ceist:

20. Deputy David Cullinane asked the Minister for Public Expenditure and Reform how he intends to deal with Association of Secondary Teachers Ireland and the Garda Representative Association in the context of the Public Service Stability (Lansdowne Road) Agreement 2013 to 2016; his plans to use the powers he has under financial emergency measures in the public interest legislation to penalise the members of these associations; how this will work in practice; and if he will make a statement on the matter. [19906/16]

Dara Calleary

Ceist:

21. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform his plans to address outstanding industrial relations issues relating to teachers and members of An Garda Síochána who are currently outside collective pay agreements; and if he will make a statement on the matter. [19905/16]

There has been far too much talk from the Minister's Department in respect of trade unions and public sector workers currently outside the terms of the Lansdowne Road agreement. There has been talk in the past of penalising and punishing workers who are outside the terms of that agreement. What is the Minister's plan for those workers now? Where do they stand? There are reasonable expectations that all public sector workers have that go beyond the Lansdowne Road agreement. We now have some unions and some workers who for genuine reasons have not signed up. Will the Minister outline his intention in terms of these workers?

I propose to take Questions Nos. 20 and 21 together.

First, to be clear and to correct the Deputy from the outset, there has not been talk from me or my Department about penalising anybody. Second, as I made clear publicly over the weekend and in the early part of this week, I am putting equal focus in my Department on the 23 unions that are inside the Lansdowne Road agreement while putting due focus on those three representative bodies who are outside it.

With regard to the other points the Deputy put to me, pay issues for public servants are currently determined within the constraints set by the Financial Emergency Measures in the Public Interest, FEMPI, Acts 2009 to 2015, while the industrial relations environment is managed under the terms of the Public Service Agreement 2013-2018. The programme for Government contains a strong commitment to the Lansdowne Road agreement and gives a framework for the next few years for the Government's proposals for ongoing public service reform as well as setting out an agreed pathway to pay restoration for public servants that is affordable to taxpayers, at a cost of €844 million over three years.

As I have always said, I believe this agreement offers the best framework for reconciling the wage needs of those who provide our public services with the broader needs of those who depend upon the delivery of public services.

This agreement is now in operation for the vast majority of public servants. Over 280,000 public servants are inside the Lansdowne Road agreement. A point I have made, and I make it again to Deputy Cullinane, is that we need to put equal focus on those public servants who are inside the agreement and the 23 unions that voted for it.

The Government has to, and will, respect and keep faith with the decisions of the vast majority of public servants who come within the Lansdowne Road agreement. The benefits of and the protections afforded by the agreement will therefore apply to those people who are inside the framework. Those not represented by a body that is inside the agreement will have the relevant provisions of the FEMPI Act apply to them, and will not benefit from the protections and benefits afforded by the agreement, including incremental progression, inclusion of the supervision and substitution allowance in the salary scale of teachers, and the protections negotiated in 2010 regarding compulsory redundancies.

The Government does not want to be in dispute with any group of people working for it. The recent decisions by the AGSI and the Teachers' Union of Ireland are clear examples of the progress that has been made in bringing more associations within the Lansdowne Road agreement.

The agreement is also flexible enough to allow for the concerns of recent recruits to the public service to be addressed in a negotiated way. I confirm to the House that in that context, officials of my Department and the Department of Education and Skills agreed yesterday with the INTO and the TUI, both unions inside the agreement, to have engagement later this month to begin to scope out fully the issues involving pay arrangements for newly qualified teachers.

The Minister said he had no intention of punishing those public sector workers who are outside the terms of the Lansdowne Road agreement, but then went on to set out exactly how he will punish them. They asked for issues to be addressed that were outside the terms of the Lansdowne Road agreement. They did not get them in those negotiations. He is now saying they will not benefit from what is in the Lansdowne Road agreement. Furthermore, he is saying they will be subject to the extraordinary powers that were given to him by the previous Government regarding the FEMPI legislation, so they will be further punished. That is what is going on here. He is punishing those workers who are outside those agreements.

The Minister has no plan beyond the Lansdowne Road agreement for public servants. He talks about those who came into the system in 2011. I have tried my best to get a figure from his Department as to how much it will cost to return to a single-tier pay structure in the public service to deal with pay equalisation. I met officials from the Minister's Department. They are not able to give me the figures. They say it is impossible to cost.

The Minister needs a plan that is fair to deal with the unwinding of the FEMPI legislation-----

Allow the Minister to reply.

-----and he does not have one.

Not only do we have a plan, but we have a plan that has been accepted by 280,000 public servants in 23 unions. The reality is that if I was adopting a different approach and looking to dismantle the Lansdowne Road agreement, Deputy Cullinane would be in the House criticising me for doing that and for not keeping faith with the 280,000 people in those unions who are part of the agreement.

With regard to language of punishment, that language is entirely Deputy Cullinane's. It is language that neither I nor any Member of the Government has used.

If the cap fits, wear it.

We have always been very clear that the benefits of an agreement have to accrue to those who are part of the agreement. If I was to use a different approach, the Deputy would again be criticising me for doing it.

I will now turn to the position in relation to new entrants who joined the public service during the crisis. I have already indicated to Deputy Cullinane that my Department has begun preliminary meetings with unions in that regard. We held a meeting yesterday with the INTO and the TUI.

Of course, the cost of that will be subject to our Estimates process but most obviously will be subject to the nature of the agreement.

Even rent is way too much for young teachers.

I want to tease out the announcement by the Minister that he mentioned during his first reply to Deputy Cullinane regarding the process with the Department of Education and Skills, the TUI and the INTO. Perhaps the Minister will outline what exactly is involved in that process, what is the deadline for completion and how deep the consultation will be for those involved in the process with new entrants.

With regard to the Garda Representative Association, GRA, it has an issue around commitments given to them by the Minister and his predecessor under the Haddington Road agreement not being met, particularly the review of Garda practices. Perhaps the Minister will clarify the situation.

With regard to new entrants to the education sector, does the Minister have plans to enter into a process with other new entrants into the civil and public service around their allowances and terms and conditions?

I will address the Deputy's first question. This builds on a commitment I gave in the earlier Dáil session around dealing with issues for new entrants. I may have been responding to questions to Deputy Calleary on this when I indicated to him that the Lansdowne Road agreement creates the processes in which matters of concern to those inside the agreement can be dealt. That is what we are doing. We are triggering one of those processes. With regard to how long that will take, I am not going to impose a deadline on that process as I do not believe it fair to those unions who have come in good faith to engage with us on the matter. I am having this engagement because of recognition of the concerns articulated by the unions on this matter.

The Deputy referred to the GRA. I am pleased to confirm that an individual has been appointed with the support of the parties involved, Mr. John Horan,-----

-----to look at how issues around the GRA, the Department of Justice and Equality and the Government can be dealt with.

The Deputy's final question was about terms, conditions and allowances of other new entrants in the civil and public service. We will look at such matters and engage with unions all the time inside the Lansdowne Road agreement on issues of concern to them.

I thank the Minister. Deputy Cullinane has one further question.

The Minister is a master at not answering the question I ask. The question was what is his plan to unwind FEMPI beyond the Lansdowne Road agreement? I am not asking the Minister to tear apart the Lansdowne Road agreement. I am asking him to spell out his plan for unwinding FEMPI in its totality and how long it would take do it. There are reasonable expectations that all of those, including the trade unions under the Lansdowne Road agreement umbrella, have that go beyond the agreement.

Will he Minister also clarify how he will treat those public sector workers who are not unionised and who did not sign up to the Lansdowne Road agreement because they were not in unions? How will the Minister treat them? Will they be treated differently from those members of ASTI or the GRA who voted against the Lansdowne Road agreement and are outside it? The Minister has not thought this through. What about dual schools which have different unions? He needs to think this through and he has not. He has no plan to deal with that other than what was in the previous FEMPI legislation.

Alas, I am not a master of anything at all. I answer the questions which the Deputy puts to me. However, when I answered the questions, I pointed out that not only is there a plan, but the plan has been voted on by the majority of unions. These are points of truth of which the Deputy takes no cognisance, apart from the fact that if I was outlining any other course of action the Deputy would be here criticising me for letting down the people who voted for this agreement.

I will answer the question, which the Deputy did not put to me earlier, on plans to unwind FEMPI. The programme for Government is very clear on this aspect. The future of the FEMPI legislation has to be based on negotiation with those in the trade union movement and based on the ability of the State to afford it. It is all in the context of the collective Lansdowne Road agreement, which at the moment is giving wage increases to members who are part of the agreement.

The final question put to me by the Deputy was about the impact of this process on schools in particular. The Department of Education and Skills is dealing with the matter, keeping in mind what could happen later in the year and the recent decision by the ASTI in relation to the Lansdowne Road agreement. Not only do we have a plan and a strategy, but we have-----

I thank the Minister. He has made that point a number of times.

------a plan that has been accepted by the majority of unions.

The Minister has said he will not impose a deadline on the new process he has announced but he does need to inject a sense of urgency into the process. We are asking people who are new entrants since 2012 to do the same job as those who were there before them at a time when rental costs are sky high and there are many other issues which affect them. There needs to be an urgency about it.

It is time the Minister laid out a roadmap for the gradual unwinding of FEMPI. The Minister needs to introduce proposals against which an unwinding can be measured. People need to be given some sort of a sense of roadmaps, measurables and a process for the unwinding. Perhaps the Minister will also clarify where we are at on the public service pay commission. I would like to hear from that soon.

The Deputy referred to the need for urgency. I acknowledge that this is a matter that Deputy Calleary has raised with me on new entrants in to the public service and especially teachers. That has informed the approach taken by me and the Department of Education and Skills on this matter.

With regard to the unwinding of FEMPI, it should be put into context. I am taking a group of questions on this point in just a moment. We are in year one of a three year agreement. We are in the early phase of an agreement which a number of unions have just voted to join. This three year agreement still has two years to run. When considering future legislation and the environment post-Lansdowne Road agreement, we will lay out our plans when the current agreement has expired and has done the work we are expecting it to do and which we have agreed with the majority of unions.

Public Sector Pay

Richard Boyd Barrett

Ceist:

22. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform the rationale for renewing the Financial Emergency Measures in the Public Interest legislation, given recent reports that Ireland is the European Union's fastest growing economy; if he had discussions prior to this renewal with the Department of Finance on alternative revenue streams to replace the €2.2 billion that public sector workers contribute to the economy; and if he will make a statement on the matter. [20100/16]

How can the Minister say, with a straight face, that he is doing anything other than putting a gun to the head of public sector workers? That gun is called FEMPI. The Minister has really outlined it. There is a series of pieces of legislation that have absolutely no justification any longer because there is no financial emergency. The financial emergency is over and the Government is never short of throwing around figures on the economic growth rates. How can the Minister say he is doing anything other than bullying all -----

Please allow the Minister to reply.

-----public sector workers with this legislation that should be abolished?

I wish to correct a point I had made to Deputy Calleary. I should have said "when the agreement is due to expire" as opposed to "when the current agreement has expired".

The FEMPI measures were enacted by the Oireachtas and remain in place until their repeal. Under section 12 of the FEMPI Act 2013, I am obliged to review and report to the Houses of the Oireachtas on the operation, effectiveness and impact of the relevant Acts and consider whether any of the provisions of the relevant Acts continue to be necessary having regard to the purposes of those Acts, the revenues of the State and State commitments in respect of public service pay and pensions.

The report on the review undertaken was laid before both Houses of the Oireachtas on 29 June in accordance with the provisions of the Financial Emergency Measures in the Public Interest, FEMPI, Act 2013. Among the considerations which informed the determination by me of the necessity for the continuing application of the measures provided for under the Acts were the instability in the international economy, including risks posed by Brexit, the still fragile nature of our economic recovery, the need to protect hard won competitiveness gains, the high level of debt, our continuing need to borrow, the obligation to comply with the Stability and Growth Pact and the need to balance competing demands within the available resources.

The terms of the Lansdowne Road agreement reducing the impact of the pay reductions are being implemented through the FEMPI Act 2015 through a three year programme at a full year cost of €844 million in 2018 with additional provisions providing for a similar programme of reductions in the impact of the public service pension reduction at a full-year cost of €90 million in 2018.

Some of the victims of the FEMPI legislation are sitting in the Visitors Gallery today, newly qualified teachers, young teachers and local authority workers who have been crucified with this emergency legislation first brought in by Fianna Fáil and the Green Party and continued by Fine Gael and the Labour Party.

The Minister has not answered the key question. Is there still an emergency? If there is not an emergency how can he possibly justify continuing to punish these workers? All of the things the Minister mentions, the instability and all the rest, were the fault of these young teachers or nurses or gardaí or local authority workers but they have suffered cruelly as a result. Even at the end of the Lansdowne Road agreement process they will be earning less than they were earning in 2009. Many of the conditions they lost are not even mentioned in the Lansdowne Road agreement.

I did answer Deputy Boyd Barrett’s question. I laid out very clearly the reasons why I believe the maintenance of the legislation is needed.

There was no Brexit then.

I outlined the reasons for that very clearly and I am sure I will be debating them with the Deputy later on and I believe also on Friday. The full cost of repealing all the FEMPI measures is €2.2 billion.

The challenge for me is that if I consider the issues the Deputy raises regularly with me - the need for housing, for more investment in our health services, bringing more people into frontline roles in our public service - I have to reconcile all of that with the wage and pension costs of supporting those already inside the public services. The additional expenditure required to relinquish that legislation is over €2 billion. Perhaps the Deputy could tell me, and I would appreciate his views on the matter, how I can find that €2 billion-----

We have loads of ideas.

-----while meeting all of the needs that the Deputy raises regularly with me because he is right to raise those issues.

Get the corporation tax.

I have no problem doing that. First, the Minister got a bounce of an extra €2 billion in corporate tax receipts last year. We are €700 million ahead of target on tax revenue at the moment, much of it coming from the corporate sector because we on this side of the House began to demand action on the "double Irish" tax scam that has started to force these corporations to pay a bit more tax. The Minister should use some of that money. He should bring in a financial transaction tax and tax people earning in excess of €100,000 more, instead of maintaining absolutely draconian cuts in the pay and conditions of public sector workers and an Act which has extraordinarily draconian provisions and which can be described as nothing other than bullying. Most of the people who signed up to the agreement only signed up because the Government put a gun to their heads called FEMPI and told them to sign up to this, which was unacceptable, or they would be punished by not getting their increments or allowances and not allowing for promotions. How can the Minister justify that extraordinarily draconian behaviour?

I have outlined the rationale for this. I have always made very clear my appreciation for the huge contribution the public service has made to our country at a time of great difficulty but amidst the anger the Deputy has articulated let us also acknowledge two other points about what is happening in our public services, first, over the past two years we have over 18,000 more public servants, the majority of them performing the frontline roles that the Deputy regularly calls for. We have more special needs assistants, SNAs, than we have had before. We are hiring new people to teach, which we were not able to do some years ago. The improvement in our public finances has given the State the ability to do that. Any future change will happen because of a change in our economic circumstances that the Deputy said was never going to happen. He said in this House that we would not see our economy get to a point where its prospects would improve and now with the very improved prospects that he said would not happen he is not acknowledging the change they are making in terms of our ability to hire more people, put more money into our health services and to pay for agreements such as the Lansdowne Road agreement-----

Give people equal pay.

-----which are needed and which have been accepted by the majority of unions in our State.

With a gun to their heads called FEMPI.

Flood Prevention Measures

Thomas Pringle

Ceist:

23. Deputy Thomas Pringle asked the Minister for Public Expenditure and Reform the progress that has been made in relation to flood prevention measures in the Finn Valley area of County Donegal. [19903/16]

This question relates to the devastating flooding that took place in County Donegal last December in the wake of storm Desmond. Large parts of east Donegal through Ballybofey, Castlefinn and Lifford were severely flooded. The flooding dissipated very quickly and in the weeks afterward there was very severe flooding in the rest of the country. I want to make sure the incident in Donegal stays on the Government’s agenda to make sure the funding is put in place to remedy this situation as quickly as possible because there is no doubt it will arise again.

The core strategy for addressing the areas at significant risk and impact from flooding is the Office of Public Works, OPW, catchment flood risk assessment and management programme, CFRAM. CFRAM is reaching a stage where we will put it on public display in mid-July. All the preliminary options have been displayed. The Government has announced increased levels in the investment for flood relief as part of its capital investment plan 2016-21. The Government recently announced increased levels of investment in the area of flood relief as part of the overall Capital Investment Plan 2016-2021 and this investment programme will allow for consideration of measures arising from the flood risk management plans.

Twenty-six areas for further assessment, AFAs, are being assessed in County Donegal under the CFRAM programme. These were deemed to be areas of potentially significant flood risk under the preliminary flood risk assessment, PFRA, which was completed in 2011. The Donegal AFAs are being assessed under the north western-Neagh Bann CFRAM study. Work on this study is progressing well. Further information is available on the study website: www.neaghbanncframstudy.ie/.

The following is the list of AFAs in Donegal:

Ardara Ballybofey / Stranorlar Bridge End Bunbeg - Derrybeg Buncrana and Luddan Bundoran and Environs Burnfoot Carndonagh Kerrykeel (Carrowkeel)

Castlefinn Clonmany Convoy Donegal Downings (Downies) Dunfanaghy

Dungloe Glenties Killybegs

Killygordon Letterkenny Lifford Malin Moville Newtown Cunningham/ (Newtowncunningham) Ramelton (Rathmelton) Rathmullan

I thank the Minister of State for his response. The key point is when the money will be made available following the completion of these studies, particularly for areas that are the responsibility of the OPW. I understand very few areas in Donegal the direct responsibility of the OPW. I presume the next stage will be applications for funding. I refer in particular to east Donegal, Finn Valley, Ballybofey, Stranorlar and Lifford. When will their status in the priority listing within the Department for funding for works to be carried out be decided?

Three hundred areas throughout the country will be determined and put on a priority list. Based on that, projects will be taken in order of priority. The public consultation that will happen in the next three months will determine people's input into that process and will be adopted by local authorities early next year. There is plenty of room for minor works schemes to be carried out to relieve some flooding. Projects up to €500,000 in total can be applied for through local authorities. Such schemes can be brought forward at any time by local authorities. A total of €430 million is available over the next five years for projects to be carried out. We would welcome any applications under the minor works scheme for projects in Donegal.