Before proceeding with the business of the meeting, I welcome Deputy McHugh as a member of the committee. He was appointed on 12 October by the Dáil in substitution for Deputy Twomey. He attended a select meeting of the committee last week and this is his first attendance at a joint meeting.
The first item is the minutes of the meeting of 6 October, a draft copy of which has been circulated. Are they agreed? Agreed. Are there any matters arising from the minutes?
Item No. 6 contains a reference to the report of the inspectors into the affairs of the National Irish Bank. It was agreed this would be included in our work programme. Could I have a rough idea as to when we will consider this report?
No, but I suggest that after today's meeting we establish a timeframe for the work programme because it has been proposed during recent meetings that three of four items be added to it.
That is okay.
When the joint committee last met I raised the issue of IFSRA's responsibility regarding those who may have lost investments with W& R Morrogh Stockbrokers. I do not want to get involved in a domestic matter but a court decision referred to the entitlement of the receiver of the firm to ownership of shares recorded in the books of the firm or in nominee accounts. This has destroyed many of the small investors who had been broking with the firm. We should examine this with a view to strengthening the legislation in this area.
As we said, there has been a request for three, four or five items to be included on the work programme. I suggest we set dates for it at our next meeting, not today.
I hope we will conclude all our business regarding correspondence, travel proposals, statutory instruments and EU scrutiny by approximately 3.30 p.m., at which time we will be able to meet the visitors from AIB.
The first item of correspondence, which has been circulated, is No. 10 of 2004. The committee has received a letter of thanks from a correspondent in London who had written some time ago alleging that AIB had sought money to which it was not entitled from the administrator of her late husband's estate. We had agreed to take the correspondent's experience into account in the context of a meeting with representatives of AIB. I suggest we note the letter. Is that agreed? Agreed.
Item No. 12 concerns a circular from Niall Murphy on behalf of AIB shareholders committed to the restoration of honest and integrity throughout AIB. I suggest we note the letter. Is that agreed? Agreed.
A letter from the chairman of AIB has been circulated, in which Mr. Gleeson indicates a number of constraints that will limit the extent to which he and Mr. Buckley can comment on certain topics. The committee will appreciate Mr. Gleeson's concerns and therefore I suggest we note the letter. Is that agreed? Agreed.
On document No. 11, a number of statutory instruments have been sent to the committee by the Department of Finance. Under our orders of reference we have the power to consider such statutory instruments made by the Minister for Finance and laid before the Houses as the committee may select. The time within which the House can annul a statutory instrument is often limited by statute to 21 days after it has been made. SI 427 of 2004 appoints 1 January as the date of coming into operation of section 19 of the Finance Act. Can I take it that the committee does not wish to consider this statutory instrument? Agreed.
SI 543 of 2004 makes regulations to extend the period following the issue of a life assurance policy within which a policyholder may cancel the policy. Can I take it the committee does not wish to consider the statutory instrument? Agreed.
SI 551 of 2004 appoints 2 February 2004 as the date for coming into operation of sections 31 and 42 of the Finance Act. Can I take it the committee does not wish to consider the statutory instrument? Agreed.
SI 570 of 2004 provides for the nomination of two persons for appointment as directors of Investor Compensation Company Limited. The people involved are nominated as they appear to the Minister to represent the interest of clients of investment firms. The 21-day review period applies in this case. Can I take it the committee does not need to consider this statutory instrument in any further detail? Agreed.
SI 574 of 2004 allows operators of touring coaches of a lower height than was hitherto allowed to qualify for the full repayment of VAT. The 21-day regulation applies. Can I take it the committee does not need to consider this statutory instrument in any further detail? Agreed.
Document No. 7 of 2004 was referred to on our last meeting. On 17 June the committee's attention was drawn to this proposal but the Sub-Committee on European Scrutiny did not recommend that we scrutinise it. The proposal involves a preliminary draft budget to budget the surplus resulting from the implementation of the 2003 EU budget. The committee had sought a briefing note from the Department of Finance and, having reviewed the note it provided on 14 July, requested a further detailed breakdown of any funds that were unspent and not drawn down by Ireland in 2003. The note explains the circumstances in some detail and in particular states that it is not possible to identify from EU budget data the country composition of any underspending in respect of the Structural and Cohesion Funds. The letter does not fully answer the questions we were asking. It states essentially that the information is not available from the European Union but I am doubtful about this. I do not believe countries do not know the level of underspend. Therefore, I propose we defer consideration of the letter rather than having a detailed discussion today. We will return to the matter at the next meeting. Is that agreed? Agreed.
The Sub-committee on European Scrutiny has sent to this committee a list of documents and proposals considered and the decisions taken at its meeting on 30 September. It has drawn our attention to four proposals, in particular, but has not recommended that we scrutinise them. They are documents COM (2004) 486, 487, 494 and 495. Is it agreed that none of the proposals considered by the sub-committee warrant scrutiny by this committee? Agreed.
The Sub-committee on European Scrutiny has also sent this committee a note on documents considered and decisions taken at its meeting on 7 October. The single proposal involved has not been referred to this committee for scrutiny. It is proposed, therefore, that it does not require scrutiny by the committee. Is that agreed? Agreed.
On correspondence, item No. 17 refers to endowment mortgage holders. A letter from Deputy Bruton concerning the manner in which endowment mortgages have been sold has been circulated. Deputy Bruton proposes that the consumer director of IFSRA and officials from the Department of Finance be urgently invited to address the committee on the issue. Does the Deputy wish to make a comment?
It is alleged that a number of these products were mis-sold in that people were not properly advised of the risks involved. Moreover, some of the sales were directed at meeting a quota, whereby local managers had to achieve targets and did not take due care in ensuring the products sold were most suited to the consumers' needs. In the United Kingdom it has been found that under common contract law some of the companies involved did not take the due care expected of them and have become involved in finding solutions for those facing difficulties with shortfalls. I understand IFSRA is conducting a study in this regard.
Concerns have been raised in public about the Statute of Limitations whereby if a complaint is made six years after the event, it cannot be investigated by the financial ombudsman under the Irish Financial Services Regulatory Authority Act 2003. There is also a concern to ensure consumers are fairly treated in respect of these products and that financial institutions will take proper responsibility for the manner in which they are sold. It is time to hear the views of the Consumer Director and the Department of Finance which is responsible for the legislation underpinning the financial ombudsman.
While I support Deputy Bruton's proposals, we should also invite a mutual endowment company such as Standard Life as well as Lifetime Assurance or one of the plc companies to appear before the committee because I understand there is a divergence in terms of the moneys involved. Mutual companies are standing up well in the area of endowment mortgages while the plcs are unable to meet the requirement to pay off the loan as expected after its duration. We should broaden the discussion in order that we hear from the regulator as well as the financial and insurance companies.
I support Deputy Bruton's request. However, I understand IFSRA is undertaking a detailed investigation to establish the extent of the problem in Ireland and how many such mortgages are still outstanding. In that context, I propose that we meet when that work has been substantially completed because the situation is different in the United Kingdom where people were advised by financial journalists, in particular, not to buy these products. Therefore, the level of exposure in Ireland is much lower than in the United Kingdom. I would prefer to see IFSRA's preliminary survey of the extent of the problem before we examine the issue further. Moreover, up until now we have not experienced negative equity as has happened in the United Kingdom. The problems and level of exposure in Ireland are different. I, therefore, recommend we find out from IFSRA how far it has progressed and that we examine the issue when we have received a body of information from the authority.
I suggest that at our next meeting, as indicated in previous correspondence, we set out the timetable for all the groups with which we want to deal in the autumn schedule. We have spent a lot of time dealing with the banks and the issue of decentralisation. However, from next week we will be in a position to set our timetable. I suggest that we agree a detailed timetable next week.
I am happy with that. While I agree the problem may not be as severe here, I also know from people who have come to me since the story broke that some individuals are badly affected. While they may not be as numerous, the issues remain the same and many of the selling techniques and materials are similar to those used in the United Kingdom. There is concern about this issue and we should take an interest. We should try to ensure IFSRA moves swiftly to complete its work and take the opportunity at an early date to see what can be done to resolve it.
We will come back to the issue at our next meeting.
On a related matter raised by Deputy O'Keeffe, it would be helpful to the committee if we had a list of the remaining mutual companies in Ireland because it is difficult to identify them. I had thought that most insurance companies had become plcs but that is obviously not the case. It would be interesting to have the information because we should discuss the value or otherwise of mutual companies.
We will try to establish that information.
They are doing business here and will make payments for people. I can recommend one to the Deputy.
The next item on our agenda relates to travel proposals. An invitation has been sent to me as Chairman to participate in the hearing of the Chairs of the budgetary committees of the national parliaments of the European Union. The meeting takes place on 23 November. An estimate of the coast of the visit has been circulated. Members believe I should represent the committee at the meeting. Is that agreed?
There has been huge media coverage of the issue of people travelling abroad. I fully support this proposal because it is crucially important that we have someone participating in the budgetary discussion at EU level. On the past few occasions I proposed that we send someone to participate in the discussion on pensions in Paris. It is probably the most crucial issue at present and is covered in all of the financial pages today. I also supported the sending of a representative to a meeting on the issue of information technology. We should leave it open to any journalist who would like to accompany the delegation at his or her own expense to do so to see what goes on. He or she might learn something which could be very good for him or her. I would love to see the press reporting on some of the conferences we attend. It would be good for the journalists involved as well as their readers.
This is merely an afternoon meeting of the Chairs of the budgetary committees. I take the Senator's point. It is useful that we are discussing this matter in public session.
As we do in respect of all proposals.
I understand this is the only committee which discusses all of its travel arrangements in public beforehand rather than have them reported after members have travelled to the far ends of the world. This committee is very open. I suggest other committees proceed in a similar way. There is nothing to be hidden and no need for secrecy. If the committee is undertaking productive work, members should be prepared to talk about it in public before they go.
With my colleagues, I recently attended a conference in Paris on the issue of corporate governance which was discussed by the committee in the context of the Enron affair. A written report on the conference is being prepared which we will have for the next meeting.
I appreciate that. A number of matters are to be considered under Standing Orders of the House in respect of travel proposals. Rules governing committee travel require that any proposal must be directly and explicitly linked to the area of work in which the committee concerned has decided to become involved pursuant to its orders of reference and in the context of its work programme. We are also required to state the reason the visit is considered necessary.
The meeting in question is the second such annual meeting. I attended last year. We replied earlier this year to a letter from the Chair of the European Parliament's committee on budgets to the effect that we would be receptive to attending further such meetings. Some members met informally this year the Chairman of the committee of budgets when he visited Dublin. Furthermore, the committee has been examining aspects of the European budgetary process in the context of Commission proposal SEC (2004) 593. The meeting in question offers an opportunity to explore further these issues.
The committee must also state the reason the visit is considered necessary. It is necessary for it to interact, to share ideas with our counterparts in other national parliaments and to play its part in addressing the perception of the democratic deficit by improving lines of communication between the Oireachtas and those in Brussels who have an important input into matters that impact significantly on the national interest.
Travel rules provide that economy class should be used where practicable and reasonable. Is it the view of the committee that given the short distance involved, economy class is practicable and reasonable for this visit, subject to the fares being fully refundable? Is that agreed? Agreed.
It is proposed that an allocation from the travel budget of up to €630 be sought from the working group or committee Chairman for this visit. Is that agreed? Agreed.
On 12 October Deputy Burton attended the ESRI conference in Dublin. As there was no time to seek agreement from the committee for her attendance on our behalf, retrospective approval is now sought for the cost of registration to be met from the travel allocation of this committee. As the expenditure involved is to be met from the travel allocation, the requirement of the rules of the Committee on Procedure and Privileges must be met.
In terms of the linkage with the orders of reference and the work programme, I suggest the module on the European fiscal framework is relevant to our interest in aspects of taxation systems and European budgetary matters. The macro-economic background to the budget is clearly of relevance to our role in scrutinising the work of the Department of Finance. Attendance at the conference was, therefore, necessary to keep members informed of current thinking in this area.
The necessary retrospective approval is sought to meet the cost of the registration fee from the committee's travel allocation. Is that agreed? Agreed.
