Róisín Shortall (Dublin North West, Labour)

I have already indicated my dissatisfaction at the manner in which the Minister is dealing with this important issue. The Labour Party will abstain on each of the amendments in relation to pension provision because adequate time has not been provided for us to consider the proposals, to consult with experts in the field or any of the groups representing either workers or pensioners. It is standard practice in the House that reasonable time be allowed for people to consider new proposals and consult on them, but the Minister has not allowed that and has not provided any explanation whatsoever. In those circumstances, we have no choice but to abstain on these amendments.

The Minister talked about the need to rush through this legislation, indicating that there were so many schemes in difficulty and at any stage any scheme could collapse. That is the case, but we have waited ten years and another week or two will not make a huge difference. That argument had some validity up to mid-afternoon before she brought in the new amendment to replace her earlier amendment, where some amount of leeway was provided to companies that wound up their schemes and they may at some point in the future be declared insolvent. It is not a matter of saying they must be in before this legislation is passed or else there is no help for them at all. The Minister has introduced an element of retrospection in this, so that if another scheme were to go bust tomorrow or next week, it would still be covered by this legislation, if she were to delay for two weeks.

I asked the Taoiseach three times today and I am asking the Minister now, to kindly explain to the House why she is rushing this. What is it about this that has to be dealt with today and could not be dealt with just as well in two weeks time? I ask her to please explain that clearly to the House. Another point about this is that it is a sticking plaster approach. She made minor changes last December and made a big deal of it. No doubt she will make a big deal about this as well. This is no substitute for a proper pensions policy. The reality is that pensions policy here in recent years has been a disaster. It has completely failed and the uptake is exceptionally low. The whole basis of the policy has been tax relief, which has resulted in a "rich man, poor man" arrangement whereby a vast amount of money has been given to people in tax relief, more than €3 billion. In that regard, there really is a pressing need for the Minister to put her proposals before the House. Both of her predecessors promised to do this and did not. We need proper proposals set in a modern day context in relation to pensions, ensuring equity. This legislation does not do that, but just provides a few sticking plasters to the existing inequitable inappropriate outdated pension scheme that we have in this country.

I am particularly concerned that the Minister has continued to allow a situation to exist whereby company directors and other wealthy individuals can set up self-administered schemes at enormous cost to the State. Ridiculous levels of tax relief are being provided to people who can stash away €5.5 million and take out €1.3 million tax free. It is outrageous and it makes a nonsense of all the Minister's bleeding heart concern about the cuts she had to make in social welfare and the kind cuts with which we will deal later in this Bill.

There was potential to make considerable savings in tapping those people who are very wealthy and who have extraordinarily generous pension schemes. However, the Minister took the decision to hit people on small pensions and small incomes rather than tackle that issue. It is incredible that nobody in the State can provide us with figures for how much it costs us to subsidise and provide welfare to high net worth individuals, because that is what we are doing. We are providing corporate welfare to people with self-administered schemes by giving them top rate tax relief and tax free status for up to €1.3 million. That is the reality of the pension policy over which the Minister stands.

In the context of the White Paper, which the Minister said is imminent, and the Commission on Taxation report, will she come up with a figure to tell us how much it costs the taxpayer to subsidise and to provide this welfare support to rich people, because those figures are not available anywhere? I do not see how the Minister can possibly bring forward proposals in regard to new pension policy or how the Commission on Taxation can come to a view in respect of tax reliefs if it does not know how much those schemes cost the State. I put that to the Minister in the context of her making €300 million in cuts in the social welfare budget.

There was huge potential to make savings in regard to pensions for rich people but the Minister did not touch them. We expect her to deal with them and the blatant inequality it generates when it comes to the White Paper and to at least be able to tell us the extent to which these people are being subsidised.

This kind of ad hoc approach is a waste of time. What we need is a proper pension system, the basis of which is a State pension for everybody. There is an amendment on the PRSI ceiling, which I will not support. However, there are issues there to be considered in a national debate on pensions. In the context of a State pension scheme, which would cover everybody, it makes a lot of sense to lift the ceiling, although it does not make sense to do so in isolation from everything else. The core of any pension policy in this country must be an enhanced State pension scheme and then to allow people to top it up at their own expense if they are in a position to do so. One must accept that the policy which has existed in this country for several years has been a complete failure. We will wait to see what exactly the Minister comes up with. Those proposals cannot come soon enough. However, the proposal before the House is not a substitute for that nor is it a way out for the Minister from her obligations under EU legislation in terms of the legal requirement to ensure adequacy of pension cover, which she has failed to do and for which we are likely to pay dearly due to her inaction.

I refer to the State annuity scheme, the PIP scheme. That has a lot of potential and I do not know why it is so limited. I hope that in the White Paper the Minister will provide for a much wider State annuity scheme. It cuts out the middle man. There is no doubt the kind of profits and charges which have been applied in the pensions industry are outrageous. What has been allowed to go on there is scandalous, as is the milking of the system by certain individuals and companies. We should move towards a system where there is a State scheme so that all that profiteering is cut out. There should not be any room for it in regard to pensions.

I do not understand why the Minister's proposal in this regard is so limited. Why, for example, does it only apply to companies which are insolvent? There is no justification for that. There is the potential to extend it on a much wider basis. I take it that at some point in the future, it will be possible for SR Technics to avail of this. There is a fundamental problem with SR Technics. This will not solve it, although it may ease it somewhat. The Minister, who is responsible for pensions, has stood by while a very strong and profitable company has managed to walk away from its liabilities in terms of pension provision. Unfortunately, this will happen more frequently in the future. That should not be tolerated and we should not have such an unregulated pension arrangement where that can happen. Not only is SR Technics a profitable company but it got a substantial amount of money in the past few months from a semi-State company, the Dublin Airport Authority, for giving back leases and for giving up an option on a site. It got tens of millions of euro from a semi-State body but it was allowed to walk away leaving a massive hole in its pension scheme. That is outrageous. The Minister stood by silently and allowed this to happen.

This can happen in regard to other schemes as well and nothing is being done about it. It is not tolerated in any other country. When the EU Commission sought to bring the UK authority to book over this issue, it moved very quickly to deal with it. However, the Minister somehow thinks Ireland is different and can avoid being compliant with EU legislation but those chickens will come home to roost and she cannot wash her hands of her responsibility in that regard.

I cannot understand why the State annuity scheme will not be allowed to cover increasing pensions. One of the stipulations is that it is only for static pensions which will remain the same and will not provide for any cost of living increases. I do not know why that is the case. It does not make any sense. In many companies, people have the option to go for a basic rate which will remain the same. It is a higher rate but they will take that and hope inflation will be low and they will continue on the same rate. Others choose to have a lower basic pension but with periodic cost of living increases. I do not understand why the State annuity scheme will not allow the same kind of provision, that is, an increasing pension. Perhaps the Minister will address that when she responds.

I refer to concerns expressed by Age Action. There is an unfairness about this because of the problem of the Minister allowing a situation to continue where schemes are seriously underfunded. Since there is no adequate pension policy in this country, workers are undoubtedly losing out. The Minister is proposing to improve marginally the position of those workers, at the expense of existing pensioners. That does not seem fair. If one were starting from scratch, one might change the priorities. I am concerned that older people who have retired are paying for the pension improvements of workers. The approach that is being taken in this instance might mean that pensioners who took up employment or started paying into pension schemes at a late stage will end up with very small pensions. I am worried that women, in particular, will end up with very small pensions as a result of this proposal. The cost of living increase that is applied to small basic pensions is very significant for such people. It is obvious that reductions in the cost of living increase do not affect those with better pensions. Many people in defined benefit schemes get very good pensions. There are cases in which senior executives receive significant and generous pensions from company defined benefit schemes. They are in a much better position than people with very small pensions to cope with the loss of their cost of living increases. It is another example of an equity issue. It would have been preferable for the Minister to have introduced some kind of cap, or to have enabled the trustees of pension schemes to impose a cap on the basis of the profiles of those in such schemes.

I will conclude by expressing my disappointment with the manner in which the Minister has handled this legislation. She has utterly disrespected and disregarded the role of Opposition Members of this House. She has ignored our right and our need to consult widely on new provisions. She ignored the precedent of allowing adequate time for new proposals to be considered. Worst of all, she has utterly failed to provide any kind of explanation of why she is doing this. Her actions can serve only to alienate those of us on this side of the House.

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