Mary Lou McDonald
Ceist:3. Deputy Mary Lou McDonald asked the Taoiseach his views on the recent suggestion that the Economic Management Council should not be retained past the period of fiscal crisis. [47797/14]
Amharc ar fhreagraTuesday, 31 March 2015
Ceisteanna (3, 4, 5, 6, 7, 8, 9, 10, 11, 12)
Micheál Martin
Ceist:4. Deputy Micheál Martin asked the Taoiseach his views on the suggestion that the Economic Management Council should not be retained after the fiscal crisis; and if he will make a statement on the matter. [2157/15]
Amharc ar fhreagra
Joe Higgins
Ceist:5. Deputy Joe Higgins asked the Taoiseach his views on the continuation of the Economic Management Council; and if he will make a statement on the matter. [5464/15]
Amharc ar fhreagra
Richard Boyd Barrett
Ceist:6. Deputy Richard Boyd Barrett asked the Taoiseach his views on a recent suggestion that the Economic Management Council should not be retained past the period of the fiscal crisis; and if he will make a statement on the matter. [5534/15]
Amharc ar fhreagraMicheál Martin
Ceist:7. Deputy Micheál Martin asked the Taoiseach when the Economic Management Council last met. [9967/15]
Amharc ar fhreagraMicheál Martin
Ceist:8. Deputy Micheál Martin asked the Taoiseach the position regarding the Economic Management Council meeting held in March 2015. [12697/15]
Amharc ar fhreagra
Gerry Adams
Ceist:9. Deputy Gerry Adams asked the Taoiseach the number of times the Economic Management Committee has met since the start of the year. [12777/15]
Amharc ar fhreagraGerry Adams
Ceist:10. Deputy Gerry Adams asked the Taoiseach when the Economic Management Committee last met. [12778/15]
Amharc ar fhreagraGerry Adams
Ceist:11. Deputy Gerry Adams asked the Taoiseach his views on the continuation of the Economic Management Committee and the suggestion that it should not be retained after the period of the fiscal crisis; and if he will make a statement on the matter. [12779/15]
Amharc ar fhreagraGerry Adams
Ceist:12. Deputy Gerry Adams asked the Taoiseach the frequency of meetings of the Economic Management Council with the banks and when these meetings occurred. [12780/15]
Amharc ar fhreagraFreagraí ó Béal (28 píosaí cainte)
I propose to take Questions Nos. 3 to 12, inclusive, together.
The Economic Management Council, EMC, was established with the status of a Cabinet committee to manage the Government's programme of economic planning, budgetary matters and banking policy. It has four members, namely, the Taoiseach, Tánaiste, the Minister for Finance and the Minister for Public Expenditure and Reform. The council met on three occasions this year. The last meeting took place on 4 March. It has met the banks on three separate occasions. The meetings took place on 9 November 2011, 21 February 2012 and 26 June 2012. Following the adoption of the statement of Government priorities in July 2014, a review of Cabinet committee structures took place and a number of changes were made. However, the Government decided that the EMC should be retained in its current format to continue its work in securing economic recovery.
I put it to the Taoiseach that from day one the main concern of the Government has been to spin its role on a range of issues rather than showing form in terms of substance. Central to all this was the establishment of a Cabinet committee which was pompously titled the Economic Management Council. An army of advisers spent countless hours talking about the importance of the EMC, themselves and their political bosses. The reality is that the EMC has been a way of making the Cabinet and Government less relevant and far more centralised than the Constitution ever envisaged. The Constitution is very clear about the role of Government, that is, that it should be responsible to Dáil Éireann.
It is a fact that the EMC has never produced a fiscal strategy. There has been no new fiscal strategy for three years. It has never published a full economic strategy. If one listened to the Tánaiste, Deputy Burton, the Ministers, Deputies White and Coveney, and others, one would find it has been a way of keeping normal discussions away from Government and the public. The water debacle was a classic illustration of that. It provided for the €500 million for water meters, devoid of any accountability.
On the forthcoming campaign event, which has been called the spring statement, will the Taoiseach say whether the EMC will be taking the lead role on that? The spring statement is due to involve civil servants in writing the document. The Taoiseach has confessed that the document is primarily about setting out Fine Gael and Labour Party policies beyond the next election. Will he outline on what legal basis he is using significant amounts of Civil Service time to write a document which has no formal status? It is not a White Paper or Book of Estimates, it contains no financial resolutions and will be immediately superseded by the budget. Will he confirm that is the case?
For most of last year we had weekly exclusive stories on tax cuts about to be handed out by a very generous Government. Will the Taoiseach confirm the status of those stories? We read about them every day. Are they cleared by the Taoiseach and the EMC before being released? Is he keeping a list of them or will it be like last year where the leaks went far beyond anything that subsequently materialised in the budget?
The EMC decided four years ago to end the practice of providing detailed distributional impact information for budgetary proposals. It seems to me that the reason it did that was to save the Labour Party's blushes due to Fine Gael's very regressive approach to budgetary and fiscal changes and the unfair policies that were allowed to dominate. One would argue that this is very basic material. The Department of Finance has all that material and historically has always produced it. Will the EMC lift a ban on its publication when the spring statement is issued? Will we be allowed to see the full impact of the announced policies rather than just the ministerial spin?
I put it to the Taoiseach that by law all budget proposals should be prepared in light of an analysis and recommendations from the Fiscal Advisory Council. It is a legal position. Will the law be followed, for example, for the spring statement? If it is not, it will be transparently and purely an electoral event and Fine Gael and the Labour Party should be asked to reimburse the taxpayer for the costs. Article 28.4.1° of the Constitution states: "The Government shall be responsible to Dáil Éireann." Instead, the Dáil is treated essentially as a rubber stamp in all this.
Will the Taoiseach outline to the House the position of the Tánaiste, Deputy Burton, on the EMC? She pouted a lot prior to becoming Tánaiste and leader of the Labour Party about not being on the EMC and not being given access to its work. Some Ministers, such as Deputies Varadkar and White, have complained publicly about the role of the EMC and their lack of engagement with it. The Minister, Deputy Coveney, did previously but has gone rather quiet on the issue. What is the up-to-date position of the Tánaiste?
Before I ask the Taoiseach to reply, I advise that because of complications, questions submitted to An Taoiseach concerning committees of the Cabinet are restricted to obtaining information on the number of meetings that have taken place, the dates of those meetings and the proposed dates of future meetings. The basis of this procedure emanates from Article 28.4.3° of the Constitution which states: "The confidentiality of discussion at meetings of the Government shall be restricted in all circumstances save only where the High Court determines that disclosure should be made in respect of a particular matter." Consequently, questions related to the activities of individual Cabinet committees are not in order. That is the advice that has been given formally to the House.
There are a quite a number of Cabinet sub-committees in existence. I choose to devote one day per month to them. For instance, yesterday I started at 8.30 a.m. and finished at 7 p.m. I went through a range of ministerial responsibilities, programmes and policy issues that need to be moved on by individual Departments or where there is a relationship between Departments and Ministers.
The EMC was set up for a very good reason. Given the scale of the economic crisis that faced the Government when it was appointed, it was necessary to have a focused entity that could regularly examine the evolving and changing economic landscape. As the Government comprised two parties, we believed it was important that there be that level of contact, as required, between the leaders or Ministers of the parties, as would apply.
The overall mandate of the Government was to fix the public finances and get our country back to work. The Economic Management Council, EMC, has in my experience allowed for very regular contact between the Taoiseach, Tánaiste and the Ministers for Finance and Public Expenditure and Reform on issues arising every day of the most serious import. They concerned matters relating to the European Central Bank or questions about bailout negotiations etc. These discussions also concerned budgets in very difficult financial circumstances. The EMC is not the Government and there has not been a case where any discussion taking place at an EMC meeting suddenly became Government policy. It is necessary for its members to go before the Cabinet so that these matters can be discussed and formal agreement can be given if required. It is often the case that a view reached by the EMC might not emerge from the Cabinet at the end of the day, as other views might have been expressed.
Given the scale evident of where we were, this was a very important entity. As Deputy Martin is aware, the number of meetings we have had this year is smaller than the number we would have had per year in the middle of this crisis. I genuinely believe the EMC has an important value in keeping the Government focused on the central remit, which is to continue to secure the recovery, achieve full employment by 2018 and allow for constant changes in the way business is done and the kind of environment in which business can operate.
The spring economic statement is not a mini-budget and it is not a case of using the occasion for the purpose of making announcements that apply to the budget. It is an important entity for the Government to be able to set out its views about the challenges that lie ahead, the kind of business environment we would like to see and the strategy the Government will set out that it intends to follow as far out as 2020. Deputies are aware that national programmes are set by and in conjunction with the European Commission that are published in or around May each year. These are normally low-key programmes but the spring economic statement allows for the inclusion of these kinds of programmes in setting out the general environment and challenges we see up ahead. As I said, the EMC is not the Government. It meets as appropriate, depending on the issues that arise. The EMC will meet representatives of the banks in due course in regard to an agenda dealing with mortgages and rates etc.
To respond to Deputy Martin, the spring economic statement is not a budget or a litany of announcements about matters being implemented. It is to set out for everybody the opportunity to engage themselves in where our country is headed in the time ahead. The strategy will consist of the announcement of the spring economic statement, followed by a consultation and engagement with elements of the public and other sectors before the drafting and presentation of the budget in October. It is good that there are definite dates set for the implementation of budgets so people know those timelines. That has been of value. That will be the process following through the spring economic statement, leading to consultation and the presentation of the budget.
The independent fiscal council is an important entity. It is a watchdog independent in its analysis and views. The Government is not bound to take those views into account but it is an important entity in its own right. People can see the opinions and views of experts in the financial field, including what they would consider important to implement. The view of that economic council in terms of fiscal adjustments would have been more severe in some cases than what the Government did. It is for the political process to assess what decisions have to be made and how best they might be implemented in the interests of working towards full and sustainable employment, continuing to reduce our debt and making serious progress to wipe out our deficit, as well as having full employment by 2018.
Will the fiscal council be consulted on the spring statement?
I do not believe there is any formal engagement but on the run-in to the preparation for the budget-----
I am talking about the spring statement.
-----the independent fiscal council will have all the information available to it. There is no proposal to have a formal engagement with the fiscal council about the spring economic statement. As I said, that is not a budget or a vehicle for indicating what issues the Government will announce. It concerns the general economic landscape as the Government sees it right out to 2020. That will be discussed and published here, with the information pertaining to that made available to people so they can have the opportunity to have their say.
One of my questions is about the Taoiseach giving us a view on the continuation of the Economic Management Council and the suggestion that it should not be retained after the period of the fiscal crisis. Another question relates to frequency of meetings with banks. I accept entirely what was read to us. It is interesting to note that in several newspaper reports earlier this month, the Minister for Finance was quoted as telling a Fine Gael parliamentary meeting that the Economic Management Council discussed the question of insolvency legislation and mortgage arrears. It appears there is no difficulty briefing the Fine Gael Members or the media of discussions within the EMC but we in the Dáil cannot be briefed on these matters.
Having made that point, my main question is whether this management committee should be retained. It has been described, variously, as autocratic and dictatorial. The Taoiseach has stated this is not the Government but it has been described as a government within the Government. That is not coming from us but people within the Government parties. Others have stated it undermines the role of Ministers and the Cabinet while enhancing the power of unelected civil servants and party advisers. Mr. Pat Leahy, in his book, The Price of Power, identifies one key reason for its existence. He argues that one senior Minister put it to him that the Cabinet "leaks like a sieve", so perhaps it is about preventing leaks and control. Last November, one of the Taoiseach's backbenchers, Deputy Eoghan Murphy, called for the disbandment of the EMC and suggested its operation might even be unconstitutional. A Minister, Deputy Alex White, warned that the council should not become a fixture of the political system. He specifically called for the role of the Economic Management Council to be re-examined. Has this been considered by the Government?
Last month, the Taoiseach reported that the Economic Management Council met representatives of the banks on three occasions, which were in November 2011, February 2012 and June 2012. That means it has been almost three years since the EMC last met representatives of the banks.
Given the central role that the banks must play in any fair economic recovery, is it right that there were no meetings for three years? We all know about the number of mortgage accounts which are in arrears and the pressure on householders, which is rising and will continue. Many times, I have raised with the Taoiseach the problem with banks not lending enough money to small and medium enterprises. Is it not a glaring fault that the Taoiseach did not meet with the banks on this issue?
It is not about control, but focus on the challenges and issues that must be addressed and the kinds of views that should be presented to the Cabinet for its consideration so that we can make decisions on them. I have never favoured holding endless meetings without a focus in which everybody throws in opinions just for the sake of it. While I am not suggesting this happens at Cabinet meetings, it is far more efficient to set out a number of views, identify the challenges we face and discuss how we will deal with them. The spring economic statement, which will be led by the Ministers for Finance and Public Expenditure and Reform, will include a stock take of economic performance, a discussion on the developments taking place in the public finances and how this will fit in with the stability programme update, which is a requirement under European legislation. The statement will set out what the Government feels are the challenges that lie ahead during the coming years.
One of the issues is that the Government has set out to reduce our deficit below 3% this year - it will be well below 3% - and to eliminate it by 2018. This means we need to create 40,000 jobs this year and 40,000 next year and in 2017 and 2018, respectively, to recover all the jobs that were lost during the recession. Tomorrow, the Central Statistics Office, CSO, will publish the live register, and we hope the positive trend will continue. Deputies will be able to contribute to the focus on economic and financial challenges, including the potential risks and challenges that lie ahead. This is where we want the spring economic statement to be focused. Given the progress the country has made, and the sacrifices people have had to make, we do not want to lose the momentum. Our intention is to set out the parameters and secure the future and the recovery so that people all over the country can benefit from it. This will be important in the sense of setting out where we are.
We hope, in 2015, to exit the excessive deficit procedure, look ahead to 2020, hold a public consultation, present our budget, let the independent Fiscal Advisory Council present its views and publish the information leading up to the budget so people can assess its impact and put forward alternative proposals. While the spring economic statement is technical in many ways, it is also political and financial in its setting out of the strategy the Government will follow and our intention not to go backwards but to secure the recovery and move forward. Around the country, in the different sectors, what I see is very encouraging. As I have said on many occasions, the credit goes to the people. However, it is the Government's responsibility to secure the momentum and progress, and this requires clarity and clear decisions. For this reason, I am a very strong supporter of the concept of the EMC.
Deputy Martin asked whether the Tánaiste attends the EMC. She does attend, and contributes very worthily to it. Arising from the meetings, people have a better perspective on the decisions the Cabinet must make. I repeat, it is not a mini Government but a process of streamlining work so the Cabinet can make decisions. The EMC will meet the banks in the period ahead. We have already committed to bringing in a number of changes to the situation in so far as mortgages are concerned. The Government will deal with it in April. The Government has put together a suite of options, including the Insolvency Service of Ireland, ISI. Although the ISI may not have dealt with as many cases as people might like, banks have reached acceptable and satisfactory conclusions in more than 100,000 cases. These settlements had been vetted by the Central Bank, and the vast majority are working satisfactorily.
I hope the process that lies ahead will prove successful and that Deputies on all sides will contribute to it in a way that will make it worthwhile. Everybody will have an opportunity to comment on it. Following it, there will be a process of public consultation, during which people will be entitled to send their views and observations as the Ministers for Finance and Public Expenditure and Reform set out their views regarding the budget, which will be presented by the Minister for Finance. Some time before the summer, the Government must reflect on the capital programme for the coming years, given that there are serious infrastructural deficiencies in various places around the country. There are other programmes that need to be followed through, such as the building of schools and primary care centres. These matters will come before the Government for decision and we hope to deal with them before the summer so everybody can have his or her say and we can discuss the budget in October.
The Taoiseach said the EMC was established for a specific reason and that it allowed for very regular contact. This seems a very poor reason for the establishment of the EMC. The Taoiseach can have this regular contact with the Tánaiste whenever he wants to. Some two thirds of the measures needed to reach the 3% deficit target had been taken by the previous Government before the EMC was established. The rationale for it has never been fully articulated, given its quasi-constitutional status. Although the Taoiseach would have voted against all the budgetary measures taken by the previous Government, he now takes credit for them and their contribution to getting the deficit below 3%. The four-year plan that the former Minister for Finance, the late Brian Lenihan, produced was done without any EMC. The full Cabinet participated in it without any emergency fiscal council. The funding arrangement with the troika, which provided the funding for three years of the plan, was done and dusted before any EMC had been established. The Taoiseach would agree with these facts.
It is difficult to ascertain the role of the EMC and the Cabinet in the episode detailed in Pat Leahy's book, when the Minister for Finance, Deputy Noonan, had proposed to burn the bondholders. We were all sitting here in the Dáil when the Minister for Finance arrived in 20 minutes late because he had received a phone call from the then Governor of the European Central Bank, Mr. Trichet, who had told the Minister that if he tried to burn any bondholders, a bomb would go off, not in Brussels but in Dublin.
The Minister had to back down, it seems, unilaterally and on an individual and solo basis. He might have told the Taoiseach or whatever but it seems quite a number of Ministers who were sitting in the House waiting were taken by surprise that his statement on that occasion did not include any reference to the burning of bondholders. It perhaps exposed the falsehoods that were perpetrated before the election that the bondholders would be burned and they were not but, again, there has never been any accountability about that.
Equally, the assertion has been made that the EMC is about keeping issues under control and avoiding leaks, as was pointed out in Mr. Leahy's book. It is extraordinary that €500 million in expenditure was approved by the council for the installation of water meters with no accountability to the House in any shape or form. The House was told that because Irish Water was a semi-State entity, the Minister for the Environment, Community and Local Government did not have to answer questions and, therefore, we can find out nothing about the awarding of the contracts for the installation of meters because that is all considered to be confidential for alleged commercial reasons. It is an extraordinary fact that the central role of the EMC in the water meter story has been to keep it all hidden from public view. As a result of the mechanisms adopted, such as using NTMA money as a borrowing instrument, which was approved by the council with no questions allowed in the House, no questions have been answered in respect of any aspect of that. One is led to the conclusion that the role of the council is to ram through measures about which people, even within the Cabinet, might ask awkward questions. They did not get the opportunity to do so. We are aware of the battle that ensued in respect of water services subsequently. There were approximately 13 U-turns with legislation rammed through the House in 24 hours twice to deal with the issue. By any yardstick or objective assessment, the EMC did not cover itself in glory on that issue, notwithstanding the fact that its role has been over hyped by a Government that was focused on spin rather than reality
The Taoiseach has stated the spring statement will not be a budgetary statement and further stated, "It is an opportunity to engage ourselves in where the country is heading". I do not know what that means.
I will tell the Deputy.
The spring statement will not be a budget, a White Paper or a Book of Estimates and it will contain no financial resolutions.
We have only two minutes left.
It is not even a national development plan. Is it an election document? Should civil servants be involved in preparing it? Will the capital programme mentioned by the Taoiseach be yet another instalment in the series of documents and announcements we are getting on a regular basis?
I am sorry. Unfortunately, we have only one minute and 40 seconds remaining.
Is it not the position that all this is about the electoral timetable as opposed to substantive fiscal or budgetary matters? There is a big question mark over the utilisation of the Civil Service in such a cynical exercise.
It is patently obvious that the spring statement is about the upcoming election. The big issue at the moment is what type of recovery we are experiencing. While I listened to what the Taoiseach said, it is also patently obvious that this is a two-tier economic recovery. He just glossed over the big issue, which is the fact that he has not met representatives of the banks for three years and the fact that they have a veto over citizens' mortgages.
When I tried to unravel the issues around Irish Water and the €85 million in taxpayers' money given to private consultants, I could not get to the bottom of who took the decisions. There are not even records of minutes of meeting between the former Minister for the Environment, Community and Local Government, Deputy Hogan, and the chairwoman of Bord Gáis. I understand what the Taoiseach is saying about the need for focus and we all have examples of meetings that did not have focus but the EMC appears to me to be almost a subversion of the Cabinet's collective responsibility for governance on the crux issues facing people. It is easier to control a small group such as this to take decisions and then, in an ongoing atmosphere of crisis, to push them through. The big issue around Irish Water and other matters I have raised is there were no proper debates in the House. The guillotine was used time out of number and sensible amendments tabled by the Opposition parties, including by Sinn Féin, were totally ignored or voted own by the Government.
The Taoiseach ignored my question, which is a suggestion from others, including those in the Government. I asked him to comment on whether the EMC should be retained following the period of fiscal crisis.
In respect of Deputy Adams's final question, I stated in my reply that the Government considered this. We made changes last year to the structures of Cabinet committees but one thing we did not change was the retention of the EMC. It is an important element of running government efficiently. It is not a government in itself. It is not only a way of focusing on the challenges we face but also a way of setting out the options for the Cabinet to consider and make decisions on.
The decisions that are the subject of valid discussion and accountability in the House were made by the Cabinet in respect of Irish Water and, in some cases, by the regulator which is independent in its duty. The value we see of having more than 600,000 meters installed is in allowing people to beat the cap but also in identifying 30,000 leaks that need to be fixed. The statistics in this regard were released earlier.
The banks will meet with the EMC in the next period and the Government will bring forward a number of changes to the mortgage regime in April. Nobody wants to see anybody lose a house where that is humanly possible and that is why we want the best range of options and opportunities for people to deal with this issue. A total of 100,000 have been sorted out successfully.
The taxation system is an issue for the budget and the Minister for Finance will consider all these issues. We expect that up to 500,000 people will be taken out of liability for the USC in the October budget if we can continue the progress made.
The spring economic statement will not be a general election document and it will not be a series of announcements about things that are happening. It will be an opportunity for the Dáil to discuss the financial position and economics of the country and, as both Deputies said, the direction we are headed and where we want to be in five years. Where we want to be is in a country with full employment, a well managed economy, jobs for everybody who wants one with the opportunity for people to come back home and powering ahead as an energetic, committed country where innovation and research change the frontiers ahead.
In 2013, there were quite a number of guillotines in the House. That was very much reduced last year. There were significant debates on Second and Committee Stages of the Water Services Bill 2014. The Government parties made decisions and they are accountable for them at Irish Water level.
In response to Deputy Martin finally, it is true that the late, lamented Minister for Finance had begun to make a number of changes. He said to me on a number of occasions that he was finding it difficult to have the then Government respond to the alarm soundings he was putting out there. Clearly, the catastrophic decisions made by that Government at the time were indicative of parties being unable to talk to each other. It came to the point where Ministers resigned from Government and others could not be appointed to particular portfolios. Deputy Martin decided to leave himself in the middle of all of that.
That is dishonest. That is not the truth. All those issues were dealt with before anybody resigned. The Taoiseach should be honest.
We saw them.
The Taoiseach is wrong.
The Government was reduced to six or seven Ministries at one stage and nobody knew what Ministry they were serving in.
Two thirds of the decisions.
We are over time.
Deputy Martin, as one of those Ministers, decided to leave the Government himself.
The Taoiseach is appalling.
One of the values of the EMC is that parties engage with each other about the matters that affect the country and bring them to Cabinet for discussion and decision. Our priorities are to fix our public finances, eliminate our deficit and create full employment. We want to provide opportunities for our people for the way ahead so that the economy is well-managed and Ireland can take its place again as a country that is reliable, confident and competently managed, and whose people have an opportunity to contribute to their own lives, to their communities, to our country and as a consequence to the European Union and beyond.
Written Answers follow Adjournment.