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					Vol. 741                                                                       Wednesday,
No. 4                                                                       28 September 2011




             DÍOSPÓIREACHTAÍ PARLAIMINTE
               PARLIAMENTARY DEBATES




                        DÁIL ÉIREANN
          TUAIRISC OIFIGIÚIL—Neamhcheartaithe

                  (OFFICIAL REPORT—Unrevised)




                                   Dé Céadaoin, 28 Meán Fómhair 2011.

Leaders’ Questions     …    …      …       …     …      …    …     …    …     …   …   …    763
Order of Business
    Taoiseach …        …    …      …       …     …      …    …     …    …     …   …   …    769
Insurance (Amendment) Bill 2011 [Seanad]: Second Stage (Resumed)   …    …     …   …   …    777
Ceisteanna — Questions
    Minister for Health
         Priority Questions …      …       …     …      …    …     …    …     …   …   …    799
         Other Questions    …      …       …     …      …    …     …    …     …   …   …    808
Topical Issue Matters …     …      …       …     …      …    …     …    …     …   …   …    818
Topical Issue Debate
    Sentencing Policy …     …      …       …     …      …    …     …    …     …   …   …    819
    Telecommunications Services    …       …     …      …    …     …    …     …   …   …    822
    Garda Stations     …    …      …       …     …      …    …     …    …     …   …   …    824
    Rental Accommodation Scheme …          …     …      …    …     …    …     …   …   …    828
Insurance (Amendment) Bill 2011 [Seanad]:
    Second Stage (resumed) …       …       …     …      …    …     …    …     …   …   …    830
    Committee and Remaining Stages         …     …      …    …     …    …     …   …   …    837
Veterinary Practice (Amendment) Bill 2011:
    Order for Second Stage …       …       …     …      …    …     …    …     …   …   …    858
    Second Stage       …    …      …       …     …      …    …     …    …     …   …   …    859
Private Members’ Business
    Employment and National Internship Scheme: Motion (resumed)    …    …     …   …   …    863
Questions: Written Answers …       …       …     …      …    …     …    …     …   …   …    887
                                    DÁIL ÉIREANN
                                            ————

                            Dé Céadaoin, 28 Meán Fómhair 2011.
                              Wednesday, 28 September 2011.

                                            ————

                    Chuaigh an Ceann Comhairle i gceannas ar 10.30 a.m.

                                            ————

                                             Paidir.

                                             Prayer.

                                            ————

                                      Leaders’ Questions
  Deputy Micheál Martin: Last July, the Minister for Health and deputy leader of Fine Gael
met with all the Laois Dáil Deputies regarding their concerns about the future role of Portlaoise
General Hospital and particularly their concerns that there would be no reduction of accident
and emergency services in that hospital. In subsequent radio interviews, many Deputies, includ-
ing Fine Gael’s Deputy Charles Flanagan, made it clear to the people of Laois that the Minister
had given a commitment to retaining accident and emergency services at the hospital. However,
the Health Service Executive has written to the Committee of Public Accounts outlining the
actual plans for Portlaoise, which appear to be quite the opposite of the commitments made
by the Taoiseach’s deputy leader. Under this plan, the Portlaoise hospital will be downgraded
to a level 2 hospital, which will mean the accident and emergency department will be a medical
assessment unit dealing with low-risk patients only. There are also reports that, as a result, the
intensive care unit will be removed.
  We know that all sorts of commitments and promises were made over the last 12 months
around the country. We know this because of the broken promises made about Roscommon
hospital. It is clear, however, that Portlaoise is in a different category given the Census 2011
results which show that the area’s population has grown by about 20% to unprecedented levels.
Some 41,000 patients were seen in the hospital’s accident and emergency unit last year alone.
  In the last six months, the Minister for Health has taken personal charge of the HSE and his
Department has underspent by about €40 million. Can the Taoiseach confirm what the plans
are for Portlaoise hospital? Will he confirm what is contained in the HSE’s communication to
the Committee of Public Accounts as regards Portlaoise being downgraded to a level 2
hospital?

  The Taoiseach: I have heard rumours and comment about Portlaoise and a number of other
hospitals. The Minister for Health informs me that there are no plans to downgrade Portlaoise
hospital from module 3 to module 2. I do not know what plan Deputy Martin is quoting from.
This is an important, busy hospital in the midlands and the figures speak for themselves. The
Committee on Health and Children will obviously consider all the reports concerning hospitals
but, as I stand here this morning, there are no plans to downgrade Portlaoise hospital from
module 3 to module 2.
                                               763
                     Leaders’            28 September 2011.            Questions


  Deputy Micheál Martin: I am referring to a document which was sent to the Committee of
Public Accounts by the HSE’s national director for integrated services, performance and finan-
cial management, Laverne McGuinness.

  Deputy James Reilly: What is the date?

  Deputy Micheál Martin: It clearly states that a medical assessment unit in a module 2 local
hospital was for GP-referred, differentiated medical patients with a low risk of requiring full
resuscitation. It lists all the hospitals, including Ennis, Portlaoise, Nenagh, Navan, Roscommon,
Loughlinstown, St. John’s in Limerick, and Dún Laoghaire.

  Deputies: What is the date?

  Deputy Micheál Martin: That is the document I am referring to and I want confirmation
from the Taoiseach——

  Deputy Peter Mathews: What year?

  Deputy Bernard J. Durkan: That was when the Deputy was in government.

  Deputy Micheál Martin: It was in July of this year, when the Minister met with the Deputies
concerned. The document is dated 26 July 2011. Therefore, at the same time the Minister was
meeting those Deputies, the HSE wrote to the Committee of Public Accounts. It is coming up
tomorrow at that committee.

  Deputy Jerry Buttimer: Is it one of Deputy Martin’s reports?

  Deputy Micheál Martin: There is a genuine issue there if Deputy Buttimer will allow me to
articulate the point. All along we are getting different stories.

  (Interruptions).

  An Ceann Comhairle: Will Deputies please allow Deputy Martin to continue?

  Deputy Micheál Martin: The issue is that different commitments are being made to different
people, while different stories are being told on an ongoing basis. The HSE communication
states that a medical assessment unit is in development in Portlaoise. The only reason it is in
development is to replace the accident and emergency facility.

  Deputy Dara Calleary: A band-aid station is being established there.

  The Taoiseach: I have just been speaking to the Minister for Health about this. I respect
Deputy Martin bringing in the letter he mentioned from 26 July, but there is no capacity in the
system to reduce a hospital like this to level 2, nor is there any intention of so doing. What the
Deputy has there has no status in the context of the Government making decisions about this.

  Deputy Tom Hayes: Deputy Martin should get his information right.

  The Taoiseach: I can confirm, on behalf of the Minister for Health, that there is absolutely
no intention of reducing Portlaoise from level 3 to level 2.

  Deputy Dara Calleary: That is what he told them in Roscommon.

  An Ceann Comhairle: Deputies can pursue the matter further by way of parliamentary
questions.
                                                764
                    Leaders’             28 September 2011.            Questions


  Deputy Gerry Adams: I was astonished yesterday when, in response to a question from me,
the Taoiseach announced that the Cabinet sub-committee on health has not met. That sub-
committee was announced by the Taoiseach in June at the height of the controversy over his
decision to close Roscommon hospital’s accident and emergency unit in complete breach of
commitments made both by the Labour Party and Fine Gael, and in advance of the crisis
concerning junior doctors. Today we see more evidence of that with nurses on strike in
Limerick since 8.30 a.m. because of gross overcrowding and the effect it is having on patient
safety. The Taoiseach will also be aware that there were 394 patients on trolleys yesterday,
with the worst case being in Our Lady of Lourdes Hospital in Drogheda.
  These are choices which the Taoiseach’s Government is making. Is é mo bharúil go bhfuil
an Rialtas ag leanúint ar aghaidh le polasaithe Fhianna Fáil, agus ag cur fhulaingt ar shaol an
phobail. Caithfidh an Rialtas stad a chur le polasaithe Fhianna Fáil. Cad faoin five-point plan?
Point three of the five-point plan talked about reforming the health services. I ask the
Taoiseach to stop implementing Fianna Fáil policy and to intervene directly to tackle this
health crisis.

 The Taoiseach: Tá ionadh ar an Teachta go bhfuil sé anseo mar Theachta Dála do Chontae
Lú. Ná bíodh ionadh air faoi rud ar bith a tharlaíonn ó thaobh cúrsaí polaitíochta de. Níl an
Rialtas ag comhlíonadh phleananna an Rialtais roimhe seo.
   The situation in Limerick is a matter of concern to everybody. Every Deputy in this House,
some of whom have been elected for the first time in the last general election, will experience
crises arising of one sort or another in his or her local hospital which is always a cause of great
strain and anxiety both for the staff working at the front line and for the patients and their
families. The Minister for Health received this morning the report from the special delivery
unit which is examining the admissions policy in every hospital. I am concerned about stoppages
in any hospital, including in Limerick. This morning there are six patients on trolleys in
Limerick and a further 41 in an overflow ward where they are not on trolleys but are awaiting
admission. This is indeed indicative of a serious situation and it must be dealt with. Unless one
knows the nature and scale of the problem, it is impossible to deal with it. This is the reason
the special delivery unit, which was set up by the Minister, has reported to him this morning
on the Limerick case.
   I understand HSE officials put proposals to the trade unions at quite lengthy talks last night
in the LRC but these were not acceptable to the unions and those talks will continue. This will
not sort out the problem and neither will work stoppages by the nursing staff resulting from
their concerns and anxieties. This situation must be discussed and a plan implemented to rectify
it. This is the reason the special delivery unit has reported on the Limerick situation to the
Minister for Health.
  Deputy Adams referred to the hospital in his constituency and to which we referred yester-
day and he also mentioned the situation in Galway. On Saturday morning at 8 a.m., 32 patients
were awaiting admission in the accident and emergency department. This number was reduced
to 14 in the late afternoon——

  Deputy Billy Kelleher: From Roscommon.

  The Taoiseach: ——and was reduced further on Saturday evening. On Sunday morning, 18
patients were waiting in the accident and emergency department for admission. In respect of
Roscommon, last week, 17 people from Roscommon presented in the accident and emergency
department in Galway and ten people presented the previous week.
                                                765
                     Leaders’             28 September 2011.             Questions


  Deputy Gerry Adams: The Taoiseach has just recited a litany of failure. This health sub-
committee which he established has not even met. He expresses concern and I accept him at
face value but he needs to go beyond the rhetoric in this regard. He says these issues need to
be discussed but where will they be discussed? We have only this short time of one minute and
a half in which to raise these issues.
  All these issues result from the choices which the Taoiseach’s Government is making. I
repeat what I said yesterday. I suggest that people mark this date in their diaries; on 2
November, the Government will pay €700 million to bondholders in the toxic Anglo Irish Bank.
Why, on earth, is he doing this?

  (Interruptions).

  Deputy Gerry Adams: Would this money not be better paid into the failing health
services——

  (Interruptions).

  An Ceann Comhairle: Please, Deputy.

   Deputy Gerry Adams: These are deadly serious issues when a Government admits that
almost 400 citizens are in corridors on trolleys and some of them, no doubt, on chairs or on
floors. It beggars belief that there is heckling and hectoring over such a serious issue.

  Deputy Jerry Buttimer: Deputy Adams should talk to his colleagues in the North and stop
playing politics.

  An Ceann Comhairle: The Deputy must ask a question.

  Deputy Gerry Adams: This is all a result of choices being made by the Government. These
decisions are being made by the Government over which the Taoiseach presides not by the
people who came before him. Would it not be better to call a halt to these bad policies and to
invest in our health services and in citizens, as opposed to bondholders and toxic banks?

  The Taoiseach: Far from hectoring, I wish to inform the Deputy that we deal with reality.
Neither the Deputy nor I can prevent people from falling ill. When people present in a hospital,
they have been referred there or they travel to the accident and emergency department for
analysis of their problem and admission to hospital. The situation in Limerick this morning is
that six patients are on trolleys and 41 are in a waiting room for assessment for admission.

  Deputy Billy Kelleher: They are waiting for trolleys.

  The Taoiseach: Far from being a litany of failure, it is dealing with the truth. The Minister
for Health has the responsibility for dealing with this situation. As Deputy Adams well knows,
the health structure in our country works exceptionally well on one hand and in other areas,
significant blockages are created at the level of admission to the system for treatment by pro-
fessional staff. This is the problem which the Minister has to deal with. Far from allowing
failure to continue, he is looking at the reality of what can be done to deal with this problem.
I reject Deputy Adams’s attempt to portray this situation as a continuation of the status quo
that applied before. When we get down to the business of examining the element of waste in
the health service, the requirement for efficiency and competency in the management of our
hospitals, and in providing facilities for trained professional staff at the front line to do their
job in the interests of patients, that is not a litany a failure rather an examination of a political
                                                 766
                     Leaders’           28 September 2011.           Questions


responsibility and an attempt to deal with the truth of what we face. If the Deputy wishes to
take a different line, he may do so.
  He may then go off to Europe with his comments in respect of the euro crisis. There will be
a debate in the House next week and I expect the Deputy, as the leader of his party, to spell
out credible alternatives and an economic policy that is not based on fantasy——

  Deputy Dessie Ellis: We always do.

  (Interruptions).

  The Taoiseach: ——but on reality.

  (Interruptions).

   The Taoiseach: If the Anglo bondholders are paid, they will be paid from their own resources.
This will not come from the taxpayer. The Minister for Finance has been dealing with this
situation at the ECOFIN meetings. Deputy Adams has suggested it is very easy to have a write-
down in respect of senior bondholders with the residual amount left in Anglo. The effect and
consequence of this view, when it was mentioned in the case of Greece, was this contagion
which immediately spreads into much bigger economies.
  Deputy Adams says it is advisable to risk the reputation of the country and the advances we
have made in the past number of months, both economically and every other way, just to do
so. An alternative being pursued by the Minister for Finance is to examine what can be done
with the promissory note signed off by the previous Government in respect of which the interest
rate is more than 8% and which begins to be payable in 2013. If that can be dealt with by
extending the maturity or whatever, the savings to the country will be substantially more and
they will be in the public interest. Deputy Adams talks about a litany of failure. I encourage
him to be very real in his contribution in the debate on the euro next week and we will see
how credible and real are his proposals.

  (Interruptions).

 An Ceann Comhairle: Do we always have to hear the same chorus every morning? I call
Deputy Joe Higgins.

  Deputy Joe Higgins: The trauma continues for tens of thousands of homeowners who, with
their families, comprise some hundreds of thousands of ordinary people whose homes are
exploding in slow motion, but relentlessly so, because of pyrite-induced heaving emanating
from contamination of underfloor infill. It is especially acute in west Dublin, north Dublin,
Meath, Kildare and some other areas.
   Since I raised this issue with the Taoiseach in May, there have been some important devel-
opments. Scandalously, Homebond, the builders’ and developers’ insurance scheme, cynically,
coldly and heartlessly used a single court case to wash its hands of its responsibility to the
homeowners, who thought they had comfort by way of this insurance scheme, and is walking
away. Last week, the Minister for the Environment, Community and Local Government
announced he was setting up a panel to look into the pyrite crisis. That is a start, but the his
statement is deeply worrying. He said, “This is, of course, a civil matter to which the State is
not a party or in any way liable”. This is deeply worrying for affected homeowners who are in
touch weekly with public representatives because the implication is that they will be left with
their homes coming apart at the seams while a gaggle of developers, builders and insurance
companies slug it out for years in the courts to try and evade their responsibilities.
                                               767
                    Leaders’             28 September 2011.            Questions

  [Deputy Joe Higgins.]

   I put it to the Taoiseach that the Minister’s statement is based on a wrong premise. The
State has a serious responsibility because it and its agencies were negligent in that the building
regulator were negligent in not supervising the construction and the materials going into these
homes when it had known about pyrites for decades. Also, the Homebond scheme was deeply
flawed from the outset, from when it was set up in 1978. It is not all the fault of Fianna Fáil.
Fine Gael and Labour were in Government twice in that time.

  An Ceann Comhairle: Has the Deputy a question?

  Deputy Joe Higgins: Who will make up the panel? Will the affected homeowners have direct
representation on it? What is its timeframe — it must be very short — and will the Government
compel Homebond to meets its responsibilities? Due to the huge worry that exists, will the
Taoiseach set up an immediate State remediation scheme to provide testing and remediation
to resolve the worries of homeowners and to pursue the corporate entities whose negligence,
along with that of the State, caused this crisis?

   The Taoiseach: A sense of pride in their home is very important to people and this is self-
evident when one visits them. Unfortunately, for a substantial number of people, this cannot
be the case. They have decided to buy or build and taken out a mortgage, but after a period
they have found their home has begun to disintegrate. This is no joke. It is very distressing for
people to experience gables splitting, floors rising, and cracks appearing in walls in front rooms,
sitting rooms and bedrooms. I visited a number of these homes in County Meath with Deputy
McEntee and also visited a number of apartment blocks in Santry and it is evident that pyrite
explosions, particularly in the foundations when they have got wet, causes these fractures. Some
contractors have taken measurements to assess the extent of the damage caused and a small
number of contractors have rectified the damage themselves.
  I cannot comment on the outcome of the long court case in respect of pyrite being in the
material from the quarries or as to whether builders who used material from those quarries
knew there was pyrite in that material. I met with Homebond last year and with a number of
people in different communities who are affected by this distressing problem. I understand
Homebond dealt with a number of people affected but that its resources are now used up. The
Minister for the Environment, Community and Local Government has set up a working group.
This is an opportunity for the working group to meet those affected by this problem and
to ensure the issue is discussed by the Oireachtas committee dealing with the environment
and housing.
  I am sure the Minister and the Minister of State with responsibility for housing will be
interested to hear proposals as to how the problem can be rectified. This is a civil matter.
However, it is one in which the State has an interest for the well-being of families and people
who purchased houses in which they intended to live. This is not a nice prospect when there is
a 2 mm or 3 mm split across the wall or ceiling. I have seen this at first hand and am aware of
the distress it has caused.

  Deputy Joe Higgins: The Taoiseach empathises with the homeowners and individuals con-
cerned, which is good. However, when responding to questions, he spends much of his time
describing the problem, which reminds me of one of his predecessors, one Bertie Ahern, who
gave us the whole story and scientific background of everything, but did not answer the
questions.

  The Taoiseach: There is no comparison.
                                                768
                    Order of             28 September 2011.             Business


  Deputy James Reilly: The Deputy’s clothes are safe here.

   Deputy Joe Higgins: I will pose the questions again. Will the Taoiseach ensure there is
significant representation of homeowners on the panel? Will he set a timeframe by which it
must come up with solutions? Considering that people’s homes are cracking and they need to
know whether this is due to pyrite and that the tests to check this cost from €2,000 to €3,000,
will he set up a fund immediately to provide for this? Will he set up a remediation fund so that
the problem can be solved? Will he go after whatever corporate entities are partially respon-
sible for this? I put it to the Taoiseach that he has a moral responsibility in this regard because
the State overlooked this problem and the proper supervision of it. Therefore, it cannot wash
its hands as the Minister is trying to do.

  The Taoiseach: I remind the Deputy that he is not playing handball against a haystack that
kills the ball.

  Deputy Billy Kelleher: A haystack, as against a turf bank for the Taoiseach.

  The Taoiseach: The Deputy was in that corner of the alley when he made that comment.
The Deputy Higgins’s figures are a bit out of line with regard to a cost of from €2,000 to €3,000.
The figures I have seen for the rectification of some of these problems are of the order of
€70,000 or €80,000. The foundations must be taken out completely and replaced with pyrite
free material and the structure must be rectified afterwards.
   The Minister is responsible for the working group and I am sure he will ensure homeowners
are represented on it. I am also sure he will set a timeframe for coming back with an analysis
of the scale of the problem and how it might be dealt with. I will not comment with regard to
whether a remediation scheme can be put together but it is necessary to discover the true scale
of the problem first. I have had some interaction with the Minister. I will pass on to him the
points made by the Deputy on the working group and I am sure he will take them into account.
It is a daily concern for those who have pride in their homes but have found something has
happened over which they have no control.

                                       Order of Business
  The Taoiseach: It is proposed take No. 1, Insurance (Amendment) Bill 2011 [Seanad] —
Second Stage (resumed) and Subsequent Stages; and No. 4, Veterinary Practice (Amendment)
Bill 2011- Order for Second Stage and Second Stage. It is proposed, notwithstanding anything
              in Standing Orders, that (1) the Dáil shall sit later than 9 p.m. tonight and shall
11 o’clock    adjourn immediately after Private Members’ business which shall be No. 26 —
              motion re employment and the national internship scheme (resumed), which shall
be taken on the conclusion of No. 1 or at 7.30 p.m., whichever is the later, and shall, if not
previously concluded, be brought to a conclusion after 90 minutes; (2) in relation to No. 1, the
resumed Second Stage of which shall, if not previously concluded, be brought to a conclusion
at 6 p.m., the proceedings on the Committee and Remaining Stages shall, if not previously
concluded, be brought to a conclusion at 7.30 p.m. tonight by one question which shall be put
from the Chair and which shall, in relation to amendments, include only those set down or
accepted by the Minister for Finance.

  An Ceann Comhairle: There are two proposals to put to the House. Is the proposal for the
late sitting agreed to? Agreed. Is the proposal for dealing with No. 2 agreed to?

  Deputy Micheál Martin: I object to the guillotining of the Bill because it reflects a pattern
of behaviour since the Government took up office of ramming through Bill after Bill using the
                                                769
                    Order of             28 September 2011.             Business

  [Deputy Micheál Martin.]
guillotine, a general lack of accountability to the House and a lack of transparency. For
example, Taoiseach’s questions has been reduced to once a week. There has been a clear
pattern of avoiding every opportunity for detailed scrutiny of what the Government is up to.
More and more, the Parliament is becoming a creature of the Executive and the Government’s
behaviour regarding this Bill reflects that even more.

   Deputy Pearse Doherty: I strongly object to the Government’s approach to the Bill, which
will dip into the pockets of every insurance policyholder bar health policyholders to the tune
of approximately €738 million. The figure was first announced at €600 million in April and it
is increasing on a weekly basis. The Minister needs to answer serious questions regarding this
legislation, particularly in regard to the payoff to the bondholders of Anglo Irish Bank. Far
from what the Taoiseach believes, the taxpayer is paying bondholders through the promissory
note, which will cost €60 billion.
  It is wrong to slam the remaining Stages of the Bill today into one slot with one vote at the
end of the debate, particularly given the Seanad was forced to deal with all sections of the
legislation in one sitting. It is improper and it is completely out of kilter with the Government’s
commitment to political reform to allow inadequate time to scrutinise legislation. I appeal to
the Taoiseach at the last minute to reverse the decision on this guillotine and to take Committee
Stage during a later sitting.

  Deputy Richard Boyd Barrett: It is precisely because I am concerned about putting people
before profit that I am deeply concerned about the fact that the Taoiseach has failed to heed
the objections raised yesterday about ramming the Bill through in such a short time. If ever
there was an example of putting profit before people, this Bill is it. The people deserve a
proper debate and proper scrutiny of this Bill, which provides for nothing more than ordinary
policyholders and the wider economy in terms of higher insurance costs being asked to pick
up the tab to bail out Mr. Quinn in a labyrinthine deal with Anglo Irish Bank, its bondholders
and a multinational company that will walk off with the profitable bits of an insurance company
after the people having picked up the tab for Mr. Quinn’s shenanigans.

  An Ceann Comhairle: I thank the Deputy. He has made his case.

  Deputy Richard Boyd Barrett: Nothing in this Bill provides for going after the €200 million
that was handed to his kids in 2008 before everything collapsed.

  An Ceann Comhairle: We are discussing the allocation of time for the Bill, not the Bill itself.

  Deputy Richard Boyd Barrett: I urge the Taoiseach to extend the debate to allow Members
to scrutinise every aspect of the Bill.

 The Taoiseach: I am astonished that Deputies Martin, Doherty and Boyd Barrett did not
mention the fact that 1,600 jobs in Cavan and Blanchardstown depend on this Bill.

  Deputies: Hear, hear.

  The Taoiseach: For the information of Deputy Boyd Barrett, these are ordinary working
people who have jobs.

  Deputy Richard Boyd Barrett: We want to protect the jobs as well.

  The Taoiseach: It is about time the Deputy realised this is due for mention in the High Court
on 4 October.
                                                770
                    Order of                 28 September 2011.                 Business


  Deputy Richard Boyd Barrett: So take Committee Stage tomorrow.

 The Taoiseach: The question will be whether provision has been made to pay into this fund.
There are 1,600 jobs dependent on this. None of the three Deputies mentioned this.

  Deputy Pearse Doherty: If the Taoiseach had listened to the debate yesterday, he would
have heard our concerns about the workers.

  The Taoiseach: They want to go on with their usual litany of public scrutiny and public
debate, which, of course, is important.

  Deputy Timmy Dooley: It is secondary issue for the Government.

  Deputy Micheál Martin: The Taoiseach has some nerve.

  Deputy Mattie McGrath: What price the jobs?

  The Taoiseach: I hope Deputy Mattie McGrath called all his constituents together for an
analysis of this. This issue is due for mention in the High Court on 4 October and this Bill has
to go through. There are 1,600 jobs depending on it.

   Deputy Timmy Dooley: The Taoiseach is becoming more and more like his party’s presiden-
tial candidate, except with more waffle.

  The Taoiseach: For that reason, the Deputies will have an opportunity to ask questions later.

  Question put:

                                    The Dáil divided: Tá, 95; Níl, 44.
                                                    Tá

      Bannon, James.                                              Feighan, Frank.
      Barry, Tom.                                                 Ferris, Anne.
      Broughan, Thomas P.                                         Fitzgerald, Frances.
      Butler, Ray.                                                Fitzpatrick, Peter.
      Buttimer, Jerry.                                            Flanagan, Charles.
      Byrne, Eric.                                                Flanagan, Terence.
      Cannon, Ciarán.                                             Gilmore, Eamon.
      Carey, Joe.                                                 Griffin, Brendan.
      Coffey, Paudie.                                             Hannigan, Dominic.
      Collins, Áine.                                              Harrington, Noel.
      Conaghan, Michael.                                          Harris, Simon.
      Conlan, Seán.                                               Hayes, Brian.
      Connaughton, Paul J.                                        Hayes, Tom.
      Conway, Ciara.                                              Heydon, Martin.
      Coonan, Noel.                                               Howlin, Brendan.
      Corcoran Kennedy, Marcella.                                 Humphreys, Heather.
      Costello, Joe.                                              Humphreys, Kevin.
      Coveney, Simon.                                             Keating, Derek.
      Creed, Michael.                                             Keaveney, Colm.
      Creighton, Lucinda.                                         Kehoe, Paul.
      Daly, Jim.                                                  Kelly, Alan.
      Deasy, John.                                                Kenny, Enda.
      Deenihan, Jimmy.                                            Kenny, Seán.
      Deering, Pat.                                               Kyne, Seán.
      Doherty, Regina.                                            Lynch, Ciarán.
      Donohoe, Paschal.                                           Lynch, Kathleen.
      Dowds, Robert.                                              Lyons, John.
      Doyle, Andrew.                                              McCarthy, Michael.
      Durkan, Bernard J.                                          McEntee, Shane.
      Farrell, Alan.                                              McHugh, Joe.
                                                    771
                    Order of            28 September 2011.                  Business


                                          Tá—continued

      McLoughlin, Tony.                                      Phelan, John Paul.
      McNamara, Michael.                                     Rabbitte, Pat.
      Maloney, Eamonn.                                       Reilly, James.
      Mathews, Peter.                                        Ring, Michael.
      Mitchell, Olivia.                                      Ryan, Brendan.
      Mitchell O’Connor, Mary.                               Shatter, Alan.
      Mulherin, Michelle.                                    Sherlock, Sean.
      Murphy, Dara.                                          Shortall, Róisín.
      Murphy, Eoghan.                                        Spring, Arthur.
      Nash, Gerald.                                          Stagg, Emmet.
      Naughten, Denis.                                       Stanton, David.
      Nolan, Derek.                                          Timmins, Billy.
      Ó Ríordáin, Aodhán.                                    Tuffy, Joanna.
      O’Donnell, Kieran.                                     Varadkar, Leo.
      O’Donovan, Patrick.                                    Wall, Jack.
      O’Mahony, John.                                        Walsh, Brian.
      O’Reilly, Joe.                                         White, Alex.
      Phelan, Ann.

                                               Níl

      Adams, Gerry.                                          Kelleher, Billy.
      Boyd Barrett, Richard.                                 Kitt, Michael P.
      Browne, John.                                          Mac Lochlainn, Pádraig.
      Calleary, Dara.                                        Martin, Micheál.
      Collins, Joan.                                         McDonald, Mary Lou.
      Collins, Niall.                                        McGrath, Finian.
      Colreavy, Michael.                                     McGrath, Mattie.
      Cowen, Barry.                                          McLellan, Sandra.
                                                             Moynihan, Michael.
      Crowe, Seán.
                                                             Murphy, Catherine.
      Daly, Clare.                                           Ó Caoláin, Caoimhghín.
      Doherty, Pearse.                                       Ó Cuív, Éamon.
      Donnelly, Stephen.                                     Ó Fearghaíl, Seán.
      Dooley, Timmy.                                         O’Brien, Jonathan.
      Ellis, Dessie.                                         O’Dea, Willie.
      Ferris, Martin.                                        Pringle, Thomas.
      Flanagan, Luke ‘Ming’.                                 Ross, Shane.
      Fleming, Sean.                                         Smith, Brendan.
      Fleming, Tom.                                          Stanley, Brian.
      Grealish, Noel.                                        Tóibín, Peadar.
      Halligan, John.                                        Troy, Robert.
      Healy-Rae, Michael.                                    Wallace, Mick.
      Higgins, Joe.


Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Pádraig Mac Lochlainn and
                                    Seán Ó Fearghaíl.

Question declared carried.

  Deputy Micheál Martin: I ask the Taoiseach about the commitment in the programme for
Government and the commitment given by the Minister for Public Expenditure and Reform
to publish the results of the comprehensive spending review in October. There is a lot of
interest in this. Along with other Deputies, I attended a meeting the other night on special
needs provision, where cutbacks are continuing despite a level of funding being made available
which has not been reached. The Taoiseach acknowledged the freezing of 475 posts for emerg-
encies. They could be released. When can we expect the comprehensive spending review to be
published? Will it be in the middle of October? Will it be before the crucial electoral date at
the end of October?

   The Taoiseach: I cannot give Deputy Martin an exact date for this. I do not think the Minister
is going to publish the review as it comes in to him. I think the information that is going to be
                                               772
                    Order of             28 September 2011.             Business


made available as we prepare the three-year fiscal programme will be available for debate and
discussion here. The Minister will set out a timeline — he has not done so yet, but he will do
so shortly — for a structure to this, for the completion of his analysis of the expenditure review,
for the preparation and publication of the three-year fiscal plan, and for the preparation of the
Estimates leading into the budget. We hope to change things from previous years. Rather than
having Deputies discuss Estimates in February or March, we might be able to change that fairly
radically so that Members have an opportunity to give their views based on the information
supplied in the comprehensive spending review and the formation of the fiscal plan and
Estimates. I cannot give Deputy Martin an exact date now, but we will set out a timeline for it.

  Deputy Micheál Martin: Did the Taoiseach say he is not going to publish the comprehensive
spending review per se?

 The Taoiseach: The information in the comprehensive spending review will be available, but
we are not going to publish it as it comes in to——

  Deputy Micheál Martin: Why not?

  An Ceann Comhairle: We cannot have a debate on it.

  The Taoiseach: The Minister for Public Expenditure and Reform has to make a judgment as
to where we go as the Cabinet and the decisions we have to make. When we come to the point
where we prepare the Estimates leading to the budget, the information that backs that up——

  Deputy Micheál Martin: The bord snip nua report was published.

  The Taoiseach: Yes. That will all be part of the discussions.

  Deputy Micheál Martin: This is a new departure.

  The Taoiseach: Obviously, quangos and assimilation of agencies will be part of that.

  Deputy Micheál Martin: This is extraordinary.

  An Ceann Comhairle: We are not having a debate. I call Deputy Adams.

  Deputy Micheál Martin: The Taoiseach is not going to publish the comprehensive spending
review.

  The Taoiseach: The Deputy can never believe——

  An Ceann Comhairle: Deputy Martin got his answer. I call Deputy Adams.

  Deputy Micheál Martin: He is not going to publish——

  Deputy Jerry Buttimer: He did not say that.

  Deputy Micheál Martin: He did say that.

  An Ceann Comhairle: Please, Deputy. I have called Deputy Adams.

  Deputy Jerry Buttimer: He did not say he is not going to publish the comprehensive spend-
ing review.

  An Ceann Comhairle: Deputy Adams is on his feet. Please show some respect to him and
the Chair.
                                                773
                    Order of              28 September 2011.             Business


  Deputy Gerry Adams: Tá ceist agam ar reachtaíocht atá geallta maidir leis an bpróiséas chun
daoine a ainmniú do thoghchán na huachtaránachta. Tá a fhios ag an Taoiseach nach bhfuil an
próiséas go maith. Feicimid na hiarrthóirí ar an teilifís agus cloisimid iad ar an raidio ag rith ar
fud an Stáit ag lorg votaí. My question is around political reform and, predictably, the archaic
system for those who wish to be nominated to run in presidential elections. Under the
Taoiseach’s promised legislation on political reform, is there any plan to change the system
to make it more democratic, more open and easier for citizens who want to nominate for
that position?

  An Ceann Comhairle: That is not in order on the Order of Business. It is not about prom-
ised legislation.

  The Taoiseach: I committed to setting up a constitutional convention, and I expect to do that
after the Presidency. That is an issue that the convention can consider. It is a matter of much
discussion. I think the current closing time for nominations will result in seven candidates for
the Presidency. It will be a matter for the convention to consider, discuss and make recom-
mendations as to whether it thinks the process should be changed to a more meaningful or
relevant one.

  Deputy Gerry Adams: I am sure the Taoiseach agrees they are all appropriate candidates,
but does the Government have any plans to bring forward legislation on the issue?

  The Taoiseach: No. What I did commit to was to have a referendum later in respect of the
question about the abolition of the Seanad, and we have to have a referendum on children’s
rights. The matters to be considered by the constitutional convention can include the criteria
and process for nomination for the Presidency. I am sure that the convention will make a
number of recommendations that Government and the Houses can consider.

  Deputy Denis Naughten: On promised legislation and in light of the disclosure yesterday
that the bowel cancer screening programme is to be postponed for another six months, one of
the main issues that has been raised is the inability of hospitals to do colonoscopies. I under-
stand that 2,500 people are waiting for a colonoscopy. In the context of No. 86, on the licensing
of health care facilities, when will the legislation be introduced? State-of-the-art theatres and
staff are lying idle at Roscommon County Hospital and they could be used to carry out those
procedures, deal with the backlog and take away the fear from people who are waiting for
colonoscopies. Will the Taoiseach intervene to ensure this work takes place in Roscommon?

  A Deputy: They closed Roscommon hospital.

  The Taoiseach: Draft heads of a Bill have been submitted to the Minister for consultation.
The bowel cancer screening issue is of concern. I understand the programme was to begin in
January and the Minister is concerned about the delay. As the Deputy knows, the Govern-
ment’s view is that small hospitals have a real future.

  Deputy Micheál Martin: Tell that to the people in Roscommon.

  The Taoiseach: I am aware this is of concern to Deputy Naughten, Deputy Feighan and
others, and in due course we will make a number of announcements about Roscommon.

  Deputy Paschal Donohoe: Many Members of this House will be members of policing commit-
tees, which have a continuing focus on the availability of alcohol to minors, particularly in the
run-up to the Hallowe’en period. Under promised legislation, the Government has given a
                                                 774
                     Order of           28 September 2011.            Business


commitment regarding a Bill on the sale and availability of alcohol. Will the Taoiseach tell us
when it will come before the House?

  The Taoiseach: That Bill will be published next year.

  Deputy Richard Boyd Barrett: Given the dire and escalating crisis in accident and emergency
departments throughout the country and the uncertainty and threat that hangs over those in
Loughlinstown hospital in my constituency and others that have been mentioned today, will
the Taoiseach allow a debate in the near future on the situation of our health service and
accident and emergency departments? It is a pressing issue.

  An Ceann Comhairle: That must be taken up with the Whip. It is not a matter for the Order
of Business.

  Deputy Richard Boyd Barrett: It is an issue for a debate.

  An Ceann Comhairle: No. It does not relate to promised legislation. The Deputy can raise
that through the Whips.

  Deputy Luke ‘Ming’ Flanagan: On the Order Paper, we have the birds and natural habitats
regulations 2011, which I understand were signed yesterday. Is the Taoiseach aware of the dire
consequences this will have on people in rural Ireland? I hear that is where he comes from.
Will he make a statement on the matter?

  An Ceann Comhairle: No, sorry. Not on the Order of Business.

  The Taoiseach: Do not hear it; know it.

  Deputy Luke ‘Ming’ Flanagan: Believe me, the Taoiseach will know it in April.

  Deputy James Bannon: Can the Taoiseach give me a date for the much-needed Bill on the
electoral commission? I understand Deputy Hogan has put a considerable amount of work into
the Bill and I am personally interested in it. To safeguard electoral integrity, it is important
that we have it as soon as possible.

  Deputy Micheál Martin: Safeguarding the seat.

  The Taoiseach: It is indeed important. It will be next year before that Bill comes out.

  Deputy Timmy Dooley: On many occasions the Taoiseach has identified levels of unemploy-
ment as being one of the biggest crises the country faces. He and his partners in Government
have indicated——

  An Ceann Comhairle: Will the Deputy cut out the padding and just ask the question?

  Deputy Timmy Dooley: ——that the flow of credit is an integral part of that. To that extent,
he has promised a strategic investment bank on a number of occasions. Can he tell us when
the legislation will be brought before the House to deal with that matter?

  An Ceann Comhairle: There is no such legislation.

  Deputy Timmy Dooley: What? It is in the manifestos.

  An Ceann Comhairle: We are not talking about manifestos.
  (Interruptions).
                                               775
                   Order of             28 September 2011.            Business


 An Ceann Comhairle: No. I will not allow the Deputy to get into a debate on the matter.
There is no promised legislation.

  The Taoiseach: Discussions are going on about that, Deputy.

  Deputy Micheál Martin: Is that why the Tánaiste is not here?

   Deputy Billy Kelleher: Some time ago, the Taoiseach said that one of the main reasons there
is overbudgeting in hospitals and a lack of throughput was incompetent hospital management.
In view of that statement, is any legislation foreseen to address the matter and restructure
hospital management?

  The Taoiseach: Yes. Discussions are going on and decisions are being made about improving
the competency and efficiency with which hospitals are run. The Minister for Health will make
a statement on that shortly.

  Deputy Pearse Doherty: On the proposed legislation to deal with the European stability
mechanism, can the Taoiseach give a date for when the Bill will be presented to the House
and when it will pass all Stages in both Houses? When the Bill is published, will the Taoiseach
also publish the legal opinion to inform Members in their deliberations on this important
legislation?

  The Taoiseach: The Bill will be presented in this session and the Houses will be given all
relevant information. I do not intend to publish any advice given by the Attorney General, in
accordance with precedent, as a legal adviser to the Government.

  Deputy Willie O’Dea: Has the Cabinet signed off on the legal services Bill and when can we
expect to see it?

  The Taoiseach: The Cabinet has not signed off on the legal services Bill, because a great deal
of work is ongoing with it. It is a huge Bill of almost 300 pages and is quite complex. It will
be brought to Cabinet as soon as possible as part of the requirement under the EU-IMF
troika timeframe.

  Deputy Willie O’Dea: Has the Cabinet seen it yet? Has it been brought to Government?

  The Taoiseach: An original draft was produced in July but I expect the Bill will be brought
to Government by the Minister for Justice and Equality shortly.

  Deputy Bernard J. Durkan: Over the past ten years, I have raised repeatedly——

  An Ceann Comhairle: I thank the Deputy for the history lesson but would like him to ask
a question.

  Deputy Bernard J. Durkan: This is a very short history, a pen picture.

  An Ceann Comhairle: We are over time.

  Deputy Bernard J. Durkan: I am trying to come back into time.

  An Ceann Comhairle: There is a shortage of time to debate the Bill so I ask the Deputy to
ask his question.

  Deputy Bernard J. Durkan: I am aware of that and ask for ten seconds. The question relates
to bail, an issue I have raised repeatedly in this House in the last ten years.
                                               776
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


  An Ceann Comhairle: We are all aware of that.

  Deputy Bernard J. Durkan: Recent disclosures indicate the situation is getting worse. While
I do not attribute the blame for this to the current Government——

  An Ceann Comhairle: That is very kind of the Deputy.

  Deputy Bernard J. Durkan: ——it has been on the stocks for ten years and ten years is long
enough. Could we get a firm indication of when the bail Bill will come before the House?

  The Taoiseach: The Minister for Justice and Law Reform is preparing legislation to consoli-
date and reform bail laws. It will probably not be published until next year but it may be ready
at the end of this year. The work is under way in the Department.

            Insurance (Amendment) Bill 2011 [Seanad]: Second Stage (Resumed)

  Question again proposed: “That the Bill be now read a Second Time.”
  Deputy Dara Murphy: I welcome the opportunity to speak on this important and urgent Bill,
the Insurance (Amendment) Bill. The comments of Deputy Michael McGrath, the Fianna Fáil
spokesman, when he was addressing this issue were ironic. He used his time to criticise the
speed with which this Bill is being passed. As the Taoiseach mentioned this morning, he failed
to comment on the urgency for the 1,600 people waiting to hear if their jobs can be secured by
the passing of this Bill. If Deputy Micheál Martin were Taoiseach now, we could expect that
by now he would have requested an expert group to do a report on what happened in Quinn
Insurance.
   There was a relationship between the practices of the last Government and the events that
have brought us to the point where hundreds of millions of euro must be found to bail out the
Quinn group. The previous Government encouraged property speculation, giving rise to the
main causes of our current position as a Government working with determination to root out
all that is bad in Irish society. The other partner in this sorry affair is Anglo Irish Bank. A
company that provided insurance moved so far from its core business that it managed to lose
€700 million in property speculation. That raises questions for the insurance industry, whereby
we must look at how any business dealing with taxpayers’ money can move so far from its core
business to speculation. The previous Government encouraged every business and business-
man, no matter if he was in insurance, shop-keeping or the bar and restaurant trade, to move
into property speculation. That mix gave rise to the current sorry state of the country.
   I was dismayed listening to Deputy McGrath that he could not focus on the positives of this
Bill, that there are joint administrators who worked hard to secure a deal that will keep people
in employment. He misunderstands completely the appetite within the country for the Govern-
ment to move decisively to deliver the changes we need so much. There is no expectation that
the Government will always make the correct call but the Government would be accused of
negligence if we did not provide the High Court with the assurances needed to protect these
jobs. Deputy Micheál Martin consistently sought reports and then failed to act upon them.
Such governance must be a thing of the past and I commend the Minister for once again
introducing legislation in a quick and efficient manner.
  I mentioned the practices of insurance companies. We must find a way in future to look at
the regulation of the insurance industry. When Cork flooded a number of years ago, groups,
including charities, were not able to take cases for the total event to the Ombudsman. At
the time insurance companies, particularly the Quinn Insurance group, did not accept their
responsibilities to the people of Cork. We must find a way not only to prevent insurance
                                                   777
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Dara Murphy.]
companies from moving from their core business, but also from operating in ways that neglect
their customers.
  I commend the Bill to the House and commend the Minister on the urgency with which it
has been introduced.

  Deputy Áine Collins: I welcome the opportunity to speak on this Bill and thank the Minister
for introducing it. It deals with vital changes to current legislation for the insurance industry,
bringing much needed clarity, as well as bringing Irish legislation into line with EU legislation.
  Reference was made to the urgency with which the Bill was brought to the House. The need
for the legislation is unquestioned, both to comply with EU law, as well as the obvious need
to facilitate the imminent sale of Quinn Insurance to Liberty Mutual Direct Insurance Com-
pany Limited. There are 1,600 jobs at stake and in the current times, those employees must
priority.
  I welcome the clarity the amendments in the Bill brings to the risks covered by legislation
and the scope of the cover provided by the insurance compensation fund. I am glad the Minister
has chosen to exempt health insurance from the proposed 2% levy. I know of many people
who are struggling to maintain their health insurance policies and many of them have opted
not to renew their policies. An extra 2% on those policies would have the unwanted result
of many more policies being cancelled. It is most unfortunate, however, that the Insurance
Compensation Fund does not have adequate resources to meet the liabilities incurred, primarily
by Quinn Insurance. The necessity to introduce this 2% levy on non-life insurance policies is
saddening. Once again, the many are paying for the mistakes of the few.
   Greed and lack of regulation combined to bring us to this situation. What is most galling is
that lessons do not appear to have been learnt from previous mistakes in this sector. It is almost
30 years since the collapse of the Private Motorists Protection Association, PMPA, which was
brought about by providing cheap insurance without sufficient funding to back up claims. No
sooner had the taxpayer begun to adjust to bearing the financial brunt of that collapse than
Insurance Corporation of Ireland, ICI, also ran into severe difficulties and its owner, Allied
Irish Bank, had to be bailed out, so to speak, by the Government of the day. There are alarming
echoes of the past in what the Government is faced with today. The introduction of this 2%
levy is exactly what happened after the collapse of PMPA.
  Quinn Insurance managed to combine the previous mistakes by providing too cheap
insurance without sufficient funds to cover claims while also overextending itself in the UK
market, leaving the burden of covering its losses with its clients and the clients of other
insurance providers. It is incredible that the Quinn Insurance website, right up the day of this
debate, claims as a positive attribute that it is the company that has driven down the cost of
insurance in Ireland and gained a reputation for value, customer service and innovation. The
company may have driven down the cost of insurance on its entry to the marketplace in 1996,
but at what cost? The concept of customer service espoused by Quinn Insurance has now,
unfortunately, extended its reach to all non-life insurance policyholders right the country, with
the imposition of this 2% levy.
  Once again, we find ourselves reliving history. The real question is, shall we learn from it.
To that end, I welcome the Minister’s efforts in addressing the need to strengthen regulation
of the insurance sector and I am pleased to note that the Central Bank has doubled its staff
resources in this area to more than 100. I also look forward to the strengthening of regulation
on an international level, especially the forthcoming EU Solvency II Directive.
  I welcome the Bill and the clarity it brings and I commend it to the House.
                                                   778
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


  Deputy Sean Fleming: I am pleased to speak on the Insurance (Amendment) Bill 2011.
Notwithstanding the importance of the Bill, I echo previous comments regarding the guillotin-
ing of the debate on Second and Report Stages. Amendments must be submitted before the
debate on Second Stage has even commenced. This does not give Members the opportunity to
hear the Minister’s response on Second Stage. We must complete the passage of the Bill
tonight. This is not a good way to pass legislation. The Minister may think it is but no one else
does. He may wish to make a case as to why the guillotine is important but no one will believe
him. It is important that what we are doing here has some level of political credibility.
  I take a slightly longer term view of this legislation. My simple comment is, “Here we so
again”. I remember the debacles of the PMPA and of the ICI and AIB. The Insurance Compen-
sation Fund was introduced to deal with the liquidation of an insurance company called Equit-
able Life. The problem of insurance companies making bad investment decisions, underpricing
their policies or running a bad business is not new. We had to introduce legislation in the 1960s
to deal with it. We did the same thing with PMPA but we learned no lessons.
  People who were involved in AIB at the time of the ICI debacle have much to answer for
regarding where we are today. I am not playing party politics but we know who was Taoiseach
at the time of the ICI-AIB debacle. We set the seeds then for the lack of regulation of the
banking sector. Much of ICI’s business was outside Ireland. AIB came to the Government and
said it would go under, with a systemic impact on the financial situation of the State, if a levy
was not introduced. The Government folded like a pack of cards. I accept that the problem
had to be dealt with, but not a single person in AIB paid a cost for it. No one lost his job, was
disciplined or sidestepped. No board member resigned. The Oireachtas told the biggest bank
in the country that no matter what mistakes it made the national Parliament would bail it
out and, above all, there would be no repercussions for the bank for any action taken in
future years.
  That led to an arrogance in the financial institutions which ultimately led to the arrogance
we saw in Anglo Irish Bank, which is why we are here today. Had that generation of senior
bankers known that if they got things wrong they would suffer and would not automatically be
bailed out with a blank cheque from the Exchequer, we would not be here today. They would
not have taken the chances they did.
   Bad commercial decisions were made at that time, but we are now in a worse situation. We
are here today to bail out the gambling debts of Seán Quinn and we are asking the people of
Ireland to do that. If we saw this in a James Bond film we would not be able to fathom what
was happening. There is a big insurance company and a big bank, Anglo Irish Bank. Seánie
FitzPatrick, of Anglo Irish Bank, is a gambler by definition, because he gambled the future of
the bank on bad financial and property decisions. One of his big customers, Sean Quinn, is
another gambler and he gambled on his insurance company. He used some of the reserves of
that company, which were needed to pay claims, to help buy shares in the bank which he was
trying to take over. It is as if a gambler in a casino wants to take over the house, and the house,
which is Anglo Irish Bank, advances the gambler some loans so he can take over the house. The
whole thing collapsed because money was going around in circles and there was no substance to
back up the original transactions.
   Anglo Irish Bank collapsed and Quinn Insurance has collapsed as a result. The Quinn empire
has been severely damaged and the Irish people are being brought in once again to bail it out.
One may speak about the Irish public, the Irish taxpayers or the Irish insured public. They are
all one and the same. The levy covers motor insurance, which all car owners are legally obliged
to have. Anyone who has motor insurance in Ireland will be obliged to pay the levy. They will
                                                   779
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Sean Fleming.]
have no choice. Every person who has a car will contribute towards paying these gambling
debts. This is what many people find obscene.
  The problems in Anglo Irish Bank have existed for a period of time. However, we now know
more about Anglo than we did two years ago. If the facts as we know them now had been
known two years ago we might have taken a different course of action.
   I have sympathy for the staff of Quinn Insurance, but no member of the Government parties,
if jobs were threatened in his or her constituency, would ever ask the Irish public to stump up
€500,000 per person to keep those jobs. This bailout will cost the Irish public €720 million to
save the 1,500 jobs in Quinn Insurance. We want to keep the insurance market alive, maintain
competition and protect as many jobs as possible, but this Bill is not only about protecting
jobs. Protecting jobs is only one aspect of the overall situation and it is being used to bludgeon
this Bill through the House. We are being told that if we do not accept the guillotining of the
debate we will cause people to lose jobs. No Government Deputy would ask for €500,000 per
job to be invested in any project in order to keep jobs alive. The Government should not
overplay this argument because people will see it is not the full picture.
  If there is a shortfall in Quinn Insurance in the future, the joint venture company of Liberty
Mutual Direct Insurance in the United States will not be caught for any of those liabilities,
because they will be capped. While this might be a good deal, there is no basis to assume it is
so. I cannot say whether this deal in respect of the joint venture, which was struck on behalf
of Irish taxpayers who own Anglo Irish Bank which is running Quinn Insurance, is a good deal
because the financial transactions have not been made known to us. While it might be a good
deal, I have no reason to believe it is. It is because of this lack of information that Fianna Fáil
has a problem with this legislation.
   Also, there is no sunset clause in respect of when the fund will come to an end. Prior to the
summer recess, the Government introduced a pension levy of 2.5% on pension funds. This
week we are being asked to support the introduction of a 2% insurance levy. What levy might
the Government introduce next week, next month or next year? Every other month a new levy
is being introduced. There has been much talk of competitiveness in the Irish economy. Those
two measures fly in the face of that. The Government says it does not want to touch income
tax rates in the forthcoming budget. Based on its performance to date, it will probably, while
continuing to state it will not be touching tax, introduce further levies. The Government has
been consistent in this respect, namely, it has raided pensions in order to get €2 billion and is
introducing, by way of this legislation, an insurance levy to meet the cost of the insurance
compensation fund.
   We do not know at this stage if the €700 million will be sufficient. Will we be back here in
five years amending this legislation to increase the levy from 2% to 3% because the amount
required was underestimated and is €900 or will the Irish taxpayer be left to pick up the
balance? None of this has been made clear in the legislation. Essentially, this is a stealth tax to
deal with this issue. Time should be provided for a full Committee Stage debate on the details
of the joint venture with Liberty Mutual Direct Insurance Company.
  As it stands, this legislation has had to be amended because it is not in compliance with
EU legislation. The Bill proposes to amend the Insurance Act 1989 which covers the risks of
policyholders of Irish authorised companies to one which covers all insured risk in the State,
except for specific risks. Many insurance companies in Ireland are only branch operations.
What is covered and not covered in this legislation will lead to legal challenges. Section 3(c)
provides that access to this fund is confined to firms that conduct a large percentage of their
overall business in Ireland, namely, 70% averaged over the three years before the appointment
                                                   780
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


of the administrator. I would like the list of companies covered by this to be made available to
us today. When we brought in the bank guarantee scheme, we knew which banks were partici-
pating. I want to know the names of the companies that will be eligible to receive funding from
the insurance compensation fund if a need arises. That list needs to be made available to us.
Also, we need an explanation in regard to why the figure of 70% was chosen. Was it chosen
to suit one or two particular companies?
  While I understand the urgency of passing this legislation, Fianna Fáil has major problems
with it as presented today.

  Deputy Tom Barry: I wish to share time with Deputy Seán Kyne.

  An Ceann Comhairle: Is that agreed? Agreed.

  Deputy Tom Barry: I welcome the opportunity to contribute to the debate on the Insurance
(Amendment) Bill 2011. In essence, this Bill must be introduced to finance the insurance com-
pensation fund. We are all aware of the reason for the establishment of the fund, namely,
Quinn Insurance is under administration and is in the process of being sold as a going concern.
Sufficient reserves will have to be in place to meet future liabilities arising from this situation.
  Quinn Insurance suffered losses of €905 million in 2009 from its operations in the UK market
which it entered as a so-called loss leader trying to create market share for itself. One could
argue that was a spectacular gamble. A further €160 million loss is envisaged for 2010. These
are colossal amounts. It is likely that the amount required from the insurance compensation
fund will be a massive €738 million. Currently, there is €40 million in this fund, which shows
how off the scale is the situation. What we could do with €750 million today if we had it.
   The Government is again tidying up the mess of reckless trading. It was once said that we
relied on the kindness of strangers. These days we are relying on the kindness of the taxpayer.
To fund this requirement, a 2% levy is being applied to all insurance policies. This will be
monitored by the Central Bank which will determine the levy to be applied and funding
required, which may vary over time. The fund, which will facilitate payment to policyholders
in respect of risks held within the State, comes with certain limitations such as payment from
the fund shall not exceed 65% or €825,000, whichever is the lesser. Under the new scheme,
policyholders will be covered in respect of risks within the State. There are four main determin-
ing factors in this regard, namely, whether the buildings are located in the State, whether the
vehicles are insured within the State, whether the short term insurance was taken out in the
State and whether the habitual residence of the policyholder is within the State. It is important
all these are clarified, given the level of wriggling there has been in this area previously. In my
opinion, all legislation now needs to be bolted down.
  The levy will not apply to health insurance, which is to be welcomed. People in all parts of
the country are, because of their financial situations, dropping out of private health insurance.
Currently, wealthy people have no private health insurance and many people in receipt of
social benefits have medical cards, which is the reverse of the position a few years ago. We will
need to address this issue in the future. People who are contributing to the State by way of
taxes deserve to be treated fairly. I believe companies should be obliged to confirm that 70%
or more of their business over a three year period has been in Ireland, as provided for in the
legislation. This will assure policyholders that they will be underwritten in the event of liqui-
dation. This obligation to declare is important given the use in the past of financial vehicles to
disguise cleverly the location of moneys. I do not want us to arrive at a situation whereby
companies will say that 70% of their business is in the State when clearly it is not. We need to
monitor this.
                                                   781
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Tom Barry.]

   We cannot be complacent. We cannot assume that once this legislation has been enacted
everything will be okay. We must remain suspicious and not assume that these situations will
never recur. History has taught us to the contrary. The Criminal Justice Bill 2011, which deals
with white collar crime, will be helpful in this regard because following its enactment people
who robbed this country of vast sums of money may be sent to prison. There is no doubt but
that this is a distressed sale. The moneys we get will not match what we could get in a healthier
situation. However, we must deal with the reality in terms of where we are. I welcome this
legislation and hope it proves to be a good deal for the taxpayer in the long term.

  Deputy Seán Kyne: It is important to note that the Insurance (Amendment) Bill 2011 is
required to extend the scope of the insurance compensation fund to cover all insured risk in
the State. It is also important to note that the request for the additional funds has come from
the Central Bank. As other speakers stated, this is hugely important if we are to protect more
than 1,600 jobs at a time when job retention is as vital as job creation.
 The ability of the State to raise finance has been seriously compromised by the previous
Government’s stewardship of the economy and the bailout arrangements with the EU-IMF-
ECB.
   The 2% levy to be placed on policies will ensure adequate funding for the insurance compen-
sation fund and must be viewed as a solidarity move. It will protect all insurance policyholders
should their insurance company become unable to fulfil its duties and responsibilities because
              of insolvency. Failure to deal with this issue could have far-reaching consequences
12 o’clock    that would negatively affect insurance customers in other companies and signifi-
              cantly affect the taxpayer. In this respect, the insurance compensation fund can
be viewed as an insurance on insurance, protecting what might, but hopefully will not, happen
in the insurance market. I welcome the important stipulation that availability of the insurance
compensation fund will be restricted to those companies which conduct at least 70% of their
business in the Irish market. Hopefully, this will focus minds in insurance companies that may
be reviewing their operations in this country.
   The provisions of limits on what may be drawn down in the fund regarding individual policies
is also crucial. This will provide a measure of equity so that as many policyholders as possible
will be protected and set a standard should payments have to be made in the event of the
collapse of an insurance company.
  My colleague, Deputy Dara Murphy, referred to insurance issues regarding flooding in Cork
in 2009. County Galway was also affected by floods in 2009, the fallout from which is still
evident in some people in the county having problems getting insurance. The 2009 flooding left
Galway city virtually isolated with access only through one road while Claregalway town was
cut off. Since then, the Office of Public Works has done great work with local authorities in
providing remediation works. The Minister of State, Deputy Brian Hayes, visited Galway to
see the works earlier this year. Much State money has been spent on small and large flood
relief schemes. In Claregalway, the bridge has been widened with a proposal for a new bridge.
   Some householders affected by the floods have had to build new homes but cannot get
insurance for them. There is a distinction between those who have not applied for insurance
and those who have applied but were refused. Some homes have had their insurance policies
renewed but this depended very much on their insurance provider. One individual who con-
tacted me was refused insurance by his current provider and has been unable to get insurance
from other providers because his house was previously flooded. He cannot even get insurance
to protect against the possibility of a burst water pipe. He built his new home 20 feet higher
than his original home which means flooding by natural disaster is unlikely.
                                                   782
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


  Will such cases be dealt with some form of an insurance credit fund? We must examine a
process in which a portion of the insurance fund is used in cases in which a person could not
get insurance. The trauma experienced by those affected by the Galway floods is now exacer-
bated by the concern they cannot get insurance for their new homes. I know the Minister of
State, Deputy Brian Hayes, had discussions with the Irish Insurance Federation about this
matter. I hope he will follow my suggestion to examine the possibility of introducing a scheme
for the small number of people affected by this.

  Deputy Brian Hayes: Yes.

  Deputy Caoimhghín Ó Caoláin: The Insurance (Amendment) Bill 2011 proposes to amend
the Insurance Act 1964 to change the scope of the insurance compensation fund from one
which covers the risks of policyholders of Irish authorised insurance companies to one which
covers all insured risk in the State, except for specified excluded risks. So states the opening
sentence in the Department of Finance’s explanatory memorandum that accompanies the Bill.
Nowhere in the explanatory memorandum, however, is there any reference to what this Bill is
actually designed to serve and neither is there any explanation for the Government’s insistence
in pressing this legislation through both Houses of the Oireachtas on or before 29 September
2011.
   The haste employed in pressing all Stages through the Seanad in a single day, the day follow-
ing the Bill’s publication, speaks volumes on this Government’s total disregard for proper
scrutiny, careful consideration and debate on important legislation that has significant con-
sequences for all non-life, non-health policy-holding citizens and much more besides. While a
little more time has been made available for Dáil Members to prepare for yesterday’s and
today’s Second Stage, all remaining Stages will be guillotined by 7.30 p.m., yet this legislation
provides for among other matters the imposition of a 2% levy on all insurance products with
the exception of life and health policies. This is expected to realise €68 million per annum and
will continue indefinitely, irrespective of any suggestion that it might be time-limited.
  This is without question yet another tax and one unrelated to any notion of one’s means or
ability to pay. The Revenue Commissioners will collect the levy on behalf of the insurance
compensation fund. So what is it all about? It is wholly and solely allied to the sale of Quinn
Insurance Ltd, QIL, to the giant US insurance company, Liberty Mutual Direct, a deal set for
ratification in the High Court on 4 October. The joint administrators of QIL, Michael McAteer
and Paul McCann, require a Government transfer of some €280 million from the insurance
compensation fund to seal the deal. The money involved will, of course, be recouped, not from
the insurance industry, but from the pockets of every other non-life and non-health insurance
policyholder in this State, irrespective of with which insurance company they do their business.
  It is important to recall some of the background to this Bill. On Tuesday, 30 March 2010, the
High Court appointed two joint provisional administrations to QIL, acting on the application
of the newly-appointed Financial Regulator, Matthew Elderfield. Mr. Elderfield took up his
appointment on 19 October 2009, less than six months prior to moving so aggressively against
arguably the most successful, certainly the most competitive, player in the insurance market
here and then a growing thorn in the side of the long-established players in the British market.
From day one, my concern was first and foremost for the jobs of the some 2,800 employees in
Quinn Insurance, for their dependent families and the economy of the Cavan-Fermanagh-
Border region. Mr. Elderfield had also placed a bar on Quinn writing new business north of
the Border and in Britain.
  With fellow elected representatives of all parties, I met Mr. Elderfield at the Central Bank
building on the following Tuesday, 6 April, at which we sought a lifting of the ban to protect
                                                   783
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Caoimhghín Ó Caoláin.]
1,500 jobs directly impacted by his ban decision. A joint all-party appeal to Mr. Elderfield on
29 April was co-signed by myself with the now Taoiseach, Deputy Enda Kenny, the now
Tánaiste and Minister for Foreign Affairs and Trade, Deputy Gilmore, and other Ministers,
including Deputies Noonan, Bruton and Howlin. It sought the early restoration of the
maximum access possible for QIL to the North of Ireland and British markets. Following this
and intense lobbying, the next day Matthew Elderfield responded advising that he had decided
to amend his direction and that private motor insurance business, both new and renewals, could
again be written by Quinn in the Six Counties and Britain.
   It was too late and not enough, however. That same day, Friday, 30 April, brought the news
from the joint administrators that some 900 jobs were to go at different Quinn Insurance sites,
with Cavan, Enniskillen, Navan and Blanchardstown to be most acutely hit. As convenor of
the all-party cross-Border elected representatives group, I accompanied colleagues of all poli-
tics, North and South, to a series of meetings in the weeks following. The exchanges and
questioning continued throughout all of 2010 as my files confirm. In the early course of its
work, the group cited four agreed pillars of concern. These were the retention of all jobs and
where they were already located and the future of the Border economy; the need to secure the
€2.8 billion due to Anglo Irish Bank, the taxpayer, by Seán Quinn; the need to maintain the
competitiveness brought by the Quinn Insurance model to the market; and the need to protect
all Quinn policyholders.
   In January 2011, we embarked on a renewed offensive securing meetings with the Financial
Regulator, the Governor of the Central Bank, the administrators, the chief executive and chair-
man of Anglo Irish Bank and the chief executive of the National Treasury Management
Agency. It was apparent to all of us on the group when attending the first of these meetings
with the administrator, Michael McAteer, that proposals prepared by the Quinn representa-
tives, which for a considerable time had been jointly worked on by Quinn representatives and
a representative of Anglo Irish Bank, were not going to be given any consideration whatsoever,
deadlines or no deadlines. The absolute rejection of our appeal for a serious evaluation of the
then styled Quinn proposals beggared belief. Why would an administrator, someone entrusted
with the task of overseeing the business and ensuring its continuation as a going concern and
with the responsibility to consider all possible resolutions of the understood difficulties in the
business, including its sale, so adamantly refuse to give any consideration whatsoever to pro-
posals emanating from the senior management in the company, the very people who knew the
business best?
  We got our answer when we met the Financial Regulator, Mr. Matthew Elderfield, on Tues-
day, 25 January of this year, a meeting also attended by the Governor of the Central Bank,
Professor Patrick Honohan. In response to a direct question from an elected Member of these
Houses, Senator Wilson, Mr. Elderfield stated that he had made it abundantly clear to the
administrators and to all stakeholders that there was to be no consideration given to any pro-
posal whatsoever that involved Seán Quinn, his family or any of his senior management team.
Contrary to normal procedure, the administrators did not have a free hand.
   This blatant admission shocked all in attendance and left us in no doubt that all was not as
it should be. It now transpires that a tape may exist whereon administrator Mr. Michael
McAteer is recorded as saying, and I quote from a typed purported transcript sent to my
Cavan office:

      Let me be ... categoric: The Quinn family are gone. They will never have an involvement
  whatsoever in this insurance company ever, ever again. Now I’ve been saying it for months
  ... I know they’ve been at various games in the background to try and manipulate things.
                                                   784
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


  That is the facts of the matter. We can’t put that in an email. I can’t put it in writing but
  that’s what’s going on.

This is a further shocking insight into the thinking and disposition of those placed at the helm
of this major employer and player in the financial services sector and of those who sought
their appointment.
   Let there be no mistake about it. Our appeal has always been for fair and full consideration
of the Quinn proposals, not to favour it. We believed from the thorough presentations we had
received that it was a viable formula to address all the agreed pillars of concern we had adopted
and were pursuing. We were not of course privy to the detail of any other proposal, so we
could not make comparisons, but that was clearly not unique to us. It also applied to the
administrators, who were given a clear instruction from the Financial Regulator, that is, no
consideration for any Quinn-connected proposals. We have never been voices for Seán Quinn.
If the Quinn proposals, properly assessed and properly evaluated, were shown to be deficient
and not fit for purpose, then so be it. How much time have I remaining?

  An Ceann Comhairle: Fifty seconds.

  Deputy Caoimhghín Ó Caoláin: It is my belief that the full facts in respect of what went on
prior to and since the appointment of the administrators need to be fully investigated. I call on
the Government to place the Insurance (Amendment) Bill 2011 on hold for a limited period
to allow for a full, independent inquiry — one with statutory powers to compel all potential
witnesses to present — to report within three or four months. Once the full truth is established,
let the Government decide on whether the course provided for in this legislation is the way to
go. I am not convinced that it is.
  I will highlight some of the questions that need answering. Why did the joint administrators
maintain for over six months that there would be no call on the insurance compensation fund
but have now made a call of almost €700 million? Why have the joint administrators set the
average reserve in Quinn Insurance Limited, QIL, outstanding claims at almost three times the
market average?

  Acting Chairman (Deputy Olivia Mitchell): The Deputy’s time has concluded.

  Deputy Caoimhghín Ó Caoláin: Why was the Quinn proposal not properly assessed and
compared with what is being proposed in the Bill in the interest of taxpayers and insurance
consumers? Did the Financial Regulator influence the selection of proposals received by the
court appointed joint administrators and did he seek to stymie the Quinn proposal from the
outset? I have many more questions, but these need to be answered in the interest of full truth
and to allow for a proper evaluation of the best way forward. I am only asking for a short
setting aside and putting on hold of this legislation to ensure——

  Acting Chairman (Deputy Olivia Mitchell): The Deputy is taking from other speakers’ time.

  Deputy Caoimhghín Ó Caoláin: ——the very best decisions are taken in respect of this
company, its employees, the taxpayer and the policyholders.

  Deputy Frank Feighan: I welcome the opportunity to address the Dáil on the Insurance
(Amendment) Bill 2011, which was published in early September. Owing to changes in EU law
on the non-life insurance sector since the fund was last used, it was necessary for the Minister
to seek legal advice on current legislation. On 4 October, a deal will be done between Liberty
Mutual Direct and Anglo Irish Bank. The Bill will assist the deal in going through and will
secure the 1,600 jobs at stake in the Quinn Group.
                                                   785
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Frank Feighan.]

  I am a part of this ongoing saga. On Good Friday of last year, we were called to a meeting
on the future of the Quinn Group. At the time, I represented Roscommon-South Leitrim,
which included Ballinamore and Carrigallen. Seán Quinn’s role in the area was important.
According to one person, the area was only good for snipe grass. However, Seán Quinn set up
a quarry many years ago and took on the vested interests in the cement and glass cartels and
the insurance industry. He created jobs in an area that otherwise would never have had them.
He gave young people an opportunity to up-skill so that they would not need to go to Belfast,
Dublin, London or New York, as was usual at the time. They could work, be involved and
have futures in their localities. Irrespective of whether we like him, Seán Quinn gave people
the opportunity to regenerate their localities.
  Seán Quinn made many enemies in the insurance and financial industries because he proved
that he could outdo the old establishment, be it in the City of London, Frankfurt or Dublin.
He was not a popular person within those industries. He had a team of young people who
excelled in delivering a service. A young person could not get insurance many years ago. I was
a named driver on my father’s licence for 25 years because insurance would have cost me
£1,700 or £1,800. Seán Quinn took on the established groups.
  Deputy Ó Caoláin correctly stated that the group attending our meetings was cross-Border,
cross-party and cross-community. We agreed that the retention of jobs was paramount at all
times, that the €2.8 billion Seán Quinn owed to Anglo Irish Bank would be repaid to the Irish
taxpayer, that the company would retain competitiveness in the insurance industry and that
existing policyholders would be protected. We met the administrators and the staff, who were
fearful for their jobs. We also met the management team, Seán Quinn, the Financial Regulator,
the Minister for Finance and the National Treasury Management Agency, NTMA. Everyone
seemed to have a different story.
   I pay tribute to Deputy Ó Caoláin for convening our group. He was forensic and fair in
managing the group’s work and he included people from all sides. He played a major role in
seeking answers, given the wide gulf. To this day, they have not been answered. Whenever we
attended meetings with Seán Quinn and his management team, they had opinions on what was
the right model.

   When we met officials from Anglo Irish Bank and other institutions, such as the Financial
Regulator, we were presented with a completely conflicting view. To this day, we have still not
got to the bottom of it. The current Financial Regulator has done a very good job. I told him
when I met him it was a pity he was not in place six or seven years theretofore when the
regulation was of such a light touch. We were told then the way forward was international
finance and we lost sight of real economic activity, including agriculture and the creative indus-
tries. Our economic activity involved selling houses to one another. The then Government and
Financial Regulator believed this was right. Perhaps we all thought we would have an easy ride
but we ended up where we are.

   Seán Quinn made the mistake of trying to own his own bank. He was duped by the chairman
of Anglo Irish Bank, Mr. Seán Fitzpatrick. He wanted to take on the banking industry and
made a huge mistake. The country is paying for it and many of his employees have been left
in a very vulnerable position. Having said that, however, Seán Quinn made a huge difference
at the time in question to an area that would not otherwise have had a fair crack of the whip.

  I am delighted Liberty Mutual has decided to buy the Quinn group. In the past six months,
many of the staff have been quite pleased they have a future under an international insurance
company. However, there is resistance from unnamed elements, who have caused a certain
                                                   786
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


amount of trouble by cutting communication lines. There is no place in this society for those
kinds of actions. The cross-Border, cross-party group has stated very strongly that the way
forward is working with all the stakeholders to ensure the jobs are retained.

  The insurance compensation fund only contains €40 million. Whatever we give to the fund
will be repaid to the Exchequer. This has happened before. A levy was introduced in 1984
following the collapse of PMPA in October 1983.

  The Minister has decided to exclude health insurance from the scope of the scheme. The
main player in the market, the VHI, is not authorised by the Central Bank. Huge difficulties
face people in private insurance schemes and many are going without private insurance because
they simply cannot afford it. The costs have increased. There are far too many cosy cartels and
far too many consultants getting paid four times more than those in other areas. The Minister
for Health is examining this. There is far too much waste.

  Many young couples do not have the money to insure their own houses. Many businesses do
not have the money to insure themselves. The only reason they are being insured is because
the banks are putting on pressure in this regard. Houses and businesses are being insured not
because it is right to do so but because the banks want to ensure they have a hold on them if
something happens to them. This is a considerable problem. The Minister should set up a team
to investigate it.

  I would like to believe politicians on both sides of the Border will try, on a cross-party basis,
to deal with this very difficult problem, not by throwing political missiles at one another but
by working together to ensure 1,600 jobs are retained. I thank the Minister for his interventions,
which I hope will secure the jobs.

  Deputy Joan Collins: Once again ordinary citizens are being forced to pay for the gambling
debts of the super-rich through a new form of tax. That is exactly what this is and what the
public sees it as.
   There is no better example of the greed of the very wealthy in Ireland than that of Seán
Quinn, who is already the richest man in the country. He embarked on a crazy gamble involving
billions of euro. If anyone put at risk the 1,600 jobs in Quinn Insurance, it was he and his
family, through being prepared to gamble so avariciously in the banking area.
   It will be very interesting to see what emerges from the Garda investigation into Anglo Irish
Bank when the results thereof eventually see the light of day. It should raise serious questions
about the relationship between Mr. Quinn, the Quinn group and the ancien régime in Anglo
Irish Bank, and also serious questions about insider trading and illegal activity.
   The Quinn group owed €2.8 billion to Anglo Irish Bank and €1.2 billion to other creditors.
This is the result of the casino-capitalism antics of Mr. Quinn and many others involved therein
over recent years. The Quinn family has the nerve to go to the courts next week to challenge
its loss of control of the Quinn group. Between 2008 and January 2010, when control of the
group was lost, €61 million in goods and services was approved by directors and paid to com-
panies controlled by the Quinn family. This was on top of €200 million in capital contributions,
whatever that means, from the Quinn group to the family companies in 2008.
  No doubt Seán Quinn and his family regard the €740 million bailout as of no great con-
sequence. It is regarded as loose change, or couch money, when one has blown €4 billion in
the bookies of Anglo Irish Bank. However, it is a real imposition on the hard-pressed policy-
holders and the public, who face austerity measures day in, day out, with a consequent impact
on their pay packets.
                                                   787
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Joan Collins.]

  With regard to the very serious question as to how open-ended the bailout will be, the value
has risen from €600 million to €738 million over the past two months. The only good point that
can be made, if any, about this disgraceful and murky affair is that 1,600 jobs have been saved,
at least for the time being. We know how vulnerable they are when we hear about the job
losses in TalkTalk and other companies.
   Quinn Insurance is part of a profitable and successful section of business and remains so.
The problem is the disastrous way that the Quinn group was managed by the Quinn family.
Surely it would have been more in the interest of the jobs at Quinn Insurance and the protec-
tion of the policyholders for the State to take over the company rather than hand it over for a
song to an American multinational, Liberty Mutual Direct Insurance.
  Seán Quinn and the Quinn family are responsible for almost 10% of the cost to citizens
accruing from the bailout of Anglo Irish Bank. Instead of going to the courts next week to
challenge their loss of control of the Quinn group, they should be coming up from the cells to
the dock to account for their actions and the financial imposition on the people of the State.
   Deputy Feighan referred to the mistakes that were made. They were not mistakes but calcu-
lable, clear, clinical and cynical moves by developers, bankers and large businessmen like Seán
Quinn to make massive profits at the expense of ordinary people. They believed they would
get away with it time and again. It did not work on this occasion; those responsible were found
out and the banks collapsed. It is no accident that citizens are being asked to pay time and
again. I refer to the bin worker, post office worker, Guinness worker, social welfare recipient,
the elderly and those who can ill-afford to pay up time and again for the ills of the corrupt
wealthy in this country. It is about time the Government and the Parliament state we will no
longer accept this from big business. TalkTalk was able to announce it would wind up in a
short period of time but we are not prepared to introduce company law legislation to oblige
companies to give at least three months notice of any closure. Such measures would give time
for intervention. The Parliament should be considering areas such as these to protect our
citizens.
  I will finish on this point although I have not used my full allocation of ten minutes. I was
not expecting the other parties in the Dáil, who made such a fuss about the guillotine, to fail
to use their full time. I will give time to other Deputies.

  Deputy Tom Hayes: I am grateful for the opportunity to speak on this very important amend-
ment. I commend the Minister for Finance and the Minister for Justice and Equality and their
Departments on their sterling work in bringing the Bill before the Houses of the Oireachtas at
such short notice. Having listened to Deputy Joan Collins one must wonder whether she lives
in the real world.

  Deputy Joan Collins: I do.

  Deputy Tom Hayes: She should take the example of private enterprise. Private enterprise is
a very tough place to be. The job of people such as Seán Quinn, who start in business and
make huge strides throughout their lives, having come from a small farm as he did, is very
difficult. Seán Quinn is not the only such person in Ireland. I have no doubt Seán Quinn got
trapped in a rat race to get to the top in his business during the time of the Celtic tiger. When
one examines what happened to him, particularly with regard to banking and Anglo Irish Bank,
who is to blame for it all? I state fairly and squarely it is the regulators who were put in charge
of banking business over the years. We come to the House and blame small and big business
                                                   788
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


and people who take risks, but we never have a go at or a chat with the civil servants who are
paid huge salaries to look after these businesses.

  Deputy Joan Collins: A man who put a company and people’s lives at risk.

  Deputy Tom Hayes: I would like Deputy Collins to listen and bear with me for a minute or
two. The most regulated business in the country, and the most successful during this era when
the country is going badly, is agriculture. For the past ten years regulators at the Department
of Agriculture, Fisheries and Food watched over everyone involved in the industry and now
we have the most transparent business in the country. We can boast about agricultural pro-
duction and tell the world how successful it is because the regulators and those in charge
watched farmers and watched the animals from birth until slaughter and everything was able
to be traced. Agricultural regulators looked after their industry but financial regulators did not.
  Deputy Collins and her people who come to the House week in and week out are anti-
private enterprise. It is high time for them to blame the real people at fault, and these are the
regulators. The world and its mother outside the House knows this and it is high time we dealt
with it and were honest with ourselves, rather than taking a populist stance and going for the
people experiencing difficulties. I ask Deputy Collins to look at this in future.
   Of course we would have liked more time to discuss and scrutinise the Bill. Much dismay
has been expressed at the speed with which this amending legislation is being progressed, but
I remind my colleagues we are doing this for the sake of the country and for the betterment
of people in the industry. A total of 1,600 jobs are at risk if we do not facilitate the sale of
Quinn Insurance on 4 October. The interest expressed by Liberty Mutual is conditional on
funds being available to cover the losses on the Quinn Insurance books. None of us is comfort-
able with having to cover these losses, but we would be far more uncomfortable contemplating
the loss of 1,600 jobs.
   The second point to be made is that at present the Insurance Act 1964 is in contravention
of an EU directive. Article 46 of the third non-life insurance directive precludes a member
state from applying an indirect tax on insurance risks outside its jurisdiction. Without these
changes, no levy, regardless of size or reason, could be placed on insurance policies in the
State. Over the summer months, there was a great deal of confusion about this matter and I
thank the Department of Justice and Equality for clarifying the issue. What we must decide
today is whether we let 1,600 hardworking and loyal employees take the hit for Quinn’s mis-
takes, or whether we as a country shoulder the burden together. Neither choice is perfect, but
only one is right.
  Of course, I share concerns about the current cost of insurance in this country. These costs
are often prohibitive for my constituents. On several occasions, I have spoken in the House
about the cost of insurance for young people and in these difficult times, we should be seeking
ways to reduce these costs. Transition year in schools is an ideal opportunity for learner drivers.
Those completing such a course during transition year would be in a better position to drive a
car when they come of age. I urge the insurance companies to allow at some stage a reduction
in charges for people who have completed a transition year driving course. The insurance
companies and the Department of Education and Skills should be encouraged to do this.
   Businesses, particularly small businesses, are under enormous pressure due to the cost of
insurance. Yesterday, I dealt with a constituent who has a small business who was not able to
afford to pay fire or public liability insurance because it would mean not taking money home
to feed the family. If at all possible, the cost of insurance should be reduced.
  Health insurance policies have been excluded from this legislation, partly due to the
increased number of people failing to renew their cover. This is another practical problem
                                                   789
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Tom Hayes.]
faced by many households. The bills received, particularly by those with two, three or four
school going children, are astronomical and it is very difficulty for them to pay these bills on
an annual or monthly basis. At all times, we should encourage people to pay their VHI bill or
bills from other health insurance providers and make it possible for them to do so. I appeal to
the Government to consider, if at all possible, including tax deductions to make it possible and
feasible for people to pay their VHI or other health insurance bills.
   Given that the levy is expected to raise approximately €65 million per year, a period of ten
years should be enough to cover what I see as a conservative estimate of €720 million. The
Minister has not put a time limit on this levy given the volatile nature of such estimates, but I
would like to hear a commitment from him or the Department that the levy is solely associated
with the Quinn Insurance issue, and that my constituents will not see this levy as a permanent
fixture in their insurance premiums.

   Many of my constituents have raised this issue with me and are sceptical about the levy being
a temporary addition to the insurance industry. A commitment such as the one I mentioned
would go a long way towards easing their concerns. It is my understanding that a reduction to
a 1% levy may be possible if claims were to be front loaded. Such a possibility must be con-
sidered by the Minister in an effort to reduce the burden placed on many households.

  Deputy Richard Boyd Barrett: It is disgraceful that this important piece of legislation is being
rammed through in two days. Frankly, it makes a joke of the Government’s pre-election talk
of transparent government, renewing democracy and all the other hyperbole we had prior to
the election. The legislation has far-reaching consequences for probably hundreds of thousands
of policyholders for many years to come. It will have damaging and far-reaching effects on our
already crippled economy.
  On the substantial legislation and what is being proposed, the Taoiseach today in responding
to concerns about the legislation and the speed with which it was being pushed through sug-
gested that what was motivating it was a desire to protect the 1,600 jobs in the Quinn Group.
From the point of view of the United Left Alliance, and I suspect the majority of those who
are critical of the Bill, we are just as concerned to maintain the jobs in the Quinn Group as
anybody else is, or at least the jobs of ordinary workers and their families who depend on
them. The issue is not about who is most concerned for the jobs and families of ordinary
people, it should go without saying — from our point of view it does go without saying — that
we are as committed as the Government is to protecting those jobs.
  The question is whether what is being done is the best way to do it from the point of view
of the cost to the public and the effect on the wider economy. I attended a briefing in the
Department of Finance yesterday and have been trying to follow the labyrinthine twists and
turns of the Quinn debacle in recent years. Frankly, one’s head would be fried by the com-
plexity of this whole business. Perhaps part of the purpose of the legislation is to obscure
something behind veils of complexity, which is in reality just another shafting of the members
of the public and policyholders who end up picking up the tab. My summary of what this is
about is that it is yet another mechanism to ensure that ordinary people pick up the tab for
the sharp practice, probably criminal practice, of corporate tycoons such as Mr. Quinn, the
people running Anglo Irish Bank and the political system that allowed it to happen. In the face
of the rampant greed of those people, yet again the ordinary citizen is being asked to pick up
the tab. That is what the legislation is really about.
  The bottom line of this rather complex piece of work is that for the next ten years, or possibly
longer, ordinary policyholders will have to pay higher insurance. It is money they cannot afford
                                                   790
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


when they are already being hit with higher ESB prices and gas prices, levies such as the
universal social charge and the impact of unemployment for the hundreds of thousands who
have lost their jobs, and the impact of welfare cuts. People are already being hit by those costs
and on top of that they are going to be hit with higher insurance costs.
   The small and medium enterprises the Government says it is so committed to assisting will
be further hit, damaged and crippled by higher insurance costs which they simply cannot bear.
The other costs they have to shoulder at the moment are already driving hundreds and thou-
sands of businesses out of business and the proposed legislation is likely to do further damage
in that regard. All of that is being done to cover the losses of Mr. Quinn. I am not an expert
in the legal and financial side of these matters but with my relatively untutored eye it looks as
if what he did was criminal. There is no other way to describe it. The assets of Quinn Insurance,
which were supposed to cover claims by policyholders were being used to essentially cover
other loans, speculative loans such as casino gambling on property, other deals and of course
on the Anglo Irish Bank debacle. Ordinary people are being asked to pick up the tab for that.
   Meanwhile, we have a situation where all the burden is being shouldered by ordinary citizens
and the economy but we are going to get nothing out of it. As if that is not bad enough, we
cover Mr. Quinn’s losses, nurse the potentially profitable bits of the company back to health
and then we give them away to a multinational. It is absolutely extraordinary. Liberty Mutual
would not be interested in the profitable bits of Quinn Insurance, primarily operating in this
State, if it did not believe a lot of money could be made. If one takes out the gambling and
sharp practice of Mr. Quinn and the mismanagement, malpractice and gambling that led to the
losses there is underneath it all, at least in this country, a fundamentally viable business. That
seems crazy in the extreme. If we are going to cover the losses, give €200 million to Anglo
Irish Bank bondholders then at the very least we should own something at the end of the
process. If, for the cost we are bearing, the public owned Quinn Insurance it would guarantee
the jobs or would give us a far better chance of guaranteeing the 1,600 jobs. In that situation
we could also have some control over insurance premia so that they do not do further damage
to the economy and we could potentially generate revenue for the State.
  Instead what we are doing is covering Mr. Quinn’s losses, protecting the bondholders in
Anglo Irish Bank, unbelievably giving them €200 million, and an important fact for the public
to digest, paying consultants enormous amounts of money to manage the heist against the
people. One of the consultants currently at the Quinn Group to advise presumably on this sort
of deal is Mr. McKillop, who is being paid €915 an hour, €7,000 a day. If it is a five day week,
that is €35,000 a week, adding up to nearly €2 million a year. Who is paying for that? We are.
The policyholders and public are paying for it. It is unbelievable. It is like a honey pot for
those over-paid consultants. Members of the Quinn family are still in situ. There is no provision
in the Bill to go after the €200 million given to Mr. Quinn’s family or to go after the other
means by which the family is trying to syphon off its personal wealth.
  It is unbelievable that in 2008, before the whole collapse took place, Mr. Quinn — who may
have been in the know about what was going to happen — could give €200 million to his four
children to increase their personal wealth portfolio. These euphemisms are about taking vast
amounts of money from us to give to his children and protect and insulate himself against what
was coming further down the line to make them obscenely wealthy. Where is the Government’s
will to introduce emergency legislation? I would be happy if the Government rammed through
such legislation designed to go after the Quinn family’s wealth and other assets, instead of
making ordinary people pay for the greed of Mr. Quinn, while also protecting bondholders in
Anglo Irish Bank. It is shameful.

  Deputy Jim Daly: I wish to share time with Deputy Broughan.
                                                   791
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


  Acting Chairman (Deputy Olivia Mitchell): Is that agreed? Agreed.

   Deputy Jim Daly: I welcome the opportunity to contribute to the debate today and commend
the Minister and the Department on the swift action taken to deal with this matter by updating
the 1964 legislation. I acknowledge that the addition of any levy is not welcome but there are
times when, simply put, needs must. In this instance, the existing fund of €30 million will not
fill the requirement by the Quinn Insurance group of between €600 million and €700 million.
   The Irish Insurance Federation has welcomed the clarity provided by this legislation because
there was a lot uncertainty about the proposals to be brought forward. The request by the
federation to remove the 3% stamp duty on non-life insurance products will require proposals
to raise the associated revenue of €109 million elsewhere in order to fulfil our obligations under
our arrangement with the EU and IMF which, whether we like it or not, continue to fund this
country. In these times there are not many willing sectors volunteering additional sacrifices
likely to raise this €109 million shortfall.
  From any reasonable assessment, the sale of Quinn Insurance to Anglo Liberty Mutual
would appear as the best possible outcome for the Quinn group, with the protection of jobs
and any call on the insurance compensation fund kept to a best case scenario. Like so many
other successful businesses at one time, previous management at the Quinn group gambled on
property-related investments and have now left the group with these reckless losses.
  The opposition to this Bill is both understandable and popular. However, it is necessary for
us to move on from opportunistic opposition to a necessary imposition on the taxpayer to
protect the company, its 1,500 jobs and the policyholders. If this company were to be left to go
to the wall, as some in this House have suggested——

  Deputy Richard Boyd Barrett: Nationalised.

  Deputy Jim Daly: The only logical extension to some of the arguments that have been
presented here is to let the company go to the wall, which has been suggested.

  Deputy Joan Collins: Nationalised.

  Deputy Jim Daly: There have also been references here to what I can only describe as classic
back-of-the-envelope sums. A Fianna Fáil speaker referred to this development as investing
€500,000 per job in the company but that is completely missing the point. The consequences
of letting it go to the wall would be catastrophic and far-reaching. The State has obligations
above and beyond the obvious comprehension of many of the Opposition contributors to this
debate thus far. This responsibility extends beyond the safe-guarding of the company and its
workforce. There are serious implications for the overall economy, Ireland’s corporate repu-
tation at home and abroad, and the knock-on effect on consumer and investor confidence.
There is also the issue of protecting policyholders’ security. All these factors must be taken
into account when assessing the overall picture. It is of course much too attractive to have a
few cheap shots at the Government and indulge in opportunistic populist rhetoric than to take
the time to assess the wider picture, which is a luxury only afforded to opposition parties.
   The most serious aspect of this debate is the necessity to learn from the dreadful mistakes
that have led the State to this situation. There is ample evidence of poor regulatory practices
in the series of events that led to the current difficulties in the Quinn group. One could go so
far as to say that the regulatory practices were non-existent. I urge this house to work collec-
tively on behalf of the Irish people, who deserve more than cheap populist rhetoric, to ensure
an adequate regulatory system for the future in order to avoid this cycle repeating itself.
                                                   792
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


  Deputy Thomas P. Broughan: This Bill is another tragic element of the wreckage from the
Irish banking disaster. At the outset, it should be acknowledged that Seán Quinn and the Quinn
group did make a significant contribution to this country’s economic life. In the group’s direct
insurance division, for example, there were around 1,700 people employed in Cavan,
Blanchardstown, Enniskillen and the United Kingdom.
   The Quinn group reportedly employed over 6,000 people across all its divisions with this
employment being concentrated in counties Fermanagh and Cavan. The establishment of the
insurance division’s headquarters in Cavan provided a major fillip for the local economy and
much needed employment in what was a terrible employment black-spot. In Cavan and
Fermanagh, the Quinn Group is the type of employer where a whole family could be employed
at the company, given the dearth of other employment opportunities in the area. The extraordi-
nary history of this group of companies began in Seán Quinn’s native Derrylin in County
Fermanagh.
  There has been a grotesque, rip-off culture within the Irish insurance market. The Acting
Chairperson, Deputy Olivia Mitchell, will remember that we used to discuss that issue 15 or 20
years ago. Nonetheless, it was ignored and thus permitted and abetted by successive Govern-
ments. The competitive advantage that Quinn Insurance seemed to achieve since it entered the
market in 1996 was often compared by the worshipping media to the achievements of Ryanair,
as a strong domestic insurance provider, as they saw it.
   However, as with our major failed banks and the totally failed regulatory system — which
was spearheaded by the Fianna Fáil and Green Party politicians who led Governments over
the past 13 years — questions were being raised from 2007 onwards, about the Quinn group’s
level of reserves, particularly in the UK. Comparisons were drawn around that time between
the group’s modus operandi and the operations of the failed Australian insurer HIH. These
are matters which I hope the Committee on Finance, Public Expenditure and Reform — of
which I am a member — will thoroughly investigate and hold all those responsible to account
in the coming years.
  The unfolding of the Quinn Group saga since 2007 and the toxic interaction of the company
with Anglo Irish Bank has produced a devastating effect on the company’s employees and on
the national economy, in addition to terrible new insurance costs for every Irish family. This
Bill is a shocking result of the situation that the Quinn Insurance division currently finds itself
in due to the appalling gambling with CFDs on Anglo Irish Bank shares by Seán Quinn and
his group, as well as by his Bazzely family company.
   Every household in Ireland is now being made to pay for that disgraceful and illegal behav-
iour. Householders are rightly appalled by the imposition of a 2% levy on all non-life and non-
health insurance policyholders because of the inexcusably reckless behaviour involving crazy
billion euro gambles on Anglo Irish Bank shares. It is now having a knock-on effect for
insurance consumers, and will have an increasing effect in the years ahead.
   It is an extraordinary scandal that throughout recent decades the public has been levied
again and again to support disastrous insurance company failures, as with banking, while at the
same time enduring high insurance premiums and dreadfully poor competition. As I understand
it, the Government has to advance approximately €280 million of our money in the fourth
quarter of this year to cover Quinn Group liabilities before the levy kicks in. The Insurance
Compensation Fund currently stands at only €40 million, which is hopelessly inadequate com-
pared to the amount required to keep this company in existence.
   We are familiar with such levies because of what occurred when the PMPA became insolvent
in the mid-1980s. That was another disgraceful episode in our economic history. That levy
lasted until 1991. I welcome section 7 of the Bill which lays out provisions on contributions to
                                                   793
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Thomas P. Broughan.]
the fund through insurance providers and includes a regular review of the levy. Such a review
is extremely important as this levy should be as temporary as possible. I urge the Government
to ensure that this is the case.
  Major changes to the insurers in administration under this legislation will also ensure that
the ICF will only apply to risks in the Irish State and only if 70% of the insurer’s business in
the previous three years related to risks in the Irish State.
   The Quinn family’s gambling on Anglo shares to the tune of €3 billion has to be one of the
most disastrous punts in Irish corporate history. Their use of contracts for difference, CHDs,
to buy shares and the toxic relationship between the Quinn family purchase of Anglo Irish
Bank shares and the bolstering of Anglo share prices eventually blew up catastrophically when
the casino bank unravelled with devastating losses for the Quinn group, for its workers and for
all of us.
  The story of the Quinn group and Anglo Irish Bank is another tale of arrogance, hubris and
perhaps criminal corporate behaviour that has become all too familiar to the Irish people in
recent years and this Bill is the necessary result. The debris and wreckage of this financial crisis
has included important companies such as Quinn Insurance and AIB. The Irish people have
been forced to purchase such companies with their hard-earned money and I would advocate
that we hold onto them.

  Deputy Shane Ross: I worry about this Bill while understanding why the Government feels
the need to introduce it because its back is to the wall. I agree with much of what was said by
Deputy Broughan and Deputy Boyd Barrett. This is not the first time such a situation has
occurred. I worry about the compensation culture which compensates businesses which run
into trouble and are bailed out by the Government because they are so big. It seems that over
a period of nearly 30 years, we have learned nothing about regulating our financial industry,
our banks and other industries which have grown very large.
   Deputy Broughan mentioned the PMPA. Just prior to the PMPA collapse, in the case of
another insurance company, Insurance Corporation of Ireland, one man went a bit berserk and
started selling extremely risky products, mostly overseas. Not only did he nearly bring down
               Insurance Corporation of Ireland, he nearly brought down AIB. It was similar to
1 o’clock      the recent situation in various financial crises. An overnight decision was made
               and three members of the then coalition Government — former Ministers John
Bruton and Alan Dukes and former Taoiseach Garret FitzGerald — decided they would have
to rescue Insurance Corporation of Ireland and also AIB.
  The result of this decision was that the Government guaranteed the future of AIB and in
the process, no jobs were lost in AIB. One person in Insurance Corporation of Ireland did not
retain his job but the rest of the banking and insurance systems carried on as if nothing had
happened. A levy was imposed upon the poor unfortunate taxpayers and this was bad enough.
Some people who were insiders made a lot of money by buying shares in AIB and this is
well documented. Once they were guaranteed, they made a lot of money out of it. It was a
shameful episode.
  The PMPA followed about two years later. This was a massive insurance company which
dealt mostly in motor insurance. It had been built up in a completely unregulated manner. The
dogs in the street knew that the person in charge, Mr. Joe Moore, was very well connected
with Mr. Charles J. Haughey and it was believed that he was protected and encouraged by
people in Fianna Fáil and as a result of some political connivance, the company was not prop-
erly regulated. The PMPA went bust for an enormous amount of money and we are still paying
for that many years later. There followed the saga of Larry Goodman, who was very powerful.
                                                   794
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


The State provided him with export credit insurance. It was a slightly different type of product
but again he was allowed to continue to trade recklessly with implicit Government guarantees
and he eventually went under.
   As in all these other cases, special legislation was required. If I remember correctly, the Dáil
and Seanad were recalled from the summer recess in order to deal with the Larry Goodman
case and to allow for the Goodman group to be put under the protection of examinership. The
most recent examples are Anglo Irish Bank, which was not allowed to fail, and now the
situation with Quinn Insurance, another insurance debacle. How in the name of God did all
these things happen within the past 30 years as they are all very similar? Nobody seems to
have learned the lessons of the banking boom, particularly the lack of regulation in the
insurance industry, which should have been the first lesson.
  There is a kind of pattern to these events. In nearly all cases, these industries or companies
are one-man bands. The PMPA was basically dominated by Joe Moore and the Moore family.
The Goodman group was obviously dominated by one man. The Anglo Irish Bank collapse
was certainly dominated by one man. The Quinn group and Quinn Insurance was dominated
by one man. Are these not danger signals? Banks and insurance companies which are domi-
nated by a family are, presumably, not properly regulated for reasons which are now completely
incomprehensible but this has been a pattern.
  The first action that should have been taken in respect of Quinn Insurance was for the
Financial Regulator to ask questions about one of the biggest companies in the insurance
market. There had been rumours and reputational difficulties. I do not suggest that regulators
should act on rumours but they should take rumours into account. There were stories about
Seán Quinn and about Joe Moore and doubts about Seán FitzPatrick and all sorts of other
people who dominated these companies and businesses. Yet they were allowed to carry on by
the Government and by the regulator.
  There was a bad feel about these companies and bad reports had circulated about them.
Everyone relied on the regulator to do the job but it has not done it. It is easy for me to say
this as a member of the Opposition and it is post factum. However, I wonder if we have learned
any lessons because the response of successive Governments for the past 30 years has always
been to introduce legislation such as this Bill in order to prop up a company which is in very
big trouble.
  I happen to agree with Deputy Boyd Barrett. The answer in these cases is undoubtedly to
nationalise such companies. I recommend they should be nationalised on a temporary basis
while Deputy Boyd Barrett would recommend a permanent nationalisation. In these cases,
they are obviously in unfit hands and therefore should be nationalised temporarily. One cannot
leave banks and insurance companies in this situation in the same hands. Neither can they
remain in the hands of a management layer which has been there during all these crises.
  I do not know the extent of this particular problem but we know that policyholders will have
to pay the price for many years to come. We do not know the extent of the black hole. I do
not applaud part of the solution, which is to sell it off to Anglo Irish Bank. I have read articles
in the Financial Times and foreign newspapers and have talked to people looking at what is
happening and they have said they do not believe this. They do not believe that a bankrupt
bank with holes all over it is being encouraged by the Government to buy a bankrupt insurance
company in the hope it will go all right. I do not know why the company was not put up for
sale and sold in total to a foreign company. God bless us, but we would be lucky if we could
get anybody to take it off our hands.
  I hope the Minister does not respond by saying we will leave it to the regulator, but what is
the Government’s vision in this regard and what measures does it have in mind to ensure that
                                                   795
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Shane Ross.]
this type of activity does not happen again? It sticks out a mile that we must regulate this area
properly and in a way which stops Sean Quinn and other reckless people like him from taking
over one of the biggest companies in the State and running it as a personal fiefdom. Otherwise
this will happen again and again. It is not good enough just to introduce sticking plaster and
say, “Off we go”. This will cost policyholders significant money for many years to come until
the next crisis.

  Deputy Peter Mathews: Insurance is a particular industry and we know from contract law
that a contract of insurance is a contract of uberimmae fidae, the utmost good faith. That is the
core of the insurance service provided to customers and we must have people who are
undoubted in character and who will not be tempted by the cash up-front from premiums
without knowing how to reserve for the risks of the policies that they write. How come a person
who built up a huge cement empire could be deemed to be experienced and competent to run
an insurance company, one that is not a monoline, but a multiline insurance business? The
thought is absurd. The ground has been covered by previous Deputies with regard to the
reasons this legislation is being introduced. Essentially, it is being introduced to cover €1 billion
of losses, €900 million that is recognised to date and a further €100 million or a little more to
be reported in the year just ended.
  Regulation, supervision and inspection did not occur. People who read the business sections
of weekend newspapers will remember that just over a year ago, Tom Lyons of The Sunday
Times wrote a very good forensic article on Quinn Insurance. He trawled over the ground of
the fine that had been meted out by the regulator to the company. What happened was that
just as PricewaterhouseCoopers came to the end of its audit for the accounts for the year
ending 2008, it decided to inquire about the €400 million described as “balances on deposit”,
expecting to be furnished with certificates of bank balances for that amount. Instead, it was
given the explanation that it was a loan repayable by Quinn Holdings Limited for cash reserves
that had been “borrowed” by that company for its own purposes — nothing to do with
insurance.
  Therefore, we had the biggest borrowing — or may it be called “theft”? — of cash reserves
of a non-life insurance company by, as previously described, the sovereign owners. I do not
mean “sovereign” in the sense of Irish Republic, but in terms of what would be the “ducal”
owners of this insurance group.

 Acting Chairman (Deputy Olivia Mitchell): I urge the Deputy to have a little caution when
making specific reference to people outside of the House.

  Deputy Peter Mathews: These are matters of fact. I have no fear whatsoever.

  Acting Chairman (Deputy Olivia Mitchell): That is not the point.

  Deputy Peter Mathews: I am very careful always to deal in fact. I hate opinions. My opinions
are weak, but the facts are strong and speak for themselves.
  The auditors then referred the problem because they could not sign off on the accounts. A
director of the company, who had been a senior public servant, and who was perhaps on the
board for decorative purposes and to add brand strength to the group, resigned when the
problem emerged. The problem was said to be resolved when it was referred to the regulator,
who suggested the €400 million could be repaid from Quinn Holdings in nine equal monthly
instalments — like hire purchase or just a small petty cash amount. The fine imposed was a
mere €3 million, the largest fine in Irish corporate history. This was just 0.75% — a laugh
considering the enormity of what took place. When that resolution was put into place, all was
                                                   796
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


quiet and the former public servant director of the group reappeared on the board. The article
on this by Tom Lyons was in The Sunday Times and nobody has challenged it because it is fact.

  Deputy Richard Boyd Barrett: What date did it appear?

  Deputy Peter Mathews: About a year ago. The finance area provides a great temptation to
misbehave for people without character. It is also an area where boards can fall asleep on the
job and it is the area where regulators fell asleep. What we need now is clear and transparent
supervision and inspection. We need a visible system, like that in hotels or restaurants where
a sheet of paper goes up on the wall of the bathrooms covering every hour of the day and the
person inspecting signs his or her initials on the sheet guaranteeing the bathroom has been
inspected and is working properly. We need the equivalent system in our financial institutions.
This is not something complex, but does require character.
  The legislation before us provides an operational and technical passage for shoring up this
loss and trying to fund it. It is appalling that a 2% levy is being applied to provide €65 million
a year for ten years. This is just as appalling as previous cases mentioned, such as the PMPA
and the Insurance Corporation of Ireland.
  It behoves us as a Parliament to insist that the operational areas that look after banks,
insurance companies and anything to do with finance are properly regulated. Not only must
the rules and procedures be set out, they must be inspected, supervised and evidenced, with
nobody being put under any embarrassment to do their work. It is with a sad and heavy heart
that I commend this Bill be passed. I commend it in order that 1,600 jobs are protected and
because there is an operational base to running an insurance company. It is shocking that a
busted bank has to form a partnership with Liberty Mutual to maintain this business. There is
perhaps merit in considering whether it might have been best to nationalise all the financial
institutions temporarily in order that we could draw back the curtains to get a full and fresh
view and an injection of new people transparently.
 It is tragic that somebody even dared to think to make an application for salary levels in
AIB to be in excess of €500,000. That is breathtaking and absurd.

  Deputy Thomas P. Broughan: Hear, hear.

  Deputy Peter Mathews: Imagine if we had a plague and qualified Irish-born consultants were
working abroad and they said they could only return if they were paid €500,000 to deal with
the disease. It would reflect poorly on them as people.
  I have raised a few thoughts because they will decide how we act in future as a country. We
are clearing up an almighty mess and it leaves a very bad taste.

  Deputy Jerry Buttimer: I compliment my colleague, Deputy Mathews, on his thought provok-
ing remarks. It is refreshing that a Member will discuss issues in a non-partisan manner.
   The Bill results yet again from the mismanagement of the financial sector, the mismanage-
ment of our economy and the mismanagement of one insurance company. The cost of gambling,
games of high stakes poker and financial recklessness has been landed on the doorstep of every
citizen regardless of culpability. The Minister, who has been responsible, brave and courageous
in his stewardship of the Department of Finance, is acting responsibly again with this legislation.
It is likely that the insurance compensation fund will need €738 million to cover the losses
incurred. The Minister outlined in the Seanad that he anticipates that the levy will bring in €65
million per year. This means we will all pay for the mismanagement of Quinn Insurance for 12
years, which is regrettable. Deputy Mathews is correct that the relevant boards and the regu-
lator fell asleep and the Minister is correct that there was lax regulation. For more than a
                                                   797
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Jerry Buttimer.]
decade we will pay for lax regulation, personal financial gambles and ignoring reserve
requirements.
  Since administrators have taken over the running of Quinn Insurance, they have uncovered
losses of €905 million in 2009 and €160 million in 2010. Stringent reserve requirements are
being enforced by the Financial Regulator to prevent such losses recurring. It takes time, a
new approach, money and leadership from the Minister to right the mistakes of a decade of
mismanagement. His proposals, however unpalatable, are a prudent and measured step in
tackling the problems presented by Quinn Insurance. He has outlined to both Houses how he
has tried to minimise the impact of the levy, how he has taken into consideration increases in
the cost of health insurance, which I very much welcome, and how he is attempting to secure
the employment of 1,600 people at Quinn Insurance. The Taoiseach yesterday and today
referred to the deadline of 4 October.
   Senator Ross referred to the issue of family domination but the reality is our regulatory
system went absent, aided and abetted by then Government. The Members opposite who
wanted to extend the debate cannot even be present for it. Where are they? There is no
Opposition Member in the House. Where is the new approach to Irish politics? It is not evident
in this Chamber.

  Deputy Peter Mathews: Hear, hear. Well said.

  Deputy Jerry Buttimer: How dare they demean Government Members who are interested
in protecting and preserving jobs and who want a new approach to politics, which the Minister
and the Government have adopted.
   Prior to implementing this legislation the Minister will take precautions to ensure that the
cost to policyholders is limited as far as possible. The review undertaken by the State Claims
Agency to review processes at Quinn Insurance has shown that the administrators have made
positive changes. It is important that we have a debate about the future viability of the
insurance industry. I am not an expert but there are issues regarding insurance that need to
examined. It is easy to only think of insurance companies as mercenaries focused solely on
profit but we must also remember the important role that they have in facilitating our daily
lives, for example, driving cars, going to the shops, buying houses and attending concerts and
football matches. Without a viable insurance industry, all these activities would be curtailed or
would cease. Insurers have an important social function which must be facilitated.
   The flood in Cork city in 2009 caused havoc, destroying homes and businesses. However, it
provided an example of the importance of insurance companies. If it was not for insurance
cover, people would not have been able to return to their homes and businesses would not
have reopened. While insurance companies have a social role, they also have social responsibil-
ities. They have a responsibility to promptly pay out on valid claims and not to frustrate the
innocent victims of misfortune. They also have a responsibility to provide insurance cover at a
reasonable cost in order that people can drive to work or buy a house. Too often these
responsibilities are ignored.
  Recently I have come across a number of cases of people having difficulty obtaining house
insurance in Bishopstown and Glasheen in Cork city. I was provided with a list of six insurers
that refused to quote by one person. House sales in Cork have fallen through because of the
inability of purchasers to secure insurance. Ostensibly, the reason given is subsidence issues
but even where underpinning has been carried out, the insurers are still refusing to quote. The
refusal by a number of insurers to provide cover for houses in Bishopstown is preventing young
families moving into the area. Recent census figures show that the population in mature and
                                                   798
                    Priority             28 September 2011.            Questions


established parts of Cork city has fallen by more than 20%. For years young people could not
afford to buy in the city but now the reluctance of insurance companies to provide cover is
preventing them from moving into the area. I hope that can be addressed.
  We cannot have a situation where insurance companies refuse to cover homes in a large part
of the country’s second largest city. When the State takes actions to secure the viability of the
insurance industry, the very least we can expect is an industry which understands its function
in society and which facilitates people to buy a home. Sadly, that is not happening and that
needs to be addressed.
   In the 1960s the State had to rescue Equitable; in 1983, ICI; in 1985, PMPA; and this year,
Quinn Insurance. We have a history of the difficulties of insurance companies becoming a
burden on policyholders for many years. I welcome that the Minister has attempted to limit
liability in this instance but I hope that the Department of Finance and the Financial Regulator
have learned hard lessons from this debacle. We must have a regulatory regime that does not
permit personal financial gambles to have such dire consequence for our entire country.
  It is important to recognise that the legislation affects 1,600 jobs. These jobs are held by
ordinary men and women, as the Taoiseach said earlier, who are not on high powered salaries
and who are trying to stay in employment. There are concerns about the role the insurance
industry plays in society and there is a need for a review. I hope the Government will pro-
actively engage with the insurance industry in this regard.

  Debate adjourned.

                                    Ceisteanna — Questions

                                       Priority Questions

                                            ————

                                      Hospital Inspections
  1. Deputy Billy Kelleher asked the Minister for Health his views on the lack of inspections
of hygiene standards in hospitals undertaken by the Health Information and Quality Authority;
and if he will make a statement on the matter. [26437/11]

  Minister for Health (Deputy James Reilly): The control of health care associated infections,
HCAIs, continues to be a policy priority for the Department of Health and the Health Service
Executive, HSE. Maintaining hospital hygiene practice is an essential component of the drive
to reduce HCAIs.
  Under section 8 of the Health Act 2007, the Health Information and Quality Authority,
HIQA, has statutory power to set standards on safety and quality in relation to services pro-
vided by the HSE and service providers in accordance with specified Acts. However, it is a
matter for the authority to determine how it can most effectively deliver on its responsibilities
having regard to competing priorities and available resources.
   HIQA’s National Infection Prevention and Control Standards were published in May 2009.
The authority carried out a national hygiene audit in late 2009 and undertook hygiene audits
of hospitals during 2010. My Department is continuing to work with HIQA and the HSE to
prepare for the inspection of acute hospitals and other health care facilities against these stan-
dards. HIQA, in association with the Department, is currently putting together a comprehen-
sive assessment of its current and likely future staffing requirements within the context of the
comprehensive expenditure review. The resources required to monitor compliance with the
                                                799
                     Priority              28 September 2011.             Questions

  [Deputy James Reilly.]
National Standards for Prevention and Control of Healthcare Associated Infection will be
considered as part of this assessment.
  Appropriate steps are being taken to address the issue of health care associated infections
in our hospitals and to treat them promptly when they occur. The HSE’s performance indi-
cators at national level continue to demonstrate encouraging improvements in the area of
infection prevention and control with the reported incidence of MRSA dropping by 48%
between 2006 and 2010. I welcome the appointment earlier this year by the HSE, jointly with
the Royal College of Physicians in Ireland, of a national clinical lead on health care associ-
ated infections.

   Deputy Billy Kelleher: I thank the Minister for the reply. Niall Hunter, the editor of
irishhealth.com, stated:

    A HIQA spokesman confirmed to irishhealth.com that the safety body was no longer
  proactively going into hospitals and checking on their hygiene standards at this time. “We
  have to prioritise our work as best we can,” he said.

It is clear that HIQA, which is statutorily set up to give information and ensure that quality
controls are in place in hospitals, is not able to carry out its statutory functions. No audit of
hospital hygiene has been carried out in any hospital in Ireland in over a year. Will the Minister
accept that, in effect, it is putting patients’ lives at risk if the body statutorily obliged to carry
out audits is not carrying them out? Will he further agree that in the context of the workload
put on HIQA there is now a need to ensure that its basic functions are upheld and that it
would begin to carry out audits on hygiene in our hospitals throughout the country?

  Deputy James Reilly: HIQA is responsible for standards and inspections but that does not
remove the obligation on the Health Service Executive, HSE, to maintain its standards and
continue its own in-house inspections. That is currently the case. The position is clear from the
reduction in antibiotic consumption since 2008 and also the continuing drop in cases of MRSA
from 592 in 2006 to 536 in 2007, and to 439 in 2008. In 2009, there were only 355 and last year
there were 305. A 48% increase is extremely encouraging but we will not stop at that. HIQA
will reinspect, as it sees fit, when it sees the need arising but as an independent regulator we
must accept what it is and is not happy with, and we should not attempt to interfere in that.

  Deputy Billy Kelleher: Nobody is asking for interference. At the outset the Minister clearly
stated that the HSE is a discredited organisation. That was one of his policy platforms in the
recent election. When he took office he sacked the board and stated he would be assuming
control of the HSE because he felt it was inadequate in trying to provide the basic functions
and services. He is now saying he trusts the HSE in the context of making sure that audits are
carried out and that hygiene inspections take place in hospitals. I am not asking any Minister
to interfere with HIQA even though it has been often said by Members opposite that HIQA
is an organisation that only makes recommendations and its policies do not have to be
implemented but all we are asking for is that HIQA is given the resources and the direction in
the context of making sure it carries out independent audits, in view of the fact that the Minister
has already stated that the HSE is a discredited organisation. Those are the Minister’s words.

  Deputy James Reilly: I will make a number of points. In recent months the HSE has made
great strides in getting its budget in order and many other innovations which will become more
clear as the special delivery unit makes more recommendations, which I would expect the HSE
to put in place. The Deputy is right, however. It is part of our policy that the HSE would be
replaced by a different organisation.
                                                  800
                    Priority              28 September 2011.             Questions


  I will address the core issue which is that of HIQA funding. HIQA’s funding will match its
requirement to allow it carry out its duties. I have no doubt it will be in contact with my
Department when we reach the end of this annus horribilis which, unfortunately, the Deputy
and his Government left us to deal with. We start next year with a clean slate and a new
budget. We will have central control over the fair deal scheme. We will have full control over
the budget for a year. We will have visibility over hospital spending on a fortnightly basis. We
will have real-time information on emergency department flows and on inpatient waiting lists,
none of which was available before this Government came into power.

                                     Vaccination Programme
   2. Deputy Caoimhghín Ó Caoláin asked the Minister for Health the action he is taking in
response to the findings that the swine flu vaccine Pandemrix may be linked to narcolepsy; and
if he will make a statement on the matter. [26439/11]

  Deputy James Reilly: It is estimated that approximately 250,000 Irish children and ado-
lescents aged five to 19 received Pandemrix vaccine to protect them against pandemic, H1N1,
swine flu. Thirty potential cases of narcolepsy have been identified, 16 of which have been
confirmed by the Irish Medicines Board as having been vaccinated with Pandemrix. Of the 16
cases, 15 were under 18 years of age. The remainder of the cases include those who have not
had a final clinical diagnosis of narcolepsy and also includes a small number of patients who
have been diagnosed but who may not have had Pandemrix vaccine.
  The Department of Health and the Health Protection Surveillance Centre, HPSC, of the
HSE are working with the Irish Medicines Board and clinical experts in narcolepsy to examine
the Irish data. However, the number of cases in Ireland is relatively small and may not allow
causality to be determined. The results of this study are expected before the end of the year.
Further studies are also ongoing in several European countries.
   Relevant health care professionals, that is, GPs, paediatricians, psychiatrists, clinical psychol-
ogists and public health nurses have been advised on the possible association between Pandem-
rix vaccination and narcolepsy and on the referral of suspect cases for diagnosis. The HSE has
agreed to provide discretionary medical cards to children affected on an interim basis pending
the outcome of decisions to be made around supports necessary on an ongoing basis.
  A group called Sufferers Of Unique Narcolepsy Disorder, SOUND, has been set up by
parents. This group is actively engaged with the HSE and has two representatives on the HSE
incident management team that is managing this issue.
  The Department of Education and Skills together with the National Council for Special
Education is also considering what further supports are required for the education of the young
people affected.
   Later today I will meet with representatives from SOUND and I understand that a meeting
is being arranged with the Minister for Education and Skills also.

   Deputy Caoimhghín Ó Caoláin: The Minister has indicated that some 30 cases of narcolepsy
with a direct link to Pandemrix have been identified by the HSE. What assistance does the
State intend to provide for these children and their families, given that it is a direct result of
the administration of the swine flu vaccine? The Minister said that discretionary medical cards
will be provided on a temporary basis, but will he elaborate on that? Will all children in whom
narcolepsy presents and where there is a clear link with Pandemrix receive a medical card
irrespective of the circumstances of the families concerned? Does he share the concern of
parents and the wider community that new cases are still presenting and we do not know the
full extent of the problem? With the recent publicity around the launch of the SOUND group,
                                                 801
                    Priority              28 September 2011.             Questions

  [Deputy Caoimhghín Ó Caoláin.]
which the Minister mentioned, several new cases have come to light, and that is likely to
continue for some time to come.
   When the Joint Committee on Health and Children met on 8 September 2009 to address the
swine flu issue, I and other members, including the Minister, expressed concern about the
indemnity granted to vaccine manufacturers, including GlaxoSmithKline, the maker of Pand-
emrix. Is the nature of that indemnity such that GlaxoSmithKline will be legally absolved from
any accountability for the drug causing narcolepsy in Irish children? That needs to be clarified.
Is the State now finding itself in the dock in this connection?

  Deputy James Reilly: First, I reiterate that no link has been established as yet. It is interesting
that some of the Nordic countries such as Finland and Sweden are concerned about large
numbers of cases there, but other countries such as the UK and the US do not seem to have
an issue. Like Deputy Ó Caoláin, I remain concerned about the matter. As a parent, I am
concerned about the possible damage the vaccine could have caused, but I will not prejudge
the situation until all the facts are before us.
   In defence of my predecessor, I have to say that she acted in good faith. It was an emergency
because the country’s health was at risk. We can never know how many people would have
died had there not been a vaccination programme. That is always the problem with these
situations. We will do the most important thing, which is to support all our citizens who suffer
from narcolepsy, including children in particular, and give them the medical and social supports
they require. The broader issue of the causality can be pursued in a more orderly fashion. What
is important is that people who have a problem have it addressed from both the medical and
social perspectives.

   Deputy Caoimhghín Ó Caoláin: At the committee meeting I mentioned, an HSE representa-
tive said that the HSE and the World Health Organisation expected “adverse events to be at
a minimum”. The Minister compared the number of people presenting with narcolepsy and the
number of those who received the Pandemrix vaccine, but this is a serious matter for the
children and families concerned, and such assurances have proved hollow to them. Does the
Minister accept that, with hindsight, granting an absolute indemnity to a multi-billion-euro
international drugs company in relation to an untested vaccine was not the correct way to go?
Does he agree that we need to ensure we do not make the mistake of administering such a
vaccine in future without all the proper checks being in place?
   Finally, on the assistance to be offered to the children, we should be clear that they are in
their early years of school attendance and this matter will significantly impact on their potential
development through the education process. The Minister said he is speaking to the Minister
for Education and Skills, but will the Government ensure that the necessary supports are
provided for these children so that they do not fall behind? Let there be no mistake — the
issue is not about attentiveness in the classroom. These children fall asleep and they will miss
out on critical hours of education in the years ahead. Will the Minister ensure supports for
them?

 Deputy James Reilly: It is easy to forget the situation that pertained. The reality is that we
were facing a swine flu epidemic.

  Deputy Caoimhghín Ó Caoláin: We have to deal with the situation here and now.

  Deputy James Reilly: Excuse me. I did not interrupt the Deputy. We were dealing with an
epidemic. I was not in charge at the time, but nonetheless I believe in fairness, and the Minister
of the day was faced with this enormous threat to the wellbeing of the people, and to younger
                                                 802
                    Priority              28 September 2011.            Questions


people in particular. Given the genetic make-up of the flu and the fact that it related somewhat
to an epidemic that occurred years ago, people over 55 perhaps had some degree of immunity.
Younger people were at more serious risk. Vaccine manufacturers go through a range of safety
checks, but when they are put to the pin of their collar in relation to producing enough vaccine
around the world to protect people from a looming crisis, perhaps not all the research that
would usually be done can take place, because some of it is time related. No doubt that is why
they sought the undertaking from the Government in relation to indemnity. I will revert to the
Deputy in writing on the exact nature of the indemnity, but we have to be fair. It is easy enough
to give out, and there is plenty to give out about without giving out about those things, which
were not under the Government’s control and had to be done in the way they were done.
  To return to what I believe is the substantive issue, the Government will endeavour to ensure
that all the social, educational and medical supports are there for people who might have
suffered as a consequence of the vaccine. However, the Deputy should bear it in mind that the
individuals in nearly half of the cases that have been identified, or certainly a large minority,
never had the flu jab. They are owed a duty of care, too.

                                  Cancer Screening Programme
  3. Deputy John Halligan asked the Minister for Health if he will provide funding for a
national screening programme for prostate cancer involving a simple examination and a PSA
blood test which a prostate cancer charity recently described as the first line of defence against
the disease; and if he will make a statement on the matter. [26436/11]

  Deputy James Reilly: International evidence does not support the introduction of a popu-
lation-based screening programme for prostate cancer at this time. The Department and the
HSE are keeping the emerging international evidence under review, including the results of
randomised trials that are being conducted internationally.
   However, I am pleased that Deputy Halligan has raised the issue and the recent publicity on
prostate cancer is welcome. I am pleased to advise that rapid access prostate cancer diagnostic
clinics are now operational in six of the eight designated cancer centres. Two further clinics are
due to open later this year. Patients who are judged to be at higher risk of prostate cancer,
based on agreed high-risk criteria, are being fast tracked directly to these clinics. These patients
will have a definitive diagnosis established within two weeks of referral and, if cancer is con-
firmed, they will have immediate access to a multidisciplinary specialist cancer consultation
regarding appropriate management. I encourage any man who has concerns in this regard to
contact his GP for referral, where that is deemed appropriate.

  Deputy John Halligan: I am disappointed, to a degree, by the Minister’s answer. The statistics
show that well over 2,500 men in Ireland are diagnosed with prostate cancer every year, with
deaths reaching well over 550 per year. Prostate cancer has become the most common male
cancer in Irish men, one in 12 of whom will develop it. There is extensive publicity about breast
cancer, but incredibly, the risk of a man getting prostate cancer is only 2% lower. Those are
significant statistics. With the ageing population, it is predicted that there will be a 275%
increase in prostate cancer by 2020. The statistics also show that early detection is crucial. More
than 69% of men who have not shown any signs of prostate cancer, but in whom it is detected
by the test, will survive. The prostate cancer charity recently estimated that two thirds of men
who are at risk of prostate cancer do not know that the simple blood test is available. Is there
funding for national screening and a national information programme? Many men are not even
aware of the availability of the simple PSA blood test.
                                                 803
                   Priority             28 September 2011.           Questions


  Deputy James Reilly: I have to accept what the medical experts tell me and they say at this
moment in time, particularly when we have to make hard choices about where the limited
resources we have are spent, decisions and responses must be informed. On many occasions
since I entered office, I said our policy would be evidence-based and so it will be.
   The second part of the Deputy’s question related to funding for charity to raise awareness
of the possible symptoms. I have no issue with that and I will discuss it with the Deputy. There
is little sense, however, if I am left with a choice between colorectal cancer screening and
prostate cancer screening and there is no international evidence to support the latter and there
is ample evidence to support the former, in doing other than what I am advised by the range
of experts the Department has access to internationally.

  Deputy John Halligan: I accept the six fast-track clinics that have been chosen but those are
for people who have already been diagnosed with prostate cancer who can be fast-tracked for
treatment. Surely when we are talking about saving money, all the international evidence shows
that early intervention saves lives and reduces costs. To go for a simple PSA test without a
medical examination costs €20. I have spoken to doctors about this and they say it should be
done free because it would not cost the health service a huge amount. Why do people not pay
for it? In the current climate, and given that many men are now even aware of it, it would be
a small cost to the health budget to roll out national screening, which would inevitably save
money for people who would be diagnosed with cancer having to be treated. The 2,500 men
who have to be treated each year would be substantially reduced, as has been shown in many
countries. This does not make economic sense.

  Deputy James Reilly: I do not want to get into a debate on the sensitivities of the prostate
specific antigen blood test, which is not 100% infallible and I accept the Deputy is passionate
about this and he is trying to save lives and that is the business of my Department as well. In
reality, however, it happens that patients who do not have symptoms are picked up in examin-
ations for all conditions. That does not mean that by providing a hugely expensive screening
programme, the sort of results the Deputy wants to see will happen in terms of picking up
cases early, not having high false positives and worrying people unnecessarily. There is a raft
of criteria that medical experts can present. The best thing I can do is speak to the Deputy
directly about the existing medical evidence behind the rationale for this decision. If he still
has issues I am happy for him to come back to the House and have a further debate.

                                       Industrial Action
  4. Deputy Billy Kelleher asked the Minister for Health his views on the strike at the Mid
Western Regional Hospital, Limerick undertaken by the International Nurses and Midwives
Organisation and the concerns about cutbacks and staff shortages expressed by their members;
and if he will make a statement on the matter. [26438/11]

  Deputy James Reilly: I do not believe that any useful purpose is served by this industrial
action. I am concerned that a further stoppage has happened today and would urge the INMO
to reflect on the impact which these actions have on the general public.
   The shared focus of all those working in the health service should be on safeguarding front-
line care in the face of the continuing very serious economic situation. The Mid-Western
Regional Hospital Limerick was €16.2 million over budget at the end of July 2011 and has had
to take measures to reduce its spending including a prohibition on staff overtime and on the
hiring of agency staff.
 In recent months I have established the special delivery unit under the leadership of Dr.
Martin Connor. The SDU is working to unblock access to acute services by improving the flow
                                               804
                    Priority             28 September 2011.            Questions


of patients through the system. It is focusing initially on emergency departments and will be
working to support hospitals in addressing excessive waiting times for admission to hospital. I
look forward to the co-operation of all health service staff with this very important initiative,
which is aimed at ensuring that patients receive a safe and appropriate service when they
present at our acute hospitals.
  I find it hard to reconcile the fact that the nursing unions are taking this industrial action
given that they are parties to the public service agreement, particularly in view of the fact that
the agreement focuses on the need to deliver services in the changed circumstances in which
we now find ourselves and with co-operation between management and unions.
  Last night the LRC put a series of measures to the unions to resolve this issue and those
measures were refused. It appears, rightly or wrongly, that they will not yield on this issue until
the moratorium is lifted and a cap put on the number of beds that may be put up in a hospital.
I might be wrong on that but it is the message I am getting back. That is not possible.
   As in all areas of the economy and the public service we must focus on solutions, including
efficiency, flexibility and innovative working, to allow us to maintain our public services in the
face of the economic crisis.

   Deputy Billy Kelleher: Does the Minister agree the overriding concern of those involved in
the industrial dispute in the mid-west is patient safety? This morning there were six people on
trolleys in the accident and emergency unit but there were 41 in an overflow ward. There is a
massaging of figures for people on trolleys awaiting proper treatment. The nurses involved in
the industrial dispute are clear that they are very concerned about patient safety and that there
is gross overcrowding in accident and emergency wards that compromises their ability to deliver
proper clinical supports and services to patients who present in the accident and emergency
department. Does the Minister agree their overriding concern is patient safety?
   The special delivery unit did not carry out a “dawn raid” but informed management in
advance that it would inspect the hospital to see how it could assist with overcrowding in the
accident and emergency ward. When it arrived at the hospital it found very few people on
trolleys but there is now an overflow ward where 41 people are awaiting admission. Clearly
the special delivery unit should not inform hospitals of visits in advance so it can see at first
hand the concerns being expressed by the INMO members.

   Deputy James Reilly: As a doctor and as Minister I fail to see how patient safety is improved
by taking industrial action. In my view that endangers the very patients we are seeking to
protect. I accept the right of the INMO to highlight the situation but it must acknowledge we
are acutely aware of the situation. The special delivery unit was down there last week, I have
its report and I am studying its recommendations before I pass it on to the HSE for imple-
mentation.
  This action is unsafe, unsound and unwarranted. I have asked the Department to contact the
HSE with a view to contacting the Croke Park agreement implementation body because I
believe this is ultra vires and outside the agreement.

  Deputy Billy Kelleher: Is the Minister clearly stating the action by the INMO in the mid-
west puts patient safety at risk and increases the dangers the INMO has highlighted in the
accident and emergency ward and is further exacerbating the problem, threatening the lives of
patients attending?

  Deputy James Reilly: I fail to see how this improves the situation and in my view this could
lead to more danger for patients, not less.
                                                805
                    Priority              28 September 2011.            Questions


                                    Hospital Accommodation
  5. Deputy Caoimhghín Ó Caoláin asked the Minister for Health if he will commence a
programme of reopening public hospital beds in view of the research by the Irish Nurses and
Midwives Organisation showing that more than 1,900 public hospital beds are currently
closed [26440/11]

  Deputy James Reilly: There are some 13,000 acute hospital beds, including some 1,800 day
beds, in the Irish public acute hospital system. The exact number available for use at any one
time varies according to a number of factors, including planned levels of activity, refurbishment
and infection control.
  Beds are also closed to control expenditure because, like all other public agencies, hospitals
have to operate within budget.
   As I have already outlined for the House and as I will outline again, we started this year
               with a hospital overrun of €70 million. In the first three months of this year,
3 o’clock      under the previous Government, we had a wild overrun of activity, whether by
               design or through negligence. Because of the economic situation we must, effec-
tively, take €1 billion out of the budget. We must also maintain a service that is safe for patients
and implement the reform programme.
  The criteria for counting bed closures and methods vary between hospitals. Instead of having
a debate about the exact number of beds that are judged to be open or closed at any one time,
we must concentrate on getting the best possible services for patients from the budgets available
to us.
  This means we need to focus on how beds are used, on the throughput of patients, on
reducing length of stay to international norms and on having as many procedures as possible
carried out as day cases rather than inpatient work.
   The work of the special delivery unit, together with implementation of the clinical care
programmes in the HSE, will help to improve the efficiency of our hospitals, allowing us to
treat as many patients as possible within budget.
  I believe that pursuing efficiencies through these means will be a far more productive
approach than debating the number of beds open or closed at any one time.

   Deputy Caoimhghín Ó Caoláin: Shortly after he came to office, the Minister indicated, in his
address to the INMO conference, that he accepted the INMO trolley-watch figures. Does he
also accept the INMO figures for closed hospital beds? It is strange that he does not want to
talk about bed closures because he talked about them ad nauseam when he was on the Oppo-
sition benches. At the last count the INMO figure was 1,847.
  The Minister is repeating the mantra of his predecessor about the fluctuation of beds at any
one time. We heard all this before. The Minister himself, when in opposition, described it as a
dodge. It was a dodge then and it is dodge now.
   Of course we must have greater efficiency. The Minister must also accept, as he repeatedly
stated when in opposition, that too many beds have been taken out of the public hospital
system and that those closures must stop. Indeed, a significant number must now be reversed.
   What about the closures of the very beds that he himself says are the most needed for
efficiency? What about beds for day cases and short stays? Does the Minister agree that more
beds closed means more patients suffering needlessly on trolleys and more patients waiting at
home in pain due to cancelled operations? Does the Minister agree with that statement and
                                                 806
                    Priority             28 September 2011.            Questions


will he commence a public bed re-opening programme as an essential part of addressing the
current crisis in accident and emergency departments and acute hospitals across the State?

  Deputy James Reilly: I will start with the Deputy’s last point, lest I forget it. I do not agree
that more beds closed means more patients on trolleys and more people waiting. I do agree
with something I said myself when in opposition: “Not another bob more into health until the
black hole is found and fixed.”
  We are in the process of doing that and of changing how hospitals operate and how and
where operations are carried out. We are placing more emphasis on day surgery. People are
being admitted into hospital the night before procedures when they do not need to be. They
could be admitted on the day. Five beds have been freed up in the Mid-Western Regional
Hospital, Dooradoyle, as a consequence of this happening.
   Deputy Ó Caoláin asked if I agreed with the INMO trolley-watch figures and I said I did. I
did not say I agreed with the bed closure figures. No joint study on bed closures between the
INMO and my Department has taken place. While I do not utterly reject the INMO numbers
I cannot accept them because I have not had advice from my own Department.
  There are great inefficiencies in our system and much work is being done inappropriately.
The basic principle of what we are trying to achieve is that the patient will be treated at the
lowest level of complexity that is safe, timely and efficient and as near to home as possible.
That remains the principle. We do not want patients going to see GPs when nurses could see
them or going to see consultants when GPs could see them. We do not want operations being
carried out in large hospitals, which should be reserved for more serious complex cases, when
those procedures could be carried out safely nearer to the patient’s home in smaller hospitals
around the country.

  Deputy Caoimhghín Ó Caoláin: The Minister is good at citing what he said previously.

  Deputy James Reilly: The Deputy is pretty good at it himself.

   Deputy Caoimhghín Ó Caoláin: What the Minister has just indicated he does not agree with
is what he said himself on a previous occasion. I quote from a statement of May 2010:

    More beds closed means more patients suffering needlessly on trolleys and more patients
  waiting at home in pain due to cancelled operations.

Who said that? The Minister said it when 33 beds were closed on a five-day ward in Beaumont
Hospital in Dublin.
   The Minister has played a game of double standards. He championed various positions as
Opposition health spokesperson but since taking office he has regurgitated what the previous
Minister said. He now employs exactly the same language in parliamentary questions. He prom-
ised to take up the issues of responsibility and accountability. The parliamentary replies he
gives me and other Deputies when we raise matters with him are verbatim what the previous
Minister, former Deputy Harney, used to give.
   Will the Minister not recognise, as he has said previously, that we need to see the restoration
of some of the beds that have been closed and which are contributing to a calamitous situation
in hospitals and accident and emergency departments across the State?

  Deputy James Reilly: The nature of the Deputy’s question has changed somewhat.

  Deputy Caoimhghín Ó Caoláin: Not at all. The only thing that has changed is the Mini-
ster’s response.
                                                807
                    Other               28 September 2011.            Questions.


  Deputy James Reilly: I would always be prepared to review the situation in an individual
hospital. In the past a blunt instrument was used, with 10% of capacity being taken out across
all hospitals with no regard to where they were within their own capacity, so that some hospitals
suffered more than others. An analysis of that is taking place at present to see where there is
a capacity issue, as opposed to a perceived capacity issue. I am not yet in a position to report
on that.
   Six months after the formation of the Government, there is a real prospect of getting real-
time information from our emergency departments and on inpatient waiting and financial
situations. We will know within two weeks what the financial situation of a hospital is, what its
spend is and if it is going off budget and out of control.
  We are also seeking, through the clinical programmes, to improve the delivery of service
within hospitals, making it more appropriate and making sure patients are treated at the appro-
priate level and in the appropriate setting.
  I do not accept the Deputy’s contention that the Government is the same as the previous
one or that I am the same as the previous Minister. I have a very different approach. Within
months the Deputy will see greater improvement than is currently the case.

  Deputy Caoimhghín Ó Caoláin: It is not in evidence as we speak.

                                       Other Questions

                                           ————

                              General Medical Services Contracts
  6. Deputy Brian Stanley asked the Minister for Health his plans to reform the consultants’
contract and the general practitioner contract; and if he will make a statement on the
matter. [26389/11]

  Deputy James Reilly: The programme for Government provides for the introduction of a
new GMS contract with general practitioners, with an increased emphasis on the management
of chronic conditions, such as diabetes and cardiovascular conditions. I envisage that the new
contract will also focus on prevention and will include a requirement for GPs to provide care
as part of integrated multidisciplinary primary care teams. My colleague, Deputy Shortall, the
Minister of State at my Department, is very much involved in this. She will answer a question
on this subject later and will give the House greater detail.
  The preparation of a revised contract will be advanced by my Department and Health Service
Executive officials. There will be a full consultation process with relevant stakeholders.
   New contractual arrangements for medical consultants were agreed with their representative
organisations, the IHCA and the IMO, in 2008, following more than four years of protracted
and detailed negotiations. Currently 2,087 consultants hold the 2008 contract, while approxi-
mately 396 consultants continue to work under the 1997 contract. The 2008 contract provides
for consultants to work as part of a team over an extended working day of 8 a.m. to 8 p.m., an
increase in the length of the working week and also structured weekend work. It also includes
new private practice provisions ranging from a total prohibition on such practice to an upper
limit of 20% for newly appointed consultants and up to 30% for consultants who previously
held the 1997 contract.
  The successful implementation of the consultant contract 2008 continues to be a priority for
my Department and the HSE. The executive has been focusing, in particular, on provisions
aimed at maximising consultant availability to public patients. In due course the contract will
                                               808
                     Other               28 September 2011.            Questions.


be subject to review in the context of reform of the health services as set out in the programme
for Government and changes to the model for delivery of services.

  Deputy Caoimhghín Ó Caoláin: The Minister will be aware from his position as Opposition
spokesperson and in his previous professional capacity that Sinn Féin and I have long advocated
addressing the privileged position of consultants in the health services. This is not a response
to the current economic difficulties post the Celtic tiger era; it long predates all of that.
   Does the Minister accept, as I expect he will, that the basis of any reform in so far as
consultants are concerned must be best outcomes for patients and equal access for all patients
to best care? Steps must be taken to address what can only be described as the obscene level
of remuneration which some consultants enjoy under the current contract and the aberrations
that have recently come to light, namely, that consultants are entitled to take off, with full pay,
their final year of service prior to retirement or, more bizarre, to appoint themselves as their
own locum and be paid double for a year’s work. These are absolute obscenities. What steps
is the Minister taking to address those particular unacceptable anomalies with the current
arrangement?

  Deputy James Reilly: The HSE has been clear in respect of its pursuit of consultants who
are in breach of their contracts in terms of the 80%-20% split. A number of consultants will
be prevented from engaging in private practice, which means, not that they will not be able to
see private patients but that they will not be able to charge them. I am given to understand
this may be challenged in the courts by the HCA. So be it. Those in the next tranche who are
found to be transgressing will also be pursued. It is not acceptable to me or the Government
that a small number of our 2,500 consultants are behaving in an utterly unacceptable manner
and are not alone being unfair to patients but are casting a slur on the remainder of their
colleagues.
 The Deputy can be assured that my Department and the HSE will not yield on this matter.
We are going to pursue it.

  Deputy Caoimhghín Ó Caoláin: I am aware of the Minister’s intent in that regard, having
received a written response to a parliamentary question from him in which it was stated that
two consultants are currently being targeted and that 40 others will be pursued. It was also
stated in the reply that the Minister is serious in this regard, for which I commend him.
However, I specifically asked the Minister about the anomalies in respect of the entitlement of
consultants to take off, with pay, the final year of service prior to retirement or to employ
themselves as locums and be paid twice for the same year’s work.
   The Minister’s reply to me on 14 September contained a tabular statement outlining the
various levels to which consultants’ pay could drop and the impact of this on the overall health
budget. It would appear that if consultants’ pay was capped at €150,000, the coffers of the
Department and HSE would be significantly improved by tens of millions of euro. Is the Mini-
ster actively working towards a new contract for consultants and general practitioners? Will he
indicate to the House today if engagement with the representative bodies is already under way
and that progress has been made on such a new contract?

  Deputy James Reilly: The Deputy, like me, is aware of the law of the land, the ability of
legislation to be retrospective and the rights of people under contracts. The law is not the only
road open to us in this regard. There can be negotiation and are broader matters that can be
brought to the table that might help people see things in a different light.
  On the Deputy’s specific point, a number of consultants have extraordinary arrangements in
place, with which I do not agree and will seek to change. The Deputy and I are law makers,
                                                809
                     Other              28 September 2011.            Questions.

  [Deputy James Reilly.]
not law breakers, and we must abide by the law. Within that framework, we will do everything
we can to reduce the impact on our coffers.
   I am interested in achieving from consultants, the vast bulk of whom are hardworking and
give great public service, the flexibility around working hours and days that will provide us
with the productivity that will deliver the service to our patients, reduce waiting times on
trolleys in hospitals and reduce the duration of stay within hospitals. That is what I want to
achieve. If I can achieve that, well and good. If consultants do not wish to co-operate, there
will be a heavy price to pay.

                                    Hospital Waiting Lists
  7. Deputy Billy Kelleher asked the Minister for Health if his attention has been drawn to
the emerging difficulties with the special delivery unit in Northern Ireland and rising waiting
times there; in view of same, is he confident in the special delivery unit’s capacity to reduce
waiting times here [26254/11]

  Deputy James Reilly: Reducing patient waiting times is a central part of the Government’s
commitment to increase equity in the Irish health system. One of my first priorities, therefore,
was to establish the special delivery unit in June under the leadership of Dr. Martin Connor.
   I know that the SDU in Northern Ireland — in respect of which Deputy Kelleher raised
issues yesterday, to which I was unable to reply — was very successful when established in
reducing waiting times. I do not propose to enter into an analysis of the Northern Ireland
health system or to comment on the issues there other than to say that there were other issues
at play which may not have been addressed. There is a series of reasons the initial, impressive
effect of the special delivery unit was not sustained. The Government here is engaged in thor-
ough reform of our health service. As such, what occurred in Northern Ireland will not pertain
here. Underlying reforms that did not take place in other jurisdictions will happen here.
  In my view, we need to embed performance management in the system to sustain shorter
waiting times. That is critical. A once-off improvement will not work. The change has to be
sustained and ongoing. Regardless of how well one improves, one must always strive to do
better and must always have assistance to help one do better. As I stated earlier, to do that,
one needs real time information.
   As the Deputy knows, this Government has an ambitious programme of reform which
includes institutional reforms and economic incentives which will make health care providers
truly accountable for delivering patient centred care. I can assure the Deputy that I have the
commitment and determination to deliver this agenda. I am very impressed with the work
already begun by Dr. Connor. Our problems did not arise overnight and will take time to
resolve but they are being tackled in a systematic and relentless fashion through the SDU. I
do not minimise the scale of the task before us but I am very confident that the special delivery
unit will provide a real performance management function for the Irish hospital system and
will drive down waiting times.

  Deputy Billy Kelleher: I wish Dr. Connor, head of the special delivery unit, well in trying to
address the difficulties in the system. However, while the special delivery unit, in the context
of Northern Ireland, did initially create a positive momentum that has, in recent times, slowed
dramatically for a number of reasons. In putting the emphasis on increasing capacity in the
public health system, the use of private care was reduced. This appears to be the reason for
the increase in the number of patients waiting more than three months to be seen. The figure
in respect of people in Northern Ireland waiting more than three months to be seen increased
                                               810
                     Other               28 September 2011.           Questions.


from 17,000 in 2009 to 26,000 in 2010. This means, in the context of the Republic, that we have
performed better than has Northern Ireland, even with the establishment of the so-called
special delivery unit.
  Some €29 million was taken from the National Treatment Purchase Fund budget to assist in
the establishment of the special delivery unit in the Republic. How will this shortfall of funding
be addressed in the context of private care in the delivery of outcomes?

  Deputy James Reilly: There is no obligation on the Government to provide funding for
private health care or private hospitals. The National Treatment Purchase Fund was established
under Deputy Kelleher’s Government to use the private sector as a stream for procedures. I
never agreed with the ideology that only 10% of that work could be done in public hospitals.
The Government is changing that. We will use the funding from the NTPF to get the best value
for the taxpayer and the patient.
  That does not mean just purchasing procedures. It means employing key personnel in differ-
ent areas to increase productivity or purchasing from the public system on a money-follows-
the-patient basis, as we have already done with orthopaedic procedures. In such a scenario,
when a hospital puts in the bill for a patient, the Department will pay it. If it does not perform
the procedure, the money will be docked and diverted elsewhere in the system where it can
deliver.

  An Leas-Cheann Comhairle: We must move on.

  Deputy James Reilly: This is about bringing accountability to the system. There is little point
in having transparency if there is no accountability to go with it.

  Deputy Billy Kelleher: Will the Minister accept that in trying to increase capacity, 1,900 beds
are actually closed in the public health system, as the previous question from Deputy Ó Caoláin
showed? People who need treatment will need beds but the capacity is not available. With a
reduction of €29 million in the NTPF, how will additional capacity be achieved to deal with
the immediate issue of people waiting over three months for treatments?

  Deputy James Reilly: Earlier this year, I sent a message to hospitals to inform them no
patient should be left waiting longer than 12 months for treatment. A patient left for longer
than 12 months for an inpatient procedure in a hospital will be treated elsewhere while the
hospital in question will be deducted the quantum required to treat the patient. We must wait
and see what this yields by 1 January 2012. That is what I mean by transparency and con-
sequence. There will be consequences for hospitals that do not perform.
  Regarding the €29 million alluded to by the Deputy, much of that may still end up in some
private hospitals or not. It is being used in different ways to achieve the best outcome. Some
of our public hospitals are extremely efficient at delivering care and more cost-effective than
the private sector. The revers situation is also the case.

  Deputy Caoimhghín Ó Caoláin: While one would wish the health service situation in the
North to be better than it is, at least we are able to assess it from the data published by the
health Department in the Six Counties. Is the Minister aware the Health Service Executive
decided to suppress the publication of details on the length of time patients must wait for access
to given services in this jurisdiction? This was reported in June by the website, www.ratemyhos-
pital.ie, when the HSE admitted it suppressed the publication of vital information on how long
average patients have to wait for outpatient appointments in public hospitals.

  An Leas-Cheann Comhairle: Thank you, Deputy. I must call the Minister.
                                                811
                     Other                28 September 2011.             Questions.


  Deputy Caoimhghín Ó Caoláin: We are not able to make comparisons here because the HSE
does not want the information to be made available.

  Deputy James Reilly: The Deputy has made a statement over which I cannot stand. I know
there is not sufficient information around outpatients due to double-counting and other prob-
lems. These are, however, being addressed.

 Deputy Caoimhghín Ó Caoláin: I do not want the Minister to stand over my statement. I
want him to have these reversed.

  Deputy James Reilly: I am sure there are many things that Deputy Ó Caoláin may want but
not all of them are achievable or desirable even.
  We have acknowledged we are still gathering outpatient figures while we have got more
information on inpatients and real-time waiting in accident and emergency departments. I
cannot wave a magic wand and get it all done in one go. Six months into our tenure, however,
we have made major strides in information gathering which allows us to analyse and plan how
to tackle problems.
   The spikes that occur in numbers at Limerick regional hospital have nothing to do with the
number of attendees and admissions but other factors at the hospital. We cannot address any
of these issues because they are not funding issues. We need co-operation from all members
of staff to address these which I hope we will get from the Irish Nurses and Midwives Organis-
ation, INMO, and others.

  Deputy Caoimhghín Ó Caoláin: The spike is also attributable to the closure of certain
hospital services at Ennis and Nenagh hospitals and the displacement of countless numbers
of patients.

                                       Health Service Staff
  8. Deputy Catherine Murphy asked the Minister for Health in the context of the public
service redundancy early retirement scheme, is there a forward planning system in place to
ensure that front-line services will not be adversely affected; if a risk assessment is being carried
out in each public hospital; and if he will make a statement on the matter. [26204/11]

  Deputy James Reilly: There is currently no voluntary redundancy or early retirement
schemes available in the public service. However, the grace period during which the calculation
of public service pensions is unaffected by the pay reductions applied under the Financial
Emergency Measures in the Public Interest (No. 2) Act, 2009, will expire on 29 February 2012.
  In this context, a three-month minimum notice period for retirement was introduced for the
public service in July this year. The purpose of this minimum notice period is to allow manage-
ment to have advance knowledge of the number of staff planning to retire in a particular service
or area and to plan accordingly. I have asked the HSE, as a matter of urgency, to carry out an
assessment of the likely impact of retirements in the coming months, based on the three
months’ notice period, queries to superannuation departments and the age profile of staff. I
have also requested the executive to identify particular pressure points as a priority and to
develop appropriate measures to deal with significant departures in a given service or area. My
Department will work with the HSE to ensure, as the position becomes clearer over the coming
weeks and in the event that significant numbers of staff intend to retire, plans are developed
to protect front-line services as far as possible.
                                                 812
                     Other               28 September 2011.           Questions.


  Deputy Catherine Murphy: Many experienced health service staff are likely to take early
retirement which will have an impact on service provision. Can the Minister refuse applications
for early retirement? Can the retirement scheme be devised in such a way to ensure it does
not affect front-line health staff? Several months ago, there was much debate about raising the
qualification age for the State pension to 67 years. With this early retirement scheme, many
people will end up retiring earlier than 65 years. We could also end up with agency staff being
hired, a much more expensive way of providing staff. This scheme does not seem to be well
thought out.
  Last night, a news report showed how an ambulance service could not be provided at one
hospital because of the public service recruitment embargo. This impacted on the hospital’s
ability to take in cases, meaning that not just front-line staff are affected by the embargo. I am
not sure there is a plan to this retirement scheme.

  An Leas-Cheann Comhairle: I must call the Minister, Deputy.

  Deputy James Reilly: I have similar concerns and have asked the HSE to put in place a plan
to examine possible areas of greatest impact caused by many taking early retirement due to
the pension reductions that will apply after February 2012. The executive will also need to
examine age profiles in certain health services to identify greater areas of entitlement to retire
and the number of inquiries about retiring.
  The Deputy is correct that the employment of agency staff is horrendously expensive and
one which we seek to avoid at all costs. With a proper plan after the ongoing analysis, we will
be able to accommodate for the likelihood of deficits in services in particular areas. I accept
many health service staff with great experience may consider taking up early retirement. Per-
haps when they reflect on where the country is at, they may stay on to help out and continue
to serve this nation and its ongoing recovery.

   Deputy Catherine Murphy: It is not exclusively front line staff who need to be taken into
account. One does not save money if a hospital porter who leaves needs to be replaced. We
need a broad understanding of the impact of each individual who leaves a front line service
like the health service, particularly in acute hospitals. This was the point of my question.

  Deputy James Reilly: I accept the Deputy’s point that it is not always the obvious people
leaving who have an impact in terms of real savings, but this is where flexibility comes into the
equation. People may be leaving in an area where we can ill afford their loss, yet others from
areas where they are not as necessary could replace them. We could still allow people to
exercise their right to leave.

  An Leas-Cheann Comhairle: I will allow Deputy Ó Caoláin in briefly, as we are almost out
of time.

   Deputy Caoimhghín Ó Caoláin: Given early retirements and so on, does the Minister not
accept that the crisis in our health service can never be properly addressed until the measures
include a lifting of the recruitment embargo? This is essential, given that many front line posi-
tions are not being filled. Only a moment ago, the Minister referred to the Mid-Western
Regional Hospital in Limerick. Is he aware that the Irish Nurses and Midwives Organisation,
INMO, stated today that, due to the moratorium on recruitment and the considerable financial
deficit in which the hospital finds itself, local HSE management was not in a position to address
immediately, even on an interim basis of five to six weeks, the patient safety concerns of the
INMO’s members? The Minister needs to examine the INMO’s full statement. What steps will
he take to address the INMO’s service delivery concerns?
                                                813
                     Other                28 September 2011.             Questions.


   Deputy James Reilly: We were always clear as regards the moratorium, in that it would
remain in place, be examined more flexibly and undergo changes where a real need existed.
Each time there is a crisis in our hospitals, the only suggestion the INMO makes to us is for
more nurses and beds, but that sort of thinking is from yesterday and another country. Ireland
is in a different place and does not have the money. We must pursue greater flexibility. Some
450,000 people are unemployed. We must seek to work in a different way to get us to where we
want to be without relying on what used to be the obvious solutions when money was plentiful.
   During the past decade, Ireland was awash with money, yet the health services were still a
mess. It is not just a question of money or beds. It is a question of how we work and use our
facilities. It is clear that the capacity of our system is not being fully utilised. We need a change
in work practices. I do not expect the likes of the Irish Hospital Consultants Association,
IHCA, the Irish Medical Organisation, IMO, and the INMO to roll over and have their tumm-
ies tickled, but they had better look around, see the hardships people are enduring, remember
that they are in the public service and that we have a duty of care to our citizens and act
accordingly.

  Deputy Caoimhghín Ó Caoláin: Absolutely, but front line staff and beds form a critical part
of any solution.

                                         Health Insurance
  9. Deputy Sandra McLellan asked the Minister for Health if he will provide an update on
the current state of preparation regarding his plans for universal health insurance [26387/11]

  Deputy James Reilly: The Government is embarking on a major programme of reform of
the health system. The aim is to deliver a single-tier health service supported by universal
health insurance to ensure equal access to care based on need, not income. There are a number
of important stepping stones along the way, each of which will play a critical role in improving
our health service in advance of the introduction of universal health insurance.
  A key immediate priority was the establishment in June of the special delivery unit, SDU,
under the leadership of Dr. Martin Connor to drive down waiting times for patients. A great
deal of work has already been undertaken in this regard. The resources of the National Treat-
ment Purchase Fund, NTPF, will be refocused to align with the work of the SDU, allowing for
a progressive improvement in the performance of the nation’s hospitals.
  A further fundamental element in the reform process involves significant strengthening of
primary care services to deliver universal primary care with the removal of cost as a barrier to
access for patients. The phased implementation programme will be overseen by me as the
Minister for Health and the Minister of State with responsibility for primary care, Deputy
Shortall, assisted by a project team of officials from my Department and the HSE.
   Reform of the funding system for hospital care will also be implemented. A money-follows-
the-patient funding mechanism and a purchaser-provider split, whereby hospitals will be estab-
lished as independent, not-for-profit trusts, will be implemented. To achieve this, a number of
initiatives are already under way, including a patient level costing project and a pilot initiative
in respect of prospective funding of certain elective orthopaedic procedures at selected sites. I
intend to establish an implementation group on universal health insurance, details of which are
being finalised and will be announced in due course.

  Deputy Caoimhghín Ó Caoláin: The Government promised a White paper on universal
health insurance “early in its term”. That was the phrase used when this proposal was first
mooted. When will the White Paper be published? To be specific, will that be before the end
                                                 814
                     Other               28 September 2011.           Questions.


of this year? Within the next three odd months, when can we expect legislation to be published?
Will it be one item of legislation or will it be a number of items? Has the Minister any idea of
how this matter will present in the time ahead? Will the White Paper include financial projec-
tions? This is an important question. Are these items in preparation and will this entire matter
be taken into account in the spending review that I presume is under way in the Minister’s
Department in advance of early December’s budget? Is it as immediate and presenting as that?

  Deputy James Reilly: We made it clear during and since the election campaign that complet-
ing this development would take two terms of Government. The idea that we will have a White
Paper before Christmas is a non-runner, as that will certainly not be the case. The Deputy’s
questions were not unreasonable, but these measures will not be delivered within the timeframe
to which he alluded. They are a number of important stepping stones along the way. We must
build a proper primary care structure. We do not have sufficient primary care centres or a new
general practitioner, GP, contract. My colleague, the Minister of State, Deputy Shortall, will
oversee work on the latter. We need to move the care of the chronically ill from the hospitals
back into the community. The contract needs to reflect this. Equally, we need to introduce a
money-follows-the-patient system of budgeting for our hospitals so that we can have greater
transparency and accountability.

  Deputy Caoimhghín Ó Caoláin: Into what does “two terms of Government” translate? Is it
two general election terms, per se? The Minister should be clear with the House.

  An Leas-Cheann Comhairle: That is not a question on health.

 Deputy Caoimhghín Ó Caoláin: It is a reasonable question and I am sure the Leas-Cheann
Comhairle is also anxious to get the answer.

  Deputy James Reilly: I would be delighted to answer.

  Deputy Caoimhghín Ó Caoláin: We will not have a White Paper Christmas in 2011, but
tell us——

  Deputy James Reilly: We might have a white Christmas.

  Deputy Caoimhghín Ó Caoláin: We may have one soon. What exactly is the Minister’s
expected timeframe for the publication of the White Paper on universal health insurance? How
will the legislation present? Will it be one or more items of legislation? Into what does “two
terms of Government” translate in the Minister’s mind?

 Deputy James Reilly: I am sure it might be three years in the Deputy’s mind. In mine, it
means ten years, but this does not mean that introducing these measures will take ten years.

  Deputy Caoimhghín Ó Caoláin: Some of us might not be here.

  Deputy James Reilly: I would love to be in a position to deliver full universal health insurance
by the end of this term, but I am a realist and a pragmatist and I know it will not be possible.
However, we will be well advanced along the road by the time of the next general election.
For this reason, I stated that a second term would be required to bed things in fully. It is too
early to say how many items of legislation will be required. This policy will be implemented
incrementally to ensure this development is done properly instead of rushing matters and caus-
ing problems down the road.
  We are committed to achieving this. For the first time ever, a political party has acknow-
ledged that bedding in a policy will take two terms. Generally speaking, it is not seen as a
                                                815
                     Other               28 September 2011.            Questions.

  [Deputy James Reilly.]
successful political tactic, but we are determined to make it happen because people deserve it.
As we have often done in the past, we are asking everyone to share the pain. We want to
ensure that, at the other end, everyone shares the gain.

  An Leas-Cheann Comhairle: I will briefly allow in Deputy Kelleher, as I want to move on
to Deputy Keating’s question.

   Deputy Billy Kelleher: One could also say that the Government is trying to kick the can so
far down the road because it knows that it will not be able to implement the political promises
it made as quickly as it claimed.

  Deputy Róisín Shortall: That is not true.

   Deputy Billy Kelleher: The Dutch model was very much espoused before the general elec-
tion. What is the position thereon in the context of the instructions to be given to the implemen-
tation body? Will there be clear guidelines given to the body about the type of universal health
insurance the Minister requires? Will it come back with proposals as to the type of health
insurance it recommends the Minister should consider and discuss in the context of a White
Paper, as referred to by Deputy Ó Caoláin? This is a fundamental change to how we go about
funding health services. Will there be a proper, open debate when the report is produced?

  Deputy James Reilly: Absolutely. I welcome debate and full discussion. One should bear in
mind it took the Dutch 20 years to achieve their model. We are learning from their mistakes
and what they did right. Therefore, we do not need to reinvent the wheel. None the less,
Ireland is a very different country, geographically, culturally and in terms of population. We
know there are many variations on the Dutch system that will not work here but that the core
of it can and will. We must ensure we have a properly regulated health insurance market before
we proceed. There are many aspects to be considered. There will be many full debates as the
various parts of the programme are put together so we can realise what I believe is a worthy
aspiration, namely, that everybody in the country will have access to medical care based on
need, not on what they can afford.

                                          Hospital Staff
   10. Deputy Robert Troy asked the Minister for Health the number of junior doctors recruited
from abroad; the total costs of accommodating them; and the time line for assessing them and
ensuring that they commence working [26271/11]

  11. Deputy Derek Keating asked the Minister for Health if he will outline the progress made
for filling vacant non-consultant doctors’ posts; the number of unfilled posts in all of the public
hospitals here in tabular form; and if he will make a statement on the matter. [26146/11]

  Deputy James Reilly: I propose to take Questions Nos. 10 and 11 together.
  I am pleased to advise the Deputies that excellent progress has been made in filling vacant
non-consultant hospital doctor, NCHD, posts over the past three months. I appreciate the co-
operation of the Deputies opposite in achieving this.
  The decision to recruit from abroad was made due to an ongoing vacancy level of approxi-
mately 150 NCHDs and a significant number of additional vacancies anticipated in July 2011
arising from the cyclical rotation of posts. Most doctors start their careers in July after their
exams, at which time the greatest rotations occur, although they also feature in December and
                                                816
                     Other               28 September 2011.           Questions.


January. In total, 259 NCHDs have been appointed from centralised recruitment and a further
226 doctors recruited in India and Pakistan for the July rotation.
   Given the shortage of NCHDs over the past two years, the HSE developed a range of
strategies and initiatives to maximise recruitment, including the development of a centralised
recruitment process for service or non-training posts. All vacant service NCHD posts were
advertised as “professional development posts” under two-year contracts to one of the four
HSE areas, with a minimum of six months in a regional centre and participation in a pro-
fessional development scheme under the relevant postgraduate training body. Notwithstanding
these measures, about 150 posts remained vacant and it was decided to undertake a recruitment
campaign in India and Pakistan.
  I introduced legislation on 8 July to amend the Medical Practitioners Act 2007 to facilitate
the registration of these doctors. The Act was amended to allow for the creation of a new
supervised division on the medical register. Registration in the supervised division means a
person is registered for a period not exceeding two years in an identified post approved by the
Medical Council and subject to supervision by the employer in line with criteria set down by
the council.
  No exam is perfect. In the old system, there were problems with staff who were found not
to be competent leaving a job in Donegal to take up a position in a different speciality in Cork.
The supervised division means this cannot happen with the doctors in question. It is a step
further in terms of protecting patients.
   The Medical Council introduced new rules for the supervised division and with co-operation
from the medical schools and postgraduate training bodies organised specialty-specific examin-
ations for the candidates. Two hundred and thirty-six candidates were successful and as of 28
September, 226 NCHDs have been registered on the supervised division, and more will be
registered in the coming days. As of 26 September, approximately ten NCHD posts of the 190
identified as vacant by the HSE before the recruitment of doctors from India and Pakistan
remain vacant. Approximately 60 doctors are expected to sit further assessments for the super-
vised division and if successful will be offered employment.
  To date, the HSE has spent €80,000 accommodating NCHDs recruited from India and Pakis-
tan. The HSE is allowing these doctors a modest weekly allowance in respect of accom-
modation, €100, and the provision of meals. It cannot be argued that these allowances are in
any way excessive.
   The doctors are making significant contributions to vacancies which existed in areas such as
anaesthetics, paediatrics, emergency medicine and general surgery, and are delivering a safe,
effective service to patients. In addition, they are reducing the HSE reliance on agency staff,
reducing overtime costs, improving the quality of the service and ensuring further compliance
with the European working time directive.

   Deputy Derek Keating: I thank the Minister. I ask my question fully aware that the Minister
is a mere six months in his new post and has inherited his difficulties. He is committed to his
tasks. It is heartening that, even within six months, progress has been made in this area. Can
the Minister assure the House that where there are unfilled doctors’ posts, priority will be given
to front-line services such as accident and emergency services and surgery?
  I am concerned about doctors who trained in our educational system, commenced their
medical internship and senior house officer post and who may be attracted to working in the
private sector. We may have a brain drain in this area. Will the Minister comment on this?
What can be done to assist in this area? I am grateful for the Minister’s response.
                                                817
                   Topical              28 September 2011.          Issue Matters


   Deputy Billy Kelleher: In the context of concerns I raised about doctors on the supervised
medical register when we discussed the medical practitioners legislation, we must ensure the
doctors are not regarded as yellow-pack doctors or doctors with lesser qualifications. This is
critical. If campaigns are required to prove they have the same competencies as others, so be
it. If they are not regarded as the same, inherent difficulties could arise.

  Deputy James Reilly: There is the old phrase, “belt-and-braces approach”. In more rural
areas, we say, “to be sure to be sure”. It is absolutely the case that the doctors are extremely
well screened and trained. They have been interviewed by the consultants in respect of langu-
age skills and ability and have gone through the documentation and examination processes. In
their places of work they have been monitored. I thank the doctors who have come to this
country and wish them well. I expect that when they leave to return to their own countries in
two years, they will do so with enhanced skills and knowledge which they can use when treating
their fellow countrymen.

  Written Answers follow Adjournment.

                                    Topical Issue Matters
   An Leas-Cheann Comhairle: I wish to advise the House of the following matters in respect
of which notice has been given under Standing Order 27A and the name of the Member in
each case: (1) Deputies Michael Healy-Rae and Pádraig Mac Lochlainn — the possible closure
of Garda stations; (2) Deputy Brian Stanley — the plans for the future status of Portlaoise
hospital; (3) Deputy Noel Harrington — the need to connect to the new Hibernia express cable
being laid from the United Kingdom to the USA; (4) Deputy Brendan Smith — the need to
retain Dún Uí Néill Barracks, Cavan; (5) Deputy Denis Naughten — the need to reopen the
Roscommon urgent care centre; (6) Deputy Aengus Ó Snodaigh — the need to discuss the
Health Service Executive’s decision to impose a 5% cut in funding to drugs projects in Dublin
mid-Leinster; (7) Deputy James Bannon — the need to designate Longford as the headquarters
of the Longford/Westmeath amalgamated vocational education committees; (8) Deputy Patrick
O’Donovan — the need to prioritise tackling childhood obesity; (9) Deputy Derek Keating —
the need to discuss the salary of the new chief executive officer of Allied Irish Banks; (10)
Deputy Mattie McGrath — the future of Kickham Barracks, Clonmel; (11) Deputy Dessie Ellis
— the need to discuss plans to transfer the role of administering rent supplement; (12) Deputy
Derek Nolan — the need to discuss the emergency department of University Hospital, Galway;
(13) Deputy Tony McLoughlin — the need to stimulate job creation measures in the Carrick-
on-Shannon area in view of the imminent shedding of jobs at Bank of America; (14) Deputy
Seán Conlan — the proposed reduction of opening hours of the minor injuries unit at
Monaghan General Hospital; (15) Deputy Pearse Doherty — the cost of the Anglo Irish Bank
and the Irish Nationwide promissory note to the taxpayer; (16) Deputy Mick Wallace — the
need to use NAMA-controlled housing units for the benefit of those on local authority housing
lists; (17) Deputy Richard Boyd Barrett — the overcrowding problems in hospitals and the
planned further downgrading of 24-hour accident and emergency departments; (18) Deputy
Charles Flanagan — the need to introduce a range of measures as an alternative to custodial
sentences in civil cases; (19) Deputy Catherine Murphy — the need to provide funding to
prevent the proposed closure of Teach Téarmainn; and (20) Deputy Joan Collins — the need
to guarantee funding in respect of refuges in County Kildare for those in need of protection
from domestic violence.
  The matters raised by Deputies Charles Flanagan, Harrington, Healy-Rae, Mac Lochlainn
and Ellis have been selected for discussion.
                                               818
                   Sentencing            28 September 2011.             Policy


                                     Topical Issue Debate

                                            ————

                                       Sentencing Policy
  Deputy Charles Flanagan: I thank the Office of the Ceann Comhairle for allowing me to
raise this most important issue, which has been highlighted once again by recent events. I refer
to the jailing and committing to prison of citizens and other residents in the State, many of
whom are taxpayers, for the non-payment of fines and civil debt, and in cases of contempt of
court. This process, about which there has been considerable discussion in the House over the
years, must be brought to an end. It is outdated, Victorian and inhumane. It is a relic of
bygone days on which we should look back with no pride. Charles Dickens’s father was sent
to Marshalsea Prison in the 19th century for the non-payment of a civil debt. At that time, the
debtors court existed and it features in most of Dickens’s novels. Regrettably, very little has
changed since then. It needs to be changed and challenged.
   As well as the inhumane treatment of persons by committing them to prison for not being
able to pay a civil debt or perhaps for being in contempt of a court order, the committal to
prison does nothing to remedy the problem. The cost factor should also be taken into consider-
ation, having regard to our overcrowded prisons and the fact that it costs more than €100,000
per year to keep a person in prison. The average time spent by those committed to prison for
failure to pay debt is approximately 30 days. The debt is not in any way purged and there is
no benefit to society or the individual in any way.
  This has been referred to in many expert reports in recent years, and I commend the work
of the free legal aid centres in this regard. I commend in particular the work of prison chaplains
and one whose work in this regard has been quite outstanding is Sr. Imelda Wickham, the co-
ordinator of the prison chaplains. She stated prison chaplains have consistently called for alter-
native ways of dealing with unpaid debts: “At a time when prisons are overcrowded it is vital
that alternatives be looked at. The penal system does not in any way improve the debt prob-
lem.” She is absolutely correct.

  Mr. Eoin Carroll, from the Jesuit Centre for Faith and Justice, is another expert in the field.
He describes it, quite rightly, as a moral issue. Often, the most vulnerable and voiceless
members of society, who during the boom years were encouraged to take out loans, are now
in prison due to their inability to pay back these loans. We imprison hundreds of debtors on
an annual basis at a massive cost and at a human cost also.

  Prison should be for dangerous criminals and people who are a threat to communities. It
should be for people who represent a threat to society. It should not be for people who cannot
pay a civil debt. How can we possibly justify the State taking someone from his or her family
home and lodging him or her in prison for an indefinite period of time at a cost to the taxpayer
for a debt that is due and owing to a bank, the leaders of which walk free having plunged our
country into severe economic crisis?

  I want to raise the matter of my constituent, Teresa Treacy, and I know the Minister of State
will not make reference to a particular case but this woman should be released and the State
should immediately set about facilitating mediation with the ESB. It is cruel, inhumane, wrong
and getting nowhere. This woman should not be in jail while criminals walk free. I urge the
Minister of State to take appropriate action.

                                                819
                   Sentencing            28 September 2011.             Policy


  Minister of State at the Department of Justice and Equality (Deputy Kathleen Lynch): The
Deputy will appreciate that I am not in a position to comment on any particular case that is
before the courts and that the comments I have to make are about policy in the law at present,
the recent changes that have been made and, in line with the programme for Government, the
examination that is taking place in my Department with a view to improving the operation of
the law where possible.
  The commitments in the programme for Government regarding the alternatives to custody
generally are that we will fully implement the Fines Act 2010 and extend the use of community
service orders. Where a member of the Judiciary is considering the imposition of a prison
sentence of one year or less, he or she will be required by legislation to consider first the
appropriateness of community service orders as an alternative to imprisonment. We will end
the practice of imprisoning people who cannot pay fines and debts and introduce a system
which takes a small amount of money from wages or social welfare by “attachment order” to
pay off a fine or debt over time, as an alternative to imprisonment for people who refuse to pay.
  At the outset, it may be important to establish that, in a civil matter, a court is asked to
adjudicate on a dispute between two or more parties. Such disputes can arise in cases of recov-
ery of debt, including maintenance debt, performance of a contract, trespass and interference
with property. These matters are determined by the courts on a daily basis. The court will
make its decision on the basis of the facts involved and the rights of the parties. Such rights
may be constitutional, statutory or common law rights or they may arise under the European
Convention on Human Rights.
   In deciding the matter, the court may order an appropriate remedy. This could involve pay-
ment of damages, restoration of the status quo or an injunction to either carry out an action or
to desist from an action. The court does not have the power in civil cases to impose a custodial
sentence as part of its remedy in favour of one of the parties. However, it is a critical feature
of our legal system that court judgments should be obeyed by those to whom they are directed.
If the person or persons concerned refuse to obey the order or implement the judgment of the
court, then the issue of a court sanction may well arise. The sanction may take the form of
imprisonment. Civil contempt in the context of such a refusal may lead the judge to order the
imprisonment of the party or parties until the contempt is purged, that is, until the party agrees
to implement or abide by the order. This imprisonment is not a punishment nor does it replace
the necessity to comply with the order of the court. This misunderstanding of the situation has
perhaps arisen most often in recent years in the context of actions by creditors to recover
debts owed.
  A particular concern in this regard was the very significant social requirement that mainten-
ance orders made by the court should be respected. New legislation has been introduced on
seeking to reduce the incidence of imprisonment with regard to non-payment of court orders
for debt and maintenance payments. While the Debtors Act (Ireland) 1872 abolished imprison-
ment for debt, it permits the imprisonment of debtors who have the means to pay but refuse
to or neglect to obey a court order in respect of the debt. However, the Enforcement of Court
Orders Acts 1926 to 2009 provide the District Court with jurisdiction to make instalment orders
where a debtor has defaulted on the debt. The court directs the debtor to pay off the sum
owed in fixed instalments over a set period. Where the debtor fails to comply with the terms
of the instalment order, the Acts set out the circumstances where a person may be imprisoned.
  Imprisonment only arises where a person fails to comply with the court order. The Civil Law
(Miscellaneous Provisions) Act 2011 introduced provisions to strengthen the existing provisions
in the law for enforcement of orders of the court to pay maintenance. The Act addresses
                                                820
                   Sentencing            28 September 2011.              Policy


difficulties which have arisen consequent on the judgment of the High Court in the McCanncase
of 2009 concerning the enforcement of orders for the recovery of civil debt.
  Additional information not given on the floor of the House
   The High Court found that the Enforcement of Court Orders Act 1940 lacked a number of
necessary safeguards in circumstances where a person is at risk of imprisonment. Following
this judgment, the Enforcement of Court Orders (Amendment) Act 2009 inserted a series of
amendments designed to protect debtors and impose obligations on the creditor. However, the
Act of 2009 created some difficulties regarding the payment of maintenance arrears by spouses
on foot of court orders. The Civil Law (Miscellaneous Provisions) Act 2011 imposes a new
regime whereby the law is based on the fact that the court has already deliberated on and
determined an appropriate level of maintenance, and if the debtor breaches this order without
a significant change in his or her circumstances, this breach will constitute a contempt of court.
   The majority of the Fines Act 2010 has been commenced. Section 14, which was commenced
last year, places an obligation on the court to take account of the defendant’s financial circum-
stances before a fine is imposed. The definition of “financial circumstances” is very wide and
includes, for example, the aggregate amount of the person’s liabilities to provide financially for
his or her family. It also includes the aggregate amount of moneys owed to the person, the
date they fall due for payment and the likelihood of their being paid. As a result of this
provision, no person can be sent to prison for default solely for the reason that he or she cannot
afford to pay a fine.
   Implementation work is continuing on two key sections of the Act. Section 15 provides for
the payment of fines by instalment. There are a number of practical and technical issues
required to commence this provision. As the House will appreciate, the current system of
payment allows for only a single payment in respect of each fine to be made within a specified
period, and this payment is recorded on the Courts Service IT system. In order to allow for a
fine to be paid by instalments over a year, or in certain circumstances longer, as the Act
provides, it is necessary for the IT system to be substantially modified to allow for the payment
of instalments and to ensure that such instalments are accurately recorded and tracked. The
Courts Service has put in place a structure to oversee the implementation of the necessary
modifications. I am informed that, assuming the necessary funding is available, it will take
approximately 12 months to complete the administrative and technical modifications required.
  Section 16 of the 2010 Act will require a judge, consequent on determining that a fine is to
be imposed, to make an order appointing an “approved person”, commonly referred to as a
receiver, to recover the fine in the event of default. Again, some IT enhancements will be
necessary in order to allow for the electronic transfer of recovery orders and data exchange
with the receivers. I am informed this work will take approximately six months to complete
and will be done concurrently to that mentioned above.
   The Fines Act 2010 also includes provision for the use of community service as a sanction
where a receiver has been unable to recover a fine or its value in seized goods. These provisions
will be commenced when the necessary arrangements have been made to implement the
              receiver or recovery order provisions. The work that has been done on implemen-
4 o’clock     tation of the Fines Act 2010 is of relevance to the question generally on what can
              be done by way of alternatives to custodial sentences associated with civil cases,
because similar considerations arise as to the practicalities of what is involved. In so far as the
further commitments in the programme for Government are concerned on possible alternatives
to custodial sentences in civil cases, I have asked my Department to carry out the necessary
examination with a view to bringing forward practical proposals.
                                                821
               Telecommunications         28 September 2011.             Services


  Deputy Charles Flanagan: How can the Minister of State justify the imprisonment of anyone
who stands committed of no crime, who is guilty of no criminal damage, who has paid all just
debts and taxes and has been a law-abiding citizen over the years? How can she justify my
constituent being imprisoned for 16 days, and that imprisonment continuing indefinitely? Is it
possible for the Minister of State to facilitate a form of mediation or conciliation on the basis
that the woman involved stands indicted of committing no crime in this jurisdiction?

  Deputy Kathleen Lynch: As I stated at the outset, I do not intend to comment on individual
cases and thankfully I do not have to justify the actions of any court. My job is to ensure that
legislation as required is enacted. The criminal justice system has all types of mediation services,
as the Deputy is probably far more aware than I am.
  This is not a comment on the case in question, but I do not believe people are imprisoned
for no just reason. We may need to mediate in particular instances and this case may be one
of them. The Deputy has made the case well. It is something we will take on board but I cannot
comment on, nor do I have to justify, any actions a court takes. We have a separation of powers
between the State and the Judiciary which is important.

  Deputy Charles Flanagan: Does the Minister of State accept the fundamental, constitutional
right under Bunreacht na hÉireann to property and property rights, to the quiet enjoyment of
one’s own land and property? I invite her to say that it is unsatisfactory in 2011 that we are
committing people to prison who have been found guilty of no criminal wrong.

  An Leas-Cheann Comhairle: I am sorry, but there is no provision for a second intervention.
I am acting under the Standing Order.

 Deputy Kathleen Lynch: It is important to state that the separation of powers is something
we hold dear. We should all uphold that.

                                    Telecommunications Services
   Deputy Noel Harrington: I thank the Leas-Cheann Comhairle for selecting this very topical
issue for debate in the Chamber regarding the possibility of inserting a branching unit to Cork
on a new tier 1 express cable or broadband cable which it is planned by an investment consor-
tium to lay between the United States and the United Kingdom, and to Europe. In the coming
days we have a chance to make a decision on whether the south west region can connect to
this tier 1 cable which is significantly important for the future development of the economy not
just in Cork but the entire region.
  Tier 1 international connectivity in the southern part of the country would present all
regional hubs along the Atlantic corridor and the south west region as serious candidate
locations for data-centric companies, Internet players and financial services organisations as a
European headquarters or back-up location for their presence in other European locations,
while at the same time protecting and promoting the competitiveness of indigenous and multi-
national industry in regional areas.
  Much progress has been made to date to advance the prospects of the new tier 1 connector
via the Hibernia Atlantic cable which would significantly enhance connectivity, improve latency
and reduce telecommunication costs along the Atlantic corridor and the south. To do business
on the telecommunications side is far more expensive in the south of the country than in
Dublin, for example, or along the Dublin to Derry corridor. That must be addressed.
  The Cork Chamber of Commerce and Cork City Council through its director of services in
the docklands fully support the project, as does Cork County Council. Connectivity would
present a significant opportunity to this country. I am also aware of a second proposal to link
                                                 822
               Telecommunications        28 September 2011.             Services


Cork and Dublin with France and onwards to Germany and back to the United Kingdom in a
European-British-Irish route. The correlation of those two lines could potentially make Cork
a significant telecommunications hub for data control or storage. I hope the Minister will be
supportive of progressing the two tier 1 connector projects into Cork.
  Some of the companies that have been attracted to Cork through the IDA are significant
global multinationals that have based their European headquarters in Cork. I refer to Pfizer,
Novartis, GlaxoSmithKline, Eli Lily, Schering-Plough, Stryker, Amazon, Centocor and Siemens
as well as one of the most significant companies of all, EMC, and the Tyndall National Institute
which are all located in Cork. If those two cables are connected then Cork could become the
hub of interconnectivity for transatlantic traffic to all of Europe which would greatly enhance
the capacity of companies to employ people in the greater Cork area.
  There has not been much investment in this area by the State. In one case the company
concerned is not looking for any funding from the State but is seeking State support through
departmental assistance and significant administrative support. It would provide a competitive
business environment in the south-western region, not just nationally where it is suffering but
internationally where it is crucial to make progress. We have seen a company such as Dell
decide to leave and go elsewhere in Europe without any regard for the communities and people
who are left to suffer.
   We must become more competitive and improve technology. I recall working in an old
telephone exchange on the Beara Peninsula which had only four lines going out. Back then
getting a telephone was a big issue. We have come a long way but we are still behind. The
proposal to which I have referred is hugely significant.

  Minister for Communications, Energy and Natural Resources (Deputy Pat Rabbitte): I am
pleased to have the opportunity to address the House on the important topic of international
communications connectivity. I am also pleased to have the opportunity to highlight some of
the factors that must be considered by the Government before any decisions to intervene in
commercial markets can be taken.
   I am well aware of the Hibernia Atlantic Express project raised by Deputy Harrington. I
can inform him that my Department has met with Hibernia Atlantic in recent months. There
was a clear understanding that the company was prepared to install a branching unit to allow
a subsequent link up. In recent weeks Hibernia has advised that the company would no longer
be prepared to discharge the costs involved. I am happy for the Department to engage with
Hibernia to ensure that the option for international connectivity is protected if that is possible.
I am advised that Hibernia understands the procedures that the Government must comply
with, especially in circumstances where there is more than one potential applicant.
   I would very much welcome any investment that would lead to improved international con-
nectivity. Indeed, we have seen significant investments by various market players in recent
years, all of which have added to our international connectivity capacity. It is important to note
that the electronic communications market is, and has been since its liberalisation, a commercial
competitive market. Accordingly, the State can only intervene in the market in limited circum-
stances, for example, where the market is failing to provide services. In such circumstances, the
State intervention can only take place following state aid approval from the European Com-
mission and a public tender procurement process.
   In addition, any such assistance would have to demonstrate that value for money would
occur. Accordingly, proposed projects are required to meet the tests of capital appraisal.
Affordability is also a key consideration, particularly in the current acutely difficult fiscal
climate. I do, nonetheless, recognise the importance of electronic communications infrastruc-
                                                823
                    Garda               28 September 2011.            Stations

  [Deputy Pat Rabbitte.]
ture to national and regional economic development. As the Deputy indicated, Cork city has
a significant presence of electronic communications infrastructure. I understand that there are
well-advanced plans to roll out additional backhaul infrastructure and therefore address the
issue of making the region even more competitive.
  It is the case that a direct connection into Cork would enhance the region’s attractiveness
for foreign direct investment. However, the international connectivity market is, as already
mentioned, a commercial market. Any proposed intervention would have to avoid distorting
the market and avoid undermining investments made by other market players. While I would,
of course, welcome additional international connectivity to the island from other countries, I
understand that the existing network owners have significant capacity available. I am also aware
that other consortia are in the process of planning transatlantic connectivity with connections
to Ireland. I am grateful to Deputy Harrington for raising this important question.

   Deputy Noel Harrington: I thank the Minister for his response. It is clear that significant
issues are involved. There was a time-sensitive proposal. The underlying reason for raising the
issue is for the Department to be proactive in attracting investment and facilitating where
possible tier one connectivity to this country. We are an open economy and we need greater
investment into tier 1 traffic, in particular for the southern region. I cannot emphasise enough
that it costs more for companies in the south to do business in this sphere than it does for any
other area of the country. That issue needs to be addressed.
  I realise that I have been granted only four minutes to raise this matter. The Minister will
appreciate that if I were to send this information through the transatlantic cable, the amount
of data transmitted in that time would take 250 years to read out. That is the type of infor-
mation deficit we have. It is a big potential for Ireland and a great need in the south-west
region. I hope the Minister’s Department will take that fully into account.

  Deputy Pat Rabbitte: I understand the Deputy’s argument very well. In recent weeks, I met
with the chamber of commerce along with the Minister for Agriculture, Fisheries and Food,
Deputy Coveney, and other colleagues on this very subject. Yesterday, I answered a question
from Deputy Ciarán Lynch on the same issue. My officials are anxious to engage with the
company involved. Unfortunately, when Deputy Harrington talks about the proposal being
time-sensitive, the company must appreciate that it cannot re-enter discussions with the Depart-
ment to say that the previous understanding in respect of its willingness to discharge the cost
of the installation of a branching unit has now changed, yet at the same time expect us to
decide it in a matter of days. That cannot be done. There are procedures there, more especially
where there is a second applicant, which there is. In those circumstances, we must be careful
not just about issues like value for money, but also that we comply with the strictures applying
to us. Other than that, I am entirely at one with Deputy Harrington.

                                        Garda Stations
  Deputy Michael Healy-Rae: I acknowledge that the Minister for Justice and Equality is in
the Chamber to hear this matter. Up to 200 Garda stations could possibly face closure after
this year’s budget as the Government seeks to cut funding. The Garda Commissioner, Martin
Callinan, has asked chief superintendents around the country to draw up a list of stations that
could be closed as the force prepares for Government cuts to its budget.
  I am acutely aware, as every other representative here is, of the impact this could have on
my own constituency and County Kerry generally. It is thought that the stations most likely to
be closed are those manned by a single Garda officer in rural areas.
                                               824
                    Garda                28 September 2011.            Stations


  In recent years, many rural stations have had considerable resources put into them, including
updating and remodelling, to make them suitable for the years ahead. It is unthinkable that
those stations may possibly face closure, which would be an awful situation. It will be a further
blow to rural Ireland. I am acutely aware of the impact this will have on the ground, particularly
to elderly people living in rural locations. The loss of Garda stations is like what happened
long ago when the railway tracks were torn up and the trains stopped running. That was a set-
back to Ireland and is now readily acknowledged as having been wrong.
  County Donegal is expected to see a significant amount of closures with up to 24 stations
possibly being earmarked due to the number of small, part-time Garda stations there. There
are 240 one-man Garda stations nationwide from a total of over 700. The proposed closures
come at a time when the Garda Síochána are on the verge of a significant drop off in numbers.
Membership within the force is facing a large fall as the retirement rate increases, combined
with the suspension of Garda recruitment. Garda numbers have already fallen by 500 to about
14,000 and an estimated 1,200 members have 30 years of service and are entitled to take
early retirement.

   Deputy Pádraig Mac Lochlainn: There is serious alarm across Donegal about possible Garda
station closures. Local newspapers and other media have reported the story, as well as naming
the locations involved. It all started because a report in The Irish Times which specifically
mentioned 24 stations across County Donegal that had been put to the Garda Commissioner.
I tabled a parliamentary question to the Minister for Justice and Equality but I am not happy
with the response. The Minister’s reply said he understood the Garda Commissioner is cur-
rently carrying out a review. Is it not correct that the Commissioner has been told to save
money and make cutbacks? He has put this request to chief superintendents throughout the
State and has got the identities of stations. The stations that have been publicly named in
County Donegal are as follows: Carrick, Glencolumcille, Annagry, Burtonport, Creeslough,
Dunfanaghy, Rathmullen, Ramelton, Pettigo, Churchill, Brockagh, Carrigans, Newtoncun-
ningham, Raphoe, Convoy, Malin and Culdaff. Others have been mentioned also.
  Across those communities there is serious concern, so I call on the Minister to state that no
Garda stations will be closed in County Donegal under his watch. Fine Gael sets itself up as a
law and order party. The Minister has met many delegations with chief superintendents to
discuss crime in Donegal. Recently, we had a spate of arson attacks and burglaries. In addition,
we have had road traffic incidents. Donegal is a difficult rural county to police. We have lost
Garda officers as those who retired have not been replaced due to the recruitment moratorium.
The Minister should state simply that no Garda stations will be closing in County Donegal. I
urge him to do that now.

  Minister for Justice and Equality (Deputy Alan Shatter): It is very refreshing to hear Sinn
Féin’s full support for the Garda Síochána. I am sure the force will be delighted to know it has
the full support of that party, bearing in mind its conduct in the past.

  Deputy Pádraig Mac Lochlainn: What conduct?

  Deputy Michael Healy-Rae: The Minister should deal with the questions raised.

  Acting Chairman (Deputy Tom Hayes): The Minister should address the issue, please.

  Deputy Alan Shatter: I thank both Deputies for raising these matters. In particular, it pro-
vides me with an opportunity to address the position on the important topics that have been
highlighted. The Deputies will be aware that under plans agreed by the previous Government
— supported by Deputy Healy-Rae’s father — it is part of the Government’s obligation to
                                                825
                    Garda                28 September 2011.            Stations

  [Deputy Alan Shatter.]
comply with the terms of the EU-IMF agreement. Under the terms of that agreement, Garda
numbers were to be reduced from 14,500 in 2010 to 13,500 by the end of this year, and by a
further 500 to 13,000 by 2014.
   This is a situation the Government has inherited and it is not of its own making, nor is the
financial and fiscal disaster brought on the country by the previous Government. In the context
of the framework within which we must operate, the reduction in Garda numbers is inextricably
linked to the extremely difficult economic conditions which continue to face the country.
  At the same time, I want to assure both Deputies, and the House generally, that it is a
priority for the Government to maintain Garda front line services at the highest possible level.
In the circumstances, it is entirely appropriate that the Garda Commissioner should carry out
a review of An Garda Síochána’s capacity to operate with reduced resources. The review to
which the Deputies have referred remains incomplete.
  The Commissioner has indicated that, in conjunction with his senior management team, the
review is continuing to be undertaken. Additionally, he has confirmed that his primary focus
in the review will be to ensure that Garda resources are managed and deployed in the most
appropriate manner to meet existing and emerging policing requirements.
  The Commissioner’s review is examining all aspects of current policing, including the deploy-
ment of personnel, the utilisation of modern technologies and the operation of Garda stations.
Clearly, an examination of the opening hours, and in some cases the viability, of stations form
part of the review. These are important operational issues which must be addressed by those
best placed to make informed decisions based on a professional assessment of how best to
meet the policing needs of the country as a whole.
   The closure of some Garda stations will be a question the Commissioner will have to address
as part of the review process. In that connection he will have to consider whether, in appro-
priate cases, a better policing service could be delivered to a local community by having Garda
members out on patrol rather than in a station. That being said, I wish to make it fully clear
at this juncture that no decisions of any nature have been made in regard to the closure of any
individual Garda stations, contrary to what has been suggested this afternoon. I am looking
forward to receiving the Commissioner’s proposals which will be directed towards maximising
Garda efficiency as well as prioritising in difficult financial circumstances the resources avail-
able for operational front line policing.
   In the context of the overall situation as detailed by both Deputies the crucial issue is that
we maintain front-line services, that the resources provided to An Garda Síochána are used as
efficiently as possible and that we maintain and continue to maintain law and order. I have the
greatest respect for the efficiencies and capacities of the Garda to do so. It is worth noting in
the context of reduced numbers that the reductions that must be effected by 2014 will return
the Garda force to numbers as existed in 2006. No one suggested in 2006 that the force could
not fulfil its obligations and duties and I have no doubt it will continue to do so. However, an
assessment of how resources are to be used is a matter for the Garda Commissioner and I
await the completion of the review and his recommendations and advice of the action he
intends taking.

  Deputy Michael Healy-Rae: I thank the Minister. I mean this in the most respectful way
but people’s patience is running very thin when they see Ministers referring to the previous
Government. That song is worn out at this stage and I ask the Minister and all his colleagues
to give it up. They all wanted to be the Government and that is where they are now.

  Acting Chairman (Deputy Tom Hayes): The Deputy has only 40 seconds for making a point.
                                                826
                     Garda               28 September 2011.             Stations


 Deputy Michael Healy-Rae: Deputy Shatter is the Minister with responsibility for the
Garda Síochána.

  Deputy Bernard J. Durkan: That is no use at all.

  Deputy Jerry Buttimer: The Deputy kept them up for 14 years.

  Deputy Michael Healy-Rae: I respectfully ask the Minister to give an assurance——

  Acting Chairman (Deputy Tom Hayes): Please allow the Deputy.

  Deputy Jerry Buttimer: Kerry lost the all-Ireland as well.

   Deputy Michael Healy-Rae: ——to the gardaí who are keeping law and order in these
stations which are in place and which have been paid for. An investment has been made in
these stations. It will not cost the sun, moon and stars to keep them open. Like my colleague,
I have serious concerns when I hear talk of stations in places such as Barraduff, Kilgarvan,
Lauragh and Beaufort, being closed. It would be a huge blow to rural Ireland. I respectfully
ask the Minister to do his best to try to keep open every one of those stations. I really believe
it would not save money to close them but it would be a retrograde step. I ask the Minister to
please take on board the views of myself and my colleagues on this matter.

  Deputy Pádraig Mac Lochlainn: It is unfortunate the Minister has demeaned his office with
cheap remarks. I can assure him that my reputation as a partner to the Garda Síochána in
Donegal is second to none. I ask him to check with the Garda Commissioner and his colleagues
as to my reputation in Donegal in that regard. I stand shoulder-to-shoulder with them in con-
fronting criminality in that county over recent years.
   To deal with the issue at hand, I note the Minister has failed to make it clear that no Garda
stations in Donegal will close under his watch. I appeal to him to take the opportunity to do
so in this House. There are headlines across the county and I am receiving e-mails, as are his
Government colleagues, from communities, from groups representing the elderly and from
community watch groups who are deeply concerned about these suggestions. With a few words,
the Minister could solve this problem now. I ask him to state categorically that he will not close
any Garda stations and that he will not accept any closure of Garda stations in Donegal under
his watch. That is the challenge. I plead with him to take up this challenge today.

  Deputy Alan Shatter: I will conclude by saying clearly that neither Deputy has learned any-
thing. Both of them engaged in what could best be described as the demeaning and discredited
politics of yesteryear. It is very interesting to listen to both Deputies. I refer to the scare
achieved by listing stations which are going to be closed in circumstances when no decision has
yet been taken to close any station. I refer to the demand that I make a commitment that no
station, regardless of circumstances, will ever close and that I should ignore reality. Let us, God
forbid, not refer to the fact that the legacy of the previous Government was to put this State
into receivership and to undermine the finances of the State and turn us into a dependency of
the ECB and the IMF. Let us pretend this is not a reality. However, this is not the way the
world works, unfortunately. For this State and for I as Minister to comply with obligations
under the agreement concluded by the previous Government, which Deputy Healy Rae and
his father supported, I have to find savings of €340 million in the Estimates for the Department
of Justice and Equality between now and 2014.
  The reality is we cannot be any more flaithiúil with taxpayers’ money because we are actually
spending the money being lent to us by the European Central Bank and the IMF. We have to
get this State’s economy back in order. The other reality is I have the utmost confidence in the
                                                827
              Rental Accommodation          28 September 2011.          Scheme

  [Deputy Alan Shatter.]
Garda Commissioner and in An Garda Síochána to make the right decisions to provide the
communities with the protections they require and to ensure that those who break the law are
properly and fully investigated and brought before our courts.
  I will not engage in a false piece of politicking or make false commitments which I am
unable to keep. Every Department will have to find savings to meet our international financial
obligations and to ensure that we keep this State afloat. The alternative, which the Deputies
might have an enthusiasm for, is that this State is put into bankruptcy and taxpayers of this
State are required to pay even higher taxes than is the case at present. Let us not pretend that
we live in some political vacuum where Garda stations of themselves have a value. What has
a value is an excellent modern responsive policing service and while I am Minister for Justice
and Equality, that is what we will continue to have.

  Deputy Michael Healy-Rae: The Minister is also getting value in the rural Garda stations.

                                     Rental Accommodation Scheme
  Deputy Dessie Ellis: I welcome the Minister to the House. The matter I raise is to do with
the transferring of the administration of rental subsidies from the welfare officer to the local
authority and which will cause many problems. A total of 48,000 families are on housing lists
across the State and 100,000 families are on rental subsidies and in RAS, rental accommodation
scheme. This is costing the State €500 million a year, which is a phenomenal sum. The local
authorities face significant challenges as regards the administration of the scheme.
   Many questions need to be answered. What effect will this transfer have on the role of HSE
staff? Will staff be transferred to the local authorities or will the local authorities be allowed
to recruit staff? It will be a major undertaking to handle such a large fund. The local authorities
already deal with this money through RAS but a significant amount has not been administered
by local authorities. Is there a facility under the Croke Park agreement to deal with a transfer
of staff and to recruit new staff?
   Families may only nominate one local authority and this will pose problems. The new rules
for qualification for the housing list may mean that smaller families with sufficient room in a
house may be removed from the housing list. That will pose a problem and we must scrutinise
it. I would like to tease out the following questions. Will there be job losses when the local
authorities take on this additional task? Will the local authorities be allowed to recruit more
people? Will this happen over a period and when will it be in place? Will the Minister give us
some idea of how this will work?

  Minister for the Environment, Community and Local Government (Deputy Phil Hogan): I
thank Deputy Ellis for raising this important issue. He knows that for many years rent sup-
plement has been used as a form of housing support for households who are unable to afford
accommodation within the private housing market and for whom social housing is not yet
available. Rent supplement, however, was designed as a short-term income support and its use
as a long-term housing support has distorted both the social and private housing markets and
has led to an employment trap for many households, particularly those with families.
  Arising out of commitments in the programme for Government to review the operation of
the rent supplement scheme, and in doing so attain better value for money, proposals to inte-
grate the systems for providing rent supplement and social housing support are being advanced.
The new housing policy statement published by my Department on 16 June 2011, signalled key
reforms in housing policy, including the phased transfer of responsibility for meeting the hous-
                                                   828
              Rental Accommodation      28 September 2011.             Scheme


ing needs of long-term rent supplement recipients from the community welfare service to the
housing authorities.
   The number of households who have been receiving rent supplement in the longer term is a
shared concern of several Government colleagues. Together with the Minister for Social Protec-
tion, Deputy Burton, the Minister of State, Deputy Penrose has already established a steering
group to oversee the development of the project and a number of working groups have been
established to address the wide range of complex issues arising. We need to ensure the transfer
happens in the right way with issues like deduction of rental contributions at source being
critical — but there is general agreement between all that the basic approach is a sound one.
  The option being examined is the transfer of responsibilities for households in receipt of rent
supplement, but who have an established long-term social housing need, from the Department
of Social Protection to housing authorities. Rent supplement would continue to be paid by the
Department of Social Protection to certain households. This would include those already in
the private rented sector but who, because of a loss of income through unemployment, require
a short-term income support to pay their rent. These applicants would not generally require
an assessment of need and the expectation would be that a return to employment would obviate
the requirement for long-term housing support. Thus, rent supplement would remain a short-
term income support, as originally intended.
  Subject to the successful conclusion of the work of the steering group, it is the intention to
bring proposals to Government later in 2011. A date to begin implementing the new arrange-
ments can then be formally agreed. The date set will allow time for the issues identified,
including crucially the issue of deduction of rents at source from relevant welfare payments, to
be properly resolved before implementation.
  The Croke Park agreement allows for flexibility when community welfare officers from the
Department of Health to the Department of Social Protection. There will be no job losses.
This is about getting better value from the technology that is available in the Department of
Social Protection and to get an understanding of the real requirements of people who are in
receipt of rent supplement.

  Deputy Dessie Ellis: I thank the Minister for his response. I welcome this move. I have
always felt that this was not an issue for the welfare officers of the HSE and that it was a
matter for the local authority housing departments, albeit that some people will have short-
term housing need.
  I have an issue with families being on rent subsidy payment for six to eight years. Will we
put in place rules to determine the length of time one can stay on rent subsidy payments?
Originally we were told that rent subsidy payments would last for three to four years and then
people would be housed. The period has been extended and in some cases people are in receipt
of a rent subsidy payment for eight years. That does not make sense. I am glad to hear that
there will be no job losses as staff can be transferred under the Croke Park agreement. Some
of the staff in the local authorities feared they would be swamped with work and I am delighted
to learn that this issue will be looked at. I will contribute as best I can when we next discuss
this issue.

  Deputy Phil Hogan: I thank Deputy Ellis for his constructive remarks and I am delighted
that what we are trying to do is in keeping with what he has been advocating. We can use the
available technology better to understand the real needs of individual applicants in the local
authority area. We can use the information we have to help people who are in genuine need.
This proposal to transfer responsibility to the housing authority for households who are in
receipt of rent supplement but have a long-term housing need, represents a fundamental shift
                                               829
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Phil Hogan.]
in the make-up of housing support. It is expected to benefit the households involved and the
Exchequer. There is no doubt there will be saving because it might catch people in receipt of
duplicate payments. That, however, is not the whole purpose of the initiative, rather it is to
make the delivery of supports to the citizen better. When it is implemented I believe it will
encourage job take-up by tenants who have been caught in poverty traps up to now. It will
deliver greater value for money for the taxpayer and it will provide security of tenure and
greater stability in the private rented market and contribute towards the creation of a higher
quality private rented sector, through improved standards. In my view it will provide a better
integrated and streamlined service for the citizen. I appreciate this is a complex issue and we
are allowing a long lead in time. I have outlined the general principles of what the Government
has in mind.

  Deputy Dessie Ellis: Are there plans to examine the length of time people should be in
receipt of rent subsidy allowance payments?

  Deputy Phil Hogan: We are considering that issue and it will form part of the Government
decision.

            Insurance (Amendment) Bill 2011 [Seanad]: Second Stage (Resumed)

  Question again proposed: “That the Bill be now read a Second Time.”
 Acting Chairman (Deputy Tom Hayes): Deputy Jerry Buttimer is in possession, and has two
minutes remaining.

  Deputy Jerry Buttimer: It is important that we acknowledge that it is regrettable that we are
in this position as a result of the mismanagement of the financial sector. It is incumbent on
Government to be responsible. There are 1,600 jobs at stake. I challenge the Members opposite
who are present, and I am glad there is one person present, to set out the alternative. This is
about securing jobs, and insurance. The Taoiseach made a comment about 4 October this
morning. In his speech, the Minister stated that we must demonstrate to the court the Govern-
ment’s commitment to advance the funds to the insurance compensation fund. That is
important because this is about ordinary people. We acknowledge the bad practice and mis-
management of the company but we are lucky we can proceed with the sale of Quinn Insurance
to Liberty Mutual.
   I wish to reiterate the points I made this morning on the flooding in Cork and the way in
which insurance costs have increased and that some insurance companies have been refusing
to insure properties until the subsidence of the property is addressed. It is important to look
at the way insurance companies have been allowed to govern in the past number of years. It is
important that the regulatory regime learns from this debacle and that it does not permit
companies to take personal financial gambles, which may have dire consequences.

   Deputy Bernard J. Durkan: I am glad to have an opportunity to speak on this important
legislation. I agree entirely with my colleague, Deputy Buttimer, that it is unfortunate that we
find ourselves in the situation that the Government must step in to reassure and make good
the deficiencies in the system. Failure to do so would be even worse. It would have a knock-
on effect throughout the industry and the financial services sector and, worse still, would have
direct consequences for employees of Quinn Insurance and the wider responsibilities of that
company to the extent that it continues to underwrite. This is reminiscent of a similar case in
the 1980s. There was much criticism in the years following that of why the Government of the
day responded in such a fashion. Few people have given much consideration to the alternatives
                                                   830
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


but we need to examine, assess and dissect them to try to come to a fair and unequivocal
evaluation. For example, it is easy for Opposition Members to screech and roar, wring their
hands, tear out their hair and stamp their feet in mock agony at the prospect of shoring up
failed financial institutions. However, we need to consider the mock agony in a clearer way
because people then need to ask themselves what are the alternatives.
  The first is to have a bonfire and burn the bondholders. Let us send a message that we will
not pay anybody anymore at local, national and international level and let us see where that
takes us. In the past number of weeks, other jurisdictions have sought to go down that road
with disastrous consequences. It could well be a great time for a bonfire and there would be
great glee on the Opposition benches if the Government was irresponsible enough to go down
the road of burning the bondholders and those who are dependent on them consequently.
When we go back to the market at a later date seeking an accommodation, they might say they
would like to burn the Government now.
   Have Opposition Members fully assessed and evaluated the consequences of such action? It
is easy to stand on a platform in a town or village down the country and say to a receptive
audience that this is unfair. It has been unfair for the past ten years but nobody said a word.
The unfairness continued when everybody was having a party. Many Opposition Members
were in government then and they did not think anything unfair about it then. However, every-
body in our society has to pay and, sadly, no amount of rhetoric will change that. If we burn
the bondholders, let us be sure of what the consequences will be and let us be sure about who
will gain most from them. Many people will not only in this country, but throughout Europe.
The consequences will be negative and they could set the country back in its development and
in working its way out of the economic crisis.
   I pay tribute to the Minister for the Trojan work done over the past six or seven months to
regain control and respectability in so far as our institutions are concerned in the international
arena and for continuing the war of attrition to see who would blink first in the international
debate. It was a difficult task but the taxpayer has gained several billion euro and the Minister’s
efforts will continue. Somebody should print a super charter for reference to Opposition
Members. They all the say same thing. They want us to be responsible but they want us to
return to our old ways. We borrowed irresponsibly in the past and now they want to us be
irresponsible again and tell everybody we will not pay it back by burning the bondholders.
They then want write-downs. Let us all go into a bank some day and say we will not pay back
the money we borrowed last year and then tell the bank manager that we will borrow more
money next year but will not pay back that either. Let us have a write-down anyway or a
bonfire for bondholders.
   I was in the House in the 1980s when emergency legislation was introduced to deal with a
similar issue and if the Government of the day had not responded in that fashion, there would
have been serous consequences. Similarly, there will be consequences from this decision. The
only proviso I seek is that in the future it should be open to the Minister for Finance or another
Minister to be able to intervene to have a direct impact on those who are facilitated if it
transpires in the future that following the rescue package, there is some means of account-
ability. That is my only regret about the rescue in the 1980s. The Government, not the insurance
industry, should have had a facility to monitor what was happening and a facility to intervene
if it emerged at a later stage that the State had shored up what needed to be shored up at the
time the shoring up was necessary and the time had come for the company to stand on its own
two feet and not come back for more.
  This a problem for the previous Government parties, albeit they realised at a late stage that
the party was over, the boat had left the shore and they was stranded. At that stage, they had
                                                   831
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Bernard J. Durkan.]
to make a calculated decision as to whether to burn the bondholders and take the consequences
or whether they should take control of the situation. They took the worst of all options by
providing a written guarantee for everything, which was a mistake. If a more graduated
response had been pursued, we would not be in as much trouble but we would still have a
serious difficulty borrowing money on the markets because the crisis had been prolonged for
three or four more years than it should have been and no action had been taken. I do not
know why that was because nobody has ever told us why action was not taken. I can only
believe that people drove along as if nothing was on the horizon. People said afterwards that
nobody had told them. One should expect to be told if one is in public office, particularly in
government. One should ask the penetrating questions about what is happening, why it is
happening, at whose behest and who will gain or lose most.
   To be responsible and accountable, we have to do what has to be done. It is not something
we welcome, glory in or wish to repeat on a regular basis. It is not something that we should
have had to do in the first place but it is something we are now forced to do because the
alternatives do not stand up.

   Deputy Michael Healy-Rae: I thank the Minister for the Trojan effort he has made over the
past six months on behalf of the public at a difficult time historically and it would be a mean
person who would not acknowledge his work and the personal effort he is putting in, which we
all appreciate. I am not purposely critical of anything when people are trying to do their best
but I have grave concerns because the juncture we have reached is not new. We were here
many years ago and I do not believe it is right or proper that the Irish people are being asked
again to bale out not once but twice a group which, over a long period of time, acted recklessly.
It is awful to think that people will be burdened for many years with the cost of that reckless
trading on their shoulders. That comes back to Government and the regulator at the time.
What was going on that allowed this to happen and get us into this position? It is frightening
when one thinks back upon it.
  We cannot look backwards, however. We must look forward and see how we will deal with
the situation and one of the questions we must ask ourselves is whether a situation like this
could occur again in the future. Everything that is humanly possible to achieve to ensure it will
never happen again must be done. I would rely on the Minister to ensure that systems will be
put in place and that this type of situation can never again happen.
  In terms of my difficulties with the Bill, businesses and private individuals are finding it
difficult to carry on and this further burden upon them could be the straw that will break the
camel’s back. As a small businessman I am aware that people are finding it difficult to keep
businesses in operation and this extra cost which will be imposed upon them will not make
their lives any easier.
   I take note of what the Taoiseach said with regard to the 1,600 jobs in Cavan and that the
Bill is necessary to save those jobs but what about the people who have already lost their jobs
and who are trying to insure their houses and their cars? Will this Bill lead to a situation in
the future where people may not pay their house insurance? We all know what may be the
horrible consequences of that. Will it lead to a situation where people will be travelling on our
public roads without adequate cover on their cars? If there are more uninsured people travel-
ling on the roads the State could end up having to pick up the tab for accidents incurred by
uninsured drivers.
  I took note during the course of the debate of Deputy Sean Fleming’s account, which I
believe is correct, that the cost of protecting these jobs could be in the order of €500,000 per
job. That must be examined.
                                                   832
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)


   I am upset that a Bill on an issue of such national importance is being rushed through the
Dáil. I would like to have had more debate on it. I am no admirer of inquiries that took place
in the past because of the enormous cost to the State but the public were entitled to see some
form of inexpensive inquiry take place into what went on in Quinn Insurance over the years
before this Bill was brought before the House and them being asked to bale it out once more.
  Rushing this Bill through the House is doing a great injustice to the people who elected us
here to represent their best interests. Every one of us are elected here to do our best on their
behalf. This Bill is not in their best interests. We are doing this in the interest of people who
gambled in the past and are letting down the electorate who elected us here.
  Ultimately, this measure will cost the Irish public hundreds of millions of euro but the truth,
and this is frightening, is that we do not know what will be the final cost. Are we writing a
blank cheque for the future? That is another frightening aspect of this measure.
   I do not believe we are acting in the best interest of the public. I would have liked more
thought given to the Bill. I am not one of those people who criticises everything the Govern-
ment does. That is not the way I think. I like to be constructive, highlight the best of what a
Government is doing, support that, and compliment people on their work but I am against this
measure. It is wrong and is a further burden on our society at a time when they will be unable
to cope with it. It will have detrimental consequences for many families and businesses which
are barely staying afloat, and I know the Minister is acutely aware of that. He is dealing with
it in his own constituency every day of the week and is acutely aware of the problems business
people are having, which are enormous. They are trying to keep the doors open and it is putting
them to the pin of their collar.
  We are where we are, however. This Bill will be passed, although not with my support, but
I will be supportive in the future of measures to which I believe there are no other alternatives.
Despite the fact that I am critical of this measure I sincerely wish the Minister well in his
further endeavours because we all know he is doing his level best at all times.

  Minister for Finance (Deputy Michael Noonan): I thank all the Deputies who contributed to
the debate on the Bill. It was a fairly good debate. After his complimentary remarks about
myself I am sorry that Deputy Healy-Rae will not be voting for the Bill but I might convince
him to do so in the next ten minutes.
   I can appreciate the concern many Deputies have that at a time when it is hard enough for
many families to make ends meet there will be another imposition on their car and house
insurance and that they will have to pay an additional 2% on their premiums but it is incorrect
to state that the proceeds of the levy going into the insurance compensation fund will be
transferred either to the Quinn family, the Quinn group or anything to do with the Quinns.
  The money is put in to cover insurance claims that others of the Deputy’s constituents would
not get paid for if we did not provide for it by way of a levy. We are talking about the Deputy’s
neighbour who has a car crash and breaks his leg and cannot work for three months, his
neighbour who has a fire in the house, the neighbour whose home is flooded or the neighbour
who booked his dream holiday only to arrive in Bulgaria and find the apartment block was not
built, and he has travel insurance to cover him. That is where the money is going. It is going
to cover outstanding claims that Quinn Insurance had insured against and because Quinn
Insurance became insolvent, those claims could not be met if we did not put money into the
insurance fund to cover them.
  The alternative was to let Quinn Insurance go bust and if it went bust not only would the
insurance claims pending not be honoured but all the neighbours the Deputy spoke about
would be driving around without insurance or would be off the road because the day it would
                                                   833
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Second Stage (Resumed)

  [Deputy Michael Noonan.]
go down, many people insured with Quinn would no longer be insured, and some of them
would find it hard enough to get alternative insurance because we know that the Quinn group
had a record of insuring young drivers at modest enough premiums compared to what the
competition was doing in the market.
  The primary purpose of what we are doing is not to save the jobs in Quinn Insurance. That
was done as soon as the Liberty Group decided to put private sector money into Quinn
Insurance and guarantee that the 1,600 jobs, all the way from the Border counties down to
Blanchardstown, would be secured. It agreed also that it would continue to trade in the country
as an insurance company with a view to expanding its market, not restricting it.
  The Bill has been attacked on a false premise to many degrees.
   The benefits are that people who were insured with Quinn and would not have their claims
honoured will now have them honoured, and those who would no longer be insured if the
company went out of business will continue to be insured. It also means the State is not carrying
              the full burden, because the Liberty Group is coming in. It is directed by a man
5 o’clock     from the same part of the country where the Quinn Group operated. He is an
              Irish American who originated in Armagh and he has been very successful in the
insurance business in the United States, and he is coming in. The alternatives are that the
company goes broke, there is no insurance for Quinn policyholders, no settlements, 1,600
people out of work, and a really bad situation. That is why we are acting. I know it is not ideal,
and we could talk about the Quinn Group and all the rest of it, but the solution that is being
brought forward achieves quite a lot. It ensures that people will have their claims paid, that
people will continue to be insured, that 1,600 people in good jobs will continue to have them,
that American investment money comes in to bolster a broke insurance company, and that it
will continue to trade on a solvent basis. Indeed, the intention in the company’s business plan
is to expand.
   I am sorry about the rush to get the Bill through, but it is being done so the final deal can
be signed off between the administrators and the purchasers of the company. The matter has
to be mentioned in the High Court on 4 October. We have to get it through because the
question in the High Court will be whether the Dáil has made the legal provisions to allow
money to be paid into the compensation fund so claims can be honoured. When the answer to
that question and some associated questions is yes, matters will proceed. I wanted to put the
issue in that context.
  It is important to remember that the Bill is technical in nature. Its main purpose is to ensure
that our domestic legislation is compatible with the third non-life insurance directive, as advised
by the Attorney General. Deputies should note that the legislative amendment needs to be
made immediately, as I said, to ensure it is done by 4 October. I appreciate the points Deputies
made about the need for due process in dealing with legislation and I admit the situation is not
ideal, but we were left in circumstances where we had to act against a fairly tight timeline. I
hoped to bring the Bill to the Oireachtas in June, but I needed to get legal advice and, in
particular, to consult the EU. The initial advice that I received from the EU was incomplete
and we had to adjust the manner in which the Bill was drawn up when we received full advice.
   A number of Deputies mentioned the need to strengthen regulation of the insurance sector
or market. A number of developments have taken place in the past 18 months to do that. First,
the Central Bank’s staff resources in the insurance area have increased significantly, from fewer
than 50 people to just over 100. Second, an authorised officer regime has been introduced that
allows the Central Bank to appoint outside experts such as actuaries to go in and investigate a
company on its behalf. Third, the obligation on the Central Bank to promote financial services
                                                   834
          Insurance (Amendment) Bill 2011    28 September 2011.      [Seanad]: Second Stage (Resumed)


has been removed. Those measures will help the regulation of the insurance industry and
make it far more rigorous. Deputies should also be conscious of international developments
on strengthening regulation of the insurance sector. The forthcoming EU solvency II directive
represents the first stage of a major transformation of how the industry is regulated. The most
essential features of the framework directive are the introduction of an economic and risk-
based approach to the measurement of assets and liabilities and a much greater focus on quanti-
tative issues such as governance and the role of the supervisor. Capital requirements will be
determined by an evaluation of the company’s level of risk using a consistent set of measure-
ment principles, resulting in an appropriate level of capital for solvency purposes. The changes
will impact on all companies in the insurance sector and are likely to take effect from 2014.
   A number of Deputies asked why Liberty, an American insurer, was chosen as the preferred
bidder. Members should be aware that the sale of Quinn Insurance Limited was a matter for
the joint administrators. It is important to be clear that neither the Minister for Finance nor
the Government had any input into the decision to select Liberty Mutual/Anglo Irish Bank as
the preferred bidder. In assessing the bids for the business of Quinn Insurance Limited, the
joint administrators were required to consider how the interests of policyholders could best be
protected and how the company could be returned to a sound financial footing. Those were
the criteria on which the decision to opt for Liberty Mutual/Anglo Irish Bank was made by the
joint administrators under the powers given to them by the Insurance (No. 2) Act 1983. At the
end of the sales process, there were only two companies left which were interested in buying
QIL. The joint administrators concluded that the Liberty/Anglo Irish Bank proposal was the
best because it protects policyholders and minimises the call on the ICF. An additional benefit
of the proposal is that it protects the jobs in QIL, and it is a clean deal because the State does
not have to cover tail risk. We have to introduce the legislation and the policyholders will have
to pay in to the levy, but we will not cover any further tail risk.
   As I said, I share Deputies’ concerns about the increased call on the insurance compensation
fund in the past couple of months. That is why I asked the State Claims Agency to go in and
undertake a review of the processes at QIL and in particular to examine claims management
and the reserving processes. In its interim report, it stated that the claims management process
is operating effectively and that reserving has improved considerably since the joint adminis-
trators took over running the business, but that there is potential for improvement in some
other areas. In summary, it stated that the increased call on the fund as a result of various
actuarial reserving reviews was appropriate.
  I thank Deputies for their contributions. I recommend the Bill to the House.

  Question put:

                                    The Dáil divided: Tá, 94; Níl, 43.
                                                    Tá

      Bannon, James.                                              Connaughton, Paul J.
      Barry, Tom.                                                 Conway, Ciara.
      Breen, Pat.                                                 Corcoran Kennedy, Marcella.
      Broughan, Thomas P.                                         Costello, Joe.
      Butler, Ray.                                                Coveney, Simon.
      Buttimer, Jerry.                                            Creed, Michael.
      Byrne, Catherine.                                           Creighton, Lucinda.
      Byrne, Eric.                                                Daly, Jim.
      Carey, Joe.                                                 Deasy, John.
      Coffey, Paudie.                                             Deering, Pat.
      Collins, Áine.                                              Doherty, Regina.
      Conaghan, Michael.                                          Donohoe, Paschal.
      Conlan, Seán.                                               Dowds, Robert.
                                                    835
          Insurance (Amendment) Bill 2011   28 September 2011.       [Seanad]: Second Stage (Resumed)


                                             Tá—continued

      Doyle, Andrew.                                             McLoughlin, Tony.
      Durkan, Bernard J.                                         McNamara, Michael.
      English, Damien.                                           Maloney, Eamonn.
      Farrell, Alan.                                             Mathews, Peter.
      Feighan, Frank.                                            Mitchell, Olivia.
      Ferris, Anne.                                              Mitchell O’Connor, Mary.
      Fitzgerald, Frances.                                       Mulherin, Michelle.
      Fitzpatrick, Peter.                                        Murphy, Dara.
      Flanagan, Charles.                                         Murphy, Eoghan.
      Flanagan, Terence.                                         Nash, Gerald.
      Gilmore, Eamon.                                            Naughten, Denis.
      Griffin, Brendan.                                          Noonan, Michael.
                                                                 Ó Ríordáin, Aodhán.
      Hannigan, Dominic.
                                                                 O’Donnell, Kieran.
      Harrington, Noel.
                                                                 O’Donovan, Patrick.
      Harris, Simon.                                             O’Dowd, Fergus.
      Hayes, Brian.                                              O’Mahony, John.
      Hayes, Tom.                                                O’Reilly, Joe.
      Heydon, Martin.                                            O’Sullivan, Jan.
      Howlin, Brendan.                                           Phelan, Ann.
      Humphreys, Heather.                                        Phelan, John Paul.
      Humphreys, Kevin.                                          Reilly, James.
      Keating, Derek.                                            Ring, Michael.
      Keaveney, Colm.                                            Ryan, Brendan.
      Kehoe, Paul.                                               Shatter, Alan.
      Kelly, Alan.                                               Shortall, Róisín.
      Kenny, Seán.                                               Spring, Arthur.
      Kyne, Seán.                                                Stagg, Emmet.
      Lawlor, Anthony.                                           Stanton, David.
      Lynch, Ciarán.                                             Timmins, Billy.
      Lynch, Kathleen.                                           Tuffy, Joanna.
      Lyons, John.                                               Twomey, Liam.
      McCarthy, Michael.                                         Walsh, Brian.
      McGinley, Dinny.                                           White, Alex.
      McHugh, Joe.

                                                   Níl

      Adams, Gerry.                                              Kirk, Seamus.
      Boyd Barrett, Richard.                                     Kitt, Michael P.
      Browne, John.                                              Mac Lochlainn, Pádraig.
      Calleary, Dara.                                            McGrath, Finian.
      Collins, Joan.                                             McGrath, Mattie.
      Collins, Niall.                                            McGrath, Michael.
      Colreavy, Michael.                                         McGuinness, John.
      Crowe, Seán.                                               McLellan, Sandra.
      Daly, Clare.                                               Moynihan, Michael.
      Doherty, Pearse.                                           Murphy, Catherine.
      Donnelly, Stephen.                                         Ó Caoláin, Caoimhghín.
      Dooley, Timmy.                                             Ó Cuív, Éamon.
      Ellis, Dessie.                                             Ó Fearghaíl, Seán.
      Ferris, Martin.                                            Ó Snodaigh, Aengus.
      Flanagan, Luke ‘Ming’.                                     O’Brien, Jonathan.
      Fleming, Sean.                                             O’Dea, Willie.
      Fleming, Tom.                                              Pringle, Thomas.
      Grealish, Noel.                                            Ross, Shane.
      Healy, Seamus.                                             Stanley, Brian.
      Healy-Rae, Michael.                                        Tóibín, Peadar.
      Higgins, Joe.                                              Wallace, Mick.
      Kelleher, Billy.


Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and
                                   Seán Ó Fearghaíl.

Question declared carried.
                                                   836
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


       Insurance (Amendment) Bill 2011 [Seanad]: Committee and Remaining Stages

  Section 1 agreed to.

                                             SECTION 2

  Question proposed: “That Section 2 stand part of the Bill.”
  Deputy Michael McGrath: Can the Minister clarify his intentions as to the exclusion of health
insurance policies from the levy? I raised this issue during the debate on Second Stage. The
Minister indicated that health insurance policies will be excluded from the levy for the moment
but that the matter may be subject to review. When does the Minister intend to review this
exclusion and what impact would the exclusion have on the amount of money the levy would
raise if health policies were included? I know the Minister has excluded health insurance on
the grounds that so many people are not renewing health insurance policies, given the increase
in the cost of health insurance.
  Can the Minister clarify the comment he made when concluding Second Stage, that we are
not covering any further tail risk? It is my understanding that we are replenishing the compen-
sation fund to the extent that is necessary and that the new venture, Liberty Anglo, will not be
responsible for legacy issues, that is old claims that will come to fruition in the next number of
years. If we are not accepting any further tail risk, surely we can put a final figure on the actual
exposure, which is currently estimated at €738 million. I understand that figure is open-ended.
Can we not be certain as to what the final figure will be?
 In his remarks on Second Stage, the Minister did not address the issue of the sunset clause.
Why are we not putting an end date for the levy in the legislation?

   Minister for Finance (Deputy Michael Noonan) (Deputy Michael Noonan): We do not have
a sunset clause because some insurance claims take a long time to settle. Sometimes people
must wait for medical evidence or to see how injuries develop before a claim can be finalised.
A sunset clause would be unfair to policyholders who have claims pending. The intention is
that claims shall run out over a period of ten years and tail off as that period comes to an end.
It is hard to be definitive about this because it is difficult to estimate in advance the amount
of an award that might be made in four or five years time. That is the only reason. The best
estimate of actuaries is that it will come in around the figure I have mentioned.
  Under the legislation, the levy cannot be more than 2%. It can be varied if the money is not
required as we come to the back end of the period. The Central Bank will advise on the
adequacy of the provisioning in the Insurance Compensation Fund. If circumstances arose
where it was reasonable to reduce the levy to, say, 1% that could be done.
   With regard to medical insurance and the VHI, I did what Ministers always do. I will not tie
the hands of any successor. However, the Government has no plan to extend the levy to health
insurance. The reason for excluding health insurance is not only to avoid making an imposition
on people who are finding it hard to pay premiums. The primary reason is that health insurance
is in a different legal space from car, house or travel insurance. It is not controlled by the
Central Bank and is outside the scope of the normal insurance regulatory regime. It is excluded
for that reason. There are other exclusions which we will speak about when we come to that
section.
  I think the Deputy asked me something else.

  Deputy Michael McGrath: I asked about tail risk.
                                                   837
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


   Deputy Michael Noonan: I was referring to the overall deal that Anglo Irish Bank and
Liberty Mutual made with the insurers. For example, we got several offers of private equity
stakes in Bank of Ireland but many of them, as well as buying a majority of the shares in the
company, wanted the State to cover any possible risk down the line. There are no tails to the
deal with Liberty, Anglo and the administrators, other than the levy. The State’s commitment
is to provide against insurance claims. Of course there are tails to insurance claims but nothing
else is being covered elsewhere in the deal. That is the point I was making at the end of
Second Stage.

  Deputy Richard Boyd Barrett: Will the fund cover only the losses of the Quinn Insurance
group in the UK or will it cover the future losses of Liberty Mutual Direct Insurance Company
Limited and Anglo Irish Bank, who are taking over as part of the deal? As I understand it, the
business will be broken up into two parts, one of which is the big loss making business primarily
in the UK which is to be run off by the administrator and the potentially profitable part which
Liberty and Anglo will own? For instance, are we giving a guarantee to Liberty that, if things
go bad and it makes losses in the future, we will cover them? Perhaps the Minister would
clarify that point.
  I have a few other questions to put to the Minister. Will I do so now?

  An Leas-Cheann Comhairle: Deputy Doherty wants to put a question on the same issue.

  Deputy Pearse Doherty: My question is on a different issue.

  Deputy Richard Boyd Barrett: I would like to make a few other points.

  Deputy Michael Noonan: I will respond to the Deputy’s first question and will then read the
speaking note on the section, which may anticipate many of the Deputy’s questions.
   The levy will be applied to all vehicle, home or travel insurance written in the State for
persons living in the State. What is being covered are the insurance claims of the Quinn
Insurance group in respect of which adequate provision was not made. For example, a person
insured with Quinn Insurance who had a car accident two years ago, at which time Quinn
Insurance was insolvent, will be compensated by the insurance compensation fund. The levy
paid into the insurance compensation fund will provide the funds out of which a person’s claim
will be met when settled. The levy has nothing to do with UK or Irish claims. It relates to any
claim that arises from insurance written by the Quinn group of companies. The big hits in this
regard are in respect of car accidents.
  While it is true that this is an imposition on ordinary Irish people who will have to pay a
further 2% on their insurance, we must ensure that other Irish people, equally meritorious,
who have had a car accident, their house burn down or made a claim on their travel insurance
get paid. That is what the insurance compensation fund is about. This has nothing to do with
the wider Quinn group. There is no question of this money being used to bail out Quinn in
any respect. That is not the issue. This is to provide money so that insurance claims that
could not be met because Quinn Insurance was insolvent can be met by way of the insurance
compensation fund.
  The enabling legislation provides that, if another insurance company which has claims pend-
ing goes broke, it or the administrator of it will have access to the insurance compensation
fund. Regulation of insurance has improved substantially over the past 18 months. Where
previously there were only 50 people in the Central Bank regulating insurance companies there
are now 100 people doing so. Also, the Central Bank no longer promotes financial services
business because being the regulator at the same time as promoting the Financial Services
                                                   838
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


Centre in Dublin to an insurance company was a potential conflict. As such the Central Bank
has moved out of that area. It also has the power to bring in third party professionals such as
actuaries to help with the regulation. It is hoped that a company like Liberty will have adequate
provision and reserves to meet all claims. There is an advantage in bringing in a big American
company which has a great deal of assets. It will have appropriate reserves and make appro-
priate provision for the business it writes. The additional regulatory regime and the fact that
regulation in Ireland is working much better than it used to should provide the assurance
we need that as Liberty trades in the market it will not get into the difficulties into which
Quinn did.
   The problem arises because Quinn Insurance did not make sufficient provision for future
claims. It is as simple as that. There are rules about this in insurance regulation and they fell
below the benchmarks. I dislike saying that this will never happen again but new measures
have been taken to ensure it does not.
  Would the Deputy like me to read the speaking note on the section?

  Deputy Richard Boyd Barrett: What is in the speaking note?

  Deputy Michael Noonan: The note provides a general description of what is contained in the
section and will probably answer many of the questions which Members may raise individually.

  Deputy Richard Boyd Barrett: I would prefer to make my points first because I am not sure
how they relate to the different sections.

  Deputy Michael Noonan: That is no problem.

   Deputy Richard Boyd Barrett: The Minister said that the new better resourced regulatory
regime in terms of the Central Bank should guard against this type of situation developing
again and that there should be proper provisioning against claims by insurance companies. I
am not that familiar with the insurance industry. Is it an offence for an insurance company not
to make proper provision against claims or not to have or maintain sufficient assets against
claims? If not, should that not be the case and should it be part of this legislation or are we
simply relying on there being a little bit better regulation by the Central Bank? The Minister
stated that there is now in place a little more regulation and that while it is hoped this will not
happen, he cannot be sure it will not. That worries me. It is bad enough that people are being
levied in this way because of what happened. Surely, in pushing through this legislation, which
provides that people will pick up the tab for the malpractice of Quinn Insurance, we should be
providing serious sanctions or measures to ensure this does not happen again and that where
it does it will be a criminal offence.
   It is right and proper that we should step in and cover policyholders who took out insurance
with Quinn in good faith. We must ensure we can discharge any claims made. However, where
is the logic of us covering all those losses and nursing back to health or cleaning up Quinn
Insurance only to hand it over to a multinational that will obviously have an interest in it
because it will be potentially profitable? If policyholders are covering the losses and paying for
the clean up, why then should we not own the company at the end of this process, thus ensuring
that any future profits generated from it will come back to the Exchequer or benefit policy-
holders in terms of lower premiums and so on? Why are we handing the cleaned up company
to Liberty? I do not understand the logic behind that.
  If the levy has to be imposed, can measures be taken to ensure the full extent of the cost is
borne by the company’s future profits rather than unloading it on to policyholders through
higher premiums? Liberty Mutual would not have an interest in Quinn Insurance if it did not
                                                   839
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages

  [Deputy Richard Boyd Barrett.]
believe it was going to make much profit out of it in the future. Notwithstanding Mr. Quinn’s
malpractice, speculations and failure to manage his business in a conscientious way, underneath
it all there is a potentially viable and highly profitable business. Liberty Mutual must know this
and it is getting the company for a song. We should at least ensure a quid pro quo for policy-
holders coughing up for the compensation fund is a mechanism whereby the company’s poten-
tial profiteering on the back of policyholders is kept in check.
  The Minister claimed the introduction of this legislation is not linked to the wider issues in
the Quinn group. I hope the departmental officials, Mr. Sheridan and his colleagues, will pardon
me if I admit I did not take in everything they said at the briefing the other day on this matter
because it is all quite complicated. If I understood their briefing correctly, some €200 million
will come indirectly out of the compensation fund to go to Anglo Irish Bank bondholders. The
officials suggested this still worked out good for the Exchequer because in exchange for this
€200 million, the bondholders would relinquish their claim on securities and assets of the Quinn
group. Whether this is a good deal for the taxpayer is debatable.

  Deputy Catherine Murphy: Are there any guarantees that Liberty Mutual will not relocate
the Quinn Insurance jobs elsewhere once it gets its hands on the company? This issue was
raised early on in the debate with criticism levelled against several Opposition Members for
not raising it themselves.
  My understanding of insurance companies is that they invest moneys raised through pre-
miums in banks, property and other profitable commercial activities. Were the large UK losses
suffered by the Quinn group due to insurance claims or investments it made? Are satisfactory
protections in place for dealing with losses caused by poor investment?
   The legislation requires the insurance compensation fund will be restricted to those compan-
ies which conduct at least 70% of their business in the Irish market. However, does this mean
that the 2% levy will apply to losses incurred by the insurance group in question in the UK?
Will the Minister clarify this confusing matter?

  Deputy Michael Noonan: Deputy Boyd Barrett raised the issue of sanctions and penalties.
This is a technical Bill and plays a small part in the corpus of insurance legislation. The wider
framework of insurance law and Central Bank regulations allows for appropriate sanctions that
can be applied to companies that do not meet their solvency requirements. I do not have the
specific details to hand but I can forward them to the Deputy if he is interested.

  Deputy Richard Boyd Barrett: Is the Minister satisfied they are sufficient, given what has
happened?

  Deputy Michael Noonan: Yes, I am.

  Deputy Richard Boyd Barrett: Does the Minister expect Mr. Quinn to be suitably pros-
ecuted then?

  Deputy Michael Noonan: The regulatory regime has improved significantly also.
  It was very difficult to get anyone interested in buying the Quinn group. When it came down
to the wire, only two companies had any interest in purchasing it. I understand from Anglo Irish
Bank that it was a difficult negotiation. Liberty Mutual will take over the complete Republic of
Ireland book, both assets and liabilities. It will assume liabilities of €51 million in excess of the
assets to be transferred to it by Quinn Insurance Limited, QIL.
                                                   840
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


  Liberty Mutual is making a contribution. When I spoke to the company’s managing director
recently, who is also a company shareholder, he told me any company guaranteeing jobs will
say so for two years but that does not mean there will be no job losses after two years. He
assured me his fullest intention was not only to trade but to expand the insurance footprint of
Liberty Mutual in Ireland. Economic circumstances may change but there was no doubt about
the security of the jobs, no more than there would be in any other company. Liberty Mutual
has no intention of closing down the company at an early date. There would be no point in
doing that anyway because the only value it has is to trade profitably.
   Deputy Boyd Barrett said he found the arrangement concerning the bondholders compli-
cated. I too find it complicated. However, I have a note which may help explain it better. The
guarantees the bondholders have over Quinn property holdings are legally enforceable. If they
were enforced, the joint administrators would only be able to realise about €40 million of the
€464 million worth of property over which the guarantees are held. In this context, the deal
struck with the bondholders through the involvement of Anglo Irish Bank has to be considered.
The bank, by participating in this deal, is facilitating the lifting of guarantees valued at €464
million over assets held by Quinn Property Holdings assets, a subsidiary of Quinn Insurance
Limited, held by banks and bondholders in return for a payment of €200 million. It should be
noted these guarantees were the reason the Central Bank appointed the joint administrators
in the first place, as the guarantees were held over assets which should have been available to
cover QIL’s insurance liabilities. This agreement releases value of €264 million to QIL which
will reduce the call on the insurance compensation fund. Without this agreement, there would
have been a considerable extra cost.
  If this deal had not been done and instead of looking for the €700 million I referred to
earlier, another €264 million would be required from the insurance compensation fund. It is a
complicated but good deal. Thanks to all the rumours and publicity, Quinn Insurance lost
business during the month of negotiations with Liberty Mutual Direct. Liberty will not find
restoring that business or rebuilding confidence easy. The publicity and events impaired the
brand. However, Liberty will go ahead, sign off on the deal in the High Court on 4 October
and get down to business.

  Deputy Pearse Doherty: The Minister will agree that the manner in which we are dealing
with this legislation is unsatisfactory. Although his clock is ticking down to 4 October, we
should have had an opportunity to listen to and digest his contribution and that of other
Members, examine the legislation and, if required, present amendments. Asking us to table
amendments last week before we had even heard him on Second Stage is unacceptable. It is
the reason no amendments have been tabled.
  I have a number of simple questions. First, I am not arguing about whether the exemption
of the health levy should be included in section 2, but how many policyholders will the 2%
levy affect? The Minister presented figures on the total estimated call — approximately €738
million is to be paid off by the 2% levy over 11 years. Some form of assumption is being used
by the Department. Will the Minister provide me with the detail of how many policyholders
this legislation will affect?
  Second, what of the figure of €738 million? Given the Minister’s comments of a few moments
ago, I obviously had the wrong end of the stick. My understanding was that the €738 million
accrued from the losses on the insurance policies held in the North and Britain and that the
company was being split into two. Will the Minister clarify this matter? It is fine if this is not
the case.

                                                   841
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages

  [Deputy Pearse Doherty.]

  The administrator has not published the 2010 accounts. They will not be published until
November. Should interim reports not have been published so that we might have scrutinised
the loss in more detail?
   On Second Stage I focused on the issue of the bondholder who has a call on assets worth €464
million within Quinn Group Property Holdings, a Quinn subsidiary. A deal is being arranged to
pay off that bondholder, and I accept the Minister’s point that it will not be the full €464
               million. Is it a bondholder in Anglo Irish Bank or a bondholder in the Quinn
6 o’clock      Group that lent to Quinn Insurance? If the former, is it covered under the State
               guarantee? It is obviously a secured bondholder, given that it has Quinn assets
as security. If the legislation passes, the bondholder will be paid €80 million next Wednesday
and will have a call amounting to €120 million in respect of three hotels held by the Quinn
Group. Is it a guaranteed Anglo Irish Bank bondholder that is to be paid off next Wednesday
or is it a Quinn Insurance bondholder?

  Deputy Richard Boyd Barrett: The Minister is about to answer Deputy Doherty’s question.
Although I asked the officials about the matter, I want to be clear. If the insurance industry is
regulated to ensure companies have sufficient assets to meet claims and so on, how can the
claim of the policyholder on the company’s assets be trumped by the claim of the bondholder?
I cannot figure it out. If the insurance company’s assets are specifically intended to ensure
sufficient provision to pay out on policyholders’ claims, surely they have some protection and
cannot be used subsequently as security for other loans. It is extraordinary that these assets
would be misused to acquire loans to cover Mr. Quinn’s speculative gambling behaviour and
that the bondholders could have a stronger legal or other claim over them than the
policyholders.
  I ask this question because the Minister is presenting it as not being a bad deal, since the
bondholders would have a claim on the assets. How is their claim legally stronger than that of
the policyholders? If it is, surely something is amiss with our insurance law, as it would give
priority not to the policyholders, but to the bondholders who lent to Mr. Quinn. In return, they
demanded securities that he should not have been able to provide, since they were assets to be
used to secure against policyholders’ claims.

  Deputy Michael Noonan: Deputy Doherty returned to what he regards as the inadequate
manner in which the legislation is being handled. I explained the constraints placed on me in
ensuring that we had the law enacted in time for a High Court appearance by the administrator
on 4 October. However, there has been a great deal of hypocrisy. The Government side of the
House is not alone in its responsibility for what occurs in the Chamber. The Opposition is also
responsible. Second Stage finished one hour before the allocated deadline despite all of the
fuss made on the other side of the House about inadequate debating time.

  Deputy Richard Boyd Barrett: Not because of us.

  Deputy Michael Noonan: An hour remained for Second Stage when we voted. I initiated this
Bill in the Seanad so that this House would have time to table amendments. All Stages were
taken in the Seanad on 15 September. If Deputy Doherty or anyone else wanted to table
Committee Stage amendments, there were 13 days in which to consider them. That there is not
a single amendment from anyone on today’s Order Paper is not because Members had inad-
equate time. Rather, it is because they did not table amendments. Deputy Doherty had a
fortnight.
                                                   842
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


  Deputy Pearse Doherty: The Minister knows it is inappropriate to ask people to take Second
and Committee Stages on the same day.

  Deputy Michael Noonan: The Deputy had a fortnight to consider amendments had he wanted
to table any.

  Deputy Pearse Doherty: I read the Minister’s speech to the Seanad. It was a different speech
from the one he gave to the Dáil. It also contained different figures.

  An Leas-Cheann Comhairle: Allow the Minister to conclude.

  Deputy Michael Noonan: The lady doth protest too much. He had a fortnight to file amend-
ments had he desired. We have discussed Dáil and Seanad reform. Only one Opposition
Member was in the Seanad when I took all Stages of the Bill. Deputy Michael McGrath’s
Fianna Fáil colleague in the Seanad handled everything. No one else from the Opposition
appeared.

  Deputy Richard Boyd Barrett: We do not have anyone in opposition in the Seanad.

  Deputy Pearse Doherty: The Minister published the Bill 24 hours——

  An Leas-Cheann Comhairle: Deputies, please.

  Deputy Richard Boyd Barrett: Believe me, if we did——

  Deputy Pearse Doherty: It was not the Minister’s finest hour. He published the Bill 24
hours beforehand.

  An Leas-Cheann Comhairle: One voice, please.

  Deputy Michael Noonan: Deputy Doherty should not take it all so personally. To enter
this House——

  Deputy Richard Boyd Barrett: For the record, the Technical Group used all of its speaking
slots.

  Deputy Michael Noonan: ——as Deputy Doherty does a fortnight after full explanations of
the Bill were given in the Seanad and blame me for his not tabling a single amendment——

  Deputy Pearse Doherty: The Minister did not answer any of my questions.

  Deputy Michael Noonan: ——is a bit rich. Less posing and a little more work would help
this House. A little bit more homework and then the Deputy would have everything done.
  I was asked about the value of the levy. It amounts to €65 million per year, including €40
million in respect of the compensation fund. Using rough mathematics, if one multiplies by ten
and adds €40 million, one will get a result close to €700 million. We cannot be accurate about
this because it pertains to future claims.
   The balance of the Quinn UK book is being run off. It relates mainly to non-motor insurance
but it is not the total story. Quite a proportion pertains to the United Kingdom and the Deputy
is correct in that regard.
  I do not have information on the number of people who will pay. The levy will apply to
motor and house insurance, and to travel insurance, which is intermittent. It is paid by the
insurance companies on the book. It is collected by the Revenue Commissioners in the same
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          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages

  [Deputy Michael Noonan.]
way as they collect stamp duty. We do not have the breakdown of the number but I presume
that, in any documentation concerning insurance, the industry will be able to say how many
people it has covered. The levy is paid by the companies to the Revenue Commissioners. It is
a question of the quantum rather than the individual numbers that are involved.
  I cannot go further than I have in explaining the bond. A bond is not an asset; it depends on
which side of the bond one is on. It is really an IOU to somebody giving money to the company.

  Deputy Richard Boyd Barrett: Why does the IOU to the bondholder carry more weight than
that to the policyholder?

  Deputy Michael Noonan: There was a charge on the assets in respect of the guarantees. This
was legally enforceable by the bondholders. The solvency rules require that assets set aside for
solvency requirements are not encumbered. Therefore, the guarantees cannot be used to meet
the requirements for reserves set by the Central Bank.

  Deputy Pearse Doherty: A little bit more homework by the Minister would not go astray to
help the functioning of this House. He stated he does not know how many people in the State
will be affected by the legislation. He cannot even give an estimate although the number is
probably in the hundreds of thousands. He told us today how much money will come into play
but not how many people will be impacted.
  What percentage of the €738 million that the Minister estimates is required under the fund
pertains to insurance in the North and Britain? It was our understanding that the vast majority
pertained to those locations.
  My third question is simple. Is the bondholder who is being paid in the order of €80 million
next Wednesday and who will have a call of €120 million regarding three hotels an Anglo Irish
Bank bondholder? If so, is that bondholder guaranteed under the State guarantee?

  Deputy Richard Boyd Barrett: When the Minister is answering that, could he not tell us who
the bondholder is? He must know the identity.

  Deputy Michael Noonan: The State had no involvement in this; it was the administrator in
Anglo Irish Bank and the Liberty Mutual group. We are ensuring the compensation fund is
adequate to pay for outstanding claims, the vast bulk of which are in Northern Ireland and the
United Kingdom, but some of which are in this jurisdiction. This is the way we fund the
insurance compensation fund, and we are following the advice of the Central Bank in doing
so. We are not party to the arrangements of Anglo Irish Bank and the Quinn group. It is not
in our remit. We do not have the information about the bondholders because it is not relevant
to this legislation.

  Deputy Richard Boyd Barrett: Could the Minister ask Mr. Alan Dukes for the identity of
the bondholder?

  Deputy Michael Noonan: Mr. Dukes is a private citizen.

  Deputy Pearse Doherty: If the Minister does not know whether it is a bondholder in Anglo
Irish Bank that will be paid off as a result of the deal, he should note it has a fundamental
bearing on the legislation. Only last week, if we are to believe what he told the people, he was
over with his friends in Europe asking that unguaranteed bondholders in Anglo Irish Bank be
burnt or made burden-share. If this were to emerge, then the call on the Quinn group would
be less. Therefore, the call on the insurance fund would be lower. It is a very simple case. The
                                                   844
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


Minister can say he does not know — it is a case of “see no evil, hear no evil, speak no evil”
— but I put it to him as he put it to me that a little bit of homework would not go astray to
help us, as parliamentarians, to decide which way we should vote on this type of legislation. Is
the bondholder being paid off as part of this legislation an unguaranteed Anglo Irish Bank
bondholder? The bondholder is to receive a cash payment of €80 million next Wednesday, with
a €120 million call in respect of three hotels. My question is simple.

  Deputy Michael Noonan: I have explained to the Deputy already that it was not legally
possible to do other than make an arrangement from Anglo Irish Bank’s perspective.

  Deputy Pearse Doherty: I may accept that.

  Deputy Michael Noonan: An arrangement worth €264 million was made that was of benefit
to the Irish State. If the bondholder arrangement had not been made, we would be required
now to make provision for another €264 million to go into the compensation fund. We are not
party to any of this.
  The relationship between Anglo Irish Bank and the Quinn group is a commercial one. Under
the relationship framework put in place under the Anglo Irish Bank Corporation Act 2009,
which governs the relationship between the bank and its shareholder the State, the issues
relating to normal commercial activities at the bank are a matter for the board, in respect of
which I, as Minister for Finance, have no role. Therefore, I do not have a role in any of the
court actions or any of the arrangements. The relationship between Anglo Irish Bank and
Quinn group is totally commercial. I am not taking Government responsibility for what are
commercial arrangements between Anglo Irish Bank and the Quinn group. It is not my legal
responsibility.

  Deputy Pearse Doherty: The Minister would like to have us believe he has no role, yet he
told us we must pass this legislation before 4 October because the State must say the fund is
in place to insure the losses before the sale to Mutual Liberty goes through. Deputy Noonan
should not pretend that he, as a Minister for Finance proposing legislation that will affect
hundreds of thousands of policyholders by increasing their premiums, has no role.
   The Minister is insisting on passing legislation that, over the next ten years, will demand the
payment of over €700 million by Irish policyholders, yet he does not know whether some of
the money is to pay off an Anglo Irish Bank bondholder who may not be guaranteed by the
State. The payment of the bondholder is central. This is not just an incidental occurrence.
When the Central Bank found out that the subsidiary of Quinn Insurance Limited, Quinn
Property Holdings Limited, posted its assets, worth €464 million, and secured this to a bond-
holder, it then said the insurance company was behaving recklessly and put it into admini-
stration. The bondholder is a central player on this stage. For the Minister to tell us he does
not know whether this is an Anglo Irish Bank bondholder, while he has been trotting about
since March stating such bondholders should be burned and there needs to be burden sharing,
is not credible. The Minister should have done his homework if he expects people to take this
legislation in any way seriously.

  Deputy Michael Noonan: Deputy Doherty’s position is that he wants to burn everybody.

  Deputy Pearse Doherty: Answer the question.

  Deputy Michael Noonan: If we take his remarks in context, he now objects to us covering,
through the insurance compensation fund, people in Northern Ireland who received their
insurance from the Quinn group.
                                                   845
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


  Deputy Pearse Doherty: No.

  Deputy Michael Noonan: That is his position.

  Deputy Pearse Doherty: It is not.

  Deputy Michael Noonan: The purpose of this——

  Deputy Pearse Doherty: With due respect——

  An Ceann Comhairle: Deputy Doherty, resume your seat.

  Deputy Pearse Doherty: ——the Minister cannot present this type of falsehood.

  An Ceann Comhairle: The Minister is on his feet.

  Deputy Pearse Doherty: I never articulated that position. The Minister cannot answer the
question.

  An Ceann Comhairle: Deputy Doherty cannot be jumping up and down when it feels like it.

   Deputy Michael Noonan: The purpose of the Bill is to provide money to the insurance
compensation fund so the claims of people who are not covered by the Quinn group will be
covered. This is what it is about. Deputy Doherty is correct to state the bulk of these are claims
in Northern Ireland and other parts of the United Kingdom but not all of them are. However,
he seems to be objecting to this, and what I am stating is that it is his position that the insurance
compensation fund should not cover the claims of citizens who are resident in Northern Ireland
if they are covered by insurance policies written by the Quinn group. This seems to be his
position.
  I have already answered the question about the bondholders.

  Deputy Pearse Doherty: With respect, you have not. Is it an Anglo Irish Bank bondholder?

  Deputy Michael Noonan: I explained it in detail to Deputy Doherty in so far as it is relevant
to this legislation. There is a major advantage in doing things this way in respect of the bond-
holder, because if it was not done this way I would be here proposing that instead of trying to
get something in excess of €700 million into the compensation fund we would be seeking €1
billion for the compensation fund, because the deal with the bondholders yielded €264 million
which would have to be got through the compensation fund if we did not do it this way.

  An Ceann Comhairle: I call Deputy Michael McGrath, but before he speaks I wish to state
that we are dealing with section 2, which amends section 1 of the principal Act which covers
definitions.

  Deputy Michael McGrath: Yes.

   An Ceann Comhairle: However, we are arguing about bondholders. Can we deal with the
issue?

  Deputy Michael McGrath: I want to raise a question with regard to section 2 but perhaps
the Ceann Comhairle wishes to dispose of the other matter being discussed.

  An Ceann Comhairle: I do not know how we can dispose of it because it is not related to
section 2.
                                                   846
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


  Deputy Michael McGrath: I have a question on section 2 which relates to the move to apply
the levy to risks in the State as opposed to the previous regime whereby Irish authorised
insurers were levied in respect of risks inside or outside the State. Will the Minister clarify
whether in a case where an insurance policy contains risks inside and outside the State the
company must do a pro rata calculation and submit this information as part of its calculation
to Revenue or how will it work?
   With regard to the definition of risks in the State and exclusions, will the Minister clarify the
impact on the various insurance policies that businesses have in respect of property, employers
liability and professional indemnity? Which of these are included?

  Deputy Michael Noonan: I thank the Deputy for his question because it finally allows me to
speak to the section and explain what is in it. Section 2 introduces a number of new definitions
to section 1 of the Insurance Act 1964 and updates the existing definitions for “authorisation”,
“policy” and “insurer”. These will allow the scope of the scheme to be extended to cover all
insured risk in the State except for specific excluded risks.
   The principal factors which will determine whether a risk is a risk in the State will be whether
insured buildings are located in the State; whether insured vehicles are registered in the State;
in the case of short-term travel insurance whether the insurance was taken out in the State;
and in most other cases whether the habitual residence of the policyholder is in the State or,
in the case of legal persons, whether the establishment of the policyholder is in the State.
   The newly defined term “excluded risk” removes such policies from the provisions of the
legislation which would enable the fund to compensate policyholders and also removes such
policies from the provisions which enable such policies to be levied. In summary, the risks
excluded from the compensation fund and from being levied are the insurance of shipping and
aircraft, mainly because these risks are located outside the State; life insurance is excluded
because this is solely a non-life scheme; health insurance, mainly because a large proportion of
the market, namely the VHI, is outside the scope of the current body of insurance legislation;
dental insurance is excluded to be consistent with the stamp duty consolidation levy, as we
want to make the payment and collection of the levy as easy as possible by mirroring the stamp
duty levy exclusions and stamp duty is collected by the Revenue Commissioners; reinsurance
is excluded because it relates to business to business transactions and is therefore not covered
by the scheme; and insurance issued when the insurer’s authorisation was revoked is also
excluded.
  There is also a definition for “insurer authorised in another Member State” as this is required
under the new scheme since such insurers can operate in the Irish market on a branch basis or
on a freedom of services basis and policyholders of these companies are brought into the
scheme with regard to risk in the State.

  Deputy Michael McGrath: Are business insurance policies excluded?

  Deputy Michael Noonan: If the business is in the State.

   Deputy Michael McGrath: Then all types of policies they have are included, such as employer
liability, professional indemnity——

  Deputy Michael Noonan: Businesses are excluded.

  Deputy Michael McGrath: Even in respect of property? I am looking at the exclusions in
the legislation.

  Deputy Michael Noonan: Yes, it is excluded also.
                                                   847
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


  Deputy Michael McGrath: Business property is excluded.

  Deputy Michael Noonan: Yes.

  Deputy Michael McGrath: So all business policies are excluded.

  Deputy Michael Noonan: Yes.

  Deputy Michael McGrath: I thank the Minister.

  Deputy Pearse Doherty: On the risks excluded under section 2, I understand this comes from
a European directive and that it is with regard only to risk within the State. My question on to
whom the existing fund would be paid and whether it would be to policyholders in the State
or outside it was not to argue we should not pay the insurance premiums of those outside the
State; it was very much because the Minister stated in his argument that the fund was to pay
Irish policyholders. The point we teased out, and which I believe I got clarified, is that the
majority of these are in the North and Britain but we have no breakdown of the categories.
  When did the European directive on risk take force? The Bill is being presented as being
required because of a European directive.

  Deputy Michael Noonan: It came into force in 1991.

  Question put and agreed to.

                                             SECTION 3

  Question proposed: “That section 3 stand part of the Bill.”

  Deputy Michael Noonan: This is a technical provision which makes a number of minor cross-
referencing changes to section 2 of the Insurance Act 1964 consequential on the amendments
made in this Bill. The purpose of this is to ensure the legislation holds together after these
amendments have been made.

  Question put and agreed to.

                                             SECTION 4

  Question proposed: “That section 4 stand part of the Bill.”

   Deputy Michael Noonan: Section 4 replaces section 3 of the Insurance Act 1964 and intro-
duces three new sections: 3A on the application by the liquidator of an insolvent insurer; 3B
on an application where the insurer in liquidation is an insurer authorised in another member
state; and 3C on the payments out of the fund where an administrator is appointed. These
provisions are designed to facilitate payments out of the fund to policyholders with regard to
risks in the State where an Irish authorised or an EU authorised insurer goes into liquidation
and the approval of the High Court has been obtained for such payments.
   This section also provides that a body corporate or an incorporated body of persons may
not be paid out of the fund unless the sum is due to an individual. The intention of this
limitation is to confine the benefits of the scheme to consumers.
  In more detail, section 3 is inserted into the 1964 Act and applies general terms to payments
out of the fund.
  Subsection (1) provides the general power to make payments out of the fund in respect of
payments due under a policy issued by an insurer in liquidation. Subsection (2) operates to
                                                   848
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


restrict payments from the fund where payment is available from other sources, for example
where the claim is guaranteed by a party other than the insurer in liquidation. Subsection (3)
elaborates on subsection (2) and provides that where the assets of the insurer in liquidation
partially meet the claim the fund will take up the balance. This ensures that the fund is not
used to meet the whole of the claim in a manner which would subsidise the assets available to
meet the claims of other creditors. Subsection (4) retains the existing limits on the amount
which can be paid out of the fund to the lesser of 65% of the total sum due under the policy
or €825,000. These limits operate in addition to any payments received from the assets of the
insurer or other sources, so where 35% of a claim was met from other sources the fund would
contribute 65%, so that the policyholder would receive the total amount she was entitled to,
assuming the €825,000 claim limit was not met. Subsection (5) clarifies that the limits imposed
under subsections (3) and (4) also apply to liabilities to third parties. For example — where a
payment from the fund is payable to a person injured by an insured driver, rather than payable
to the policyholder, the limitations in subsections (3) and (4) will also apply. Subsection (6)
retains the existing limitation of the scheme in respect of payment to legal persons. Legal
persons are entitled to receive compensation under the scheme only in circumstances where
the sum due is in respect of a liability to a human person or in respect of liabilities towards the
legal person from a human person’s insurance. Subsection (7) elaborates on subsection (2) and
retains the existing limitation in respect of payments from the fund where the Motor Insurers’
Bureau of Ireland, MIDI, meets the claim. It provides that the fund will contribute only towards
any shortfall where a part payment is made by the MIDI. Subsection (8) defines “insurer in
liquidation” for the purposes of the section. This definition means that subsection (1) operates
in respect of Irish authorised insurers when a liquidator has been appointed by the High Court,
or in respect of insurers authorised in another member state when an equivalent person is
appointed.
   Section 3A, application by liquidator of insolvent insurer, provides for the mechanics of
payments being made out of the fund to the liquidator of an Irish authorised insurer which has
gone into liquidation. Subsection (1) empowers the liquidator to apply to the High Court for
payments to be made out of the fund under section 3, to meet the claims of policyholders of
the liquidated insurer. Subsection (2) provides that where a liquidator receives money in respect
of policyholders under subsection (1) it must be paid over by the liquidator to the policyholder
concerned, so that it cannot be used to meet the claims of other creditors. The subsection also
provides that the fund shall be a creditor of the insurer in respect of the amount paid over,
and so will be entitled to recover any portion of the debt available to unsecured creditors in
respect of the insurer’s debts generally. Subsection (3) provides that where persons who receive
payments from the fund also receive other sums in respect of the claim so that in total they
receive in excess of 100% of the claim, they are obliged to repay the fund in the amount of the
overpayment. The subsection also clarifies that where the accountant receives sums under the
winding up of the insurer he shall not pay over those sums to the policyholder to the extent of
any excess. Subsection (4) creates an offence where a person fails to make a repayment as
required under subsection (3). Subsections (5) and (6) apply the standard provisions for the
criminal responsibility of management if the offence under this subsection is committed by a
legal person. Subsection (5) provides for the criminal liability of officers of a corporate body,
where the corporate body commits the offence under subsection (4), in circumstances where
they consent or connive in the offence or the offence is attributable to their wilful neglect.
Subsection (6) applies the equivalent rules as apply under subsection (5) to offences committed
by members who manage a body corporate, for example, members of a club. Subsection (7)
provides that the Central Bank can bring summary prosecutions for the offence, as well as
the DPP.
                                                   849
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages

  [Deputy Michael Noonan.]

  Section 3B deals with application where the insurer in liquidation is an insurer authorised in
another member state. It provides for the mechanics of payments out of the fund which are
due to policyholders of an insurer authorised in another member state. Subsection (1) provides
that where the insurer concerned is in the equivalent of liquidation in another member state
the accountant to the insurance compensation fund, who manages the fund on behalf of the
High Court, can apply on behalf of the persons concerned for payment to be made, once in
every six months. The limitation on the frequency of the applications is included to ensure that
excessive legal costs are not imposed on the fund and to enable claims to be made in respect
of a number of policyholders at a time, rather than in respect of each policyholder individually.
This section also makes provision to allow the accountant of the High Court to receive a
payment from the fund for the costs of any application to the insurance compensation fund he
or she makes to the High Court on behalf of policyholders of insurance companies authorised
outside the State, whether the application is successful or not.
   Subsection (2) provides that where an amount is paid out of the fund under subsection (3),
the accountant will pay over the amount due to the person concerned, and the fund and the
accountant will be a creditor of the insurer concerned in respect of the amount paid over.
Subsection (3) provides that where a person receives an overpayment in respect of the claim,
between payments made by the fund and payments from other sources, the amount of excess
must be repaid to the fund. This will mean that the fund covers a shortfall in the claim, subject
to the limits imposed in section 3, but will not cover overpayments which would result in a
windfall for the person concerned. Subsection (4) provides for an offence equivalent to that
which applies under section 3B, where a person fails to make a repayment as required under
subsection (3). Subsections (5) and (6) apply the standard provisions for the criminal responsi-
bility of management if the offence under this subsection is committed by a legal person.
  Subsection (5) provides for the criminal liability of officers of a corporate body, where the
corporate body commits the offence under subsection (4), in circumstances where they consent
or connive in the offence or the offence is attributable to their willful neglect. Subsection (6)
applies the equivalent rules as apply under subsection (5) to offences committed by members
who manage a body corporate, for example, members of a club. Subsection (7) provides that
the Central Bank can bring summary prosecutions for the offence, as well as the DPP.
   Section 3C deals with payments out of fund where an administrator is appointed. Section 3C
provides for the mechanics of payments out of the fund in respect of administrations. Subsec-
tion (1) provides for payments out of the fund in respect of administrations. Where, in the
opinion of the Central Bank, the average business of the insurer was at least 70%; in respect
of Irish risks, then the current rules will apply and sums required to enable the administrator
to carry on the business of the insurer and to perform his or her functions can be paid out of
the fund. Where the average proportion of the insurer’s business over three years that concerns
risk in the state is less than 70% then payments from the fund will only be available to defray
the expenses of the administrator in circumstances where those expenses are unlikely to be
defrayed from other sources. Subsection (2) retains existing provisions which apply to payments
made to administrators, so that the amount paid from the fund is an unsecured debt of the
insurer. There is also a provision to enable the Minister for Finance to waive such a debt in
certain circumstances. The provision mirrors the existing provisions in both respects. Subsection
(3) relates to the existing restriction on payment of dividends or making other distributions to
shareholders, while an administrator is appointed to an insurer remains. The restriction would
continue to apply after an administrator ceases to be appointed to the insurer, while the debt
remains outstanding. Subsection (4) mirrors the substance of the existing provisions in respect
                                                   850
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


of the matters to which the High Court shall have regard in exercising its discretion under
subsection (1).
  Members can see the section is technical. It deals with how the fund will operate. I wanted to
read it into the record in order that a full explanation is provided for Members and the industry.

  Deputy Pearse Doherty: I have two questions, one of which I have not posed before but I
posed the other on Second Stage. First, I am curious as to where the figure originated of 65%
of the claim being paid out to a maximum of €825,000. How was that percentage and value
determined? What were the factors that led to a 65% figure being introduced in the legislation?
   Second, I am concerned by section 3C which deals with companies that have more than 70%
of their business in the State for over three years. According to the legislation, when companies
go into liquidation they are treated equally whether they have 70% or less in the State.
However, only companies that have 70% of their business in the State are covered when
in administration.
   For example, if I have a policy with a company that has 60% of its business in the State and
someone else has a policy with a company that has more than 70% of its business in the State,
and both companies fall into administration, am I put at more risk than the other person
because I have decided to go with a company that has less than 70% of its business in the
State? Apart from the individual, is the latter company itself in a more disadvantageous posi-
tion because the fund will assist a company that has at least 70% of its customer base in the
State, thus helping it to get over the hump when it is in administration? The fund will not,
however, assist a company with 65% of its business in the State to get over the hump when it
is in administration. I am sure there is a rationale as to why this provision is in the section. I
understand that everybody is supported when in liquidation and I presume that is because
policyholders are affected rather than the business. Can the Minister explain the rationale
behind that? Are there any questions as to how that would be construed concerning State aid,
or any similar questions that would be of concern?

  Deputy Michael Noonan: I will deal with the 65% question first and then the 70% one. The
purpose of an insurance compensation fund in a liquidation situation is to provide a certain
minimum level of protection to policyholders. There is a need to strike a balance between what
policyholders will receive in compensation and what the cost of such payments will be, as
ultimately funding for such compensation will be paid for by other policyholders through the
levy system, as we have discussed. The rate in the existing legislation is 65% and we saw no
reason to change the level at this time. It should be noted, however, that there is a proposal to
introduce an insurance compensation directive at EU level which would require a minimum
set of harmonised standards to apply to every EU country. It is likely that under these rules
the level of protection will increase for policyholders. While this is expected to be published in
late 2012, agreement between the member states is not expected for a number of years
thereafter.
   As regards the 70% question, at the outset it should be noted that the Central Bank will
continue to have the option of placing any firm in administration if it deems it appropriate.
There will, however, be restrictions on the availability of funding for new administrations, as
funding for day-to-day business will be confined to firms which conduct over 70% of their
business in the Irish market. The reason for restrictions is that, unlike liquidation, there is no
link between the funding available for administration and the levy process. The role of an
administration is to carry on the business of an insurance company on an ongoing basis and
meet policy obligations as they arise. Therefore if a company is put into administration and
funding is required, it is not possible to distinguish between insured risk in the State and foreign
                                                   851
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages

  [Deputy Michael Noonan.]
risk, because all obligations must be met as they arise since in many cases the company is still
conducting business in the open market. Consequently, since only insured risk in the State can
be levied to pay for the administration, it is important that the company in question conducts
the bulk of its business in the Irish market, as otherwise there would be a disproportionate
benefit for foreign policyholders at the expense of Irish policyholders who would be paying for
the funding.
   The 70% share will be averaged over the previous three years. The reason the 70% figure
was chosen is that we believe it covers all the large domestic firms in the Irish market. It should
be noted that Irish policyholders or firms that are not eligible for funding while in admini-
stration are protected should the company be unable to meet its obligations to them and it has
to go into liquidation.

  Deputy Pearse Doherty: I thank the Minister for his reply and can see where he is coming
from. Please God, no company currently trading will have to go into administration anytime
soon, but there is obviously a benefit for a company that has more than 70% of its business in
this State. I am worried about a company that might have, for example, 32% of its business
outside the State. We live on an island that is partitioned. If a company in Monaghan or
Donegal had 68% of its business in this State but 32% in the North of Ireland, it would not
have the same support as a company in Cork that may have 70% of its business in the State. I
am worried how the legislation we are introducing will affect the market in relation to that. Is
this a State aid issue, as well? Does the Minister have any concerns over that, or perhaps there
are no concerns? It seems, however, that we are not providing a level playing pitch for these
companies. Maybe that is the only way the Minister can do it, but I am concerned by that
aspect of the legislation.

  Deputy Michael Noonan: I do not think anybody is being treated unfairly because there is a
compensation fund in the UK as well. A company in Northern Ireland would have access to
the UK fund, so I do not think we need to be too concerned about that. I do not think there
are considerations of State aid in this. As I said already, the EU is considering a compensation
fund which would apply throughout the Community.

  Deputy Pearse Doherty: May I clarify this matter? I will take the example of a Donegal
company that has 68% of its customer base in the South, but would not be able to apply to
this fund when in administration. I presume that even though it would have 32% of its customer
base in the North, it would still not be able to apply under the British fund because it is based
in this State and the majority of its customer base is here. I am concerned that it would have
absolutely no support whatsoever under administration, bar the expenses that the administrator
would incur. I am sure businesses would not plan for the eventuality of going into admini-
stration, but it would be a concern for businesses that wish to operate on both sides of the
Border and have an all-Ireland business plan. That is something that not only Sinn Féin pro-
motes, but also I am sure every party in the Dáil wants to see a vibrant economy right across
the island. I am therefore concerned about that issue.

   Deputy Michael Noonan: I am advised that the 70% marker includes all the large companies
that trade in the State. However, it is also part of the section that the 70% is averaged over
three years. Therefore the possibility of somebody getting caught on the basis of one-year
figures would not arise. A Northern Ireland company will not have access to liquidation pro-
visions if its business model was not sustainable. We do not think there is any such company
as the Deputy’s example refers to. We think it is a workable solution because there are
obviously other considerations.
                                                   852
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


  Question put and agreed to.

                                             SECTION 5

  Question proposed: “That section 5 stand part of the Bill.”

  An Ceann Comhairle: Section 5 involves the repeal of section 4 of the principal Act.

  Deputy Michael Noonan: Section 5 repeals section 4 of the Insurance Act 1964 which is
obsolete as it relates to a specific insolvency in 1964, namely the insolvency of the Equitable
Insurance Company Limited. This provision allowed the Minister for Finance to provide a
grant of £30,000 to the fund out of moneys provided by the Houses of the Oireachtas under
section 3 of the existing legislation, to the liquidator of Equitable Insurance Company Limited.
This matter has been resolved a long time ago so the Office of the Attorney General has
agreed this provision is no longer necessary.

  Question put and agreed to.

                                             SECTION 6

  Question proposed: “That section 6 stand part of the Bill.”

  Deputy Michael Noonan: Section 6 is a technical provision that makes a cross-reference
change to section 5 of the Insurance Act 1964, consequential on the amendments made in
this Bill.

  Question put and agreed to.

                                             SECTION 7

  Question proposed: “That section 7 stand part of the Bill.”

   Deputy Michael Noonan: Section 7 replaces section 6 of the Insurance Act 1964. The section
sets out the conditions for the levying of insurance companies in relation to the Insurance
Compensation Fund. The provision sets out a number of elements including the following —
the Central Bank continues to be responsible for assessing the fund from time to time to see
if it needs financial support. In addition, it determines the levy to be placed on insurers where
funding is required and notifies them. The Minister for Finance is provided with power to
appoint a collector to collect the levy who will pass on the levy to the Insurance Compensation
Fund. The collector will inform the Central Bank where no payment is made. The collector is
the Revenue Commissioners.
  The Central Bank will continue to be responsible for enforcement in the event of non-
payment of the levy. The levy is required to be reviewed regularly. All insurance companies
will be levied in respect of risks in the State under the new scheme. This contrasts with the
existing scheme under which only Irish authorised insurances are levied. However, in that
scheme, they are levied in respect of risks inside or outside the State. The levy will be collected
by the Revenue Commissioners.
   Deputies may be aware, because they were probably lobbied by the insurance industry, that
in the early stages of drafting this legislation it looked as if the levy would have to apply to all
business written in Ireland, even if the insured persons or assets were outside of the State.
There was a serious threat to major insurance companies who had written much of their busi-
ness across the Continent of Europe, particularly in Germany. There was a potential loss of
1,500 or 1,600 jobs arising from this and it was one of the reasons we needed to scrutinise it so
                                                   853
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages

  [Deputy Michael Noonan.]
carefully in Europe and come up with a formula to ensure that in protecting the jobs of this
company that we did not lose the jobs in very significant insurance companies in this city who
write a lot of business from the financial services centre in respect of risk outside the State.

  Deputy Michael McGrath: I ask about the mechanics of how the levy will be implemented.
I note under this section that the Central Bank determines the levy to be placed on insurers
and notifies them of same. When is it intended this levy will take effect and what will be the
relevant valuation date and payment date? Will it come into force in 2012? Any details the
Minister can provide would be helpful.
   The levy is being imposed on the insurance companies. Is it accepted that this levy will be
automatically passed on to policyholders as a 2% levy? What discussions, if any, has the Mini-
ster had with the industry regarding the levy? Has the industry confirmed it will be automati-
cally passed on to policyholders? Has there been any change of thinking as regards the existing
3% stamp duty? Is the Minister proposing any changes in that regard?

   Deputy Michael Noonan: I am not proposing any changes in the stamp duty but all such
issues are budgetary issues and it would not be done in mid-year in any case.
  Subsection (1) makes the Central Bank responsible for assessing the fund from time to time
to see if it needs financial support. It can determine the appropriate contribution to be paid to
the fund by each insurer up to an amount not exceeding 2% of the gross premiums paid to the
insurer, in respect of policies issued in respect of risks in the State.
  Subsection (2) requires the bank to publish on its website any decision to levy insurers and
to deliver a notice to each insurer specifying the date from which the levy will commence, the
percentage contribution to be paid and the person to whom it should be paid.
  Subsection (3) requires the insurance company to deliver to the collector a statement in
writing showing the aggregate of gross premiums paid in that quarter in respect of risks in the
State and to pay the appropriate contribution based on the gross premiums.
  Subsection (4) requires the collector to pass the money received on to the fund after
deducting its costs and to inform the bank of who has been paid and what is the contribution.
  Subsection (5) requires the collector to inform the bank if it is the view that a company has
not paid its appropriate contribution.
  Subsection (6) provides the bank with the power to recover any contribution not paid by an
insurer and to take appropriate action against the company.
  Subsection (7) requires the bank to transmit any money to the fund recovered as a result of
the action taken under subsection (6).
   Subsection (8) requires the bank to publish on its website any decision to levy insurers and
to deliver a notice to each insurer specifying the date from which the levy will cease. It also
provides the bank with the basis for reviewing the levy on a yearly basis, either to increase or
to lower it or to allow it to continue at the same rate. Of course, it could only be increased if
it were below 2% in the first instance.
   Subsections (9), (10), (11) and (12), provide the legal basis for the offence provision in
circumstances where an insurer does not pay the appropriate contribution.
   Subsection (13) enables the Minister to appoint the Central Bank, the Governor or Commis-
sioners or any other appropriate person, to perform the functions of the collector under this
section.
                                                   854
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages


  Where the bank is appointed, then subsection (b) removes the obligation to inform itself
which would otherwise arise. Where the Revenue Commissioners are appointed, subparagraph
(c) ensures that if stamp duty moves to electronic collection, then the levy may also move to
electronic collection.
  Subsection (14) is a definition section which provides for defined terms for the purposes of
the section. The obligations on the insurers to make payments are triggered with reference to
the effective date, the date on which the original notice is published by the Central Bank or
the dates on which amending notices are published under subsection (8). The definition pre-
mium ensures that policies cannot be taken outside the scope of the levy in the event they
cover a risk outside the State as well as risks in the State. The definition of “quarter” operates
to govern the period during which contributions must be paid.
  The Deputy asked about a three month notice which must be given when it is signed.

  Deputy Michael McGrath: Has the Minister had discussions with the industry and has the
industry confirmed it will be levying policyholders?

  Deputy Michael Noonan: There have been levies before so the industry will be familiar with
the Insurance Compensation Fund and the 1964 legislation. I think the levies lapsed some time
in the early 1990s so the companies would be familiar with the situation.
   The main requirement of the domestic industry is that there should be a level playing field
between companies which operate in the Irish market on a subsidiary or a branch basis. Their
main fear with the existing arrangements was that an authorised firm could convert its business
              into a branch and therefore evade the levy. This possibility has now been removed
7 o’clock     by applying the levy to all policies relating to risks in the State, whether these
              are sold by a branch or by a subsidiary. International industry is satisfied that the
legislation addresses their needs, their main concern having been that because of the scale of
their international business, they would end up paying the bulk of the levy. Their view was
that this would force most companies conducting such business to leave the country. They have
indicated they have no difficulty paying the levy on insured risk in the State. This reiterates the
point I made about the risk of losing jobs if the levy were imposed on the risk written here——

 Deputy Michael McGrath: Have the companies confirmed that the levy will be passed on?
The levy is on the companies and they will absorb it.

  Deputy Michael Noonan: The Central Bank organises it and the Revenue collects it from
companies on their book of particular businesses and it is passed on by the company to the
Revenue and it is passed in turn to the insurance compensation fund on the direction of the
Central Bank.

  Deputy Michael McGrath: Yes, but it is not a requirement of the law that the insurance
companies pass it on to the policyholder.

  Deputy Michael Noonan: The way the levy operates, it operates on the books; the Deputy
can take it that it will be passed on.

  Deputy Michael McGrath: I know that but they do not have to do it legally.

  Deputy Michael Noonan: Legally, they could absorb it.

  Deputy Pearse Doherty: I take it that Michael Flatley’s legs will not be paying into this
insurance fund, given the exemptions the Government has got.
                                                   855
          Insurance (Amendment) Bill 2011   28 September 2011.   [Seanad]: Committee and Remaining Stages

  [Deputy Pearse Doherty.]

   I presume that the Minister’s ability to pay into the fund itself is covered in the principal
Act. What payment will be required this year and next year? How will the money be recouped?
Is that covered in the principal Act?

   Deputy Michael Noonan: The Exchequer will have to put in money in the first instance.
When the Bill is signed there will be three months notice. Money is required from now on. It
is like a loan from the Exchequer. In terms of the general Government deficit, it is treated as
a financial transaction. The State will put money in and will get an interest rate on it. The State
will get its money back as the levy builds over the years. It does not have an effect on the
budget figures for example because it is a financial transaction according to the people who
deal with these issues.

  Deputy Pearse Doherty: Is it correct to say that the State will put in a sum in the region of
€400 million in the next 24 months? Will the State receive a higher rate of interest on that
money that it puts into this fund than what it paid to borrow the money from the EU and IMF
at this time?

  Deputy Michael Noonan: We are putting in €460 million, a sum of €280 million this year and
€180 million next year because we think many of the claims are front loaded. We will receive
the appropriate commercial rate of interest on this investment and members can take it that
will cover the cost of State borrowing.
  These things vary. On the CoCos we put into the banking system for recapitalisation, we will
get a 10% coupon on that. I do not think it will be as high an interest rate as that, it will be at
commercial rates, but I am sure it will be above the cost of borrowing.

  Deputy Pearse Doherty: Will we see a return on the money in two, three or four years time?

  Deputy Michael Noonan: It depends on the level of draw down. The levy will produce €65
million a year and there is €40 million in the fund at present. If we put in €280 million this
year and €180 million next year, the Deputy can do the sum, but it will be a while before we
get the money back.

  Question put and agreed to.

                                             SECTION 8

  Question proposed: “That section 8 stand part of the Bill.”

   Deputy Michael Noonan: Section 8 is a technical amendment. The purpose of this provision
is to repeal section 31 of the Insurance Compensation Fund of Insurance Act 1989, which made
amendments to section 3 of the 1964 Act. Those amendments are now obsolete as they are
superseded by section 4 of this Bill.
  This repeal will remove any ambiguity which might arise in the event that section 31 were
to remain on the Statute Book.

  Question put and agreed to.

                                             SECTION 9

  Question proposed: “That section 9 stand part of the Bill.”
                                                   856
          Insurance (Amendment) Bill 2011    28 September 2011.   [Seanad]: Committee and Remaining Stages


   Deputy Michael Noonan: Section 9 provides the saving mechanism and to ensure that any
liquidations or administrations commenced before this Act comes into effect will continue to
be subject to the old rules. This is a standard convention that a company under administration
is protected under the rules that applied when the company went into administration. The
effect of this is to ensure that QIL, Quinn Insurance Limited, remains under the administration,
as if this Bill had not been introduced.

  Question put and agreed to.

                                              SECTION 10

  Question proposed: “That section 10 stand part of the Bill.”

  Deputy Michael Noonan: Section 10 sets out the Short Title of the Act, as the Insurance
(Amendment) Act 2011. This is a standard provision in all Acts.

  Question put and agreed to.

  Title agreed to.

  Bill reported without amendments and received for final consideration.

  Question proposed: “That the Bill do now pass.”

  Question put:

                                    The Dáil divided: Tá, 97; Níl, 42.
                                                    Tá

      Bannon, James.                                              Fitzgerald, Frances.
      Barry, Tom.                                                 Fitzpatrick, Peter.
      Breen, Pat.                                                 Flanagan, Charles.
      Broughan, Thomas P.                                         Flanagan, Terence.
      Bruton, Richard.                                            Gilmore, Eamon.
      Burton, Joan.                                               Griffin, Brendan.
      Butler, Ray.                                                Hannigan, Dominic.
      Buttimer, Jerry.                                            Harrington, Noel.
      Byrne, Catherine.                                           Harris, Simon.
      Byrne, Eric.                                                Hayes, Brian.
      Cannon, Ciarán.                                             Hayes, Tom.
      Carey, Joe.                                                 Heydon, Martin.
      Coffey, Paudie.                                             Hogan, Phil.
      Conaghan, Michael.                                          Howlin, Brendan.
      Conlan, Seán.                                               Humphreys, Heather.
      Connaughton, Paul J.                                        Humphreys, Kevin.
      Coonan, Noel.                                               Keaveney, Colm.
      Corcoran Kennedy, Marcella.                                 Kehoe, Paul.
      Costello, Joe.                                              Kelly, Alan.
      Coveney, Simon.                                             Kenny, Seán.
      Creighton, Lucinda.                                         Kyne, Seán.
      Daly, Jim.                                                  Lawlor, Anthony.
      Deasy, John.                                                Lynch, Ciarán.
      Deering, Pat.                                               Lynch, Kathleen.
      Doherty, Regina.                                            Lyons, John.
      Donohoe, Paschal.                                           Maloney, Eamonn.
      Dowds, Robert.                                              McCarthy, Michael.
      Doyle, Andrew.                                              McHugh, Joe.
      Durkan, Bernard J.                                          McLoughlin, Tony.
      English, Damien.                                            McNamara, Michael.
      Farrell, Alan.                                              Mitchell, Olivia.
      Feighan, Frank.                                             Mitchell O’Connor, Mary.
      Ferris, Anne.                                               Mulherin, Michelle.
                                                    857
          Veterinary Practice (Amendment)   28 September 2011.        Bill 2011: Order for Second Stage


                                             Tá—continued

      Murphy, Dara.                                              Quinn, Ruairí.
      Murphy, Eoghan.                                            Reilly, James.
      Nash, Gerald.                                              Ring, Michael.
      Naughten, Denis.                                           Ryan, Brendan.
      Nolan, Derek.                                              Shatter, Alan.
      Noonan, Michael.                                           Sherlock, Sean.
      Ó Ríordáin, Aodhán.                                        Shortall, Róisín.
      O’Donnell, Kieran.                                         Spring, Arthur.
      O’Donovan, Patrick.                                        Stagg, Emmet.
      O’Dowd, Fergus.                                            Stanton, David.
      O’Mahony, John.                                            Timmins, Billy.
      O’Reilly, Joe.                                             Tuffy, Joanna.
      O’Sullivan, Jan.                                           Twomey, Liam.
      Perry, John.                                               Walsh, Brian.
      Phelan, Ann.                                               White, Alex.
      Phelan, John Paul.

                                                   Níl

      Adams, Gerry.                                              McGrath, Finian.
      Calleary, Dara.                                            McGrath, Mattie.
      Collins, Joan.                                             McGrath, Michael.
      Collins, Niall.                                            McGuinness, John.
      Colreavy, Michael.                                         McLellan, Sandra.
      Crowe, Seán.                                               Moynihan, Michael.
      Daly, Clare.                                               Murphy, Catherine.
                                                                 Ó Caoláin, Caoimhghín.
      Doherty, Pearse.
                                                                 Ó Cuív, Éamon.
      Donnelly, Stephen.                                         Ó Fearghaíl, Seán.
      Dooley, Timmy.                                             Ó Snodaigh, Aengus.
      Ellis, Dessie.                                             O’Brien, Jonathan.
      Ferris, Martin.                                            O’Dea, Willie.
      Fleming, Tom.                                              O’Sullivan, Maureen.
      Halligan, John.                                            Pringle, Thomas.
      Healy, Seamus.                                             Ross, Shane.
      Healy-Rae, Michael.                                        Smith, Brendan.
      Higgins, Joe.                                              Stanley, Brian.
      Kelleher, Billy.                                           Tóibín, Peadar.
      Kirk, Seamus.                                              Troy, Robert.
      Kitt, Michael P.                                           Wallace, Mick.
      Mac Lochlainn, Pádraig.



Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Aengus Ó Snodaigh and
                                   Seán Ó Fearghaíl.

Question declared carried.


             Veterinary Practice (Amendment) Bill 2011: Order for Second Stage

  Bill entitled an Act to enable persons other than veterinary practitioners and veterinary
nurses to carry out certain procedures on or in relation to animals, for those and other purposes
to amend the Veterinary Practice Act 2005, and to provide for related matters.

  Minister for Agriculture, Fisheries and Food (Deputy Simon Coveney): I move: “That Second
Stage be taken now.”


  Question put and agreed to.

                                                   858
          Veterinary Practice (Amendment)   28 September 2011.      Bill 2011: Second Stage


                   Veterinary Practice (Amendment) Bill 2011: Second Stage

  Question proposed: “That the Bill be now read a Second Time.”
  Minister for Agriculture, Fisheries and Food (Deputy Simon Coveney): I am pleased to
present to the House, on Second Stage, the Veterinary Practice (Amendment) Bill 2011.
  Before giving an outline of the Bill I propose to make some preliminary remarks about the
context in which this Bill is being presented and the role played by veterinary practitioners,
nurses and others in the treatment and care of animals.
   At the outset, it would be appropriate for me to take the opportunity in the House to convey
my congratulations to the veterinary profession in this year which marks the 250th anniversary
of its establishment in France. The profession can rightly be proud of the role it has played in
the development of agricultural systems in Europe and beyond in the interim, particularly in
combating animal diseases. While the establishment of formal veterinary education and training
in this country came somewhat later, we nonetheless have a track record of more than a century
of Irish-trained veterinarians.
  The primary role of the profession continues to be animal health care, with the greatest
number of veterinarians working in this field, either in caring for farm animals, sport animals
and increasingly in the care of companion animals. At farm level, veterinarians perform a very
important function in assisting farmer clients to maintain the high health status of their animals
and minimising disease risks which can have a significant impact on farm income. Veterinarians
are also a critical part of the official inspection service, both at farm and processing levels, in
terms of verifying that food is safe for consumers. Veterinarians are also involved in many
other roles within industry, including research as part of the pharmaceutical industry, reflecting
how the profession has responded to evolving demands and is prepared to participate fully in
the broader economic life of the economy. Veterinarians can truly be said to be involved from
“farm to fork”.
  Turning to the broader economic context, this House will be well aware of the ambitious
targets which have been set for the agrifood sector under Food Harvest 2020. I am personally
committed to driving this strategy forward, which was put in place by a previous Government.
As Members are aware, our agriculture and food industries have been identified as key drivers
of our overall economic recovery in the years ahead. Producing high quality, safe food at a
competitive price will be a central determinant of our success in meeting our ambitious targets.
In view of the ongoing and increasing awareness and concern about animal health and welfare
and, equally importantly, food safety, the veterinary profession will no doubt play a significant
role in the drive to achieve the 2020 vision.
  Against this background, I would like to stress the importance the Government attaches to
ensuring that while our regulatory procedures are robust, they must not be unduly restrictive
or overly burdensome on the industry they are designed to serve, and in particular they should
not impact negatively on national competitiveness and economic development. The professions,
including the veterinary profession, play an important part in the broader economic life of the
country but we must ensure that only those functions or tasks which need to be reserved for
highly trained professionals are reserved for them. In particular, it is important that functions
currently safely performed by persons other than veterinarians can continue to be performed
by these persons, although it may be necessary to put in place additional guarantees in regard
to the training and skills of persons performing these functions. This is the philosophy under-
pinning the main element of the legislation I bring before this House today.
  It is worth recalling at this stage that the veterinary profession was the first of the professions
in Ireland to have its underpinning legislation significantly reformed and brought up to date.
                                                   859
          Veterinary Practice (Amendment)   28 September 2011.   Bill 2011: Second Stage

  [Deputy Simon Coveney.]
The Veterinary Practice Act 2005 overhauled regulation of the profession in areas such as
composition of its regulating body, the Veterinary Council of Ireland, improved disciplinary
procedures, establishment of mandatory continuous professional development and premises
accreditation schemes.
   The 2005 Act also represented an important milestone in the development of the veterinary
nursing profession as a discipline in its own right, with the Act conferring formal recognition
on nurses for the first time in Ireland. This has enabled the veterinary nursing profession to
develop its distinct personality and there are now almost 500 nurses registered to practice. In
the field of nurse education and training, we have moved from a situation less than five years
ago where most nurses had to go overseas for training to the current situation where five
colleges in Ireland now offer approved and accredited courses. All of these positive devel-
opments have taken place in the relatively short period since the 2005 Act came into force and
I look forward to the veterinary nursing profession developing further in tandem and in co-
operation with their veterinary practitioner colleagues in the years ahead.
   Turning to the Veterinary Practice (Amendment) Bill 2011, it may be useful to state at this
stage that the measure can be divided into two broad strands. The first strand, which is covered
in section 2, concerns mechanisms for exempting certain functions and activities from being
reserved to veterinary practitioners or veterinary nurses — when I refer to practitioners and
nurses together elsewhere in my remarks I shall, for convenience, refer to them jointly as
registered persons. The second strand, in other words, sections 3 to 9, inclusive, relates in
summary to changes being proposed to streamline and improve operation of the legislation in
light of experience since its implementation in January 2006. In the majority of cases, the
changes proposed derive from suggestions put forward by the Veterinary Council of Ireland
based on its direct experience of implementing the 2005 Act. The proposed amendments also
take account of more recent legislation governing regulation of the professions, in particular,
the Medical Practitioners Act 2007 and the Pharmacy Act 2007. I propose to outline to the
House in greater detail the principal elements of the Bill.
  As I have indicated, section 2 is the kernel of the Bill and, in summary, the proposed amend-
ments are intended to ensure that activities and services concerning animals, which have tra-
ditionally been carried out safely by non-veterinarians or nurses, do not become reserved to
the veterinary profession.
  By way of background, I might explain that it was decided when drafting the 2005 Act to
address a shortcoming in the previous legislation by creating a greater degree of legal certainty
around what constitutes veterinary practice or, as the Act terms it, “the practice of veterinary
medicine”. Accordingly, the 2005 Veterinary Practice Act includes, at section 53, a definition
of the concept of veterinary practice.
  However, since the 2005 Act came into force, the Veterinary Council of Ireland, the regulat-
ory body for the profession charged with day to day implementation of the Act, has raised
concerns with my Department that the definition of veterinary practice could be interpreted as
embracing a range of procedures or activities which have traditionally been carried out by non-
veterinarians with appropriate skills, training and experience. Examples of such procedures
identified to date include farriery, equine dentistry, bovine hoof trimming, micro-chipping of
companion animals, scanning of cattle and sheep and physiotherapy. The legal advice that my
Department obtained also indicated that there could be doubt about the status of such pro-
cedures carried out on animals, particularly in the event that legal disputes arise.
  As I mentioned in my introductory remarks, competitiveness is a key issue for our economy,
including the agrifood sector. Against this background, it would be invidious if we permitted
                                                   860
          Veterinary Practice (Amendment)   28 September 2011.      Bill 2011: Second Stage


the provision of certain services to farmers and other animal owners to become overly restric-
tive, with the negative cost implications that would result for those concerned. It is, therefore,
appropriate to address the situation. The Office of the Attorney General advised my Depart-
ment that this could be achieved comprehensively only by means of an amendment to the
Veterinary Practice Act 2005, and that is what the Bill comprises. Under the amendments I am
proposing, my office would be vested with a delegated power to make regulations to exempt
specific procedures from being reserved to registered persons. The exercise of this function
would be subject to appropriate principles and policies approved by this House and set down
in the primary amending legislation. We can, of course, examine these aspects in much greater
detail at Committee Stage, and I look forward to that. I believe it is appropriate that there
should be formal consultation with the Veterinary Council of Ireland before any activity is
exempted, and the Bill provides for this.
  The amendments also provide for exemptions to be made subject to appropriate conditions,
including certain education, training and skills, membership of specific bodies and so on. In
that way, the process will build on the informal arrangements that are in place across the
disparate groups involved, and this will provide clients with a greater degree of quality assur-
ance. I think we would all support that. It will also facilitate, where appropriate, specification of
the parameters associated with particular procedures that can be performed by non-registered
persons, which will bring much more legal certainty to the area. My Department has consulted
widely on the issue and I am pleased to say that there has been a general welcome to the
matter being addressed. Indeed, many groups that represent current service providers see the
changes as a basis for developing their areas of activity in accordance with best practice.
   I turn to the main themes of the other amendments in the Bill, the first of which is dis-
ciplinary procedures and enforcement. The professions, including the veterinary profession,
occupy an important and somewhat privileged position in society. Given their nature, society
places a great deal of trust in them. It is, therefore, critical that society has confidence in the
way in which the profession is regulated. This places a particular responsibility on us, as legis-
lators, to ensure that the legislation that underpins the professions guarantees that regulation
is robust, effective and transparent and that any hint of closing of ranks around a colleague is
avoided. The Veterinary Practice Act 2005 brought regulation of the profession up to date in
many important respects, introducing more external representation at council level, an external
chair of its fitness to practise committee, publication of the findings of disciplinary proceedings
and so on. Although the mechanisms are working well, we know from feedback from the
Veterinary Council of Ireland that some changes are needed and I propose to adapt some
provisions to further improve their effectiveness.
  The first amendment, which is in section 4 of the Bill, is designed to give the Veterinary
Council of Ireland a greater range of options in the sanctions it can apply when its fitness to
practise committee upholds a complaint against a veterinary practitioner or nurse. Under
section 80 of the 2005 Act, the council is permitted to apply a sanction only when the fitness
to practise committee has made an explicit finding of unfitness to practise. I propose that, when
the fitness to practise committee upholds an aspect of the substantive complaint, it should have
the discretion to determine the appropriate penalty from the range specified in the legislation,
even if there is no finding of unfitness to practise. It follows that, in exercising this function,
the council will be required to apply penalties that are appropriate to the scale and import of
the breach that has been established.
  In section 9(i) of the Bill, I propose to amend the definition of professional misconduct. As
Deputies will appreciate, this definition is critical for the purposes of upholding standards in the
profession. As I said, members of a profession must be measured against the highest standards,
reflecting their role in society. Legislation governing the regulation of doctors and pharmacists
                                                   861
          Veterinary Practice (Amendment)   28 September 2011.    Bill 2011: Second Stage

  [Deputy Simon Coveney.]
has come into force since 2005. I propose, therefore, to adapt the definition of professional
misconduct in the 2005 Act and align it as far as possible with the equivalent provisions in the
more recent profession-regulating legislation by including certain behaviours or activities that,
while not directly impinging on the role of veterinary practitioner or veterinary nurse, may
nevertheless bring the profession into disrepute.
   In section 7 of the Bill, it is proposed to improve the effectiveness of the council’s investig-
ative and enforcement functions. Experience in Ireland and elsewhere has demonstrated the
need for regulatory bodies, where necessary, to be able to investigate complaints or concerns
quickly, for example, before evidence can be removed or destroyed. Under section 126 of the
2005 Act, authorised officers of the council are required to obtain a search warrant in order to
enter premises unless the agreement of the person concerned is forthcoming. The council has
expressed the view to my Department that this requirement unduly inhibits its ability to investi-
gate quickly and effectively. Accordingly, I propose to enable authorised officers of the council
to enter premises, where this is necessary for the purposes of carrying out an investigation,
without the need to obtain a search warrant from a District Court judge. I stress, however, that
a search warrant will continue to be needed to enter a domestic dwelling, and rightly so. This
approach is generally followed in powers of entry for authorised officers and it follows the
approach in, for example, the Pharmacy Act 2007. A number of other minor procedural amend-
ments are proposed in the area of disciplinary procedures and these can be examined in more
detail on Committee Stage.
   A requirement for indemnity insurance is not a feature of the 2005 Act, and the Veterinary
Council of Ireland believes we should avail of the current legislative opportunity to address
this deficiency. From a public policy point of view, I believe that provision should be made to
ensure that clients of registered persons are protected against adverse events where civil liab-
ility attaches to the professional. Thus, section 3 of the Bill proposes the insertion a new
provision into the 2005 Act to enable the council, with the Minister’s consent, to make regu-
lations making indemnity insurance mandatory for specific types of veterinary practice. The
requirement will not apply to practitioners in respect of official duties.
   On registration, I mentioned earlier that the 2005 Act was a major milestone in the develop-
ment of the veterinary nursing profession in Ireland. It provides for recognition of appropriately
trained nurses from Ireland and other EU states, and it provides for transitional arrangements
for nurses who had been practising as such before the legislation was contemplated, by afford-
ing them a five-year period to formalise their education status. However, provision now needs
to be made to enable the council to register nurses who come from third countries. The council
has also identified a need for registration processes for people with particular expertise in
the field of veterinary nursing to assist in the delivery of courses at education and training
establishments. The amendments in section 6 of the Bill are designed to address these issues
by providing the Veterinary Council of Ireland with a broader range of recognition options in
the case of veterinary nurses. The range of options for veterinary nurses will be put on a par
with the options that the 2005 Act provides for veterinary practitioners. Also, in the area of
registration, I propose to avail of this legislative opportunity to remove any doubt that the
registration mechanisms are capable of accommodating short-term registration of, for example,
veterinary specialists from third countries who are accompanying horses from overseas partici-
pating in sporting events.
  Mutual recognition arrangements for veterinary practitioners and six other professions,
including doctors and dentists, have been a reality at EU level for many years. These arrange-
ments operate on the basis that training requirements in each member state are required to
reach a common EU standard. More recently, as part of the initiatives at EU level to make
                                                   862
             Employment and National        28 September 2011.   Internship Scheme: Motion (Resumed)


the Single Market a reality across a range of services, free movement arrangements were
extended to various activities, including veterinary nursing, where minimum educational stan-
dards are not co-ordinated at EU level. This process included initiatives to make it easier for
veterinary practitioners and veterinary nurses, as well as a host of other service providers, to
provide services on a temporary basis across national borders.
  This regime at EU level is laid down in Directive 2005/36, which has been transposed into
our national legislation through the European Communities (Veterinary Practice Act 2005)
(Qualifications in Veterinary Medicine) Regulations 2007 (SI No 745 of 2007). However, taking
account of legal advice, it is felt to be appropriate to avail of this opportunity to consolidate
the Statute Book by restating, in primary legislation, relevant provisions currently contained in
the statutory instrument already referred to; this is the purpose of section 8 of the Bill. In
addition, to take account of observations received from the European Commission on three
minor technical aspects of SI 745 of 2007, the relevant provisions are being adjusted to align
them more closely with the requirements of the directive. The amendments concerned relate
to the status, in the home EU state, of the veterinary practitioner or nurse wishing to provide
cross-border services on a temporary basis in this country and the time limit governing such
applications. Again, we can discuss these issues in greater detail on Committee Stage.
  The Bill also contains a number of other miscellaneous and consequential amendments in
section 9, mainly designed to facilitate greater efficiency in the carrying out of the council’s
business, including in areas such as filling of casual vacancies and quorums for meetings.
  It is timely to amend the Veterinary Practice Act 2005 in the way I have outlined. I look
forward to hearing the views of Deputies and to a more detailed examination of the proposed
amendments on Committee Stage. I commend the Bill to the House.
  Debate adjourned.

                                       Private Members’ Business

              Employment and National Internship Scheme: Motion (Resumed)

  The following motion was moved by Deputy John Halligan on Tuesday, 27 September 2011:

    That Dáil Éireann:

      recognises:

         — the unacceptable fact that the current rate of unemployment is 14.5%;

         — the crushing toll that persistent job losses, mounting unemployment and height-
           ening emigration levels are having on ordinary Irish people and the desperate
           need for honesty when addressing this crisis and those affected by it; and

         — the particularly devastating impact of recent job losses on areas such as
           Waterford City and County which have not only seen the direct impact of job
           losses due to closures of companies such as Waterford Crystal, the Iron Foundry,
           ABB Transformers, Teva Pharmaceuticals, GlaxoSmithKline and, most recently,
           TalkTalk but have also experienced the secondary impact that the removal of
           such vital industry has on surrounding and supporting industries;

      condemns the present Government for:
                                                   863
         Employment and National    28 September 2011.   Internship Scheme: Motion (Resumed)


      — opting to make good the gambling debts of unguaranteed bondholders at a time
        when desperately-needed State funds should be invested aggressively in job
        stimulus initiatives;

      — undermining the right of workers to a fair day’s work for a fair day’s pay with
        the introduction of a deeply flawed National Internship Scheme that allows
        employers to recruit often skilled, qualified and experienced individuals into
        entry and non-entry level positions which in no way, apart from their €50 per
        week rate of pay, bear any resemblance to an internship; and

      — introducing a piecemeal and tokenistic jobs budget and initiative aimed more at
        producing headlines than creating true growth in employment levels; and

   demands that the Government:

      — restore the right of workers to a fair day’s work for a fair day’s pay by immedi-
        ately addressing the deep flaws in the National Internship Scheme;

      — return sanity to the commercial rental sector by eliminating the presence of
        upward only rent reviews in the Irish economy;

      — abandon its commitment to pay back the gambling debts of unguaranteed bond-
        holders and instead use State funds to implement a truly effective jobs initiative
        that promotes education, training, entrepreneurship, meaningful support for the
        small and medium enterprises (SME) sector and the development of a genuinely
        ‘smart economy’; and

      — honestly deliver on its commitment to ‘Get Ireland Working’.

Debate resumed on amendment No. 2:

 To delete all words after “Dáil Éireann” and substitute the following:

   “recognises:

    — the difficulties faced by many individuals and families as a result of job losses in
      the current economic climate;

    — the need to continue to take concerted action to reduce the unemployment rate of
      14.2%, which is a legacy of the incorrect policies pursued over the last number of
      years by previous Governments; and

    — that, notwithstanding recent improvements in the competitiveness of the Irish econ-
      omy, further measures need to be taken to support economic recovery;

   commends the Government for:

    — the strong and decisive actions and policies which are designed to restore sus-
      tainable economic growth and job creation capacity to the economy as soon as
      possible;
                                           864
      Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)


 — the measures announced in the Jobs Initiative to stimulate the domestic econ-
   omy,including the reduction in the lower rate of VAT, the halving of PRSI on jobs
   paying up to €356 per week and investment in labour intensive local capital projects
   such as school works, investment in local and regional roads and home energy
   efficiency;

 — the further measures taken in the Jobs Initiative to provide an additional 20,900
   places in training, education and work experience programmes;

 — the creation of the National Internship Scheme, ‘JobBridge’, which is aimed at
   providing work experience and training in enterprises for people who have been
   on the Live Register for 3 months or more and the success of the scheme to date,
   which has placed over 1,400 interns since 1 July of this year;

 — the importance of continuing policies to support our enterprise culture to provide
   investors with confidence, encourage growth in the economy and promote further
   foreign direct investment and the growth of indigenous businesses;

 — the work underway within Government in relation to increasing access to credit
   for viable businesses, in particular through the recapitalisation of the banks, the
   development of a partial credit guarantee scheme and the establishment of a micro-
   finance fund for start-up businesses;

 — implementing policies to stimulate the development of new business and facilitate
   the retention of jobs and expansion of existing companies through the ongoing
   work of the enterprise agencies;

 — the stronger focus on strategies to promote exports and assist Irish based businesses
   to compete on global markets;

 — its support for the development of a more dynamic venture capital industry through
   the implementation of Innovation Fund Ireland; and

 — pursuing policies to ensure restoration of overall economic competitiveness, includ-
   ing through the commitment to legislate to end upward-only rent reviews for exist-
   ing business leases, reforming the Joint Labour Committees (JLC) system of wage
   settlement, to legislate to tackle legal costs, and to implement the findings of the
   Local Government Efficiency Review Group;

notes the continuing impact of these policies reflected in:

 — strong export performance and our highest ever trade surplus;

 — the creation of new jobs in companies such as Twitter, Bioware Studio, Coca Cola,
   Arvato and others; and

 — increased tourist activity; and
                                         865
             Employment and National    28 September 2011.   Internship Scheme: Motion (Resumed)


       encourages the Government to continue to develop the employment strategies as out-
    lined in the Programme for Government.”.

                                                (Minister for Jobs, Enterprise and Innovation).
  Deputy Peadar Tóibín: It is exactly seven months since the Government took office. In that
period, an extra 25,144 people have signed on the live register and, going by ESRI figures,
29,166 people emigrated. That is a shocking figure of over 50,000 people, with 1,667 people
signing on or leaving every week, something that has an unbelievably negative effect on the
country.
   So far the Government’s answer to the crisis has been JobBridge, a €40 million investment
in capital and current expenditure. Going by the Government’s figures, that creates about 400
jobs, the equivalent of two days of signing on and emigration. Those figures represent a serious
crisis, one where people cannot feed their families, pay their mortgages, heat their houses or
go to the doctor, with many families leaving Ireland for good. The depth of the crisis and those
shocking figures are an indictment of the Government in that time. We need an immediate,
substantial and enormous response. The Minister for Finance stated this is not a Keynesian
stimulus package but that is exactly what the crisis demands.
   On two occasions the Taoiseach has intimated in the Chamber that there are jobs but that
Irish people do not want them, that they were not happy with the wages and the relevant
employer had to ask for immigrants to fill the posts. I do not believe that. Irish people want to
work and if the Government wanted to resolve this situation, it would be simple to create social
media based on a system such as LinkedIn where the unemployed could upload their CVs and
businesses could immediately find them. Through the State they could then work out exactly
who could fill these jobs.
  On other occasions Government Ministers have said we are in a terrible crisis but we are
not hearing anything from Sinn Féin on the issue. The opposite is the reality; if people came
into the Chamber and listened to the debates, they would hear we have made many suggestions
that would create jobs without massive costs to the State. Those jobs would make a serious
difference.
   The Government claims the State does not create jobs but clearly it does; it is one of the
biggest employers, directly and indirectly. Before the recession many massive contracts for
roads, schools, hospitals and electricity and water infrastructure created thousands of jobs for
small businesses. Targeted capital investment by the State would create the badly needed infra-
structure while significantly improving the competitiveness of the State.
  Small businesses are having major difficulties accessing State tenders because they are not
built to suit small businesses. Businesses must have large balance sheets and years of profit
generation before they can even be considered for these tenders. Infrastructural investment
leads to a one to three multiplier, which is a massive factor in an open economy, so if the
Government created a tender system that was accessible to small business, many of them would
be able to migrate from a position where they employ less than ten employees to become larger
businesses with more than 50 employees. The process must be streamlined and made more
accessible for small businesses.
  Accessing credit is another major problem. The Government tells us credit is being made
available; the State has made €6 billion available for small business. That cannot be the case.
Banks must deleverage by €70 billion while the Government sets them the objective of loaning
€6 billion to small business. The two objectives are incongruous and cannot be achieved: only
one or the other can be achieved. ISME stated in July that 58% of small businesses cannot get
credit but the Credit Review Office has reviewed 100 applications, intervening on 30 occasions.
                                               866
             Employment and National    28 September 2011.   Internship Scheme: Motion (Resumed)


Of the small businesses that have applied for credit, 58% did not get it but the Government
response — the Credit Review Office — has only intervened 30 times. This is an anaemic and
inadequate response to a major crisis.
   Ireland’s competitiveness has gone down the tubes in the last years. Serious energy, telecom-
munications, waste management and transport cost reductions are needed, with proper hedging
for the energy supply. The State must make a concerted effort to move away from fossil fuels,
which are experiencing major upward pressure in price. A number of large commercial organis-
ations have claimed fuel and energy costs are almost more important when deciding on a
location than corporation tax rates. This will become more prevalent in the future.
   Three Irish enterprise agencies, the IDA, InvestNI and Enterprise Ireland, have offices
throughout the world. These three organisations could be amalgamated and their offices ration-
alised with no reduction in their effectiveness. These organisations are orientated towards the
sluggish old world and not towards the BRIC countries — Brazil, Russia, India and China —
which is where growth will happen in the near future.
   Seven months after the formation of the Government there is still no nationwide export
training programme for businesses with fewer than ten employees. These businesses are the
engine that will get the country going again, but all export related supports are delivered in an
ad hoc fashion.
   County enterprise boards offer major opportunities in local areas. They could become busi-
ness incubation centres where hot desks could be provided for local businesses that are trying
to start up but do not have a location. These businesses could come in and share a computer
or a space where they could invite customers or do work. County enterprise boards could help
with legal, human resources, accountancy or funding matters. These incubation units could be
linked with local third level institutions to help with the cross-fertilisation of ideas.
  The grant aid system needs to be reformed. It was designed when the economic bubble was
at its biggest. The mid-east region of Louth, Kildare, Wicklow and Dublin cannot now offer
the full gamut of grants to businesses because it is hampered by EU rules. This situation will
not be altered until 2013 unless the Government gets its act together and makes it happen.
   The Government should consider PRSI reform. A generation of people have been educated
away from the idea of enterprise. They have been told that there is no safety net if one fails at
enterprise. A simple reform could create a PRSI safety net for people who take the risk of
starting their own businesses. People could leave the support of social welfare and develop a
business without putting their families at the risk of freefall if the business fails.
  An enormous amount of reform and change can happen within the enterprise sector and to
support enterprise. These matters must not be put on the long finger. A State investment bank,
which is part of the programme for Government, could be established within six months. As
far as I am aware, discussions as to how it will be constituted have not even started. The Joint
Committee on Jobs, Social Protection and Education has not been involved in any discussions
and is not aware that they are taking place. It is important that the joint committee be part of
those discussions.
   It is seven months today since the Government took office. In that time, 25,414 extra people
have signed on the dole and 29,166 people have been forced to emigrate. Fianna Fáil were
responsible for unemployment of 400,000, but the Government is building up its own set of
figures. I implore the Government to get started.

 Minister for Social Protection (Deputy Joan Burton) (Deputy Joan Burton): With the agree-
ment of the House I will share time with Deputies Joe O’Reilly, Colm Keaveney, Patrick
O’Donovan, Mary Mitchell O’Connor and John Paul Phelan.
                                               867
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)

  [Deputy Joan Burton.]

  I am delighted to have the opportunity to talk about the national internship scheme. We are
now at the third anniversary of the disastrous bank guarantee. It is a pity some of the parties
who voted for the guarantee were not astute in recognising the difficulties into which it would
lead us and the legacy it would leave.

  Deputy Peadar Tóibín: That information is incorrect.

  Deputy Joan Burton: The national internship scheme was launched 12 weeks ago, on 1 July.
To date, it has had applications from more than 4,000 employers, of whom approximately 2,600
have been accepted as appropriate internship hosts. I know that many people are concerned
that the scheme should achieve its core aims and objectives, which are to provide a quality
internship and a learning and work experience where the intern is mentored. I hope the scheme
will provide an opportunity for employers to retain their interns in more permanent
employment.
  The history of internship around the world, according to the academic literature on the
subject, is extremely positive. Certain types of social welfare interventions and back to work
schemes really do help people. One of them is internship. The literature on the subject is clear
that long-term unemployment does damage to a person’s whole life. Unemployed people lose
confidence in themselves, connection with the workplace and motivation. A long spell of unem-
ployment can damage a person’s skills level so that the skills become out of date. A graduate
who does not find employment within a reasonable time will find him or herself in competition
with the next set of graduates, which creates an added difficulty.
  We must recognise what an internship can do. Deputies will be familiar with the back to work
enterprise allowance. This is an extremely positive scheme that offers people self-validation and
appreciation of their willingness to get up and try to create, or recreate, business opportunities
for themselves. In the 1990s I was heavily involved in the development of back to work
schemes. Deputies may remember that back to work schemes offered high levels of personal
validation for people. The State gave people a hand up, rather than simply a social welfare
payment with no help, encouragement, coaching, support or opportunities.
  The take-up of the national internship scheme and interest in it, by employers and interns,
has been very good. More than 1,400 people have commenced internships. About 500 of those
came from the work placement programme. They were allowed to transfer because interns
receive a top-up payment of €50 in addition to the social welfare payment. I wanted people
who were on the work placement programme to have the opportunity to transfer to the intern-
ship scheme if they wished to do so. Many people have done that, as I expected. However,
more than 800 people have commenced internships entirely from scratch in the 12 weeks since
the scheme started.
  There are, of course, teething problems. One does not create a whole new scheme without
them. For instance, some employers have applied to become hosts while not understanding
what an internship involves. We have a large number of people who check, validate and take
feedback from the public, social media and people such as public representatives who question
the quality of some of the positions offered. It is our job to ensure that the positions offered
are quality internships.
  The scheme’s steering group is chaired by the chief executive of Hewlett-Packard in Ireland.
A number of business people have been involved from the start. The stakeholders’ group,
which includes employers and trade unions, is very active and holds regular discussions in
regard to quality.
                                                868
             Employment and National      28 September 2011.   Internship Scheme: Motion (Resumed)


   We are currently putting in place an evaluation structure of social welfare in this country.
There is need for reform in this area. Upon taking up my position as Minister, I received a
large report from the ESRI on people’s experience on FÁS courses. However, the report
related to the situation during the height of the boom in 2006 and 2008 and provided no
information for 2009 and 2010 in terms of whether people’s experiences were positive or nega-
tive. We must ensure we have evaluation systems in place.
  We need then to learn from experience just as does a person in business responsible for a
budget that is not working out. As politicians, we must listen to people’s concerns. It is neces-
sary, in terms of public administration in Ireland, that we build in evaluation systems. We must
then learn from the experience and amend schemes. An issue brought to my attention is that
of people on FÁS training courses who, on taking up a position on a course go off the live
register. We have put in place arrangements to ensure that their status, in terms of being on
the live register, can be suspended and, if they finish the course, the duration of it will not
disqualify from taking up an internship if previously they had the three months on the live
register or signing-on qualification.
  I am grateful to all the people who have been in fairly continuous contact on this issue.
There is a final point with which I would like to deal as it comes up a great deal. Many people
have asked why it is necessary to have a qualification period. I would like to respond to that.
We are now approaching the third anniversary of the putting in place of the disastrous bank
guarantee that led to our loss of sovereignty. We are required to show the IMF that people
are moving from unemployment and the live register into education, training, JobBridge and
so on. We have received very positive feedback on JobBridge. It will not suit everyone just as
no job will suit everyone. Work on setting up this scheme has been the first big initiative in
terms of co-operation between my Department and the labour services side of FÁS. The civil
servants who have been working flat out on this, holding weekly meetings with myself and
others and evaluating it on a constant basis, have helped to achieve a great deal in 12 weeks,
which is a short time.
  We will be able to evaluate the scheme in approximately nine months time and to see how
the first graduates of internship are faring.

  Deputy Joe O’Reilly: It merits repeating that there is nothing more soul destroying or as
negatively impacting on families as unemployment in terms of their decisions to have children,
self development, confidence and so on. It is for that reason that this Government has from
the outset treated unemployment as a priority. Everything the Government is doing is predi-
cated on that principle.
  The Minister, Deputy Burton, outlined the workings of the internship scheme on which 1,400
people have taken up places. It will be a huge life changing experience for those people. In the
jobs initiative, of which the internship scheme is part, the Government restored the national
minimum wage, cut PRSI and reduced VAT rates in labour intensive areas. There is anecdotal
evidence of a real improvement in tourism this year and of the VAT rate cuts having been a
success in the food and catering sectors, which is good news.
  It is necessary that we continue to remove impediments to employment. The first major
impediment to job creation is the shortage of credit flow in the economy. The creation of the
two pillar banks is the first initiative to deal with this. The pillar banks will over a period lend
€30 billion to small and medium enterprises. They are required to lend €3 billion this year,
€3.5 billion next year and €4 billion in 2013, which is an important initiative. The partial loan
guarantee scheme, which will be announced during the next few weeks, will assist businesses
that have potential but cannot readily access credit. I believe that is hugely important.
                                                 869
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)

  [Deputy Joe O’Reilly.]

   A micro-finance start-up fund and business expansion loans are to be made available. All of
this finance, which will enable small enterprises start up, is a critical part of recovery and job
creation at this critical time when credit is not and has not been flowing. There has been a
              huge problem over the past few years in terms of credit flow in the economy.
8 o’clock     That remaining impediment needs to be addressed. In the context of job creation,
              another area that needs to be addressed is research and innovation. The Minister,
Deputy Bruton, with his colleagues, the Minister of State, Deputy Perry, and others are cur-
rently reviewing the innovation agenda. Some €5 million will be spent on an applied research
centre in cloud computing. Cloud computing is hugely important given that, according to recent
reports from Microsoft, it has the potential to realise €9.5 billion annually and to employ 8,600
people by 2014. This extraordinary initiative must be supported. Some €6 million will be spent
on a research centre in energy and the smart grid and €44 million will be spent on research
teams in ICT and the live sciences. Innovation and research is critical to our recovery.
  We must reduce costs in our economy, including in respect of professional fees and we must
obtain more value for money in terms of how we do things. I have advocated in a lot of fora
in the media that as a first start we liberalise the legal profession. We must ensure barristers
and solicitors can go into the same courts, do the same jobs and work together to reduce legal
costs, as in the case of the medical profession. We must take on a value for money ethos and
a value for money practical way of progressing in every one of our State agencies and so on.
We must place a high emphasis on costs.
  If we deal with costs, actively support research and innovation, continue with the current
jobs initiative and get credit flowing we can, I believe, ensure consumer confidence returns and
turn things around.

  Deputy Colm Keaveney: I welcome the opportunity to speak on this important motion. I
acknowledge the quality of contributions from the Opposition. While we may not agree on
many issues, the Government must in the context of the forthcoming budget take on board
many of the points made in this debate.
  A sound argument was made by an earlier speaker in regard to the role of county enterprise
and development boards. To that end, I welcome the dedication, commitment and action of
the Minister of State, Deputy Perry, in terms of today’s announcement of a €3.5 million capital
spend in this area.
  It means much to my county, as it will get 10% of the national allocation, €350,000. Tonight,
the county manager confirmed to me that this will mean the immediate creation of 50 jobs.
  Deputy Tóibín’s analysis is correct that we need to penetrate into communities through local
small and medium-sized enterprises. The motion, however, unfairly attempts to accuse the
Government of not recognising or understanding the difficulties faced by the jobless. Concern
for unemployed people and the identification with those who find themselves without work is
not a characteristic that should be monopolised by any political party or persuasion. With few
exceptions, I did not hear many Opposition Members say they would be prepared to appraise
positively the results of the recent jobs initiative.
  The initiative is an investment in people resulting from our ongoing success in renegotiating
the EU-IMF arrangement. Since the Government took office, it has driven the jobs initiative,
making it easier for employers to hire and making it less costly in the recruitment and retention
of those seeking jobs with a 50% cut in PRSI rates for workers earning less than €356 a week.
The introduction of the 9% VAT rate and the suspension of the air travel tax have also incen-
                                                870
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)


tivised tourism to Ireland. According to the Restaurants Association of Ireland, up to 500 jobs
have been created in its sector since the initiative was put in place.
   The significant increase in the number of visitors to the country, with 250,000 extra tourists
in the first six months of this year must also be acknowledged. The minimum wage has been
restored to €8.65 per hour to maintain decent standards of living and dignity for those who
find themselves in low-paid work. It also protects local economies and the Government will
legislate for workers affected by the legal dismantling of the old joint labour committees. More
training places and back-to-work initiatives have been introduced by the Government such as
the internship scheme, JobBridge. Up to 30,000 places have been provided to jobseekers and
graduates. This is one of the many planned initiatives to end our economic winter.
  These solutions do not take into account, however, the preservation of the 12.5% corporation
tax rate over which we faced an onslaught from our European partners. Neither does this
motion take into account the proposed landlord and tenant Bill which will abolish upward only
rent reviews.
  I note the observations from Members opposite about the importance of the Government
setting the conditions for employment. The Government can be an agent of change for direct
employment. Next week in Tuam, County Galway, the Government will invest €1.1 million in
an ambulance base.

  Deputy Finian McGrath: Hear, hear.

 Deputy Colm Keaveney: It is no thanks to Deputy Finian McGrath. His years have been
wasted on the issue.

  Deputy Finian McGrath: I represent Dublin North-Central in case Deputy Keaveney does
not know.

  Deputy Colm Keaveney: Work will commence on the base next week resulting in the employ-
ment of 20 medical emergency technicians in the reconfiguration of ambulance services in
Galway, Mayo and Roscommon. This capital spend will go to a local contractor who will
employ locally. These are positive developments in which the Government is getting people
back to work. Such capital spends as the one in Tuam send out the right signal that communities
can expect significant improvements in health services, etc. It also highlights the extent to which
the Government, unlike its predecessor which Deputy Finian McGrath supported, is committed
to serving rural communities.

  Deputy Finian McGrath: Deputy Keaveney is a great man for not giving up on this one.

  Deputy Colm Keaveney: Deputy Finian McGrath may laugh about the jobless issue, partic-
ularly considering his fingerprints are all over the problems caused by his support for the
previous Government.

  Deputy Finian McGrath: I stood up to that Government when it counted.

  Deputy Colm Keaveney: Developments like these will address the neglect caused by the role
played by Deputy Finian McGrath in supporting the previous Government. They also give
hope to the people of my community and others who have suffered because of Deputy Finian
McGrath’s mismanagement of the economy.

  Deputy Patrick O’Donovan: I wish the Minister of State, Deputy Perry, and his departmental
colleagues well in their roles. No greater problem faces this country than joblessness. If I were
not elected to the House, I could easily be on the dole queue or working abroad in New
                                                871
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)

  [Deputy Patrick O’Donovan.]
Zealand. Many of those who qualified as primary school teachers with me find themselves
unemployed. No political party has a monopoly on representing the concerns of the unem-
ployed. We must all put the country first and put politics in the backseat for a change.
  From my experience as a county councillor over the past eight years and seeing the work
done by small and medium-sized enterprises as the backbone of local economies, the Govern-
ment must relight the spirit of entrepreneurship which was quenched by the mismanagement
of the country’s finances and the recklessness of the banks. We have come full circle now where
people with good business ideas and models cannot get seed capital. Many of these people tell
me of such problems in my constituency clinics. The banking sector, with the assistance of
independent third parties, must give those with well-researched and developed business pro-
posals access to capital so they can create employment.
  I also want to see what may be terms the “dequangoisation” of the job creation sector. I
have lost count of the number of agencies involved in job creation. While the Government
must get rid of the duplicity that is occurring among the job creation agencies, the Opposition
should not use it as a chance to score points. Having worked over the past eight years with
small and medium-sized enterprises and Limerick’s county enterprise board, I know the
enterprise board system works. I would like to see companies under the system which have the
potential to expand having a seamless transition to Enterprise Ireland support. Such companies
must be provided with a route to progress and encouraged to expand to be able to come under
the Enterprise Ireland remit.
   I see no benefit in dumping county enterprise boards into another quango. We have a mass-
ive land bank available to the State. It is important local authorities control this land bank and
assets such as broadband and water services while the county enterprise boards under the
auspices of Enterprise Ireland are retained to promote small and medium-sized businesses.
Currently, business people can go to up to 12 different agencies but not one can give them
straight assistance. I implore the Minister of State to “dequangoise” Ireland and get back to a
single agency approach and a supportive banking sector for small and medium-sized
enterprises.

   Deputy Mary Mitchell O’Connor: I am disappointed by the negativity of this motion. There
is nothing positive in it with no concrete solutions offered. My disappointment is compounded
by the fact the members of the Technical Group who tabled this motion were conspicuous by
their absence in the Chamber last night. What we, and our young people who are thinking of
emigrating, need is a bit of positivity. We have a responsibility to give them hope. We can do
this with creative thinking and real solutions. The Government inherited an unemployment
rate of approximately 14%. A drop in Ireland’s competitiveness from fourth to 24th in the
world presented a serious challenge to the new Government when it took office, but it has
already showed its mettle in the fight against unemployment by introducing real solutions. The
twin policies of cutting VAT rates and employers’ PRSI were widely welcomed in the context
of job creation. The tangible effect of our abolition of the joint labour committee employment
regulation orders was the creation of 490 jobs in just two months. We introduced the visa
waiver programme, which was intended to boost tourism to provide a jobs boost. I highly
commend the plans to develop a micro-finance start-up fund that will provide start-up and
expansion loans to micro-enterprise. I also commend the plans to ensure open public procure-
ment for small to medium-sized enterprises, SMEs.
  The big news this week that Twitter is to establish an international office in Dublin shows a
renewed international confidence in our economy and the Government’s policies. This is the
kind of creative thinking sorely missing in the motion.
                                                872
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)


  I recently attended events at the Dublin and Dún Laoghaire chambers of commerce and the
Dún Laoghaire Businesses Association. Organisations like these are out there doing their very
best. They should be recognised and deserve all the support we can give. Let us stop the
whinging.

  Deputy John Paul Phelan: I thank Deputy Mitchell O’Connor for sharing a couple of minutes
with me. I welcome the opportunity to address the House on the contents of the motion. As a
representative from the south east, where the recent announcement of TalkTalk’s closure is
devastating and will have a knock on effect for the region, I urge the Ministers for Jobs,
Enterprise and Innovation and Education and Skills to bring their energies to bear on finding
a national and regional solution to the jobs crisis.
  After County Donegal, the south-east region has the country’s highest level of unemploy-
ment at more than 18%. The levels in counties Wexford and Kilkenny are slightly higher still.
Contrary to the popular image, the Celtic tiger’s presence in the part of the country that I
represent was not strong.
  I commend the Government, in particular the Minister for Education and Skills, on the swift
action taken to announce the criteria for the establishment of a technological university for the
south east. The project has the potential to have a positive impact on our region. Ours is the
only region without a university. We have the lowest average household incomes and the lowest
third level attendance rate. The political, geographical and economic cases for the university’s
development are strong.
   I am slightly confused by some of the issues raised in the Technical Group’s motion. It refers
to the Government repaying unguaranteed bondholders. Since coming to power, our policy has
been not to repay unguaranteed bondholders in full. The motion also refers to the need for a
fair day’s pay for a fair day’s work. One of the Government’s first actions was to increase the
minimum wage and introduce the jobs initiative.

  An Leas-Cheann Comhairle: I must ask the Deputy to conclude. We are short on time.

  Deputy Finian McGrath: And no whinging.

  Deputy Michael Healy-Rae: There is an air of despair among our young people. They are
highly educated, highly skilled, yet with no prospect of gainful employment. Unemployment
creates many issues, not least of which is the low morale of those who are unemployed. It also
creates many health and family issues. The list goes on and on. As legislators, we have a duty
to ensure that no measures we enact will impair the prospects of employment.
   We have a duty to put in place measures that will enable people to gain employment. We
also have a duty to employers, be they large multinationals or indigenous companies, to put in
place measures that will in no way restrict their ability to employ people.
  We must at all times try to introduce legislation that will create an environment that allows
employers to create employment. We must consider ways to reduce the hidden costs of
employing people. The employers’ PRSI contribution is one element in which we can make
changes. Health and safety training, be it mandatory or specific training, creates another cost.
Could this training be provided by FÁS or other agencies? We can talk in the Chamber until
the cows come home. Unless we act to create an environment that does not restrict or apply
prohibitive costs to the recruitment of new staff, all of our talk is only hot air.
  This morning, an example of an employer being prevented from retaining jobs was brought
to my attention. To date, if a person running a small business wanted to send a circular advertis-
ing his or her business in the locality, he or she could target 1,000 or 2,000 people. An Post has
                                                873
             Employment and National      28 September 2011.   Internship Scheme: Motion (Resumed)

  [Deputy Michael Healy-Rae.]
changed its policy on this type of leaflet drop. Instead of being able to concentrate on a certain
area, the Caherciveen employer in my example must now cover most of south County Kerry
in his leaflet drop.
  Instead of helping business people and encouraging them to remain in business, HSE inspec-
tors are going around closing them down. I blame the people who send out the inspectors
rather than the inspectors themselves.
  I respect the Minister of State, Deputy Perry, for being in attendance and thank him for his
work on our behalf since taking up his position. I wish him well for the future.

 An Leas-Cheann Comhairle: Deputy Luke ‘Ming’ Flanagan is sharing time with other
Deputies.

  Deputy Luke ‘Ming’ Flanagan: I had better address the comments on why certain Members
were not present last night. I can only answer for myself. It is unusual that I would not be in
attendance, but something unusual occurred. Something was signed into law behind our backs
yesterday and I spent the whole of the evening dealing with the reality. I am referring to the
habitats and wildlife regulation, which signals another nail in the coffin of rural Ireland. Perhaps
I should have forgotten about it and come to the Chamber, but I did not have the time. We
were surprised because no one told us about the regulation. Then again, why should we have
a right to know? We heard about it second-hand from the media, but that is nothing new.

  Deputy Shane Ross: Hear, hear.

  Deputy Luke ‘Ming’ Flanagan: Since there are more than 120 Members on the Government
side, the phrase “It is a bit rich” comes to mind, given that only 5% of them, some six Deputies,
are present. Some 40% of the members of our group are in attendance. I look forward to the
day the Government can reach these levels.

  Deputy Finian McGrath: Hear, hear.

  Deputy Luke ‘Ming’ Flanagan: If run correctly, this country has the potential to be the most
prosperous in the world. We can feed 15 times our population, even more if the Government
changed its policy and let us drain land. The potential exists to double the number of jobs in
the tourism sector. However, creating employment in an area like mine is difficult. The State
has never successfully created jobs in my area. On my first day in the Dáil, I stated how many
people emigrate from my area, even in good times. Nineteen of the 20 people in my and my
wife’s families needed to emigrate. Half of our respective families were born in London. No
one has ever successfully created a sufficient level of employment in my area.
   Throughout that time, the State has never had the courage to give people the power to
control their own destinies or allowed for a decent system of local governance wherein people
can decide their futures. This is a major problem. Had we that power, we would be able to
reduce rates while retaining the same service levels, as we would have the power to get rid of
waste in the local government sector. If one reduces the cost of rates, one makes it easier for
someone to set up a business. There is no incentive for someone to set up a business in
Roscommon, south Leitrim or any of the surrounding counties because, before one earns a
single cent, one must give between €100 and €200 per week to the council. The latter is a
totally unaccountable body in that it has an unelected person in charge. Therefore, it is a case
of money down the drain.
  Reducing rents would help us become more competitive. How did we get into circumstances
in which the reduction of rents has become impossible because of upward-only rent reviews?
                                                 874
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)


We have a joke of a system in which one cannot win no matter what one does. Although one
increases competitiveness if one reduces rents, our system is such that one reduces the value
of people’s pensions if one does so. Moreover, if one does so, one reduces the value of many
of the properties in NAMA, thus costing the taxpayer even more money. We are tied to a joke
of a system in which one cannot budge. No matter what one does, one gets hung out to dry.
The system is broken and needs to be fixed. Until it is fixed, we will never go anywhere.
  Agriculture has massive potential where I come from. It would have even more potential if
the planning legislation passed some months ago behind our backs had not been introduced.
How can one increase output if one cannot stop one’s land from flooding? I am wrong in saying
jobs will not be created in this area because jobs will be created for consultants and experts on
areas in which they have never been before. They charge farmers a fortune to tell them they
cannot drain their land. How do these people increase productivity or employment? The
Government, if it really wants to increase employment in this area, would want to increase the
suckler premium payment, which it halved, from €40 to €80. This would make sense. As a
result of the reduction, the national herd has reduced by 30% at a time when we need more
activity in this area. Farmers cannot afford to hold onto animals long enough because they do
not have an incentive to do so.
   I find rather amusing the idea that Ireland has a car industry, which industry must be stimu-
lated by throwing money at car dealerships. This does not do anything for the economy. It
does wonders for the Japanese and German economies but nothing for us because, although
some of the money circulates in Ireland, the vast majority ends up in the countries with real
car industries. If we were really interested in helping people in the car industry, we would
encourage people not to buy new cars for three years. In this case, there would be a lot more
employment for mechanics whose job would be to fix cars.
  If I had more time, I would make many more suggestions.

   Deputy Finian McGrath: I am thankful for the opportunity to speak on the motion on jobs
and the current unemployment rate, which stands at 14.5%. Before I discuss the details of the
motion, I must commend and thank the Independent group for bringing it forward to draw
attention to the needs of the unemployed. Tonight we stand with the unemployed and put
forward sensible solutions and ideas to create jobs. It is not our first time to do so and we have
never run away from putting forward a radical and sensible alternative. Tonight I urge all
Deputies to support our motion and not to play party politics with the unemployed. This issue
is too serious and we must stand up and be counted.
  Let me refer to some of the comments made by the Government Deputies. Many of us are
optimistic about the future of the country. Irish workers have great resilience. They are not
afraid of working. The average retirement age in Ireland is 64, compared with an EU average
of 61. More young people have acquired a higher education in Ireland than in any other EU
country, with the possible exception of Cyprus. Ireland ranks ninth by the World Bank’s
measure of ease of doing business. GDP per capita is still well above the EU average. These
are the positive points and this is why we are saying it is a scandal that our talent is not being
utilised in the national interest.
  There is much debate in the media about social welfare fraud and clampdowns thereon.
There is major hype coming from the Government. I am very disappointed that the Labour
Party seems to be sucked into this debate. Less than 1% to 2% of people receiving social
welfare engage in petty fraud. One should compare this to the scandals created by the tax
dodgers and those who travel abroad to avoid paying taxes. It is time to stop targeting the
unemployed and poor and go after the people with the wealth and resources.
                                                875
             Employment and National    28 September 2011.   Internship Scheme: Motion (Resumed)

  [Deputy Finian McGrath.]

  The American humorist Will Rogers said, “Even if you are on the right track, you’ll get run
over if you just sit there”. The Government should not just sit there. It should listen to the
advice of the people on the ground and the Independents in the Dáil and then act. Waiting for
the European Union to react is not an option. Ireland should lead in this regard.
  This motion condemns the Government for opting to make good the gambling debts of
unguaranteed bondholders at a time when desperately needed State funds should be invested
aggressively in job stimulus initiatives. That is where the future lies.
  Let us consider the undermining of the right of workers to a fair day’s pay for a fair day’s
work. Advocating this right is a Labour tradition and it should not be breached. Giving some-
body €50 per week is not and should never be an option. Taking away jobs in the sector should
not be accepted. We must restore the right of workers to a fair day’s pay for a fair day’s work
by addressing immediately the deep flaws in the national internship scheme. I ask the Minister
to do so.
  We need to return sanity to the commercial rented sector by eliminating upward-only rent
reviews. We should face up to the issue of the massive gambling debts of unguaranteed bond-
holders. We need to get this country moving and working.
  There needs to be a change in mindset in this debate. We need to go after and challenge the
mega-rich. Ever since the Thatchers and Reagans of the 1980s, there has been a steady transfer
of wealth to the very rich. This accelerated in recent years as hard-working people took cuts
in income to bail out the super-wealthy bankers. Not only is this social injustice contributing
to many injustices in society, it is the case that those on low and middle incomes reinvest
practically all their money in the local economy, thus keeping more people at work. On the
other hand, the mega-rich raise much of their wealth by hoarding, buying gold, silver and high-
end luxury imports, or by speculating on the money markets.
   The more the working-class and middle-class people are hit the more money is taken out of
the economy. The Government should, therefore, stop implementing the failed policies of the
past ten years and adopt a sensible suggestion, such as that made by billionaires such as Warren
Buffet, which has led to both economic and social progress in smaller economies. We should
not be afraid to encourage people to buy Irish in local shops and industries. An extra €20 spent
in local shops and industries by every person, particularly those who are over 55, who seem to
have an extra few bob and savings worth in the region of €75 billion, would create 20,000 new
jobs. This is the reality of the debate.
  Addressing cigarette smuggling could raise €500 million. Cigarette smuggling puts legitimate
retailers out of business. Up to 6,000 retail jobs are at risk because of difficult trading con-
ditions, caused by factors that include cigarette smuggling. Ireland is in deep recession and we
must protect jobs. If shops close, more people will need social welfare, thereby creating an
extra burden for the State. I recently met people directly involved in the industry and they
gave me proposals to put to the Minister, Deputy Noonan, that would raise €500 million extra
in revenue. The Government has a brass neck to accuse the Independents of not putting for-
ward proposals. While we challenge Government policies, we put forward our own.

  Deputy Shane Ross: Let me deal with the criticism regarding the absence of the Independent
group last night. It is fair enough and I am as guilty as anybody if the group’s number was not
as high as it should have been. This is dangerous territory in which to tread, however, because,
since I entered the House this evening, I have not seen a single Minister, in spite of this being
a debate on jobs. I have seen one member of the Labour Party, which was traditionally sup-
                                               876
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)


posed to be very concerned about jobs. During part of the time I have been here, I saw no
members of the Labour Party.

  Deputy John Perry: The Minister, Deputy Burton, was here until a moment ago.

  Deputy Shane Ross: Yes, but she was not here for a period of the debate.

  Deputy John Perry: She spoke on it.

  Deputy Shane Ross: This is the type of politics in which we should not indulge, but it started
on the Government side of the House and people in glasshouses should not throw stones.

  Deputy Finian McGrath: Hear, hear.

  Deputy Shane Ross: This is the only comment I will make on the matter as it is unproductive.
This is a serious debate and if the only contribution people on the Government side have to
make is to state not enough members of the Technical Group are present, it looks to me as
though they are pretty bankrupt of ideas for sorting out the jobs problem.

  Deputy John Perry: Far from it.

  Deputy Shane Ross: I have not seen before or during this debate, or in Government thinking
since it came to office, any radical change in its attitude towards job creation. Nobody on the
Government side appears to think in any way outside the box. They seem to think with exactly
the same paralysis as the previous Government on this issue. I acknowledge the internship
programme and it is not fair necessarily to criticise it at this stage. However, we are speaking
about a very small number of jobs for the 14.2% of people who are out of work. Why does the
Government not embark on something radical?
   I am sure I do not have the support of all of my Technical Group colleagues on this sugges-
tion, but why does the Government not focus on two or three areas in which it could do
something? I will suggest two. Where are the areas in which growth has and could occur? It is
very simple: the first is multinationals and the second is entrepreneurships and small businesses.
What has the Government done about these? Last week, Twitter came and this is a great
achievement. Of course there was a great parade and trumpeting and the Government claimed
credit for it. I suspect it has to do with the IDA and has been in the offing since long before
the Government came to power. This is an area in which all Governments of the State have
been immensely successful.
   It is not very popular to speak about multinationals as a successful growth area because it
implies we are not doing it on our own. However, we are because successive Governments
have been united in seeing the advent and arrival of multinationals as a job creation mechanism,
with more than 100,000 jobs from US multinationals alone. This is a tremendous achievement.
It is the policy of matching education with the multinational capital foreign direct investment
which comes here.
  Why not state this is working and reduce the tax? It is because the Government cannot think
outside the box and does not dare to do so because it is scared of Sarkozy and Merkel and the
rest of them. Why does the Government not go over there and state we will reduce it? We do
not owe anything to Europe except the few bob; we owe it no goodwill whatsoever. What
would be the result of this? There would be a loss in tax revenue but an enormous growth in
jobs, and this is what we want. The spin-off effect and the spending effect would boost the
economy. Europe would not like it, and we are frightened of going to Europe and stating it is
                                                877
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)

  [Deputy Shane Ross.]
what we will do. Try it. What is wrong with it? The Government is scared of doing anything
dramatic. The Government is still in the same mindset.

  Deputy John Perry: We are not one bit scared. We have a clear plan for small businesses.

   Deputy Shane Ross: I am glad to hear the Minister of State interrupting. He has come to
life and I am glad to see that someone on the Government side has come to life. It is good.
Stand up, speak and interrupt whenever you like.
   The other area in which the Government could do something is that of credit, which was
mentioned by a speaker on the Government side of whom the Minister of State did not take
any notice but did not interrupt. Why does the Government not get credit flowing? It can do
this. The Minister of State knows, I know and everybody else knows the banks are telling plain,
straightforward lies about lending to small businesses. Speak to any small business organisation
and it will state enterprises do not even bother going beyond a telephone call seeking credit
because the banks have told them not to bother. The Government controls the banks and is in
charge of every significant bank in the State bar the Bank of Ireland on which it has huge
pressure to bear. What is it doing? It is conniving with the banks, and the hidden agenda is
that the Government states the banks have set targets but the applications are not there so
forget about it. This is how it works. However, this is not the case because anecdotal evidence
and surveys conducted by ISME and other small business organisations show quite conclusively
that credit is not flowing to small businesses and as a result no jobs are being created. It is in
the power of the Minister of State and the Government to do this. Instead, we hear all about
Enterprise Ireland, the IDA and all of the others.

  Deputy John Perry: They are doing a good job, with €15 billion of exports.

  Deputy Shane Ross: Enterprise Ireland is one of the least efficient organisations among the
semi-State satellites and, I can tell you, that is saying something.

  Deputy John Perry: Unfair comment.

  Deputy Shane Ross: I agree with much of the Sinn Féin proposal——

  Deputy Finian McGrath: This is historic.

  Deputy Shane Ross: ——that many of these job creation entities should be merged, because
they are quangos which do very little. They are established as window dressing to protect
Governments so they can hide behind them and summon them.

 Deputy John Perry: There have been €15 billion in exports by Enterprise Ireland companies.
The Deputy does not have his facts right.

   Deputy Shane Ross: The previous Taoiseach’s solution to the unemployment problem was
to knock together of all of the heads of the quangos but nothing happened. The Government
is doing exactly the same.

 Deputy John Perry: Deputy Ross is incorrect about Enterprise Ireland. A total of €15 billion
was exported by Enterprise Ireland companies.

  Deputy Shane Ross: I am glad the Minister of State is awake. Thank God for a voice from
the Government benches.
                                                878
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)


  Deputy Tom Fleming: The major issue is that almost 450,000 people are out of work and
many of them see no light at the end of the tunnel. We need innovation and radical thinking
in job creation allied to the existing measures being put in place. I suggest we begin with people
in the public and private sectors who are within five years of retirement and who, I am sure,
would give serious consideration to job sharing. This would be on a voluntary basis and it
would give them an opportunity to ease into and adapt to retirement. If it were properly rolled
out in a structured manner, it would open up opportunities for thousands of people.
  While people would work for half a week during the five years of their semi-retirement, they
would be credited with a full week’s pension contribution. The people replacing them would
include those in professions who are well qualified, well educated and well skilled who would
not need pension contributions because they would benefit in a major way. There would also
be retraining and up-skilling. The major issue is that they would be removed from the unem-
ployment list and given hope.
  It may be possible for companies and the public sector to work with employees to make up
for the person who is leaving. I am sure in many cases the shoes of the person being replaced
would be filled successfully by the person replacing them for the five years because they would
have the basic qualifications required. This structure should be explored. It would be up to the
Department to tweak it and perhaps to find ways around the system. It would be cost neutral
as there would be no cost to the State; if anything there might be a little net gain.
  I agree with Deputy Ross that the small and medium-sized enterprise sector is having a very
challenging time. These businesses find it difficult to receive payment in many cases and many
uncollectable debts exist which are being written off. Most of these companies cannot downsize
because they are small by nature. They are heavily dependent on the banks and, as Deputy
Ross mentioned, the banks have put the shutters down and are not co-operating. The aspiration
of Government policy is that approximately €3 billion will be made available this year from
the two pillar banks, with €3.5 billion next year and €4 billion the year after. That is not
happening. It will not happen unless the Government intervenes and takes action immediately.
The Government must intervene to allow people to access credit and to give them an oppor-
tunity to at least retain what they have and build on it.
  County enterprise boards are providing invaluable backup and support to small and medium
enterprises through mentoring them and directing them on the right pathway in the future. If
county enterprise boards are allocated funding they offer the necessary start-up funding to
companies. They have a vital role to play in future job creation along with Enterprise Ireland.
They might both need to be revamped, built up with the correct structures and properly funded.
Last year for instance Enterprise Ireland client companies generated exports of €13.9 billion,
an increase of 10% on the previous year. Those companies provide 133,500 jobs and they
generate a spend in the economy of €19 billion.
  Although the concept and principle of internships is good they should be promoted and
policed more so that nobody can abuse them. An internship should be based on the number
of staff a firm employs prior to recruitment. At all times the intern should be additional to the
existing workforce. An internship provides a net gain for people who need to get on the
employment ladder as it gives them an opportunity to develop their skills.
  Many people are currently facing emigration. They are flying out of the country at a rapid
rate. The Minister, Deputy Burton, indicated that 4,000 had applied for internships, which is
disappointing. The programme must be accelerated. Only 2,600 placements have been
approved, which is even more disappointing given that the scheme has been in operation for
some time. The programme should be reactivated and pushed more strongly.
                                                879
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)

  [Deputy Tom Fleming.]

  In reply to a parliamentary question on the Garda vetting system implemented by the Garda
on behalf of the Minister for Justice and Equality it was indicated that it takes approximately
three months to vet individuals seeking part-time or full-time work in the various professions
requiring vetting. That is most disappointing. Approximately 188,000 people required to be
vetted in 2007 and the number rose to 292,000 in 2010. The waiting time is significant and must
be reduced.

  Deputy Joan Collins: What time do we conclude tonight?

  An Leas-Cheann Comhairle: We will conclude at 9.07 p.m.

  Deputy Joan Collins: I will try to be succinct. I welcome the opportunity to discuss job
creation and the jobs crisis. I thank the Members from the Technical Group and also those
from Sinn Féin who tabled an amendment to the motion.
   Recently, I had a conversation with a trade union organiser in the construction industry who
visited a site with a public contract to monitor whether workers were registered on the CIF-
CIC pension scheme. Not a single worker was paying into the scheme. The site was being
worked by contractors and sub-contractors who were employing almost exclusively workers
from across the Border.
  Again, at a meeting I attended recently with building workers the point was made that they
cannot obtain employment due to contractors who are engaged in the black economy. It makes
a nonsense of the investment in so-called shovel-ready projects. The investment levels are
paltry compared to what is required. We must address the fundamentals in this economy where
approximately 500,000 are unemployed. Reference was made previously to the number of
people who are emigrating.
   Schemes such as JobBridge, internships and work on SMEs are all small tinkerings with the
system that can play a tiny role in terms of getting the economy back working. The collapse of
the construction industry has had a significant effect. At least one in every three of those
thrown on the dole during the crisis was a construction worker. Due to the property bubble
we had an unsustainable lopsided economy with one in every seven male workers employed in
construction. That means there is a need for extensive retraining programmes, but the most
effective way to make an impact on the dole queues is for the setting up of a public works
programme aimed at taking construction workers off the dole. Such public works could include
an integrated rail and transport network for major cities, including metro north and metro
west, on which we heard the announcements that they would not go ahead.
  Carbon emissions in this country are double the agreed Kyoto levels. Carbon credits will
cost the Irish economy approximately €1 billion in the next five years. There should be a
programme to make all public buildings energy efficient. I refer to hospitals, schools and offices.
There should be a national programme for housing insulation and the construction of a network
of primary health care centres to reduce the pressure on accident and emergency units in
hospitals. There should also be a programme to provide social housing, schools, crèches and
community facilities. Such programmes would help upskill building workers and every building
worker off the dole would help to cut welfare costs, increase the tax base and improve consumer
demand leading to other job gains.
   To eliminate the black economy element from construction the programme of useful public
works should be carried out by a State construction firm using direct employment with con-
struction industry registered employment agreements as the basis for pay and conditions. That
is what is really needed to fundamentally get the country back working.
                                                880
             Employment and National      28 September 2011.   Internship Scheme: Motion (Resumed)


  The capital programme for 2010 to 2016 has been cut by 60%. Fianna Fáil’s four year plan
to 2014 is now being implemented by the Government. There is an envisaged capital spend of
€3.5 billion, which is a mere 1.9% of GDP. We need a State investment programme with direct
employment and real jobs.
  There is a problem with some schemes that take people off the dole such as Tús Nua. It pays
only a small amount above the welfare payment for transport but people are being put on
emergency tax which can take a number of weeks to sort out. People on welfare, especially
those with families, cannot afford to be the victims of such bureaucratic cock-ups. Perhaps
someone in government would examine the issue.
  Unless we deal with the issue head-on, we cannot sustain the mountain of debt both in the
economy and in terms of mortgages. We must look seriously at a writedown of the debts. We
must propose a jobs programme along the lines I mentioned and get the money from Europe
even if it means getting a low-interest loan for it and pump the money into the economy. It is
the only way to deal with the problem. Otherwise, we will see the problem trundling on while
the can is being kicked down the road. This country will grind to a halt under the mountain of
debt and austerity.

  Minister of State at the Department of Jobs, Enterprise and Innovation (Deputy Sean
Sherlock): I hope I can respond positively to all the ideas that were put forward. I acknowledge
the contribution by Members to the debate on the past two evenings. Members have been
generally constructive in their comments to date.
  I wish to put on record press releases from the IDA which outline certain examples of foreign
direct investments made in the past two weeks. On 26 September the headline read “Twitter
to establish international office in Ireland”. On 22 September, the headline read “MSD opens
new €100m R&D centre in Tipperary”. On 21 September the headline read “arvato Finance
marks 15 year anniversary with ambitious growth plans”. On 20 September the headline read
“Pfizer invests €200m in its Grange Castle biotech site”. On 20 September the headline read
“HCL Technologies establishes Software Delivery Centre in Dublin”. On 16 September the
headline read “The Coca-Cola Company opens new manufacturing and innovation facility in
Wexford.” I only put those on the record because they are examples of success in attracting
foreign direct investment.
  As Minister of State with responsibility for research and innovation, we are currently engaged
in a research prioritisation exercise. The purpose of the exercise is to narrow down key
elements of areas of research so we can continue to attract that kind of FDI in order that we
can ensure we have a platform for the basic research and applied research and that the level
of collaboration between industry and academia is deepened so we can ensure we can continue
on that platform and to put us even higher up the global rankings in research and innovation.
No party or Government should claim for itself this evolutionary process which has been put
in place since 1996 by various parties. It is only successful because of the fact that we have
organisations such as Enterprise Ireland, the IDA, Science Foundation Ireland and Forfás
which have the level of expertise to pitch to a market and attract the type of companies we
need.

  An Leas-Cheann Comhairle: The Minister of State has two minutes left.

  Deputy Sean Sherlock: I apologise to Opposition Members because my time is limited and I
would like to respond. Since July, some 1,400 people have signed up to the jobs initiative and
the national internship scheme. It will not be a panacea for all our ills but it is making incremen-
tal progress. That is how the Government will proceed. We will not have a great leap forward
within the next thee or four months because we must still address a deficit issue which has
                                                 881
             Employment and National    28 September 2011.   Internship Scheme: Motion (Resumed)

  [Deputy Sean Sherlock.]
been acknowledged by all sides of the House. There will be differences over the manner in
which we continue to address the deficit, but we still have that restraint in terms of our public
finances which hampers one’s ability to concentrate solely on stimulus. It will be a mix of
stimulus and retrenchment, which is the reality of the situation. I will not blame past Govern-
ments but will rather look forward to our FDI and strong export sector.
  My colleague, the Minister of State, Deputy John Perry, will soon be receiving the first draft
report of the small business advisory group. He announced today that county enterprise boards
will get another €3.1 million. These are all initiatives which locally and nationally will create
the type of stimulus we need.

  Deputy Mattie McGrath: Who is in charge?

  Deputy Sean Sherlock: It is a slow, incremental process but our hearts and minds are in the
right place. If I am to engage in a bit of rhetoric along with some of my counterparts in
opposition, I would say that to govern is to choose. That means we will have to make tough
decisions in future, but at the same time we are trying to keep the basics right.
  I would like to address the habitats directive and farming, as Deputies have referred to them.
The “Food Harvest 2020” document has been bought into by all stakeholders involved in the
rural economy, including the co-operative movement and farming organisations. We will see
tangible growth in that area, but the challenge is whether it will be jobless growth. I acknowl-
edge we must be cognisant of that also.
  Flooding was referred to and the Deputy mentioned his inability to get information on the
habitats directive. However, not one Deputy in the Technical Group has ever approached me
as a Minister to ask for any kind of briefing on the area I represent, which is a foundation for
the growth we are talking about. Like other Ministers, my door is open to any Member of the
House in order to engage with them constructively on any aspect. Let us do away with the
rhetoric that has filled the air for a long time.

  Deputy Mattie McGrath: The Minister of State is good at that himself.

  Deputy Sean Sherlock: We will work together constructively with those on the Opposition
benches.

  Deputy John Halligan: We made a good few suggestions.

  Deputy Sean Sherlock: I extend the invitation.

  Deputy John Halligan: Will the Minister of State take on those suggestions?

  Deputy Sean Sherlock: I extend the invitation to Opposition Members to engage with us on
a personal level and we will do everything we can to bring their agenda to the House.

  Deputy John Halligan: The Minister of State should read our submissions.

  An Leas-Cheann Comhairle: Silence please. I call Deputy Maureen O’Sullivan.

  Deputy Maureen O’Sullivan: I studied the Government amendment to see what was common
to it and to our proposal. What is in common is that we all find it totally unacceptable to have
an unemployment rate of 14.5%. We all recognise the toll increasing job losses are having on
families and individuals. We also recognise that meaningful action must be taken to reduce
that rate. I do not doubt that the Government wants to reduce unemployment as well as
                                               882
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)


restoring sustainable economic growth and job creation capacity. I acknowledge some of the
Government’s actions in that regard. It is unfortunate, however, that the JobBridge internship
scheme is being abused by some employers who are letting employees go in order to take on
intern staff. Robust action is required to ensure that such abuse does not continue.
  In its amendment, the Government commends itself on its work to increase access to credit
for viable businesses. Yet we hear of small businesses that are unable to obtain the credit
needed to continue, not to mention expand and take on more employees. The dots are not
being joined up between what is being said and what is happening on the ground.
  It is easy to blame previous Governments, but the Government must also take responsibility
for continuing to make good the gambling debts of unguaranteed bondholders. We need State
funds to be invested in job stimulus initiatives. We cannot isolate the loss of jobs from what
happened in the banks through overextending and risky deals that put the jobs of ordinary
workers at risk and which led to the current 14.5% unemployment rate. Jobs are central to our
recovery and it is very important to debate this issue now.
  It is disappointing that no sooner does a Minister announce X number of jobs in an area,
than they are followed by the loss of a wide number of jobs in another area. We must examine
why we are losing these jobs. Job retention is vital but it means more than words in the
Government’s amendment about implementing policies to stimulate the development of new
businesses and facilitate the retention of jobs. We must see this actually happening and the
more examples, the better.
  I want to make two points about the labour force. First, the constant harping on about
turning out robotic youths is doing a total disservice to our young people and their second-
level teachers. The science exhibition, young entrepreneurs and mini-companies provide just a
couple of examples of how creative, inventive and innovative our young people are. Let us not
be totally negative about the system.
  Second, I cannot understand the rationale of “encouraging” — and I use the word loosely
— experienced older people in the public sector to take to the hills. We need their experience
and a balanced approach should be adopted in this regard. It is disappointing that we are not
encouraging them to stay and give the benefit of their experience.
   The national unemployment rate is 14.5% but in Dublin Central, which I represent, it is as
high as 28% in some parts. Some areas of central Dublin have been devastated jobs wise
because they have been let down in the regeneration initiatives and lost community projects.
Long-term unemployment has trebled since 2008 in parts of Dublin Central. Many skilled and
unskilled construction workers have been left with very few opportunities for meaningful work.
The potential and capacity is there in Dublin Central for building because we are short of
houses that have long been promised. In addition, water and sewerage systems are required as
it improved social housing by insulating homes to make them more heat efficient, particularly
for senior citizens. We are all agreed on what has to be done but the difference lies in how we
are going to do it.

  Deputy Catherine Murphy: Employment is the number one priority for every Member of
the Dáil, so it is essential that the measures taken result in job creation. I wish to focus on a
few areas starting with the county enterprise boards. This is a micro-sector featuring up to ten
jobs in any enterprise. This area is aimed at a person who may have lost a job and is thinking
of setting up a business. The 35 county enterprise boards have local flexibility which is an asset.
Each of them is set up as a limited company which means that each one must prepare its own
full set of accounts. In addition, they have their own websites and prepare 35 annual reports
which must be translated into Irish.
                                                883
             Employment and National     28 September 2011.   Internship Scheme: Motion (Resumed)

  [Deputy Catherine Murphy.]

   I will now focus on Kildare which is the fourth most populous county in the country. People
might not realise that but it has grown substantially to a population of 209,000 according to the
last census.
   Kildare County Enterprise Board had not had any funds available to commit to projects in
2011. In recent months I asked a series of parliamentary questions seeking information as to
what happens to county enterprise board surpluses. I was informed this money cannot be
transferred to other enterprise boards. What typically occurs is there is a stipulation late in the
year that the money must be spent before the end of the year. Therefore, it becomes a joke
because the money cannot be used when the allocation is so late in the year. This practice
must change.
  I recently asked the board how it deals with people who ask for funding during the year
when the money is not available. I was informed that the board will advise them to submit an
application but in reality, people are so busy that they do not submit an application.
   For those who decide to make the leap from welfare to work, there is a significant risk that
if the business does not succeed they will be exposed without the cover of welfare payments
and anyone leaving a job to become self-employed is even more vulnerable.
  The county enterprise boards should be amalgamated into a single limited company and use
the money saved on administration costs to spend on job creation. Our welfare system must
be more flexible and more inclusive for the self-employed.
   I refer to a report on “Morning Ireland” this morning about a man who has set up a unique
business providing on-site blood testing for the equine industry. He made the point that he had
received a lot of assistance from Enterprise Ireland but all the banks did was talk to him. He
                was of the opinion that the banks did not know how to lend to business. The
9 o’clock       banks are stuffed with cash but according to an article in today’s Irish Indepen-
                dent, eight out of ten mortgage applications are refused. There is ample evidence
that the banks are not lending to business. AIB is looking to increase the cap of €500,000 on
the salary for its chief executive. I thought we were to have a change in the culture of the
banks. Unless there is a change in attitude in the banks we have no hope of recovery because
jobs cannot be created without money. The recapitalisation of the banks was to ensure they
could function as banks but they are not doing so. We either wholly own or control these banks
and if they are not working then the Government must address that issue now.
  The internship scheme works well in some countries and I am not opposed to it in principle
but there are major flaws in the design and operation of our current scheme. I listened carefully
to the Minister and I agree with some of the points she made. However, it appears that the
scheme is being used in some instances to recruit experienced people and this in some cases
could be described as job displacement. There is no apparent economic test to determine if a
job could be provided rather than an internship. People at both the top and the bottom are
being abused.
   I was informed about advertisements for jobs for solicitors asking for six years’ experience.
However, the Legal Aid Board was recruiting for solicitors. In a reply to a parliamentary
question the Minister stated, “I can confirm that the Legal Aid Board is actively participating
in the scheme and this is a development that I very much welcome.” It is either an internship
scheme or it is not. This confusion is what gets the scheme a bad name.
  I remind the House of what the Government parties said before the general election com-
pared with the actions taken since then. At last year’s Fine Gael Ard-Fheis, its finance spokes-
man said, “the creation and retention of jobs is the only way to get the public finances out of
                                                884
             Employment and National         28 September 2011.     Internship Scheme: Motion (Resumed)


the current crisis”. It is not good enough to say that it is a top priority because Fine Gael is
now the senior party in the Government. This must translate into actions which result in the
creation of jobs. The tourism initiative was welcome and it showed that investment brought
returns but it was too little and more needs to be done.
  In early February, the Labour Party spokesperson, Deputy Joan Burton, said:

      “Austerity and cuts alone, as we know, will not do the job. Whatever savings have been
    made by cuts have been eroded by the fact that growth rates keep falling....Labour is
    planning to use €2.8 billion in the National Pension Reserve Fund for shovel ready projects
    and then the €2 billion remaining in the fund towards the creation of a strategic invest-
    ment bank.”

Less than a year ago, it was reported that Deputy Eamon Gilmore stated that while the €6
billion in cuts aimed to convince certain institutions that the Government was earnest about
making fiscal adjustment, no growth resulted from the €4 billion cuts last year. In the same
article he highlighted warnings that companies that were successful have invested their way out
of a recession and not tried to save their way out of it. I ask if we can have that Eamon
Gilmore back.

  Deputy Mattie McGrath: Labour’s way or Frankfurt’s way.

  Deputy Catherine Murphy: We clearly need to have a comprehensive jobs package. Unem-
ployment is now at emergency levels. Not a week should go by without an initiative. We need
something like the Marshall plan.

  Amendment put:

                                    The Dáil divided: Tá, 92; Níl, 40.
                                                    Tá

      Bannon, James.                                              Farrell, Alan.
      Barry, Tom.                                                 Feighan, Frank.
      Breen, Pat.                                                 Ferris, Anne.
      Broughan, Thomas P.                                         Fitzpatrick, Peter.
      Burton, Joan.                                               Flanagan, Charles.
      Butler, Ray.                                                Flanagan, Terence.
      Buttimer, Jerry.                                            Griffin, Brendan.
      Byrne, Catherine.                                           Hannigan, Dominic.
      Byrne, Eric.                                                Harrington, Noel.
      Cannon, Ciarán.                                             Hayes, Brian.
      Carey, Joe.                                                 Hayes, Tom.
      Coffey, Paudie.                                             Heydon, Martin.
      Conlan, Seán.                                               Hogan, Phil.
      Connaughton, Paul J.                                        Howlin, Brendan.
      Conway, Ciara.                                              Humphreys, Heather.
      Coonan, Noel.                                               Humphreys, Kevin.
      Corcoran Kennedy, Marcella.                                 Keaveney, Colm.
      Costello, Joe.                                              Kehoe, Paul.
      Coveney, Simon.                                             Kelly, Alan.
      Creed, Michael.                                             Kenny, Seán.
      Creighton, Lucinda.                                         Kyne, Seán.
      Daly, Jim.                                                  Lawlor, Anthony.
      Deasy, John.                                                Lynch, Ciarán.
      Deering, Pat.                                               Lynch, Kathleen.
      Doherty, Regina.                                            Lyons, John.
      Donohoe, Paschal.                                           Maloney, Eamonn.
      Dowds, Robert.                                              McCarthy, Michael.
      Doyle, Andrew.                                              McHugh, Joe.
      Durkan, Bernard J.                                          McLoughlin, Tony.
      English, Damien.                                            McNamara, Michael.
                                                    885
                     The             28 September 2011.                Adjournment


                                       Tá—continued

     Mitchell, Olivia.                                    Phelan, Ann.
     Mitchell O’Connor, Mary.                             Phelan, John Paul.
     Murphy, Dara.                                        Quinn, Ruairí.
     Murphy, Eoghan.                                      Reilly, James.
     Nash, Gerald.                                        Ring, Michael.
     Naughten, Denis.                                     Ryan, Brendan.
                                                          Sherlock, Sean.
     Nolan, Derek.
                                                          Shortall, Róisín.
     Noonan, Michael.                                     Spring, Arthur.
     Ó Ríordáin, Aodhán.                                  Stagg, Emmet.
     O’Donnell, Kieran.                                   Stanton, David.
     O’Donovan, Patrick.                                  Timmins, Billy.
     O’Dowd, Fergus.                                      Tuffy, Joanna.
     O’Mahony, John.                                      Twomey, Liam.
     O’Reilly, Joe.                                       Walsh, Brian.
     O’Sullivan, Jan.                                     White, Alex.
     Perry, John.

                                            Níl

     Adams, Gerry.                                        McGrath, Finian.
     Browne, John.                                        McGrath, Mattie.
     Calleary, Dara.                                      McGrath, Michael.
     Collins, Joan.                                       McGuinness, John.
     Colreavy, Michael.                                   McLellan, Sandra.
     Crowe, Seán.                                         Moynihan, Michael.
     Daly, Clare.                                         Murphy, Catherine.
                                                          Ó Caoláin, Caoimhghín.
     Doherty, Pearse.
                                                          Ó Cuív, Éamon.
     Donnelly, Stephen.                                   Ó Fearghaíl, Seán.
     Ellis, Dessie.                                       Ó Snodaigh, Aengus.
     Ferris, Martin.                                      O’Brien, Jonathan.
     Flanagan, Luke ‘Ming’.                               O’Sullivan, Maureen.
     Fleming, Tom.                                        Pringle, Thomas.
     Halligan, John.                                      Ross, Shane.
     Healy, Seamus.                                       Smith, Brendan.
     Healy-Rae, Michael.                                  Stanley, Brian.
     Higgins, Joe.                                        Tóibín, Peadar.
     Kirk, Seamus.                                        Troy, Robert.
     Kitt, Michael P.                                     Wallace, Mick.
     Mac Lochlainn, Pádraig.


Tellers: Tá, Deputies Emmet Stagg and Paul Kehoe; Níl, Deputies Catherine Murphy and Seán
                                       Ó Fearghaíl.

Amendment declared carried.

  Motion, as amended, agreed to.

 The Dáil adjourned at 9.20 p.m. until 10.30 a.m. on Thursday, 29 September 2011.




                                            886

				
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