Order of Business.

Senator Donie Cassidy

The Order of Business is No. 1, motion re time limit for the Order of Business; No. 2, motion concerning US agreements on extradition and mutual legal assistance, the approval of the adoption by Ireland of an EU Council decision establishing the Europol Police Office, EUROPOL, and the proposal for a framework decision on the recognition and supervision of suspended sentences, alternative sanctions and conditional sentences; and No. 3, statements on the economy.

It is proposed that No. 1 will be taken without debate at the conclusion of the Order of Business, No. 2 will be referred to the relevant committee, without debate, at the conclusion of No. 1, and No. 3 will be taken at the conclusion of No. 2, to conclude not later than 7 p.m, with the contributions of spokespersons not to exceed ten minutes, those of all other Senators not to exceed eight minutes, on which Senators may share time by agreement of the House, and the Minister to be called upon ten minutes prior to the conclusion of the debate to make final comments and take questions from spokespersons.

Senator Frances Fitzgerald

I propose an amendment to the Order of Business. In light of the dramatic events unfolding in the financial world, we should engage in a question and answer session with the Minister who will be present in the House to take the debate on the economy. Many Members will want to pose questions in respect of current events and I propose an amendment to the Order of Business to ensure the House will not merely take statements but that there will be adequate question and answer session of one hour. I await the Leader's response on the matter.

We meet in extraordinary times. Today is a day on which the Government and the taxpayer have become exposed to financial risk like never before, probably to the tune of €250,000 per person in the country. It is an extraordinary sum.

There are 235,000 unemployed people in the country. Some 46,000 people joined the unemployment list since Deputy Brian Cowen became Taoiseach. Some 235,000 people are worrying about how they will pay their rent or mortgages and from where their next job will come. Tax revenues have fallen by €7 billion. The country is in recession for the first time in 25 years and the economy has shrunk this year. It is a very difficult economic situation. There has been much denial in this House over a number of months but today reality is dawning on people.

We have heard much about bailing out the banks and about what is happening. It is a far cry from when the banks appeared before the Joint Oireachtas Committee on Finance and the Public Service earlier this year and told us all was well. Today is a far cry from the presentations given that day in July, which was only a few months ago.

We have not heard much about what the impact will be on the taxpayer. Legitimate questions are being posed by people about today's decision to which we need answers. Many people will welcome the decision as a sign that some necessary action is being taken. However, the 400 parents I met last night in Palmerstown whose children's school was left off yesterday's list wonder what will happen to the schools building programme and about the lack of transparency in regard to the list. That is on their minds as well as the bigger questions such as the risk to the taxpayer. What sort of bad debts are we guaranteeing, to some degree? What impact will it have on the State's finances? Crucially, how can we have confidence that the banks will not engage in reckless borrowing once again and put taxpayers at further risk? These are the types of questions about which people are very concerned.

People are very concerned about regulation. What happened in regard to regulation? Why did it fail? What type of regulation will we have from here on in? We need to hear about that from the Minister for Finance. We need to see more joined up thinking from Departments on the broader economic issues.

I will refer to three areas from which uncertain messages have been coming from Government. The first area is third level fees, the second is the fact the Tánaiste and Minister for Enterprise, Trade and Employment could not decide whether there needed to be an investigation into FÁS and eventually decided there is such a need and, finally, in a matter of life and death, the Minister for Health and Children failed to grapple with the tragedy which seems to have beset breast cancer diagnosis and treatment.

In this era of the Celtic tiger, we have heard of the needless deaths of women who have not received proper diagnoses in our health service. It is an extraordinary legacy. As far as the health service is concerned, what were the Taoiseach, Deputy Brian Cowen, and the Minister for Foreign Affairs, Deputy Micheál Martin, doing during their tenure in the Department of Health and Children which allowed us to reach this point? Where were the reforms during that era of huge economic wealth in this country? We need leadership and joined up thinking.

The Minister for Finance has a series of questions to answer and we need to hear those answers. I would like to start today with a question and answer session in the House.

Senator Joe O’Toole

It would be worthwhile if the House noted and welcomed the new initiative from the library and research service of the House, namely, a digest of each new Bill. One of the reasons this House wanted such a service was that it would get an unbiased, unprejudiced and neutral view on the legislation and would not have to depend on the explanatory memorandum issued by the sponsoring Department. It is a very important initiative and should be used by the House.

After all the populist comment in recent weeks, it is interesting that the people who have been lecturing us for years about having too big a Government, Government interference and a nanny state have been proven to be people not to be trusted. The House may not be aware of who David Doyle is, but he is Secretary General of the Department of Finance. He and his officials and officials involved from other Departments deserve our congratulations for coming up with a proposal that is unique, creative and deals with an issue we must address. We need all the detail on this and for that reason I support and second Senator Fitzgerald's proposal that we have a question and answer session on it. This is not something that should just develop into an argument over and back across the floor of this House. We need information. When the bankers were in the counting houses and those in the private sector sat on their hands, we saw how useless they were at dealing with a problem outside of that realm. For that reason, we should always recognise the importance of the public sector.

I do not welcome this development out of support for bankers. As far as I am concerned, they should take much of the responsibility for the difficulty in which we find ourselves. They are the people who invented sub-prime lending, handed out 110% loans way above the value of property, increased limits on credit cards without being asked and who urged youngsters to change their mortgage accounts into current accounts and use them to go on holidays, buy cars, extend their houses or whatever. They deserve to pay the price now. I do not welcome this initiative as in any sense a threat to the taxpayer nor as being a support for bankers. The bankers are now on their knees screaming and we should do unto them as they did unto us over the years.

I want to hear from Government today how it will make the banks pay for this. We should get a full list of how it will charge them. I want to hear there will be a surcharge and levy on bank profits and what the charge will be for insurance cover. I want to hear there will be no more million euro salaries and that directors' bonuses and perks will be taken off the agenda. I want to hear that the State has seats on the boards of all the institutions mentioned today. That is the starting position. We need to move through that list, but more than anything, we need oversight on how these people do their business.

For the past year we have been looking at what banks have been doing, but we still do not know the element of exposure or their liabilities. We still do not know the total outline of their risks. We need to have people in that area to present these facts to us. In the meantime, I welcome the Government's unique initiative. Global economies and finance houses are watching in amazement, wondering how it will work. I do not know if it will work, but I welcome it as a positive move. I look forward to debating the issue. It is crucial for every Member of the House to support the view that there should be a question and answer session on the Government's proposals which, I presume, will appear shortly in legislative form.

Senator Alex White

I support Senator Fitzgerald's call for a question and answer session with the relevant Minister on the proposal or decision brought forward by the Government. With regard to the bail-out as described, it is not entirely clear whether we have a decision or a proposal. We were told this morning the justification for the decision is to avert a catastrophe, and the word "catastrophe" was used liberally. It is a big word, especially when until recently we were told Irish banks did not have liquidity problems and there were no fundamental difficulties with their position. However, the word "catastrophe" has now been used.

Politicians on all sides have a responsibility to hold back and wait to hear the rationale for the proposal being brought forward and to debate it carefully. However, the public is entitled to have spelled out to it what momentous catastrophe would happen if this decision were not made. We are entitled to be told that and not to have to guess at it. We should be told precisely what would be likely to happen and the consequences of this decision not being made. What are those consequences? I do not refer to general issues and suggestions that we should look to what is happening in the United States or that if we do not act the sky may fall in. I want more detail because the Irish people are entitled to be told the precise nature of the so-called catastrophe — that is not my word — which we are seeking to avert. We can then compare the action that is proposed with the consequences of not taking it. I support what has been said by others in regard to the level of scrutiny that is needed of the banks and financial institutions if this proposal is to be adopted.

Senator Fitzgerald noted that we are a far cry from the point some months ago when the banks appeared before the Joint Committee on Finance and the Public Service. This is the most momentous economic decision that has been taken in a considerable period of time. Surely an argument can at least be made for the establishment of an Oireachtas committee. Sometimes we are criticised for having too many committees, but if there was ever a need for an Oireachtas committee dedicated to a central economic question, surely it is now. There is a compelling argument for a committee to deal with banks and the banking system so that Members of the Oireachtas can be afforded opportunities on a regular basis to scrutinise the banks, understand precisely what is occurring and raise questions about the history of loose and reckless lending and the issue of executive salaries which Senator O'Toole correctly raised. Such a committee would also provide a forum through which people can ensure that banks and financial institutions pay for this extraordinary bail-out and what I heard the Minister for Finance describe as "succour". I sat in my car and reached for the Kleenex tissues at one point while listening to the Minister. I know it is important not to make light of this issue but he claimed that the measures had to be taken in regard to these six Irish banks because they had nowhere else to go for succour. I had a different kind of "succour" in mind when I heard that phrase from the Minister and it is the Irish taxpayer who is potentially being turned into a sucker in this.

I support the call for a proper question and answer session. It is good that we have scheduled a debate on the economy for today's Order of Business but events have changed dramatically overnight. In regard to the Order of Business and the role of this House, is this a decision by the Executive or should it be made by the Oireachtas? I have heard mention of legislation being introduced this afternoon, certainly in the other House and perhaps in the Seanad. It manifestly appears to be a matter which should be decided by the Oireachtas and not simply a matter of Executive order, so I ask for confirmation from the Leader on what is proposed in that regard. I strongly support the proposal made by Senator Fitzgerald on a realistic and meaningful opportunity for questions this afternoon, rather than the five minutes squeezed in at the end of statements with which we sometimes have to contend.

Senator Déirdre de Búrca

It is hard to concentrate on other issues given the turbulence in the international financial markets and the impact this is having on financial institutions, taxpayers and consumers in Ireland. I welcome the action of the Minister for Finance on protecting Irish banks because the interests of Irish taxpayers and consumers will as a result be protected in the longer term. However, the financial sector cannot continue with business as usual and we have to be realistic and accept that the financial markets are no longer subject to the control of any individual government. We have international financial markets and the current events in the US are having a direct effect on the markets in this country.

I concur with the call from my European Green Party colleagues in the European Parliament for an EU-wide supervisory authority for financial markets. They also called for a system of regulation and authorisation of management companies and fund managers. This is important because the essence of the problem with the financial system appears to be that self-regulation has been the modus operandi to date. Governments have allowed the situation to arise whereby many of the instruments traded on these markets are not fully understood by the bodies which are supposed to be regulating them.

My colleagues in the European Parliament have called for debt limits to be placed on hedge funds. Arising from our recent experiences, that would seem to be a positive move. I call for us to summon the political will not just to address this issue and debate how to respond to it at a domestic level, but also to use our influence within the European Union to call for and be party to the establishment of an EU-wide regulatory authority that will ensure that problems such as those we are now facing will not occur again in the international financial system.

Senator Paul Coghlan

We are certainly living in times that none of us would wish for. Everybody accepts we must safeguard the banking system and everybody is agreed that the limit for deposit protection needed to be raised, as Deputy Richard Bruton pointed out a considerable time ago. However, we are now talking about a guarantee involving lending by banks. I support, as have other speakers, the call of Senator Fitzgerald for a proper question and answer session involving the Minister. Providing unconditional guarantees for senior and subordinated debt is a serious matter. Does this not equate to supporting all the past poor lending decisions of the banks involved? That is why we must know the details of the deal.

Senator Frances Fitzgerald

Hear, hear.

Senator Paul Coghlan

We must know what protection is available for the taxpayer. In addition, what sort of provisions are in place for scrutiny involving both the Financial Regulator and the Central Bank? This is very important. We also need to know what is being done collectively to strengthen the banking system, perhaps by way of encouraging necessary mergers. I hope the Leader will be able to provide a positive reply to the request for an immediate question and answer session. No one can call the markets and we really do not know where we are. We need more immediate information.

Senator Marc MacSharry

I congratulate the Minister for Finance on his decisive action over the last day. It is timely and much needed and shows the kind of leadership to which not only this country but also our European counterparts can look with confidence. I believe it will become the benchmark for small, open-market economies such as ours. If other countries follow suit, we will begin to establish the floor for which this international crisis needs. I look forward this afternoon to the opportunity to discuss a wide range of issues regarding the economy but, like many colleagues, I believe we should have an exclusive debate on the banking system and its future regulation. I ask that the Leader focus at his earliest convenience on allotting time to such a debate, perhaps a whole day if necessary. I understand a banking Bill will come before the Dáil, perhaps later today, and this may be with us in the next couple of days, at which time we will have a further opportunity for discussion.

We will tease out all these issues further during this afternoon, but I wish to make one final point. Our banking system is inextricably linked to our economy and to our society. I pay tribute particularly to the officials who got no sleep last night as they prepared these measures, and to the Minister. These measures will be introduced in the best interests of our economy and our people, not in the interests of the banks. It is as simple as that. I look forward to debating this further throughout the afternoon.

Senator Ivana Bacik

As all my colleagues have done, I wish to talk about the economy, particularly the momentous decision that was taken today. We are all relieved to see some decision being made on the current appalling state of the financial system. For too long there was a sense that no decisive action was being taken and that things were simply being let slip. While the Oireachtas was not sitting, it was particularly worrying to see that nothing was being done.

Senator Jerry Buttimer

Hear, hear.

Senator Ivana Bacik

It is a relief that something has been done. However, I echo the concerns of others on this side of the House with regard to the lack of any apparent quid pro quo for the taxpayer in this bailout. We need to know the guarantees the State, the public and the taxpayer have regarding the enormous potential risk we are taking on.

It seems that for too long we have privatised profit and now we are nationalising debt. Where is the gain for the taxpayer? Where is the return that may come about? I would be very interested to hear what there will be in it for the taxpayer. For too long we have seen what has been called "casino capitalism" run wild and we are now seeing the terrible consequences. As others have said those terrible consequences may not have been fully spelt out and it is still rather unclear. That may be why the US Congress did not pass the bailout Bill despite being urged to do so by their leaders.

In this context I raise before the House a relevant survey released yesterday by TASC, a think tank for action on social change, of which I am a board member. The survey pointed out the serious inequality in wealth distribution in this country after years of boom. As we debate this big rescue package it is important that we remember there is still enormous poverty here despite the Celtic tiger. The TASC survey found that the top 1% of the population owns 20% of the nation's wealth and we rank first among the previous EU 15 countries in terms of earnings inequality. TASC has shown that people are willing to have a fairer and more equitable tax system, which is what we should debate in the present economic situation.

Senator John Hanafin

I also commend the Minister on his speedy and necessary response. I am reminded that this is not the first time governments have bailed out banks with debts that were regarded as toxic. During President Reagan's era there was a serious problem with the Savings and Loans in the United States. The matter turned around for the US Government when it took over the loan book and it eventually made a profit on it. It is also not the first time that a bank has been assisted in this country. In the Insurance Corporation of Ireland debacle AIB was assisted.

We will need to take this action and do so quickly — I have already commended the Minister on doing so. Further action will be taken. In the past action was taken quickly to help a bank that was in trouble and subsequent events showed that not only did the Government do well out of helping the bank but that the bank levy gave significant sums. I am suggesting that the day of the storm is not the day to fix the thatch. We will get around to regulating the banks and getting our security and more returned. While today may not necessarily be the day to deal with that specific item, it will be done and I have no doubt that the confidence the Minister has instilled into the economy, which is almost unique in Europe today, may result in a net inflow of funds into the country which will place us in a better position.

On an unrelated item, I commend the Standards in Public Office Commission on inquiring as to the source of funding for Libertas. The McKenna judgment has resulted in absolute equality in time on television and radio, and in column inches in the newspapers, which we all accept. I have previously suggested that there might have been other funds coming through to Libertas. It appears that a loan was given that might have been outside the guidelines of the Standards in Public Office Commission. I would particularly like to know if there was outside intervention. Did some of the far right UK parties — I include the UK Independence Party — subscribe? It is a simple question. We play on a level playing field. I have suggested before there was American military intervention. I do not for a moment suggest it was the American Government——

An Cathaoirleach

This may not be the forum to check that body's——

Senator John Hanafin

I accept it is not the American Government or the American army. However, the military machination in America is privatised and there are many far right groups there. I would like to know whether they subscribed to Libertas. It is a simple question that needs to be answered to ensure we all have a level playing field. I do not for a moment suggest it was the American Government or army. However, it could be that some right-wing groups in the United States have subscribed. It is a simple question: have they subscribed?

Senator Nicky McFadden

I wish to raise the school building projects the Minister for Education and Science, Deputy Batt O'Keeffe, is including for this year. As representatives for Westmeath, Senator Cassidy and I, along with our other colleagues, met the Minister in regard to a number of schools, for example, the dance school for Kinnegad and Athlone community college. There is no mention of these schools, as is the case with a number of schools around the country. How does the Minister select schools? Before the last election, there were several announcements made about school buildings being progressed and started in the following few weeks, but sadly nothing happened.

I appreciate that the Minister had taken on a new brief and had to review a number of the existing projects. Speaking of "succour", what will happen to the schools that need buildings for 2009? I ask the Leader to invite him to the House for a debate on school building projects, transparency, and how schools are delivered.

Senator Labhrás Ó Murchú

I ask the Leader to consider allowing time on an ongoing basis to discuss the economy. As we are all aware, the global financial crisis appears to be changing on an hourly basis. While a fair amount of time has been laid aside for a debate today, that is not sufficient. I do not know whether it should take the form of a question and answer session, as has been suggested, but I genuinely believe it should be done on a regular basis.

There is no doubt the banks will eventually have to answer questions. It is not necessary that this should be part of what we are trying to achieve at the present time. The Government certainly moved very rapidly last night and, in the early hours of the morning, did something which, to many, would seem extraordinary and very courageous. We also know that if it had not taken those steps we would not have the improved situation in the markets today. That the Anglo Irish Bank alone dropped 40% in its share price yesterday and recovered 40% again today is an indication that the right steps were taken. Regarding what happened in America, we were all kept on tenter hooks as to whether the administration's finance rescue Bill would pass. One clear message from the Democrats and the Republicans, so far as I can see, is that at the end of the day the decision not to back the Bill was based more on politics than on any legislative consideration. I have been encouraged by the united approach that has come about as a result of the Government's decision last night. I detect the same tone in the House today. I believe that is exactly what is required at this time.

Before the recess I spoke in much the same way when we did not know the extent of the situation. The only hope we have at present is to determine whether we can promote a united approach because what we are talking about is jobs, the concerns of small investors, people with deposit accounts and so on. When we break down the bigger picture we are still talking about the taxpayer and the individual on the ground. If we are not talking about those, who do we represent? I genuinely believe we are trying to legislate for the concerns on the ground and hopefully we will be able to come through this problem. Incidentally, I think we have done better than some of those who would regard themselves as the great powers. America has not done itself any credit by the manner in which it has procrastinated because it impacts on countries throughout the world who are not as well placed as itself. We should not tie ourselves too closely to its coat tails. Last night we proved that we were capable of making an independent sovereign decision. That is the leadership we need now and such a feeling can be sensed in the House today.

Senator Donie Cassidy

Hear, hear.

Senator Feargal Quinn

Senator Fitzgerald called for questions and answers rather than the proposed statements followed by questions and I support that. Today is an important day with regard to the financial crisis. None of us in this country can remember a similar one.

I wish to correct Senator Fitzgerald on one point. She said that the Minister for Finance, Deputy Brian Lenihan, had made a decision. I do not believe the Minister makes the decision, rather that he makes a proposal. I have not had this confirmed but I imagine the proposal must come before both Houses.

Senator Frances Fitzgerald

Yes.

Senator Feargal Quinn

Let us look at what happened in the United States where it was not just matter of a decision made by the Secretary of the Treasury. The Secretary had to go before Congress where, regrettably, the representatives turned down the proposal. Will the Leader tell the House what will happen in this regard? Is legislation needed as I assume it to be? If so, will the legislation come to the house and will that happen today? Perhaps the Leader can answer that as soon as possible.

Senator Alex White made a point about the Oireachtas Joint Committee on Finance and the Public Service. I am one of the Members of this House who is on that committee. It is only two months since we invited those six banks to report to the committee. Five were represented and questioned on exactly the topic under discussion today. The Committee on Finance and the Public Service exists and had already taken those steps two months ago. I welcome the chance to ensure the committee continues to do this.

Senator Ó Murchú talked about what happened yesterday. I agree with the words he used. I believe we must speak immediately on this matter and we should not spend time on other areas at this stage although the rest of our work must continue. Let us ensure we ask questions and get answers. I hope the debate today on the economy will be a questions and answers session rather than the other format.

I draw attention to one other financial point. I got some change the other day when I was in France. This was not a €5 note but a €5 coin. I had not seen this before and wonder if we are to have such a coin here. It seems to me that we should move in that direction.

Senator Ó Murchú said that the share price of one bank dropped 40% yesterday and wished to see it raised again by the same amount. However, 40% of a lower figure does not bring it back to where it was before.

Senator Eugene Regan

Hear, hear.

Senator Feargal Quinn

My arithmetic tells me that would be about 84% of where it had been. This is just a reminder that when we drop 40% we must rise by a much higher percentage to get back to where we were.

I have a Bill before the House tomorrow and I hope it will get a good debate. The idea is to open the question of consent for organ donations. I have a session at 4.15 p.m. today and welcome those Members of the House who are free to come to the audio-visual room to learn a little more about this topic. It deserves much more attention than it has received in the past.

Senator Ann Ormonde

I know it is difficult at this time to concentrate on any issue other than the economy. I agree with many of the points raised by colleagues. I compliment the Leader and the Minister for Finance, Deputy Brian Lenihan, on making a decision so quickly to protect the banking system and the taxpayer. This is a very serious time for discussion by all of us and we must think seriously about the situation. I welcome any debate that takes place so that we can all make our contributions.

There is another issue, however, about which I have been approached by many young women in Dublin in recent days. It concerns the city area in particular. The taxi drivers' union representative has spoken on the matter and highlighted the fact that there are drivers of cars with bogus taxi signs. Young women flag these down, thinking they are getting into a proper taxi and then find that it is not such. This is a very serious issue. It appears there may be a loophole in the legal situation. I ask the Leader to find time to put this matter on the agenda in the future when we have more time and less serious measures to consider. It deserves thorough discussion. Women are frightened and when flagging down taxis wonder whether it is a real taxi or a driver with a bogus taxi sign. This is a highly serious issue and I have been obliged to highlight it today because it has been drawn to my attention in recent days. I acknowledge that Members must deal with other important issues at present and welcome a debate on the economy and the current global position. However, the Leader should allocate time to discuss this issue, which should be examined by the Minister before providing Members with an update on it.

Senator Fidelma Healy Eames

It is welcome that Members will have a question and answer session this afternoon on the economy. People have little to speak of, except the banking system, unless they live in Galway and are at risk of lead poisoning. This is a highly serious matter in respect of people's health, about which they have genuine worries. Yesterday, a woman in Mervue spoke to me about a recent miscarriage and she now wonders whether it was linked to lead contamination in the water.

I urgently ask the Leader to invite the Minister for the Environment, Heritage and Local Government before the House to explain how he will guarantee the quality of drinking water, both nationally and in Galway. It is time he pulled out all the stops for Galway and outlined the measures and the clear oversight that now is required. The council has been caught on the back foot too many times in Galway in respect of cryptosporidium, e.coli and now lead poisoning. I implore the Leader to ensure this happens soon, as the public has lost all confidence in the quality of drinking water. Unfortunately, the emergency supply was unsafe last weekend. Regardless of whether it was safe, people have lost confidence and are buying water, which cannot continue. This has gone on for too long in Galway, which always is being reactive. I note this issue has been replicated elsewhere in respect of other public water supplies.

Senator Jerry Buttimer

Hear, hear.

Senator Fidelma Healy Eames

It is time to pull out the stops for Galway. The Minister for the Environment, Heritage and Local Government must take a personal interest in Galway this time.

An Cathaoirleach

The Senator's point to the Leader on this issue has been made.

Senator Rónán Mullen

I support Senator Fitzgerald's call for a question and answer session on the economy and the latest dramatic developments. We live in momentous times and I feel reassured that matters are being handled with dispatch, as well as a sense of urgency and clarity about the precise solutions that are needed to deal with the current crisis. One cannot overlook the fact that no matter how much one might resent the large salaries enjoyed by bankers and so on, the welfare of the banks is intrinsically and inextricably tied up with the welfare of the economy and our people. I also compliment Deputy Richard Bruton on his fine contribution to this morning's broadcast of "Morning Ireland". This is a time that calls for a bipartisan approach, which is the sense I am getting in this regard at present. I commend all sides, not simply the Government, in this respect.

I note Senator Hanafin's comment that the day of the storm is not the time to fix the thatch. However, when the debate on the economy takes place, it will be important for Members to consider that however important regulation may be, what is being witnessed globally and nationally simply is the inadequacy of regulation alone. It is clear that a failure of ethics has led to the current global crisis. People felt themselves to be under pressure to produce short-term quarterly results and bent the rules to do so. Members' discussion for the future of finance in Ireland must examine how to inculcate a culture of virtuous leadership, as of all areas this is one in which the rot can set in from the top down. People at board level determine the culture within the organisation. As Warren Buffett stated, it is only when the river runs dry that one realises who has been swimming naked. It is only when we have these problems that we realise who has been acting inappropriately.

I hope we will take the opportunity to have a serious debate about ethics and integrity in the areas of business and finance and how we can stimulate better behaviour in them. The price is too high when there is a failure of ethics.

An Cathaoirleach

There will be a debate on the economy later. The point has been well made.

Senator Rónán Mullen

I will raise another issue for when we have time for it. Last year I called for a debate on bioethics and specifically the area of embryo protection. I am very grateful to many colleagues, both here and in the Dáil, who attended the briefing I organised last term. At that time I mentioned the developments in Wisconsin and Japan in which scientists had successfully transformed adult cells into the equivalent of embryonic stem cells, which seemed to show great potential in the area of finding future cures.

One concern was that the method was based on a technique that relied on retroviruses, with this connected to some risks of cancer. The good news, according to the journal Science published last week, is that a group of Harvard researchers has now managed to successfully reprogramme adult cells into the equivalent of embryonic stem cells without the need for retroviruses. This opens the even greater possibility of development in the area of adult stem cell research. It also proves good science need not be at odds with good ethics and we hope for cures that all of us can live with.

When we get over the current emergency debates, I hope we will have the opportunity to debate developments in bioethics and how we can have a properly ethical approach to the issue in this country.

Senator Paul Bradford

I support the request for a substantive question and answer session during our debate on the economy as it would be very helpful.

One fact we have had to deal with as public representatives in our own constituencies over the past number of months arises from the significant number of additional people who are unemployed. Senator Fitzgerald indicated that 40,000 or so people have become unemployed since Deputy Brian Cowen became Taoiseach. The issue is the difficulty in the processing of social welfare claims.

We have many big issues to discuss with regard to economic matters and job creation but 40,000 or 50,000 people have unfortunately become unemployed over the past five or six months. They are finding it very difficult to have their rightful entitlement to social welfare processed, which is grossly unfair.

During the reign of Deputy Michael Woods — perhaps "reign" is the wrong word but he was there so long we almost considered it a reign — or period as Minister responsible for social welfare matters, there was great progress in the computerisation of social welfare records. It resulted in the streamlining of the system and payments were made on time.

Something seems to have gone wrong within the Department of Social and Family Affairs from a claims processing perspective. People are waiting not just weeks but months to have unemployment benefit claims processed. The State is saving virtually nothing because the HSE must come forward with supplementary welfare payments.

Will the Leader confer with the Minister for Social and Family Affairs, Deputy Hanafin, and try to clear this blockage? It is bad enough that 50,000 people have lost their jobs over the past five or six months and we hear it on a daily basis in every town and townland. The least those people could expect is that having been compliant taxpayers and paid social insurance, they would receive their entitlements on time. We should try to deal with and resolve the problem, getting the computers running again so people, in their time of great need and distress, can at least be assured of their financial entitlements

Senator Eugene Regan

I support Senator Frances Fitzgerald on the question of the amendment to the Order of Business. The point has been made that the banking sector in Ireland is vital to the economy and the standing of the financial services industry in the international financial system. The Government's action is welcome and it was a very necessary measure. It was acting in extremis and it has safeguarded the banking system in Ireland. There are issues of responsibility and oversight but the Government has acted. The Government acts only when its back is to the wall, when it has no option but to act. The Minister for Finance acted after Joe Duffy’s “Liveline” programme in raising the deposit guarantee for depositors in banks. It was absolutely necessary that he act, despite the fact that our spokesperson on finance, Deputy Richard Bruton, had suggested that more than a year ago. He acted last night. It is not a question of leadership, it is a question of no choice. This action was necessary and it is the banks who designed this policy, put it to the Minister and he had no option but to act.

I do not think it is a question of leadership.

(Interruptions).

Senator Jerry Buttimer

The Greens have woken up.

An Cathaoirleach

Order please, Senator Buttimer.

Senator Eugene Regan

Joe Duffy has made more of a contribution to economic policy in Ireland than the Minister for Finance. This reactionary rather than proactive approach is very worrying.

An Cathaoirleach

The Senator should put a question to the Leader.

Senator Eugene Regan

There needs to be an effective economic strategy going forward.

Senator Shane Ross

I see very little point in an appeal for bipartisanship on this issue. I regret the chorus of congratulations from the Government to the Minister for Finance on what he has done.

Senators

Hear, hear.

Deputy Shane Ross

I say that because I have no opinion at this stage on what sort of Minister for Finance he is. I do not know. It is ridiculous to get up here and congratulate him on his speedy performance and actions. Senator Regan was right. The man did it because he had to. The banks came to him begging him to do something about the situation, otherwise catastrophe would have hit us today. I do not know what they said to him. I presume, and the markets were signalling clearly yesterday, that a bank here was going to go under if we did not do something very quickly.

Let us not congratulate the Minister on this. What has actually happened in Irish banking history in the past four years is that the banks have been running rings around the Government, pulling the wool over its eyes, or worse still, doing things to which the Government has turned a blind eye.

Senators

Hear, hear.

An Cathaoirleach

Questions to the Leader please. We will have a debate on the economy later.

Senator Shane Ross

Let us not say this was a great job done overnight. It was a last resort. What has been done is phenomenal in terms of figures. We have given guarantees of €400 billion to €500 billion. That probably will never be called on. It is nearly half of the figure being talked about in the USA, which is $700 billion. Let us not say it is realistic and congratulate the Minister. Why in the name of God did he not sack the Financial Regulator? For the past four or five years, the banks have been allowed, by the Financial Regulator, to lend money on 100% loan, as Senator O'Toole referred to, and to lend money to property developers to whom they should not have lent any money, and they have gone berserk.

There is only one body in this country that can stop that, and that is the Financial Regulator. The Financial Regulator has been asleep on the job. It is not the Minister's job to rescue shareholders; I do not give a hoot about shareholders, that is their problem. When this is over and the shares have rallied, are we going to have the same people doing the same things with the same problem? There is no evidence of a change of personnel or regulation at this stage.

An Cathaoirleach

We have to move on. There are other speakers.

Senator Shane Ross

I am asking the Leader to address this point. Let us forget about the fact that depositors are being rescued and underwritten. The same problem will exist tomorrow and the banks will be just as insolvent tomorrow, with the same loans and property developers looking for huge amounts of money. How will that be tackled? That will come up and bite us next week when we realise the depositors are all right.

Senator Liam Twomey

To reflect the views of citizens the Fine Gael Party does not propose to hold hands across the Chamber during the debate on the economy. I ask the Leader to have an open debate. Last Thursday, Ireland officially entered a recession and yesterday the stock market crashed, losing 13% of its value in one day. These developments caused the Government to intervene this morning. If, God forbid, the Minister for Finance had decided last night to have another long lie-in, where would the stock market be this morning?

The crisis is of the Government's and banks' making but they refuse to accept responsibility for it. Ministers must come before the House for a long debate. There is no point in me speaking for a few minutes and Government Senators commending the Minister on his speedy response. The Minister responded before the stock market shut down completely and the economy went bankrupt. It was a case of falling asleep on the job, rather than responding quickly.

The House should have a proper debate with the Minister present to answer questions on his actions. Perhaps he read The Sunday Business Post at the weekend or received press releases from those who spoke of protecting depositors. On the other hand, he may be making up policy as he goes along. We need to know what is going on because the Minister and Taoiseach are not inspiring confidence in any of us.

Senator Pearse Doherty

I echo Senator Fitzgerald's call for a proper debate with a question and answer session. All Senators, regardless of their political affiliation or outlook, want to work together to get the economy back on track. While all parties should welcome the Minister's intervention early this morning, its purpose is to protect the banks. We need information on how he intends to protect the citizens and taxpayers who are underwriting €500 billion in debt. As Senator Ross noted, it is unlikely this debt will be called in. Nevertheless, as we are making a substantial commitment, we need to know how we will benefit and ensure taxpayers are not caught in the long grass. What is the quid pro quo for citizens?

On procedural matters, when is it proposed to take Committee Stage of the Housing (Miscellaneous) Provisions Bill 2008, Second Stage of which is scheduled for tomorrow?

Senator Bradford raised the processing of social welfare claims. People in County Donegal and many other areas will be familiar with long queues of people waiting outside social welfare offices as they seek to have their claims for benefits processed. It is degrading to require people to stand on a public street, frequently in rain, as they wait to have social welfare claims processed. One social welfare office in County Donegal recently closed its doors to members of the public because demand was so high.

Last weekend I spoke to three people who visited their local social welfare office to inform officials they had been unemployed, only to be told to return in three weeks if they wished to speak to an officer. It is deplorable that those who have been working to build up the economy are being treated in this manner by the Government and system. The Minister should come before the House to discuss the resources needed in the public service to address increased demand for social welfare benefits.

I ask the Leader to facilitate a debate on the crisis in the education system at the earliest possible opportunity. The first day of the new session affords Senators the first opportunity to raise this issue. Tens of thousands of young children recently returned to school to be educated in prefabricated classrooms. buildings which are falling apart or were once rat infested and classrooms which have windows nailed shut. The Minister is aware of countless schools across the Twenty-six Counties which have been certified as dangerous by local authority fire officers or include buildings which electrical contractors have indicated are not safe for children to enter. Notwithstanding these problems, it was announced yesterday that 25 of 1,400 projects on the schools building programme would proceed. The announcement was a disgrace. The Minister must come before the House to explain how he proposes to bail out children from prefabricated classrooms and deplorable conditions in buildings which are falling down and provide them the modern accommodation they deserve.

Senator Jerry Buttimer

The economy is undoubtedly the focus of proceedings today. Senator Labhrás Ó Murchú spoke eloquently about the need to break down the bigger picture but ignored the fact that 225,000 people are unemployed, twice as many as when it came to power.

An Cathaoirleach

The Senator must ask questions to the Leader rather than address remarks across the floor.

Senator Jerry Buttimer

I have waited patiently to make a contribution and while I respect the Cathaoirleach's position, I know he and other Government Senators find it uncomfortable to listen to bad news.

An Cathaoirleach

I ask the Senator to withdraw that remark. I do not find it in the least uncomfortable to listen to bad news.

Senator Jerry Buttimer

It is important to put matters in perspective.

An Cathaoirleach

I ask the Senator to address questions to the Leader.

Senator Jerry Buttimer

Unemployment has doubled to 225,000, tax revenue has decreased by billions of euro and the Minister for Finance has turned a surplus into a deficit. Does the Leader agree that Wall Street and the economic crisis were not the reason the mother of an adult child who is paralysed was told yesterday by a community welfare officer in Cork that she could only have four nappies and must control her daughter's incontinence? This case and job losses last week are the Government's legacy.

I have repeatedly asked the Leader for a debate on aviation policy. The Minister for Transport, a member of the Leader's party, has refused to publish a report on the debt of Cork Airport and has failed to appoint a chairman of the Cork Airport Authority. He has also failed to separate the boards of Cork, Shannon and Dublin airports. When will a debate on aviation policy take place? When will the Minister, who has been silent on Cork Airport, answer questions on these issues in the House?

Senator John Paul Phelan

I, too, echo Senator Fitzgerald's call for a question and answer session on the commitment the Minister for Finance made on our behalf overnight. While I concur with previous speakers that the measure is necessary, I feel a little sick in the pit of my stomach about the prospect of such wholesale Government intervention. We need to ensure any proposed scheme includes safeguards to protect taxpayers. I concur with Senator O'Toole's comments on insurance cover and the bank levy. The levy was removed several years ago shortly after a former general secretary of the major Government party was appointed head of the Irish Banking Federation. I assume some form of bank levy will be introduced following the Government's initiative.

I watched on the monitor in my office a recent meeting of the Joint Committee on Finance and the Public Service with the heads of five or six large Irish banks. While it is good to have such guests before Oireachtas committees, we should review the manner in which we issue such invitations if they fail to give forthright answers.

Over the summer, we heard a number of proposals from the Department of the Environment, Heritage and Local Government on increasing loans to first-time buyers and other groups with a view to reinvigorating the housing market and house construction sector. Will — as I hope — this morning's announcement scupper these proposals? The best way we can help people who want to provide a house for themselves is to ensure those inflated house prices — in regard to which we are now seeing the chickens come home to roost with our bailing out of the banks — would fall a little further. Rather than the Government intervening again in the housing market, which it did on five or six occasions during the time I have been involved in politics and on each such occasion there was a further increase in house prices, perhaps it could let the market find a natural level.

Having got on to the housing ladder recently, I find it sickening that we are bailing out the banks which threw good money after bad by approving 100% mortgages and recklessly granting loans to developers in this city and across the country to outbid each other for grossly inflated sites, particularly in this city but also in other parts of the country, and now we are asking the taxpayers to bail them out. I know we have to do that, but we should have a proper questions and answers discussion on this matter to ascertain what safeguards are being put in place to ensure that taxpayers gets some sort of value for the potential liability to which they are being exposed.

Senator Donie Cassidy

Senators Fitzgerald, O'Toole, Alex White, de Búrca, Coghlan, MacSharry, Hanafin, Ó Murchú, Quinn, Ormonde, Mullen, Bradford, Regan, Ross, Twomey, John Paul Phelan and many other Senators highlighted their great concerns about the difficulties being experienced worldwide in the global downturn in the economy. As Leader of the House, I welcome the Government's decision to put in place, with immediate effect, a guaranteed arrangement to safeguard all deposits, whether they be retail, commercial, institutional or inter-banked, which covers bonds, senior debt and dated subordinated debt, which is the lower tier two, with the following banks, the Allied Irish Bank, the Bank of Ireland, the Anglo Irish Bank, Irish Life and Permanent, the Irish Nationwide Building Society and the Educational Building Society and such specific subsidiaries as may be approved by the Government following consultation with the Central Bank and the Financial Regulator. We want to bear in mind that this has been done — as was stated here — following advice from the governor of the Central Bank and the Financial Regulator about the impact of the recent turmoil in the internal markets in the banking system.

We all know that we have been leaders in the field in terms of the success of our economy, particularly the Celtic tiger, during the past ten to 15 years. The one great certainty that drove us forward during those years was confidence in the system. School colleagues who emigrated to Canada and America in the early 1960s because they had no other option showed me their bank accounts on their return home four or five years later and they were paying 5.5% or 6% in interest rates when people here were paying 18%, 20% or 21% and I was paying 22.5% in the Christmas of 1980. We know how difficult times were then. I have said on the Order of Business and in other debates in the House that those who stayed here to witness the success of the economy that we have had deserve a gold medal for what we achieved during the past 35 to 40 years.

Many people in Ireland this morning would like to compliment the Government, the Minister for Finance, the Taoiseach and everyone associated with giving a guarantee that the few euro people have on deposit following their life-long savings are assured and that everything related to the current and other accounts held by people in business in Ireland has been guaranteed and looked after.

We now go forward to meet the challenge we face. I must take account of the advice of the father of the House, Senator Ross, on these senior financial issues because he has been dealing with this area all of his working life. However, I must differ with him in that all my friends who have generated thousands of jobs here over the past number of years have told me — having been a Member of this House for a considerable time I am probably more senior in age to most Members here — that in their lifetime this was the first time that they had seen the banks not lending to the banks, which was a road to disaster. I look forward to Senator Ross's contribution to the debate on the economy. I was pleased two weeks ago to place this issue as the first item to be debated on our return today. I will listen to the submissions of colleagues, particularly that of Senator Ross, on how the banks loaning to the banks will improve the position for all of our people.

Senators MacSharry and Ó Murchú called for an all-day debate on banking. I can assure the House I will accede to that request. I will inform the House on the Order of Business on Thursday how I will facilitate the taking place of such a debate next week.

I join Senator O'Toole in welcoming the library initiative detailed in the pamphlet which he highlighted to the House. It is a great step forward.

Senator Hanafin raised the issue of the source of funding for Libertas and asked if there was outside intervention in respect of it. I will pass his views on to the Minister responsible.

Senators McFadden, Doherty and other colleagues requested that the Minister for Education and Science be invited to the House for a debate on school funding allocations and the manner in which financial allocations are prioritised for new school building projects. I have no difficulty in making time available for such a debate.

Senator Quinn drew the attention of the House to a new €5 coin he obtained in France. This change is a move in the right direction.

Senator Ormonde called for a debate on the issue of taxi drivers who are not registered. This is an issue of concern. We must have confidence in the security of travelling by taxi and in taxi drivers having obtained a licence to operate them from the local authorities. I will bring this issue to the attention of the Minister concerned and I have no difficulty in setting aside time for such a debate.

Senator Healy Eames highlighted the difficult position faced by the people in Galway regarding the high content of lead found in the water supply in certain parts of Galway city. I and many colleagues spent three lovely days in the Clayton Hotel in Galway recently. We viewed the great progress that has been made in Galway city. It was an eye-opener. Galway has changed substantially during the past ten to 15 years. The difficulty that is being experienced by the people in that city will be given top priority by the Government.

Senator Fidelma Healy Eames

I look forward to that.

Senator Donie Cassidy

The matter is in safe hands under the remit of the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív——

Senator Fidelma Healy Eames

He is doing nothing about it.

Senator Donie Cassidy

——and his other ministerial colleagues in the Department of the Environment, Heritage and Local Government.

Senator Fidelma Healy Eames

I want the Minister, Deputy Gormley, to deal with the matter in this House.

Senator Donie Cassidy

The city of Galway is a growth area of the country. I was delighted to visit Galway and participate in our party conference.

Senator Mullen called for a debate on stem cell research and all matters pertaining to it. I have no difficulty in setting aside time for such a debate.

Senators Bradford and Doherty outlined to the House the difficulties experienced by those who have lost their jobs in claiming their social welfare entitlements. First, I must welcome the announcement in Limerick today of 200 jobs. However, it is not good enough that those people who paid their taxes now find there is a difficulty in processing their social welfare claims. I will ensure inquiries are made in this regard. Senators should advise me of the areas of the country where people are experiencing such difficulties. I will take up the matter with the office of the Minister responsible immediately after the Order of Business and report back to the House on Thursday morning.

Senators Pearse Doherty and John Paul Phelan referred to housing matters and inquired when it is proposed to take Committee Stage of the Housing (Miscellaneous Provisions) Bill. The best information available to me indicates that it is proposed to take Committee Stage of the Bill in three to four weeks.

Senator Jerry Buttimer asked that the Minister for Transport come to the House to discuss aviation matters, especially as they relate to Cork. I have no difficulty making a request for the Minister to come to the House.

Senator Buttimer also expressed his serious concern regarding job losses. There are 2.1 million people currently in employment, whereas 20 years ago only 1.1 million had jobs. This represents a substantial improvement. Please God we are reaching the stage where we will be able to assist people and improve the position further. The 200 jobs announced for Limerick earlier today are welcome.

I cannot agree to Senator Fitzgerald's amendment to the Order of Business.

The Seanad divided: Tá, 20; Níl, 25.

Tá

Bacik, Ivana.
Bradford, Paul.
Burke, Paddy.
Buttimer, Jerry.
Coffey, Paudie.
Coghlan, Paul.
Cummins, Maurice.
Doherty, Pearse.
Fitzgerald, Frances.
Healy Eames, Fidelma.
Kelly, Alan.
McFadden, Nicky.
Mullen, Rónán.
O’Toole, Joe.
Phelan, John Paul.
Quinn, Feargal.
Regan, Eugene.
Ross, Shane.
Twomey, Liam.
White, Alex.

Níl

Boyle, Dan.
Brady, Martin.
Butler, Larry.
Callely, Ivor.
Cannon, Ciaran.
Carty, John.
Cassidy, Donie.
Corrigan, Maria.
de Búrca, Déirdre.
Ellis, John.
Feeney, Geraldine.
Glynn, Camillus.
Hanafin, John.
MacSharry, Marc.
McDonald, Lisa.
Ó Domhnaill, Brian.
Ó Murchú, Labhrás.
O’Brien, Francis.
O’Donovan, Denis.
O’Sullivan, Ned.
Ormonde, Ann.
Phelan, Kieran.
Walsh, Jim.
White, Mary M.
Wilson, Diarmuid.

Tellers: Tá, Senators Maurice Cummins and Joe O’Toole; Níl, Senators Déirdre de Búrca and Diarmuid Wilson.

Amendment declared lost.

Order of Business agreed to.

Seanad Éireann díospóireacht - Tuesday, 30 Sep 2008