Dáil debates
Wednesday, 20 April 2011
Leaders' Questions
10:30 am
Micheál Martin (Cork South Central, Fianna Fail)
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The Nyberg report is a candid and clear assessment of the origins of the financial crisis and at its core is an analysis of the systemic failures, which is far more challenging than a more narrow approach. It confirms that one cannot simply take action against a number of individuals and expect that everything will be fine. It explicitly addresses the roles of the banks, regulators, politicians-----
Micheál Martin (Cork South Central, Fianna Fail)
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-----Departments, auditors, the media and commentators.
Micheál Martin (Cork South Central, Fianna Fail)
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I suggest to the Taoiseach that were Members to respond properly to the lessons of what went wrong, they must commit themselves to a much wider set of specific regulatory reforms. In this context, will the Taoiseach support the establishment of an Oireachtas regulatory oversight committee?
Jerry Buttimer (Cork South Central, Fine Gael)
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The Deputy is 14 years late.
Micheál Martin (Cork South Central, Fianna Fail)
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Because the fundamental question-----
Bernard Durkan (Kildare North, Fine Gael)
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It is a bit late for that.
Jerry Buttimer (Cork South Central, Fine Gael)
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Where has light-touch Charlie gone now?
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Sorry, will the Deputies please allow the Leader of the Opposition to speak?
Jerry Buttimer (Cork South Central, Fine Gael)
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Where has Charlie McCreevy gone?
Micheál Martin (Cork South Central, Fianna Fail)
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The fundamental question remains as to who guards the guardians in such situations. The conventional wisdom historically and over the past decade or so advocated the independence of regulators from politicians and from the Oireachtas. That has been the conventional wisdom but when things collapse, conventional wisdom changes and Members need to endeavour-----
Jerry Buttimer (Cork South Central, Fine Gael)
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Light-touch Charlie.
Micheál Martin (Cork South Central, Fianna Fail)
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-----to create alternatives to that approach. I suggest a proposal I have made previously, namely, the establishment of an Oireachtas regulatory oversight committee with the capacity to hire independent expert staff to assist it in its work. Members are in discussions on the establishment of committees and this presents an opportunity for this Dáil to establish such a committee to ensure that this House - if one goes back over the past decade or so, one will note the House rarely discussed bank regulation - will have an ongoing, systemic approach to overseeing the work of the various regulatory authorities in the different sectors of our economy.
Enda Kenny (Mayo, Fine Gael)
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I thank the Deputy for his having arrived at a point of distilled wisdom after all the years. I agree on behalf of everyone else in the House that Members should have the capacity to have authority to investigate such matters properly. The Nyberg report speaks for itself. However, what it does not state is that the entire culture was such and that banks knew they were lending too much and in many cases, borrowers knew they were borrowing too much. I recall being in the House during the controversy caused by a former Taoiseach to the effect that if people were a bit concerned about the housing business or that the housing boom might fail, they should go off and commit suicide. When the Nyberg report came before the Cabinet, it discussed this and people want those who were involved in reckless lending and the pursuit of such activities to be legitimately questioned. The Oireachtas does not have the authority to do this because of the current legislative constraints. The Government intends to change this and will ask the people for their authority and imprimatur to deal with the consequences of the Abbeylara judgment. This will give the Oireachtas the right to investigate the facts, without criminal intent being determined, in the way people desire in respect of accountability. This will be the oversight that Members must have and will get. The Government will bring forward its views shortly after Easter on the new committees and the numbers thereof, which will be seriously reduced. These committees will have the opportunity to deal in a real way with issues that come before them. In respect of the matters arising from the Nyberg report and for all future occasions, I want elected Members of the Oireachtas to have the right to have compellability whereby witnesses may be called before them to investigate facts regarding which the electorate is rightly and thoroughly outraged.
Micheál Martin (Cork South Central, Fianna Fail)
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One can be highly partisan and political about this issue but that is not the point. The Nyberg report fundamentally is about a systemic failure across a range of issues and I have put forward a constructive proposal in the context of how, on an ongoing basis and in a systemic way, Members should change the way in which they do politics and business in the House by having a proper regulatory Oireachtas committee with teeth and with independent expertise that can ensure the role and performance of regulators are as the legislative framework ordains. This change can and should be brought about and I ask the Taoiseach to make a commitment to work with other leaders in the House to establish such a regulatory oversight committee. I have no difficulty with the amendment of the Constitution in respect of the Abbeylara judgment. However, while that will deal with the specific issue on hand, other issues may arise in the future. The Taoiseach is correct in that one can make comments and observations about what did or did not happen. Regulation was introduced here and the Oireachtas raised issues on dog doping and so on but what is important-----
Bernard Durkan (Kildare North, Fine Gael)
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We know what happened.
Jerry Buttimer (Cork South Central, Fine Gael)
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We still are paying for it.
Micheál Martin (Cork South Central, Fianna Fail)
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-----in respect of what happened within the financial system is that Members should change systemically the manner in which they operate to ensure they can prevent other occurrences in the future.
Enda Kenny (Mayo, Fine Gael)
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While there was a regulation committee in the last Dáil, it was not able to do its duty. The question to be asked of the people will give the Oireachtas and its committees real authority and teeth to do their job both in a specific case and for all others. I believe the Deputy will agree with and support this measure. While the Nyberg report speaks of systemic failure, it also deals with a blatant lack of leadership and direction from the Government in office.
Enda Kenny (Mayo, Fine Gael)
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When the Abbeylara consequence has been dealt with, the appropriate committee to deal with these matters also will be able to call before it politicians representing the Government. I refer to my quotation from the Nyberg report yesterday, "The higher ... [the office], the greater their responsibility", and that did not exclude politicians or the political process. This is the reason a referendum on the Abbeylara judgment is needed and is the reason I intend to enable Members of the Oireachtas on an appropriate committee to do their duty for the people so that there can be accountability for what happened. As the Deputy knows well, this was a scandalous series of events. He was a Member on the benches on this side of the House which unfortunately allowed it to happen. That is in the past and we must now deal with the future to ensure this cannot happen again.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Thank you Taoiseach.
Enda Kenny (Mayo, Fine Gael)
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The Minister, Deputy Michael Noonan, has pointed out that decisions will be taken in conjunction with the EU directions for changes and in respect of what the Government will implement.
Gerry Adams (Louth, Sinn Fein)
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Obviously, we need to put in place procedures and committees with appropriate powers to deal with this issue, but we are missing the point about the pulse of the public. The Nyberg report points to all of the failures. Sinn Féin warned about what would happen, but we were ignored and dismissed. We repeatedly called for stronger regulation, caps on remuneration, a fair tax policy and so on.
What about those who created this mess? How will they be held accountable? Yesterday the Taoiseach stated he would not intervene to get back the €3 million of the people's money pocketed by Colm Doherty of AIB, citing contractual entitlements. This came the week after the announcement that 2,000 lower paid bank workers would be sacked, while thousands more are being denied modest pay rewards, despite their contractual entitlements. Is it only the rich and the golden circles that have entitlements? Cén fáth nach ndéanann an Taoiseach an rud ceart - seasamh ar son na cosmhuintire amuigh ansin in ionad bheith ag seasamh ar son an chiorcail órga atá beo go fóill? As we seek to reform the banking system, can we expect to hear further news of more big bankers walking away with obscene severance packages and pensions for which the taxpayer will pay and in respect of which the Government will repeat the mantra that it can do nothing? The people concerned acted in breach of their duties, caused significant losses, brought banks to the point of collapse and almost bankrupted the State. They should not be rewarded. I know of no other sector in which this conduct would be rewarded. Citizens have taken action against those whom they perceived to be politically responsible, but what action will the Government take to ensure there is not a recurrence and that those who are accountable will be brought to book instead of being allowed to walk away with millions of euro in public money?
Enda Kenny (Mayo, Fine Gael)
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I heard the leader of Sinn Féin say he had issued warnings about what would happen. I am not sure how severe the warnings were, but I know that his party knows a lot about banking. There is no question about this.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputies, please.
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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The Taoiseach is absolutely right. We certainly do. Does he have any other gems of information to share with us?
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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The Taoiseach to reply, please.
Enda Kenny (Mayo, Fine Gael)
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As Deputy Caoimhghín Ó Caoláin is aware-----
Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Sadly, some of us spent a long part of our lives working in the damn things.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Could we hear the Taoiseach reply, please?
Enda Kenny (Mayo, Fine Gael)
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As Deputy Caoimhghín Ó Caoláin is aware, the money was paid to Mr. Doherty last year before the general election occurred. I make the point to Deputy Gerry Adams that the Government has taken action and that the Minister for Finance has outlined a series of changes that are to take place. There may well be other senior banking executives who have legal entitlements to similar deals. I do not know.
Enda Kenny (Mayo, Fine Gael)
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The Department of Finance is examining that matter following the making of a request by the Minister.
We have to look at new remuneration allowances for the future. As the Deputy is aware, there are similar developments in the European Union where there are directives on the remuneration of senior bankers and in which their bonus culture is attacked head on, which did not happen here. We will be moving towards a new regime to replace the old one. I am conscious of the fact that there are people with legal entitlements that will be very difficult to disentangle.
The pension cash payment in the case of Mr. Doherty arose under the Finance Act 2006. Pension pots above €5 million, the standard fund threshold, were made subject to a very high tax rate. The SFT was reduced to €2.3 million in the last budget. Individuals with bigger pots were allowed to agree a personal fund threshold with Revenue that eliminated retrospective tax liability. Usually, no future payments were made into the pension fund. Some employers offered lump sum tax payments which were taxed as income each year in place of pension contributions. When this issue was examined by the CIROC group, it recommended against making these payments in lieu of pensions and AIB agreed to withdraw its scheme. However, it indicated to CIROC at a meeting in February 2009 that Mr. Doherty had agreed his arrangement with Revenue and would suffer financially if he attempted to undo it. This was accepted. When AIB sought the agreement of the Minister for Finance on the appointment of Mr. Doherty in November 2009, it was agreed that his salary should be €500,000. AIB also sought approval for a continuation of the pension cash allowance. This was agreed, subject to it being strictly in line with existing contractual entitlements.
The important point is that the Department of Finance did not have the details of Mr. Doherty's contract. The then Minister for Finance, referred to as a person of high office in the Nyberg report, should have known this. Certainly, as a person who did not want to have Mr. Doherty appointed in the first place, he should have made it clear that he should have been apprised of each and every issue regarding the internal appointment of Mr. Doherty by AIB.
Gerry Adams (Louth, Sinn Fein)
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That is a bit rich, if the Taoiseach does not mind the pun. He asserts that the then Minister for Defence should have known this.
Pat Rabbitte (Dublin South West, Labour)
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The Minister for Defence was giving interviews in Limerick at the time.
Brendan Howlin (Wexford, Labour)
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And writing for the Sunday Independent.
Gerry Adams (Louth, Sinn Fein)
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I thank the Ministers for their assistance.
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Ministers and Deputies, please allow Deputy Gerry Adams to continue.
Gerry Adams (Louth, Sinn Fein)
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The Taoiseach stated the then Minister for Finance should have known this, yet he stated earlier that there might be others about whom he did not know who would walk away with a great deal of money. That is exactly what he stated.
Gerry Adams (Louth, Sinn Fein)
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He then went on to criticise what the former Government had done, despite repeating-----
Brendan Howlin (Wexford, Labour)
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During the appointment process.
Gerry Adams (Louth, Sinn Fein)
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Let me outline my understanding of what the Government plans to do. It plans to remove board members of the bank who were appointed before the bank bailout-----
Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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This should be a supplementary question.
Gerry Adams (Louth, Sinn Fein)
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Sin é. Is that the case? What about senior management? Surely, it must go. What about the public interest directors? Do they not have a case to answer? This is occurring on the Taoiseach's watch. He needs to know and tell the House clearly that bankers will not walk away with obscene amounts of the people's money.
Enda Kenny (Mayo, Fine Gael)
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I did say it was the Department of Finance, not the Department of Defence, as the Deputy said. The position is that I do not know the contractual arrangements of other senior bank executives and whether there are similar deals that were done. I do not know the answer to that question, but the Minister for Finance has asked the Department of Finance to inform us of what the position is. The Minister has pointed out, following the Government's deliberations, that changes are going to take place. My point is that if the Minister for Finance of the day did not want Mr. Doherty to be appointed to the bank in the first instance, he should at least have been diligent to the utmost in finding out what contractual arrangements were being made for him. The contractual arrangements had been drawn up at that stage, but a copy of the contract was not made available to the Department. Obviously, following the Minister's query, I expect that we will receive some further information on the number and range of other persons who may have had similar contracts drawn up currently working in the banking sector.
Finian McGrath (Dublin North Central, Independent)
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I revert to an issue I raised a number of weeks ago, namely, that of cystic fibrosis services. I believed this matter had been done and dusted in the Dáil three weeks ago when I was fairly satisfied with the Taoiseach's response. The problem stems from the considerable confusion caused by a major change made last Tuesday. Will the Taoiseach respond to a letter I received from a constituent of mine who is a person with cystic fibrosis attending St. Vincent's Hospital? The letter reads:
We all watched prime time on Tuesday with a sigh of relief as this part of the battle was coming to an end. The harsh reality that was presented to us in the last seconds of the programme (only 20 inpatient beds) and the realisation we have to continue fighting is almost too much to comprehend.
It continues:
I am afraid to go into hospital and have never had the luxury of an en-suite single room. I do not understand how people who understand what we are going through can do this to us.
Will the Taoiseach confirm to the House that 34 beds with en-suite facilities will be available for cystic fibrosis patients at St. Vincent's Hospital when the new wing is finished next year? Will he end the confusion on the matter, particularly after the "Prime Time" report, where the Minister announced there would be 20 beds for the purpose? By the Friday he seemed to revert to the original 34-bed figure.
If the figure for 34 en-suite rooms is accurate - I hope it is - will the Taoiseach remove the 20-bed figure from the agenda? Does the Taoiseach accept that cystic fibrosis patients and their families have a right to the precise figure? Does the Taoiseach understand the hurt, anxiety and trauma caused to cystic fibrosis patients by these announcements? Will the Taoiseach confirm that 34 beds with en-suite facilities will be dedicated to cystic fibrosis patients at St. Vincent's Hospital?
Enda Kenny (Mayo, Fine Gael)
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I thank the Deputy for raising the matter again and if he provides me with a copy of the letter I will reply to it on behalf of the Minister for Health and Children and the Deputy. It is only right and proper for us to say that the needs of cystic fibrosis patients must be respected and recognised. I took the opportunity to attend the annual gathering of the cystic fibrosis organisations in Westport recently and met with significant numbers of parents who have children with the condition. One of those parents made the point that it is not just the child in a case who must deal with cystic fibrosis but the entire family. From that perspective, attitudes and focus would change entirely because of having to deal with the condition.
Last week the Minister for Health and Children decided to bring all the various interests together to bring about a common understanding about cystic fibrosis. I am aware of the building currently under way at St. Vincent's Hospital and proposals in respect of other places around the country. Deputy McGrath should be aware that four parties issued a joint statement as a result of the Minister requiring a common interest to ensure everybody plays on the same pitch. The parties are Mr. Philip Watt, the chief executive of the Cystic Fibrosis Association of Ireland; Professor Charlie Gallagher, the lead clinician for cystic fibrosis in St. Vincent's Hospital, who has done remarkable work over the years; the chief executive of St. Vincent's Hospital; and Dr. Barry White, the national director for quality and clinical care in the HSE.
These people issued a joint statement which sets out the following:
It is Department of Health and Children policy that there must be sufficient inpatient beds to treat all people with cystic fibrosis who require hospitalisation. The number of cystic fibrosis inpatients at St. Vincent's University Hospital is expected to vary between 20 and 34. In this respect, 20 inpatient beds is a minimum and not a maximum, and the number of beds with appropriately trained staff can potentially accommodate 34 inpatients. When the beds are not required for cystic fibrosis they will be used for other inpatients with a clearly agreed protocol that there will always be beds available for patients with cystic fibrosis who require admission.
That is the joint statement from the four professionals dealing with the matter. In answer to the Deputy's question, the 20 inpatient beds are a minimum but there will always be beds for cystic fibrosis patients who need them.
Finian McGrath (Dublin North Central, Independent)
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I am concerned about the absence of the 34-bed figure, although the Taoiseach mentioned a 20-bed figure that could go as high as 34 beds. Before the last general election, the Labour Party, Sinn Féin, the Independents and all the Government parties agreed on 34 beds. The new Members of the Oireachtas should be aware of that. Deputies such as Caoimhghín Ó Caoláin and a current Minister of State, Jan O'Sullivan, were very supportive of a 34-bed unit. There should be no messing with the figures or saying that the 20-bed unit can go to 34 beds.
The Taoiseach mentioned Charlie Gallagher, whom I know very well. I worked with him very closely over the past number of years at the cystic fibrosis unit in St. Vincent's Hospital. He and all the other professionals and parents want 34 beds. Accommodation for 100 beds is currently being built so surely we can get 34 beds without any dithering. I suspect there is something going on in the background between hospital management, the HSE and the Department of Health and Children, which is part of the problem. Is there a turf war between the HSE and the Taoiseach's Department? In the past four or five days I have been under the impression that he has been on the case.
People like Orla Tinsley have done much work on cystic fibrosis so the Taoiseach might consider nominating her as one of the 11 nominees to the Seanad. That would enable a voice in here for cystic fibrosis patients.
Enda Kenny (Mayo, Fine Gael)
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I have always commended Deputy McGrath for his continuing interest in genuine matters related to health. As I understand it approximately 1,200 people in the country must deal with cystic fibrosis. The new unit is being built in St. Vincent's Hospital to increase the capacity and level of facility available for people who must deal with the condition. The Deputy is also aware that it is important for optimum use to be made of whatever beds are available, with 20 as the minimum number. The statement from the four professionals in the field indicates that the facility will be able to cater for up to 34 beds with appropriate trained and skilled staff. That should be of some comfort to people with cystic fibrosis, and beds should not be idle when they can be used. There is a clear indication that if beds are required for cystic fibrosis patients, they will be used for that purpose.
Deputy McGrath would be aware of other developments in train in respect of Limerick and other areas. I hope that over a period, the people who must deal with cystic fibrosis, including families, will have proper facilities and thus increase quality of life and life expectancy. That will come about by having the best and most up-to-date facilities available. The Minister called the relevant parties together last week and I am glad there has been a clear statement from four people who are genuinely involved in the matter. I listened to Mr. Gallagher speaking in Westport and as a man of considerable experience I appreciate his views. I am glad he is party to the statement which sets out the true position.