Liz McManus (Wicklow, Labour)

It is very regrettable that we have been put in this position by the Government. At 6.10 p.m. we were informed by the Minister that legislation would be rushed through the House without us having a chance of ensuring it would undergo proper scrutiny, care and attention, which is the way things should be done. I object to the fact that, in effect, a legislative gun is being put to the head of the Opposition in regard to this legislation.

The Labour Party has and will support risk equalisation and community rating. They are the fundamentals that ensure people are protected and have access to health insurance. I suppose we can be grateful to the Minister that she has not abandoned both community rating and risk equalisation. However, we are extremely concerned at the failure of the Government to safeguard both community rating and risk equalisation in a competitive market where people can have a choice, something which the Minister certainly espoused in the past but has not lived up to. Instead what is being created is a muddle at best and a risk at worse, a risk to jobs and to people who have taken out health insurance who are worried about their future. The most extraordinary thing about this is that it need never have arisen that we find ourselves in this position.

In 2003 legislation was passed by this House. The then Minister for Health and Children, Deputy Martin, put through the Health Insurance (Amendment) Bill and he promised, "The second [provision of the Bill] is to ensure that the temporary exemption from risk equalisation, which has as its objective the encouragement of competition, can be availed of only by genuine new entrants to the market". We were told that was the purpose of the Bill and we accept it in good faith. It is getting to the stage where one cannot believe anything this Government says, but that is what we were promised. He outlined the various sections, including section 6. He stated:

Section 6 is concerned with the arrangements in place to facilitate and encourage the entry of new insurers into the market to provide greater competition and choice to consumers. The legislation provides for insurance undertakings that have not yet commenced business to avail of a three year exemption from risk equalisation.

We know the purpose of this. The provision of the Bill retained the measure of risk equalisation. However, he went on to state:

The main purpose of amending the existing provision is to avoid a possibility that the exemption could be availed of through the creation of a subsidiary or some other form of associated company by an existing undertaking. This approach is considered desirable to remove any possibility of an issue of avoidance arising in the arrangements ... It aims to ensure the exemption will only apply in circumstances where the added value for consumers of private health insurance is a genuine increase in the choice of insurers and greater real competition in the market.

Somebody was looking at the problem, but somebody did not see how far the problem extended. Companies such as Mercers were brought in to advise on this complex matter. Civil servants were also involved. There was no lack of advice to ensure the legislation would encompass measures to deal with the risks inherent in the system. We dealt with one risk and the other was ignored. This was a commitment made by a Minister to guarantee by legislation that there would be competition and that nobody would avoid living up to his or her responsibilities. It was another broken promise and here we are trying to fix the mess.

The Minister said she had not seen the legal agreement between Quinn Direct and BUPA. This raises issues about the extent of what we are facing. If she does not know anything about the legal agreement, what does she know about the future of the 330 jobs in Fermoy? Each worker has been living through a very anxious time in recent months. The workers are mainly young people with mortgages who do not know where they stand. What will happen to them now? That is one practical outcome, even though we have not been asked to look at all the implications.

What is the future for competition? It is hard to envisage any future for it. If a three-year derogation on risk equalisation was designed to assist new insurers to come into the market, what will happen when there is no derogation? The Bill will get rid of derogations; therefore, the tender plants will not even have a chance to grow. The Minister is in effect stating we will not see competition. The chairperson of the Competition Authority made a statement to the Joint Committee on Enterprise and Small Business, in which he specifically recommended that VHI's exemption from prudential regulation should be brought to an end as soon as possible in order that it would become subject to the legal solvency requirements and corporate structuring rules applying to other health insurers. This is a cause of great complaint from the competitors of VHI. A timeframe was set out, but the Competition Authority is clearly indicating that such a timeframe is not acceptable. I would like the Minister to respond to this.

If the Bill is signed into law by the President after midnight, when will it become law under the Interpretation Act? Will it become law from midnight or from midnight tomorrow? My party cannot support the Government when it pushes through emergency legislation without any chance of ensuring it is robust. There are real risks and I have no doubt that the Bill will be challenged in the courts. Risk equalisation has already been the subject of court action and the Minister is right to say she succeeded in the courts following the BUPA challenge. However, that will not stop future court challenges, especially when situations such as this could have been avoided.

There was a clear concern expressed about the difficulties with derogation during the debate on the 2003 Bill. However, there seemed to be no ability within the Department or the ministerial team to do anything. Of course, the then Minister's advisers never read a brief, just like the Minister himself; perhaps, therefore, we should not be surprised. Nonetheless, they touched the surface and dealt with one loophole, but they did not deal with this one and we are now trying to play catch-up in an area worth millions of euro. Derogation is worth millions and any company will try to ensure it can hold on to a derogation to avoid the levying of a large bill. That is what companies do and one should not expect them to do anything other than this. We are talking about huge amounts of money, yet the Government has failed to recognise and acknowledge that what should have been done in 2002 was not done. We are now being given a Bill at the last minute and asked to accept it in good faith without going through it in detail. Frankly, we cannot do this. We must remember that there are individuals taking out insurance who will be affected by this and that there are hundreds of people working today who thought the crisis had passed. Their concerns need to be foremost in our minds tonight.

See this speech in context