Enda Kenny (Mayo, Fine Gael)
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Last week, the Fine Gael Party supported the action taken by Government in defending our economy and maintaining the banking system. Has the Government approved the scheme? The Taoiseach has been briefed by the Central Bank, the Financial Regulator and the institutions named in the guarantee. Arising from the briefings and the information provided, has the Government calculated the property-related bad debt in the institutions involved? Does the Taoiseach know the scale of this? Will he give an assurance that the level of property-related bad debt poses no threat to the solvency of the institutions in question? It is perfectly obvious that significant sums are being moved from other institutions to those named in the guarantee, which is not yet in place because it has not been approved by the Dáil and the Seanad. When will it be introduced in the House?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The scheme has not been approved by Government. It is at an advanced stage with work being done on it by the Department of Finance, the Central Bank and the Financial Regulator. The preparation of the framework for the scheme to give effect to the guarantee is at an advanced stage. The objective is to enable the terms and conditions of the guarantee to be prepared in accordance with the objectives of the legislation. The Government is anxious to enable this process to proceed and be completed, including the consideration of draft schemes by the House, as soon as possible. I cannot say exactly when these will be finalised. There will be a need for discussion between the authorities and the EU Commission to ensure the scheme meets State aids and competition requirements, which is important. This is an evolving situation.

With regard to question of the provisions in the banks themselves, what we did last week related to the need to provide confidence in the market as we dealt with capital outflows from Irish credit institutions to the extent that we were advised it had reached the stage where the Government needed to act and, on that basis and on that advice, we made the decisions we made. The question of how lending practice proceeds from hereon in relates to the work of the Financial Regulator and the Central Bank in dealing with the overall financial stability of the system. The legislation considered by the House last week provides options in that regard.

Clearly, the issue dealt with last week was the liquidity of the Irish financial system and the need to improve liquidity where global financial markets had dried up to a large extent. The position has not dramatically improved in a global sense and the issue still remains. We are not in any way out of the woods regarding this matter. The banks and credit institutions must continue to do their work in terms of conducting their business and taking account of the new realities.

Enda Kenny (Mayo, Fine Gael)
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Obviously, there are a number of problems. My party supports the action taken by the Government, but it is important we know the attached conditions.

The Taoiseach has not responded to my question on whether the extent of bad property debt known to the Government, as outlined by the banks, the Central Bank and the Financial Regulator, will impact on the solvency of banks. Will he assure the House that the extent of the debt will not impact on the solvency of any of the institutions? What is the position regarding institutions beyond the named six? While the guarantee is not in place, my understanding is that there is fluid movement to the institutions named in it.

It is not a Central Bank or Financial Regulator scheme. Rather, it is a Government scheme underwritten by the taxpayer to the extent of €400 billion, between €200,000 and €250,000 per worker. In the interests of the taxpayer and the Government, it is important we know to what we are signing up. Banks are daily in a position to indicate the loans they consider to be bad debts. Given the risk associated with bad property debt and loans in a number of institutions, a different guarantee scheme in each case will be required. When the guarantee scheme is before the House for approval, will it reflect the difficulty and range associated with bad property debt in each institution? For bank or financial institution X, a particular kind of scheme may be required while the scheme for another institution, one with a greater risk attached to its property loans and debts, may be more robust, rigid and regulated. Will the Taoiseach clarify the position?

Brian Cowen (Laois-Offaly, Fianna Fail)
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On the drawing up of the framework for the schemes to give effect to the guarantees provided for in the legislation and to answer a previous question that I may not have answered, the Minister for Finance has already made it clear that applications from the subsidiaries of parent bodies incorporated and regulated outside this jurisdiction for inclusion in the guarantee scheme will be considered where the subsidiaries have substantial engagement in the economy on a retail basis, subject to their meeting the terms and conditions of the scheme. No more than in the case of the six named institutions covered by the initial Government announcement, our authorities will need to be satisfied that the necessary terms and conditions are met in each case. Each applying organisation will also need to decide whether it wishes to participate in the guarantee scheme when the full terms of the scheme are considered by it.

We have already made it clear, both domestically and in our communications with other EU member states and EU authorities, that the guarantee scheme is designed to ensure financial stability. It is not intended to provide a basis for predatory activity based on an unfair competitive advantage, which has been made clear to all relevant credit institutions in Ireland and will be reflected in the terms of the scheme.

It is important to point out that the Minister for Finance is reflecting on the issues raised with him in his finalisation of the detailed scheme. As Deputy Kenny stated, the question of what terms and conditions will apply to individual credit institutions will be determined by the criteria set out therein. They will not be exactly the same in every case. The idea is to provide a guarantee scheme that reflects the commercial realities of the situation. The purpose of providing the scheme is to try to ensure we protect the interests of the economy and the taxpayer.

Eamon Gilmore (Dún Laoghaire, Labour)
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Since our last Leaders' Questions last Wednesday, there have been a number of significant developments in the economy. Disturbing and bad Exchequer figures have been published and, today, the ESRI's quarterly review was published. It told us the country will be in recession this and next year to a higher degree than previously predicted. The review also predicts that unemployment will rise to 8% in 2009. The live register figures have been published and show that almost 80,000 more people are on it than at this time last year. Yesterday, the recently privatised Aer Lingus announced it is to add another 1,500 people to the live register.

When the Dáil resumed after the summer break, I asked the Taoiseach whether he could identify any initiative taken by the Government to deal with the problem of rising unemployment. At the time, he could not. I have read the Government amendment to be tabled to the Labour Party motion for tonight's Private Members' debate, but I cannot find in it any new Government initiative to deal with the problem of unemployment. What new initiative, if any, is the Government planning to deal with the increasingly serious problem of growing unemployment?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy is aware we are preparing a budget for next week. All of these issues are being considered with some degree of detail as to how we can, on the one hand, provide the necessary changes in public finances to ensure we arrest the rate of increase in public expenditure seen in recent years in different economic circumstances and, on the other hand, provide a means by which we can in the coming years ensure we address the imbalance currently taking place.

It is a question of trying to ensure we provide a means by which the country can continue to provide more investment and employment. As the Deputy pointed out, this is taking place in a more difficult economic environment, in which there have been 70,000 job losses in the past 12 months compared to more than 640,000 created in the past ten years.

We must put measures in place to ensure that those who become unemployed are given effective employment services and training supports to assist their return to employment as soon as possible. We are acting to help newly redundant workers. They are now being referred immediately to FÁS instead of waiting for three months on the live register, as was the case previously. FÁS will be providing a range of certified, short, flexible programmes designed to upskill redundant workers. A number of programmes are already in place, the frequency and range of which will be expanded during the coming months. Through various agencies, we will continue the training and upskilling of the workforce in line with the national skills strategy. We must acknowledge the substantial support given to community employment schemes, which give people employment experience and assist in their return to the open labour market. These are positives in dealing with the immediate reality for those who become unemployed.

There is also a need to examine inward investment. Last month, the CEO of IDA Ireland told the Joint Committee on Enterprise, Trade and Employment how inward investment is ahead of where it was in September 2007 despite the difficulties we are facing. Equally, indigenous industry is ahead. Despite the difficult background against which we are operating, there are proactive measures in terms of employment supports and wider enterprise support policies to try to maximise opportunities for employment as they arise.

Eamon Gilmore (Dún Laoghaire, Labour)
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All of that is an "as you were". It is a recitation of the measures, schemes and steps already in place. What those who have been losing their jobs, many of whom the Taoiseach and I meet, are asking is when are they likely to find work and what steps is the Government taking to source and encourage new employment for them. They are wondering for how long they will be out of work. They have suddenly dropped to a situation where they are on social welfare, with substantial household bills to meet and large mortgages. In the past few days my colleague, Deputy Shortall, has highlighted the extent to which people now have recourse to the Money Advice and Budgeting Service, mortgage interest relief and other measures they never thought they would have to access. We know what has been happening in construction for some time but it is also happening in services that have been supplying the construction industry and professions associated with it. Young professionals — solicitors, architects and engineers — are losing their jobs and finding themselves out of work with a large mortgage as they start their lives.

The questions they ask are when they will get a job, how long they will be out of work for and how long the Government plans on leaving them on social welfare. The scale of what has happened over the past 12 months in terms of people losing jobs has not been fully grasped by the Government. A debate will be held tonight on foot of the Labour Party motion but the self-congratulatory, business as usual amendment that the Government tabled is not the response that these people were seeking. We need to hear that new initiatives are being contemplated and will be taken to get people back to work and provide hope for those who find themselves in a new situation, one they never anticipated and are finding increasingly difficult to cope with.

Brian Cowen (Laois-Offaly, Fianna Fail)
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There is nothing self-congratulatory about this or any other Government amendment. It acknowledges that unemployment has increased from 4.5% to 6.3% this year. The Central Bank and others, as the Deputy points out, indicate that next year we will have great difficulty in creating growth in the economy, that there is a wider downturn in the world economy and that this open economy is not immune from those developments. It is acknowledged that they are hitting us hard.

In the meantime we must provide for investment and continue with significant investment in the Irish economy. In the coming year, despite the difficult budgetary situation we face, we will continue to prioritise the areas that will give an economic return more quickly than other projects, such as major investment in a public capital programme, which is very significant. We have seen that significant investment in the past seven or eight years. A sum of €2.3 billion was spent in schools between 2000 and 2006. There is a commitment for €4.5 billion in the current development plan. Some 40,000 people are in new primary schools that were built in this period in developing areas, with 45,000 in schools that were refurbished or had classrooms added. That can continue and therefore there will be a certain degree of offset from the public capital programme for the decline in private sector activity, particularly in the construction business. That will not totally offset it but we will do all we can, within the resources available to the State, to continue with the capital investment programme that will, in large proportions, remain even with prioritisation that will be necessary in view of the fact that by the end of this year tax revenues will be down by an estimated €6.5 billion compared to last year. That involves difficulties.

We must examine our capital programmes, expenditure programmes and tax base to see how we can chart a way forward in the new situation in which we find ourselves. So long as the global financial and equity markets are in turbulence, we are seeing — everyone acknowledges and understands it — the impact it is having on the real economy in terms of business sentiment and business confidence. These are issues that every country must deal with, including this one, and we intend to do so to the best of our ability.

It is not a question of business as usual, it is a question of using enterprise supports to identify companies in Ireland that can grow jobs — some are doing this. IDA Ireland has been successful in getting investment of over €2.3 billion in the first nine months of 2008, ahead of where it was this time last year. That is a fair achievement but that is not to say that it will continue unless we continue to work at it and bring forward policies to show that Ireland is open for business, that there is another story to tell in addition to the very difficult situation on the operational day to day side.

We will begin to address all those issues in the budget as announced by the Minister for Finance when he sets out the budgetary framework. We will seek, in the first instance, to stabilise the situation and then, in coming years, to see the ways we can address expenditure and grow revenue. In the meantime we will continue with a significant investment in our public capital programme that will build up the country when the upturn comes. We will make investments to ensure Ireland is better placed then than now in terms of capital infrastructure and taking up the opportunities that will arise. That is the challenge and no one suggests it is easy, that there is a quick solution or that anyone has a monopoly on wisdom on how to do it. Those significant realities must be faced by the Government and the Oireachtas as we consider the budget and the Finance Bill. In that way, and in no other way, we will chart a way forward.