Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Tá mé iontach sásta a bheith ag labhairt anocht ar an ábhar seo. Tá mé sásta go mbeidh mo pháirtí ag tabhairt tacaíochta don Bhille seo le dul tríd go Céim an Choiste. I am delighted to be speaking and I am glad this party will support the passage of this Bill to the next Stage. If it passes tonight the next Stage will be critical in making sure it is a realistic and practical solution. For me the real question is whether this Bill will work and will it lead to insurance on fair terms and a reasonable price for families and businesses who need insurance. They are our criteria for supporting this Bill.

I acknowledge the work of the Irish National Flood Forum and thank it for its engagement with me and my party on this issue. We can all recall, I am sure, the image of Ministers in canoes or in wellies only a year ago trying to show they were doing something about the floods. If ever there was a perfect image of closing the door after the horse has bolted, it was that one. Investment in general is not something that is a Government strong point but investment in flood defence is particularly poor. The State is on a course of ever-diminishing capital investment compared with what is required. The results are inevitable and for all to see. They are a housing crisis, congestion in our cities and flood defences being overwhelmed if they even exist.

In June this year I asked the Minister of State sitting opposite, Deputy Canney, how many times he met representatives of the insurers on flooding and he told me he had not yet met them. That was seven weeks into his role and the most important issue on his plate. That lack of urgency and understanding of how critical is this issue is typical of the Government's response. The Minister of State confirmed to me that of the seven schemes due to start in 2015, none had started. No doubt when the winter storms come the Minister of State and others will promise action but it is all rhetoric and the necessary investment is not being made.

This lack of investment offers an excuse to insurers on a plate. We have a combination of a Government ideologically opposed to capital investment and an insurance industry that is in trouble of its own making. Together, we have as a result families, farmers and businesses left without insurance. The Government says it is not its fault and so do the insurers. As we have seen in the motor insurance investigation, insurers have used every excuse going to avoid responsibility for their actions. Time and again we have heard them claim they cannot insure inevitability, which is perhaps fair enough, but in reality from the cases we hear about it is more a question of only wanting to insure when they can be sure there is absolutely no risk. The challenge before us is how to protect family homes and our businesses in an era when investment is bottom of the list of priorities and the insurance industry is actively hostile to playing its role in the economy.

The Bill is sponsored by Deputy Michael McGrath tonight and it attempts to empower residents through the Financial Services Ombudsman and the Central Bank. Much of the Bill is unprecedented, to my knowledge. Those who live in areas designated as having less than a one in 100 chance of flooding each year will be allowed make a complaint to the Financial Services Ombudsman on the grounds of discrimination, whether it is a refusal to insure or unfair terms or price. In effect, families and businesses will be allowed call the bluff of insurers. It lays down in legislation grounds on which insurers cannot refuse or charge extortionate prices for insurance, which is to be welcomed.

The Office of the Financial Services Ombudsman is a very important one, as we all know. We can see that in light of the tracker mortgages scandal, it has been negligent in dealing with the responsibilities it had. I believe, nonetheless, we have seen a step change in the last while. It is an important office and one that is growing into its role. This would be a new role for it, effectively defining new rights rather than simply enforcing existing rights. I am not sure that is what the office is designed to do or if it would have the resources or expertise to do that but at this point, the issue has been allowed to develop to such a point that I am prepared to look at all of that.

Likewise, the extra powers proposed to be given to the Central Bank are quite extensive. It will be able to put in place enforcement orders forcing a company or whole sector to offer insurance to ensure compliance with the principles of non-discrimination and fair pricing and terms. It would be remiss of me not to make the point in terms of powers that the Central Bank currently has and the fact it does not use them. Again, I refer to the tracker mortgage rate scandal. For five years after mortgage holders took complaints to the Financial Services Ombudsman, the Central Bank did nothing and four years after the High Court upheld the decision of that office against the banks and in favour of their customers, the Central Bank still did nothing. It was only last year, after mounting political pressure, that the Central Bank was forced to ask for an industry-wide review of the issue. We now know this means there was industry-led theft of 8,600 mortgage holders who were denied their tracker rates.

I raise this because although this legislation rightly gives the Central Bank more power, we must ensure it will use those powers if they are provided by the Houses of the Oireachtas. This is a new approach, although I and Deputy McGrath proposed something similar with regard to mortgage rates. This is a different issue but the principle of a State body stepping in to force the private sector to play its role is one with which I have no issue.

Unlike the old days of a majority Government rejecting Bills it did not like on the grounds of secret and often questionable legal advice, I accept that this Bill raises some complex legal issues, including the effect of European Union rules. I hope if this Bill reaches the next Stage, the Minister will be generous and open in sharing any such analysis. My concern at this point is getting us to a stage where we can rationally decide whether this will work. We must look at the possible side-effects of this approach. Forcing insurers to set a certain price at one point of the market could lead to increases in other parts. I hope the Bill will go to Committee Stage, the time in which to tease out all that detail and all the concerns we may have. For today I am happy to support this Bill so that a clear message can be sent to insurers and the Government that this problem cannot simply be wished away.

In the context of a changing climate, we know extreme weather conditions will become more common. The need for a functioning insurance system, whether based on the private market or not, will become greater than ever. I note that both the Minister of States' three options and Deputy McGrath's solution are limited to a private sector approach. Having just finished with the finance committee's report on motor insurance I am doubtful that such an approach can be the only solution, at least not by itself. That is not a radical suggestion and some sort of state involvement in insurance against natural disaster is the norm across Europe.

I finish by commending Deputy McGrath on taking this initiative and the many activists who have kept this issue to the forefront. I look forward to this Bill passing Second Stage tonight and to examining its impact on Committee Stage as soon as possible.

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