I ask Members leaving the House to do so quietly. I call Deputy Barry Cowen.
Leaders' Questions
Yesterday the homeless figures rose again by 35%. There were 1,026 families and 2,110 children homeless in Dublin. Despite all the apparent efforts that are being made to provide homes for people, this is an increase of 48% on last October's figures. None of us on either side of the House can be complacent about the homelessness crisis. We should make every effort to remove whatever obstacles that exist and are preventing families from leaving emergency hotel accommodation.
A major part of the housing crisis is the lack of supply and yesterday's announcement by the Central Bank is an effort to address it. We all know and appreciate that the 20% deposit requirement was putting enormous pressure on those who are saving to buy a house, particularly those who are already paying exorbitant rents. The Central Bank economists found that the average first-time buyer would have to save €64,000. However, the new requirements will still prohibit those who own apartments from buying a modest house to accommodate a growing family. They are the biggest losers in yesterday's announcement.
There is also a large chance that house prices will be inflated. The new rules will allow first-time buyers to borrow any amount if they have a deposit of 10%, so long as they meet the other criteria. The other criteria include a lending limit of three and a half times the income of the buyer, which we accept and acknowledge is common sense. There is no doubt that many people in the country will be relieved with the announcement as it will possibly enable them to get on the property ladder. However, when these rules are taking in conjunction with the Government's help-to-buy-scheme, some people will only now be required to have a 5% to 10% deposit. Essentially, 95% mortgages are back in town. With the limited supply of new homes on the market at present, there is considerable risk of further house price inflation.
We all know and accept that we want diggers on sites, but these initiatives, on their own, are a high-risk strategy. One of the problems of the housing market is a lack of supply and not enough construction. How can the Government be confident about giving money to potential buyers so that they can outbid each other for limited supply? How does the Government believe that that will not inflate house prices? With building costs still very high, how is the Government sure that developers will not see this combined effort, on their own, as a massive opportunity for them to go back to the future when house prices went out of proportion?
Thank you, Deputy.
Finally, if I may, are the Tánaiste and her Government satisfied that the €50 million allocated for the help-to-buy scheme, in combination with the new Central Bank regime announced yesterday, will not inflate prices? The Central Bank Governor stated yesterday that he would renew the rules if prices rise, but what will the Tánaiste do if she is proven wrong and that is the case? I contend - make no mistake about it - that that will be the case. We need to know if the Government has any idea as to what it will do when it does happen.
The Deputy raised two important issues, namely, the changes to the Central Bank mortgage rules announced yesterday and the issue of homelessness. I will address both of them.
We welcome the changes to the prudential rules announced by the Central Bank yesterday. These rules had set borrowing conditions on those seeking to take out a mortgage. The changes will be welcomed. When we examine the figures on first-time buyers in Ireland, we know that the percentage is far too low. This gives a much needed opportunity to those first-time buyers who have not been able to get on the ladder. As a result of the easing of the rules, they will now be able to do that. This will be welcomed by individuals throughout the country. It is also important to note that it will impact on supply.
Yesterday Professor Lane stated, "The 90% loan to value ratio limit for all first-time buyers simplifies the overall framework, with only 5% of lending permitted above this level". He also stated that the rules needed to be adjusted because they were too complicated, but that the limit of a 3.5 times loan to income ratio on borrowing remains. I believe that deals with the point made by Deputy Cowen. Professor Lane further stated that he will monitor the situation, as will the Government. I believe that these are welcome initiatives that dramatically change the mortgage lending rules. In that regard, I note the reporting from various experts today which speak of a dramatic change. The move is expected to lead to a surge in home building, which is precisely what is required in the country. The situation will be kept under review, but we need an increase in supply and for first-time buyers to be able to move out of renting, as they are paying high rents, and get a deposit together. This allows them to do that. This is a very welcome change for a hard-pressed group, but the situation will be monitored.
The Deputy is well aware of the figures on homelessness. The new figures we have today are those for October. There is a slight increase, but they also show that there is a slowdown in the rate of increase, which must be welcomed. None of us wants to see families in accommodation for the homeless or hotel accommodation. The Minister has made it clear that it his intention, as I am sure it is everyone's intention, for no family to have to live in hotel accommodation. We are working steadily towards ensuring that that is the situation and there will be a change in the early months and towards the middle of next year.
There is an issue, but progress has been made. None of us wants to see families in this situation. Let me note, however, that in 2016 there were 4,240 extra social housing units and that 1,755 homes were purchased, 670 were built and 1,500 voids were made habitable. These are significant figures and we are seeing many families moving out of homelessness. As a Government, we have acknowledged that this is a crisis, but it is being dealt with. The plan was announced in July but, as the Minister acknowledged this morning, it will take time.
The Tánaiste's comment on the homeless figures reminds me of a comment Garret FitzGerald once made about inflation when he spoke of a decelerating rate of acceleration. They sound somewhat similar to say the least-----
It is a hybrid.
-----but far be it for me to be making flippant remarks given the seriousness of the situation.
The emergency and the urgency of the crisis were meant to be resolved in the short term with the provision of modular units.
This time last year 500 rapid-build modular units were promised, of which only 22 have been built. At Question Time this week I asked the Minister to make us aware of the problems in order that we could help to make sure this would not happen again and that the matter would be resolved, whatever the logjams.
On the comment the Tánaiste made on what the Governor of the Central Bank had said yesterday, of course, the rules needed to be changed. They were cumbersome, complicated and downright unfair. However, the problem of supply cannot be solved in isolation, but the measures announced by the Central Bank and the help-to-buy scheme, allied with other measures, would have the desired effect. Will the Tánaiste and the Government consider real supply initiatives that would help and work hand in glove with the announcements made by the Central Bank and the Government such as reducing development levies and revamping certification costs, without compromising standards, as has happened in the United Kingdom, including the North where construction costs are up to five times lower than down here? Will the Government consider VAT reductions? Will it allow the credit unions into the market to allow the provision of competitive finance to be at the heart of the mortgage market?
I repeat to the Deputy that providing affordable, quality and accessible housing is a priority, as can be seen in every action of the Government, in the work the Minister, Deputy Simon Coveney, is doing, in the plan published and its delivery to date, notwithstanding the fact that serious issues remain, with people moving into homelessness and a dysfunctional housing market, one of the most scarring legacies of the work of the Deputy's party in government and its catastrophic handling of the economy. We have taken on the problems with which we were faced and taken every-----
The Tánaiste has all of the answers.
The Deputy has not provided many answers on homelessness.
That is true.
Already this year 320 rapid-build units have been provided.
Some 320 have been provided.
Where?
Construction will have started by year end.
Started.
Yes, on 350 units.
(Interruptions).
May we have order, please?
There have been 650 housing solutions through the housing assistance payment, HAP, initiative, as well as a 40% increase in the housing budget. A series of actions have been taken. I have acknowledged that they are not-----
They are not working and we want to know why.
They are beginning to work but will take time. That is quite clear.
The Tánaiste's time is up.
Everyone across the House has as much sympathy as the Deputy does for every family that find themselves in this situation. It is shared by all of us. Dealing with this issue is a priority for us and the Minister will make further announcements on the rental strategy in two weeks. We need to consider alternative solutions for families at risk of entering homelessness and they will be announced in the next two weeks.
We are running seriously over time on Leaders' Questions. I call Deputy Eoin Ó Broin on behalf of Sinn Féin.
I was going to say the Ceann Comhairle was in a very generous mood with time this morning, but-----
I will be equally generous to everybody. If some Members disregarded the time limits, the Deputy should do so also.
I will not need the Ceann Comhairle's generosity.
It appears that Fine Gael's mishandling of the issue of water charges is set to continue. Yesterday we finally saw the motions to establish the committee on the funding of domestic water services and they confirm yet another stitch-up between Fianna Fáil and Fine Gael. The Government has decided to impose Senator Pádraig Ó Céidigh as Chairman of the committee, which, as the Tánaiste knows, is contrary to ordinary procedure. The special Committee on the Future of Healthcare elected its own Chairman; the special Committee on Housing and Homelessness elected its own Chairman; yet for some reason the Government has decided to deny this right to the committee on the funding of domestic water services. Ministers do not have the right to hand-pick the Chairmen of Oireachtas committees, yet that is exactly what is happening.
Who elected Deputy Gerry Adams?
This is just the latest instalment in the great Fianna Fáil-Fine Gael stitch-up on water charges.
(Interruptions).
A majority of the Deputies elected to the House were elected on manifestos which included a commitment to scrap water charges, yet every time Sinn Féin has forced a vote on the matter, Fianna Fáil and Fine Gael have stitched it up to keep the issue of water charges alive. The people voted for abolition of this unjust charge, but what did Fianna Fáil and Fine Gael do? In a stitch-up they suspended the charges for nine months and appointed a so-called expert group to examine the issue. Now, in another stitch-up, they are interfering with the committee, the job of which will be to discuss the expert group's report. All the while, Fianna Fáil keeps twisting and turning on the issue. It is the party that signed up to water charges in 2010, that called for their suspension in 2012 and their abolition in 2016, yet only last weekend Deputies Micheál Martin and Barry Cowen left the door open for the return of a water charging regime. With all of the U-turns and stitch-ups, is it any wonder it has tied itself up in knots on the issue?
My questions are very simple. Will the Government withdraw from its attempt to impose a Chairman on the special committee on the funding of domestic water services? Will it put an end to the Fianna Fáil-Fine Gael stitch-up on water charges? Will it respect the democratic will of the people and allow us to vote on scrapping these unwanted and unjust charges?
(Interruptions).
May we please have order for the Tánaiste's response?
The Dáil will vote on the motion on the establishment of the committee today and I assume Deputy Eoin Ó Broin will accept its democratic will when the vote is taken. The Chairman of the committee is named in the motion as Senator Pádraig Ó Céidigh who, as the Deputy knows, is not a member of any party but a member of the Independent group in the Seanad.
He is a Fianna Fáil nominee.
I am sure the Senator will chair the committee in a way that is fair to all members. As Deputy Eoin Ó Broin knows, the committee has been given a set timeframe of three months from the date of its first public meeting in which to report to both Houses. The expert commission is due to publish its report at the end of the month. I understand the motion on the establishment of the special joint committee was discussed by the Business Committee this morning and it is appropriate to have the committee in place before the commission's report is published. It needs to be set up by the Dáil today and any vote called can take place today. As we know, the issue is one on which many Members of the House have very differing views; as such, an all-party committee, where every party and group has a voice, is the appropriate place in which to have such a discussion. The Deputy will have ample opportunities to put his views to the committee and I suggest he do so. It is being established as a joint committee in order to include Members of the Dáil and the Seanad. The membership has been designed to broadly reflect the make-up of the Dáil. In fact, it favours smaller parties and groups at the expense of the larger parties, especially the Government. That is the reality.
Not on water charges, though.
There will be a democratic vote to decide on the approach to the work the Government has agreed should be taken. Deputy Eoin Ó Broin will have an opportunity, if a vote is called, to decide whether he wants to support the composition of the committee, including the Chairman. I am very confident that the Chairman named, Senator Pádraig Ó Céidigh, will do his work in a way that is very fair to all members. There will be ample opportunities to consider the broad range of issues involved in a place where the work can be done in a way that will provide the best possible information for citizens on what has been a very contentious and difficult issue.
Not only has the Tánaiste confirmed that it is the intention of Fianna Fáil and Fine Gael to deny the right of the committee to elect its own Chairman, unlike the other two special committees established since the start of the Thirty-second Dáil, she has also confirmed that the Government is imposing on the Seanad one of its four nominees. Ordinarily, when an Oireachtas committee is set up, the Seanad decides who it will appoint to it, yet Fianna Fáil and Fine Gael are imposing on the Upper House one of its four nominees in the person of Senator Pádraig Ó Céidigh. The reality is that everybody knows that the function of the suspension of water charges, the so-called expert commission and the Oireachtas committee is to get Fianna Fáil and Fine Gael over the hump of water charges. It allowed the return of Deputy Enda Kenny as Taoiseach and will allow this odd coalition between the two parties to limp on endlessly.
(Interruptions).
May we have order, please?
I appreciate that, with all of the U-turns, Fianna Fáil is confused about its own position and does not like to hear people remind it of this fact. My question is very simple. Why, for the first time since this Dáil was formed, is the Government seeking to impose a Chairman on a special committee contrary to ordinary procedure?
Why for the first time, probably in decades, is the Government seeking to impose on the Seanad one of its Members it would ordinarily elect for itself to an Oireachtas committee? These are very simple questions. I am sure the Tánaiste has the ability to answer them.
The question is why Deputy Eoin Ó Broin is afraid of the democratic process in which we are involved.
Sinn Féin never really did take to democracy.
(Interruptions).
Why can Sinn Féin not accept a democratic vote in the Dáil?
Sinn Féin Members do not seem to want to vote on it.
Why can Sinn Féin not accept the results of a democratic vote in the Dáil? There will also be a democratic vote in the Seanad where Senators will have ample opportunity to decide how they wish to respond. They will take their democratic decision as well. Why be so fearful of a committee which will bring in experts to discuss the issue? It will be very helpful to have experts at a committee designed especially to consider this issue. Ireland is the only country in Europe which does not have water charges. It is worthwhile to have a committee with expert input which was agreed by this House. It has been given a clear remit about the issue to be discussed and will report within three months. That is a democratic process which the Government has put forward and which we will vote on today. I suggest Sinn Féin has its input into the committee when it is formed. It is the appropriate place for Sinn Féin to put its opinions on the table.
Is the Tánaiste aware there is a serious and developing crisis in our pensions industry? Is she aware of the catastrophic situation where 600,000 Irish citizens with defined benefit pension schemes are facing virtual pauperisation in their retirement years, despite a lifetime of making pension contributions? Already six out of ten defined benefit schemes have shut down under this Government's watch. Now we have the ignominy of the Melbourne Mercer Global Pensions Index putting Ireland at the bottom of the grading list and ranking it the worst for sustainability of its pension system.
If the Government is aware of the crisis, it has a funny way of showing it. Not only has it done nothing to address this issue, what it has actually done has made the situation worse. Last week, Independent News and Media, INM, unilaterally closed its defined benefit scheme on the back of a €23 million shortfall, despite the fact that this was the company that got a €140 million bailout from the taxpayer. There was no discussion and no alternative provided. It was simply gone. It is the latest solvent employer to shut down a pension scheme because it does not want to foot the bill. There is nothing coming out of this House to put a stop to this type of behaviour.
Earlier in the year, we had the appalling example of the Central Remedial Clinic, CRC, unilaterally shutting down its scheme on foot of a €2 million deficit, a tiny amount when lined up against its assets. To add insult to injury, €2 million is coincidentally the same amount that will be paid from these workers' pension pot to Mercer and all the other advisers involved in that scheme. This is because the Government put wind-up costs higher than members' benefits.
The same professional experts, who play all sides of the house, advising the trustees and acting as actuaries will now get money from a wind-up and bringing people into a new defined contribution, DC, scheme and money from administering those schemes. One could not make this up.
The Irish airline superannuation scheme, IASS, also has the same advisers. They set up a very peculiar and unique funding arrangement. I do not know if the Tánaiste knows but a new bombshell trustee report has emerged on the IASS. After years of all the so-called professional advice and a year in operation, this scheme is now in trouble. Hidden in his report, the actuary stated he is no longer confident the scheme will meet the funding standard. Normally, he stated in the report, that should be brought to the attention of the Pensions Authority which should be required to intervene and take action. No action is being taken in this case, however.
When is the Government going to wake up and realise we have a crisis in pensions? What action will it take to examine the cabal at the top of the pensions industry? The same organisations, IPT, Mercer and Irish Life, appear on all sides of the fence in this arrangement while pensioners' living standards are being utterly decimated and the Government sits on its hands.
On the final point the Deputy made, we have a financial services regulator who can deal with the claims she has just made. She outlined several individual schemes where there are problems. I will revert to her on those individual schemes.
On the broader point, in the Government's approach to the Lansdowne Road agreement and the unwinding of the financial emergency measures in the public interest, FEMPI, legislation, the pensions situation will also be addressed. The Minister for Social Protection, Deputy Varadkar, and the Minister for Public Expenditure and Reform, Deputy Donohoe, are both examining these issues. The Minister for Social Protection has made it clear that we know there are problems and we are concerned about the deficits which have emerged. Careful planning will be needed to deal with this issue as we go forward.
Given the improvements in the economy, which are continuing as we see from the latest employment figures, we are obviously in a better position to deal with some of the issues highlighted by the Deputy than if we were still facing a situation where we had the kind of problems we had some years ago. The pensions issue is a central one and of significant concern to individuals and organisations. We are conscious of that. In the unwinding of FEMPI, that will be part of the negotiations. We are approaching the whole issue of public sector pay by a process of negotiation and discussions. That is how we will have to address the pensions issue also.
I am not sure if the Tánaiste understood the question or realised the points I specifically made with regard to particular problems with defined benefit pension schemes or my very firm claim that blatant mismanagement of the schemes is under way on a vast scale. It is not just in the companies I mentioned but in many more at the expense of citizens and pensioners. While it may be the case on paper that we have regulation, a Pensions Authority and so on, the point I am trying to make is that this regulation is wholly inadequate.
It is not that there is a crisis in funding. I gave an example to the Tánaiste's colleague, the Minister for Social Protection, Deputy Varadkar, several weeks ago of a supplementary pension scheme in Aer Lingus where €200 million has sat in cash for two years in a pension scheme. A decision was made to close it but it has not been wound up. People have retired and could be the beneficiaries of that money but they are being denied access to it. Meanwhile, the trustees, advisers, administrators and the management fees are all feeding off the pot which is getting smaller and smaller.
The same names appear across all of the trustees and across the industry. There needs to be an inquiry into this. When are we going to the beef up pensions regulation? When I put that to the Minister for Social Protection, he put me in touch with a very nice man from the pensions section of his Department. He eventually came back to me and said it is very bad form but they are not doing anything illegal. The law needs to be changed.
The points the Deputy made are extremely serious. I acknowledge the impact on individuals and their income after retirement. I also acknowledge the serious consequences of these issues if not dealt with. Clearly, she has raised this with the line Ministers, Deputy Varadkar and Deputy Donohoe. If further legislation is needed, I have no doubt it will be examined. I will ask both Ministers for a response to the particular schemes she has raised and the points she has made about them.
On the broader issue of whether stronger legislation is needed, I am sure if it is needed, it will be considered. I will revert to her on whether any legislation is planned. It seems clear from the Deputy's supplementary, the Minister for Social Protection arranged for further discussions and input from his Department on this issue. I will advise him that she would like further contact.
The cost of insurance is still a serious problem for practically everyone.
The old and young cannot pay the premiums that are now being demanded. An elderly person of 72 or 73 who never had an accident must now pay €710. This has risen from €350, despite the fact that the man is driving the same car. It has passed its test, everything is perfect and the man has made no claim. This is the way it is going.
Youngsters starting out in the world should get a chance unless they do something wrong but they are being penalised from the start. Young fellows who want to drive to work are getting quotations of €5,000 and €6,000.
With regard to transport, the quotations for lorry drivers have increased from €2,000 to €5,000. One transport company that was paying €75,000 is being quoted €250,000 for next year. This company will not be able to stay in business. Buses, especially school buses, have been affected. Quotations have risen from €2,000 to €4,000; they have doubled. Many school bus contractors are tied into contracts for the next three or four years, and some for up to five years. They will not be able to stay in business.
An elderly woman who contacted me paid €330 last year but was quoted €810 for the coming year. One of her sons rang the insurance company. He, having a lot of vehicles, asked what was going on with his mother and he managed to reduce the premium back to €330. Things like this need to be explained.
The cost of public liability insurance for businesses has gone mad. Companies are now trying to decide whether to keep going and they are analysing how much it would cost to get out of business. Homes threatened by flooding can get no insurance. The authorities will not clear the rivers. It is well known the houses are not sinking, but the rivers are rising.
An insurance broker has told me there has been a huge increase in the number and value of claims. Claimants cannot lose because some solicitors work on a no-foal, no-fee basis. The Personal Injuries Assessment Board is dealing with only 20% of claims now. Minor claims for whiplash amount to £7,600 in England whereas the figure in Ireland is €19,400. Up to €77,000 is claimed for serious whiplash in this country. Some solicitors are blatantly advertising for claimants, and insurance claims are not being fought because 70% of cases are being won. England, France and other countries are paying a lot less in the case of such claims.
This is a very important issue. Rising costs have been a concern. The Deputy has outlined a number of individual cases of rising costs for people seeking to renew their premiums. He mentioned both car insurance and the difficulty in obtaining insurance in other areas, including in respect of flooding. This is an issue we take very seriously. We will have a report from the working group in which the Minister of State, Deputy Eoghan Murphy, has been involved before the end of the year. We will certainly accept any initiatives or recommendations from that working group, which has been examining the specific issues the Deputy raised. We will take on board the initiatives and recommendations and I am sure we will have a debate on the report in the Dáil once it becomes available. It will be available by the end of the year and it will examine the very issues the Deputy raised here this morning.
The Deputy will be aware that the Minister of State, Deputy Canney, has been working with representatives of the insurance sector in respect of cases where families and individuals have not been able to get flood insurance for their homes. He is seeking a solution. I met representatives of the insurance industry last week to discuss various issues - for example, the issue of people who seek insurance but who do not produce a driving licence. Apparently, it is not compulsory at present, as the Deputy is probably aware. There are drivers who are unlicensed and without insurance, and they end up costing tens of millions of euro every year. Therefore, the insurance industry needs to act itself in regard to a range of issues.
The Deputy raised the broader question of costs and claims. A number of Bills are to be introduced in regard to settlements and agreements. Periodic payments are separate but there are new initiatives in regard to payments in court. There will be more efficient court practices dealing with people who break the law, including by carrying out road traffic offences. All this will make a difference. A range of initiatives will, I hope, see improvements regarding the increases the Deputy has been outlining.
One solicitor boasted on Facebook that he got €80,000 for a girl making a claim. He said that if others have similar cases, they should come to him so he can do the same for them. There are serial claimants and they need to be dealt with. They need to be put on a list and action needs to be taken in regard to them. The fraud squad or some other squad needs to be sent after them because they have the country ruined and they have people driven down through the ground. We have enough reports and studies; we want action now. I ask the Minister to take action on fraudulent claims.
Some of what Mr. Quinn did was not correct but he also did a lot of good. He revolutionised how claims were dealt with. He dealt with them before they went legal. We must take positive action now, and the fraud squad or some other squad must be put into action to deal with these people. We have had enough reports and studies; we want action.
It is important to have an evidence-based report. We will have it very shortly. I understand the Deputy's impatience but we will have the report before the end of the year. It will give us detailed information based on evidence the committee has been gathering. I assure the Deputy that we intend to take action. Once we have the report, we will act on the recommendations therein to deal with the circumstances the Deputy has outlined so comprehensively this morning.