Mattie McGrath (Tipperary South, Independent)

I am delighted to be able to speak to the Bill. I was never as excited about a Bill being brought before the House as I was about this one. I compliment the Minister of State, Deputy Brian Hayes, his staff and Senator Feargal Quinn on the work they have done on it. I particularly compliment the Minister of State on the bipartisan approach he has taken to it. He has been prodded and nudged by all of us because all Members can tell horror stories from their constituencies. The Minister for Finance is also aware of these cases and I am glad he is present in the House to hear the debate.

The Minister of State has accepted Senator Feargal Quinn's Bill, but it does not matter whose Bill it is, as it is long overdue and eagerly awaited. Unfortunately for thousands of small companies, it has been introduced years too late. I condemn the previous Government for not advancing it when Senator Feargal Quinn introduced it. We thought the construction industry was great, but inside that greatness there was a cancerous rot.

I compliment all speakers but especially Deputy Arthur Spring who brought his financial expertise gained in a former life in banking to bear on the issue. Many of the people who have lost their businesses, cannot educate their children or pay their bills and are in Stubbs Gazette and in hock to Revenue would not be in that position if the money provided for contracts had been ring-fenced. I welcome Deputy Arthur Spring's suggested amendment and proposal that a working group be set up in the Oireachtas to deal with the matter.

Funny money was being moved from A to B to Z and nobody knew where it was. Money that was provided for a construction contract could have been used to buy land, not the site of the contract in question, or to speculate on other matters. The banks did not know where the money was going. They could not follow it. The people who were responsible were able to do it. We now know that they should not have done it because it was to the cost of many of them but also to the cost of the country and the taxpayer.

I will never forget the morning I came to the House during the term of the previous Government when 550 contractors connected with Pierse Construction were meeting in a hotel on the outskirts of Dublin. They all went out of business. If that was not a prod to the then Government to act, nothing was. That is only one of many companies that has since gone out of business with hundreds of small companies left high and dry. It is shameful. All of us who were Members of the Dáil at the time should hang our heads in shame because we should have dealt with the issue, yet we did not.

The Construction Industry Federation, CIF, must come in for a lot of blame as well because it sat around the table during negotiations with the social partners when everything was being divvied up in the good times. It was comfortable and happy with the situation. It was also happy to squeeze – I hate to use the word "screw" but that is the word I should use – the small business people. The small man was kept down. We thought when we achieved independence in this country and got rid of the British that we would have fair play but we got more greedy than they were. We were happy to keep the small man down. The CIF negotiated lucrative rates.

The minimum wage has been an issue. I did not support the cutting of it. I welcome that the issue has been raised. The minimum rates of payment that were negotiated for some sectors in the trade were ludicrous. Since I built my house in 1984, the cost of blocks has not even doubled in price but the cost of laying them has increased tenfold. We got carried away. Time was a factor as there was pressure involved given completion date clauses in contracts. The Construction Industry Federation has not stepped up to the plate and dealt with the matter. It is crying halt now but in the good times it got carried away. It was not interested in the small business man or the small one-man or two-man operations which are the backbone of this country.

I shouted across to the Tánaiste today that he should change the record. I welcome the job announcements. We need them, but small businesses are the backbone of the economy. We must be aware of what it costs to entice foreign direct investment companies to set up in this country. I welcome them all but we must bear in mind the costs involved. The small businesses to which I refer are based on initiatives that came from people who went to the local technical school and then got their trade qualifications and extended them to become builders. I agree with Deputy Spring that most of them should not have become speculators. Most of them did not, but some of them did and we have a mess as a result. They must be supported and allowed to work. The Bill is of the utmost importance to them because they must get paid for their work.

The threshold of €200,000 and €50,000 is totally off the wall. I welcome the fact that the Minister said he would examine the issue. The threshold must be reduced to €2,000 or €3,000 or certainly it must be reduced to €5,000. If one has given one's time laying blocks, plastering, doing carpentry and possibly supplying materials, a few thousand euro is like a million euro to a big company. Such a small business man or woman needs the money to put bread and butter on the table to feed himself or herself and his or her family, insure a van and meet all the health and safety requirements. Sums between €2,000 and €5,000 are more important to such a person than a million euro to the big companies. That must be recognised. The small men are caught all the time. They are paying their way, paying VAT, PRSI and taxes, and are not a burden on the State. What is worse is that in spite of having paid all their taxes, VAT and PRSI, because they were stung by the reckless trading of big companies that did not want to pay them in the first place, now they are not entitled to social welfare payments having paid their own PRSI. The Minister for Social Protection, Deputy Joan Burton, is examining the matter, which I welcome. Those people are the lifeblood of the economy and we must protect them.

Deputy Tom Hayes referred to a regeneration project that is currently ongoing in Carrick-on-Suir in the Ballylynch housing estate. It was built 30 years ago and it is in a terrible state of decay. Previous Deputies, including Deputy Hayes, and Ministers worked for years, as I did, and it was finally announced that €4 million would be allocated for the project. As is happening with almost every contract now, local, well-renowned, quality builders in each county – in my area there are the Hally's, the O'Gorman's and the Morris's who have been operating for decades - that are responsible for the finest monuments and public works and cannot get a chance because companies are coming in and trading recklessly.

The company in Carrick-on-Suir was involved in four different projects, all paid for by the State. I accept there was a bond but no bond covers the contractors. Thank God the bond covers the local authority. The company in question has left the project high and dry. It has gone bust and left a trail of destruction after it, including unpaid bills. Ordinary, decent, hard-working people who gave services and supplies cannot get paid. Thankfully, the council has the bond which, according to the town manager to whom I spoke, ensures the bondholders can send in a company to certify the work carried out to date is structurally safe and appoint a new contractor to continue the work. However, that is of little good to the small contractors who have provided the machinery to dig out the foundations, supplied blocks and concrete, the craftsmen and tradesmen who have laid blocks, those who supplied and put in the windows and put on the roof, and the painters and plumbers.

What happened was disgraceful. Rip-off Ireland was never better. Some of those companies knew they would never pay the subcontractors. That is what happened. I am a subcontractor myself but, thankfully, I have not been caught for years. I did get caught on a big project in Clonmel. My wife manages the business and any time some of those companies rang looking for me to do work, she did not even tell me they called. She wanted to keep away from them because a lot of them were fly-by-nights. They had big names and everything else but, as Deputy Spring said, they were spending the money elsewhere and they had no notion of paying the contractors.

If a company goes into receivership, one will only get a couple of cent in the euro. The subcontractor is the last person to get anything. The banks and the Revenue will get money but the small suppliers and self-employed people who are the backbone of the economy will not get a cent. It is an outrage. When Pierse Construction went into liquidation 550 small companies were affected. Since then, thousands of small businesses have been affected. Some of those involved have been driven to suicide, unfortunately, because they are honourable people who pay their way, paid their workers and everything else. They got left high and dry. In some cases it was downright blackguardism that they were caught out because the cowboys who were doing the big jobs never intended to pay them anything in the first place. The rot must be weeded out and sorted out because it is a disgrace. It is a shameful practice that should not be allowed.

I welcome the provision of an alternative resolution mechanism because we cannot go to the courts. It could cost €15,000 to get a case into the Circuit Court and then one only might get a judgment in one's favour. Even if one gets a judgment, one still has to get the money. It is a waste of time which is only making fat cats fatter in the High Court and Circuit Court. That is another racket.

The biggest racket I wish to expose is that of receivership. It is the newest industry in town. I appeal to the Minister in that regard. I could add NAMA to it. Between receivers and NAMA, they are the biggest show in town. It is the biggest con-job in town. The rates receivers charge are astronomical – hundreds of euro per hour. If a company goes to the wall for whatever reason leaving many suppliers waiting for money, they will not get a cent but the receivers in many cases are heartless, relentless gangsters and chancers. They are getting their money from the sweat and blood of ordinary people. It is outrageous and it has become an entire industry. One sees the firms involved on both sides. They act as advisers in many cases.

When NAMA was set up I described it as a wild animal in the forest and that we would not know where it would end up. My words are coming true because that is what it is. It is another big boys club. Rogue developers are involved in it and are getting healthily paid by NAMA after they banjaxed the country along with the bankers, the regulator and some politicians. One could ask whether we are ever going to learn.

This is going on and we must introduce a Bill with the utmost urgency to regulate the receivers because it is the biggest industry in town and it is cronyism. I do not have words to describe it because it is so bad. It is so hateful and merciless how they treat people and families. They have no interest whatsoever in the ordinary suppliers and workers. Rip-off Ireland is doing well with those industries and with this carry-on. It cannot and must not be allowed to continue given the times we are in.

I mentioned company turnover levels. I accept there is a bond for public buildings but there should be a second bond to cover subcontractors and suppliers. I understand that is the case in the United States, England and other places to ensure these fellows cannot come in and hire all the subcontractors, get them in first at rock-bottom prices, operate a break-neck, cut-throat business and then have no notion of paying them.

There should be a bond to cover subcontractors and suppliers. The situation in Carrick-on-Suir is disgraceful. People are waiting for their estate to be done up. They are out of their houses and living in rented accommodation. The place is a mess. Thankfully, the local authority had a bond, but some of the subcontractors will not receive a shilling. Is that fair in this day and age? The building work will recommence, probably with different subcontractors, but those who have done the work on this occasion will receive nothing.

I question the term bespoke goods. This is another minefield for the wigged gentlemen in the High Court who will define it. The Bill concerns all materials used. The foundations are the most important part of any development, that is, the concrete used which is a raw material. It cannot be taken out. Neither can one take out the blocks and mortar and the plumbing used. We must, therefore, get away from the clause about which the Minister of State is concerned. The concrete suppliers' federation has lobbied hard on the issue. They must be entitled to get the money they are owed because it costs a great deal to generate a contract. Deputy Stephen Donnelly from Wicklow mentioned the quarry company in that county. There are similar companies are all over the place which cannot get the money they are owed. I worked for a number of companies 30 years ago, some of which are still operating, but many of them are not. The best of companies are on their knees.

I salute road builders such as Sisk & Co. They have fine expertise and paid everybody. Some projects were carried out perfectly, managed properly and completed on time and within budget, but in other instances the cowboys took over. There are cases where things were done right and we can see the fruits of people's labour. I use those roads every day. As a result I will be able to travel home this evening in two and quarter hours, whereas it would have taken four hours ten or 20 years ago. There are good cases, but there are also many cowboys in the industry who give everybody else a bad name.

What are bespoke supplies? Will there be endless arguments among lawyers in the High Court to define the term? The Minister of State should cut out the nonsense by including all supplies used. He also should include an amendment to ensure all subcontractors who should be bonded will be paid because without them building work could not go ahead and projects would not be completed.

The Bill has been well put together. I am interested in hearing whom the Minister of State consulted. With whom did he consult? I will be told it was the Construction Industry Federation and others, but he must consult at a lower level. The farmers contractors association was only set up a number of weeks ago. In fact, I was at the launch. They are also contractors who are being caught, left, right and centre. Ordinary small builders must be consulted, those who do not have the money to join the wealthy man's club of the Construction Industry Federation where we have seen a great deal of money go astray. I hope the matter will be fully investigated in time, but that is another issue. They all got around a table and got cosy.

Section 7 provides that if an adjudicator's award is not paid in full within seven days of the adjudication decision, the unpaid party has a right to suspend work under the construction contract. The section sets out the rules governing this arrangement. This is a vital component. However, one has one's hand in the dog's mouth. Where a subcontractor supplying machinery, for example, tells his or her company to stop, the main contractor will get Johnny down the road to do the job for less. As the subcontractor is afraid he or she will never get what he or she is owed, the bill gets higher and higher and the subcontractor is led a merry dance and then left high and dry. It is important that one has rights in that instance.

Section 9 gives the Minister for Public Expenditure and Reform the power to prepare and publish a code of practice to govern the conduct of adjudications. However, a code of practice is as useless as a piece of paper in dealing with the cowboys. We have seen this happen in the case of the Competition Authority which has no funds and no power. We are aware of the cartel in the concrete sector, to which Members referred. Millions of euro have been lost to the taxpayer. The Competition Authority is toothless and powerless to act. There is inertia which stemmed from high places. There were cosy deals negotiated with a nod and a wink.

It is welcome that there was a regulatory impact assessment and that there will be further consultation. There is too much legislation passed here without any impact assessment being made. This is an issue which must be addressed. The Technical Group looks forward to the making of amendments on Committee Stage and considering the rationale for Government intervention. There must be a good reason to intervene, but intervention is needed. While the Bill is long overdue, it does not cover all areas, but no doubt we could put another Bill side-by-side with it to deal with the money trail and the funny money.

We must insert amendments to bring down the thresholds of €50,000 and €200,000, respectively, to €1,000 or €2,000 and €5,000, respectively. The figure of €3,000 or €5,000 is as or more important to the small man working and paying his way than the figure of €1 million, €2 million or, for that matter, €10 million to the big guys because it is his livelihood, his bread and butter, to provide an education for his family. It is keeping him in employment and off the dole. The small subcontractors are the ones we must support because they offer us hope of recovery.

I welcome this legislation. On Tuesday I spoke to different legislation to which I was opposed because it was providing for another layer of bureaucracy to be put in the way of small hauliers and others who were trying to survive in stringent economic times. We need many more items of legislation, but it is vital that this Bill has a speedy passage through the House. We should make amendments to it on Committee Stage to ensure it is enacted into law before the summer recess. On another Bill, somebody asked this morning who would police it. We do not want another quango, but we certainly want to create fear among rogue builders, in other words, gangsters, that they will not be able to get Government contracts at ridiculously low prices. Government agencies and local authorities must look at their track records on other projects and put in place a bond for subcontractors, alongside the one put in place for projects, because people are merely being used, abused, blackguarded, threatened, intimidated and whatever else - I could not use strong enough words for it.

I look forward to a robust debate on the Bill and compliment the Minister of State because since he took office he has taken many imaginative steps. He has had the first regulatory impact assessment published by a Government and is a man who is interested in accepting Bills from the Opposition. There have been at least five Private Members' Bills presented by the Technical Group since the Government took office and each one has been blindly rejected. I had one dealing with scrap metal. I thank the Minister of State for the magnanimous way in which he has accepted and agreed to work with this Bill which he called Senator Feargal Quinn's Bill. It does not matter what it is called. What is important is that it is passed and made court-proof. Let us keep it away from the courts. Having a code of practice is nonsense. There are too many codes of practice and too many cowboys who merely pay lip-service to them. I, therefore, look forward to the passage of the Bill.

See this speech in context