Thursday, 28 January 2016
On Tuesday 12 January, the Tánaiste, the Taoiseach, the Minister for Defence, Deputy Coveney, the Minister for the Environment, Community and Local Government, Deputy Kelly, and the Minister of State with responsibility for the Office of Public Works, Deputy Harris, met representatives of the insurance industry to raise a number of issues, including the need for flood insurance to be provided in areas where the Office of Public Works, OPW, has completed flood relief schemes and the need to recognise the effectiveness of demountable flood defences in the relevant areas.
In a Government statement following that meeting there was a commitment that within two weeks - which was two days ago - there was to be a follow-up meeting with the industry and that by last Friday the industry was to have responded to the issues raised. We have learned through the media and through leaks in the past 48 hours that the insurance industry has come back, but it has been largely a negative response on these two key issues, in other words, on the issues of taking into account the effectiveness of demountables and the need to ensure all home owners and businesses in areas where OPW schemes have been completed can get flood insurance cover.
It gives me no pleasure to say it but, in effect, the Government has been snubbed by the insurance industry. The outcome means that thousands of home owners and businesses throughout the country continue to be denied flood insurance. There seems to be no strategy at Government level to deal with this.
The insurance industry will say that a high percentage of home owners and businesses in areas where schemes have been completed can get flood cover. However, a survey was released in recent days by a flood alleviation group from Ballinasloe. This is a community project under the auspices of the national flood forum. The group undertook a survey in Derrymullan, Galway. They found that despite the fact an OPW scheme with permanent flood defences - not demountables - was completed five years ago at a cost of €1.5 million, some 60% of those surveyed cannot get flood insurance. The message we are hearing from the insurance companies is not matched with the reality. The figures they are providing to the Government simply cannot be validated.
As the Tánaiste is aware, we brought forward a flood insurance Bill which would compel the insurance industry to provide cover where the OPW has completed schemes to the required EU standard, as set out in the 2007 directive, that is to say, to the one in 100 year standard. The bottom line is that where these schemes have been completed, they have worked, for example, in Fermoy, Mallow and Clonmel. It is not sustainable for the insurance industry to continue to deny the effectiveness of demountables. In some towns the defences have to be of a mobile demountable nature, otherwise the towns simply cannot function. The Government needs to take account of the serious impact this is having. Businesses may not be able to get credit from their banks because the banks will, understandably, seek to ensure there is adequate flood cover. It is going to have an impact on the rates base of local authorities further down the line if this issue is not dealt with.
Did the follow-up meeting which was to have taken place by Tuesday of this week actually take place? Will the Tánaiste confirm that the insurance industry came back to the Government? Will the Government publish the response, whatever it was? Will the Tánaiste outline for Members in the House today the nature of that response? How is the Government going to react to the fact that, unfortunately, the issues raised are not being addressed or dealt with? Ultimately, the people suffering are home owners and business owners who cannot get flood cover in areas where relief schemes have been completed.
I agree with much of what the Deputy has said in respect of the difficulties caused to families and businesses where they are unable to get flood insurance. This discussion with the insurance industry is ongoing. A great deal of detailed work is being done, including an international comparison of what other countries faced with the same issues are doing. Many countries in Europe, including our neighbours in the United Kingdom, are faced with repeat episodes of flooding. Different models of seeking to have the matter addressed through general insurance have been tried in these countries. Some have worked more effectively than others but in all of the countries this is an issue for the insurance industry.
I agree that where significant sums of public money have been spent on either permanent flood defences or on removable or demountable flood defences, the statistics show in a significant number of cases that a proportion of people continue to be denied insurance by the insurance industry. Obviously it is a priority that this should be addressed.
The conversation with the insurance industry is ongoing. On Tuesday, for example, the Minister of State, Deputy Harris, and the Minister for Public Expenditure and Reform, my colleague, Deputy Brendan Howlin, presented to Cabinet a detailed proposal in respect of the oversight of the development of the flood risk management programme for the Shannon basin. This has been discussed in the House and it is now going ahead and progressing. I assure Deputy McGrath that as part of the process there was a discussion of the statistical evidence, which shows that notwithstanding the significant sums of public money being spent, some people are being refused insurance even where there are permanent flood defences.
The rate of refusal is significantly higher where flood defences are of the demountable kind. It is an ongoing issue with the insurance industry. The reason a meeting with the insurance industry did not take place as recently as last week was because the Taoiseach had commitments in the UK and the annual conference on the economy in Switzerland. He was involved in heavily promoting Ireland at a very large international business conference. I do not think that people would have wished him to do anything other than go and defend Ireland. I anticipate that the follow-on meeting with the insurance industry will happen quite soon.
I ask the Tánaiste not to treat us like fools. The suggestion that the Taoiseach's commitment to attend the conference in Davos and to meet Prime Minister David Cameron in London were arranged in the past two weeks is not credible. The fact of the matter is that a commitment was given on 12 January that a follow-up meeting with the insurance industry would take place within two weeks. That did not happen and the Tánaiste has not been able to tell the House that a date has been set for a further meeting between the Government and the insurance industry.
In the meantime, the issues raised by the Tánaiste, Taoiseach and a cadre of Ministers with the insurance industry - there was great fanfare when the meeting was organised - have simply not been addressed. The reality is that they have come back and rebuffed what the Government has suggested. What is the Government going to do about it? The Government has been snubbed. The reality is that this issue cannot go unaddressed. Home owners and business owners in communities around the country are living with the daily fear of being flooded again and not having flood insurance.
As the Tánaiste well knows, the particular issue we have raised relates to areas and communities where OPW flood relief schemes have been completed to the required standard, at the expense of taxpayers and in line with the EU directive, and where they have proved to be effective. The Government has unvalidated figures from the insurance industry. A survey from the national flood forum was carried out in Ballinasloe. One example is Derrymullan, where €1.5 million was spent on permanent flood defences five years ago which have proven to be effective. Some 60% of those who responded to the survey cannot get flood insurance. It is a real issue.
The Government brought in the insurance companies and asked them nicely what they would do about the problem. We are hearing a lot of motherhood and apple pie, but not a lot of action.
It is not good enough because people feel that the insurance industry is not stepping up to the mark and providing cover.
We are not asking it to provide cover where there is a probability of property being flooded in the future. That is a much more complex issue, as the Government knows. The reality is that €1.4 billion has been collected from insurance policyholders in respect of the 3% stamp duty over the past 15 years. People are asking what that money was for. In cases where schemes have been completed, what will the Government do about the issue?
The response of the Tánaiste is not good enough. I want to know whether there will be another meeting with the industry before the election. What is the Government committed to doing? Will the Tánaiste give a commitment that the Government is prepared to introduce legislation if necessary? Ultimately, the industry will only act if that threat is made and they are compelled to provide cover.
The Government devoted an extensive part of its meeting on Tuesday to the issue which received priority from all of the Deputies in the House, namely, the very serious situation regarding the Shannon. Deputy Michael McGrath and Deputies from other parties raised the issue. On Tuesday, the Government gave the go-ahead for the Shannon co-ordination group. This will mean all of the different agencies, bodies, stakeholders, citizens and businesses, including groups in Ballinasloe, that have an interest in the enormous difficulties facing home owners, businesses and farmers in the Shannon region would be brought together under the umbrella of the Shannon co-ordination group.
While discussions about the Shannon have taken place in this country since, I understand, well before independence-----
The Shannon co-ordination group is under the chairmanship of the OPW and will bring all of the stakeholders, public and private, involved and affected by the Shannon together for the first time in the history of the State in a co-ordinated group.
We have undertaken a survey of the practice in other European countries and the United Kingdom in regard to insurance and the investment of significant sums of public money in flood defences.
If the outcome is that we spend €430 million and, as a consequence, the people whose homes and businesses are protected still fail to get insurance, we will have to develop a system of providing cover to people who are affected. If we rush this-----
On earlier occasions, the Deputy said he was not happy that ordinary policyholders would immediately carry the cost of everybody who needed flood insurance. This issue requires very serious analysis of how we address the issue.
As a country we will spend €430 million on flood defences. If the result is that there is no cover for people whose homes have been permanently protected and people whose homes and businesses have been protected by demountable defences, that is not acceptable.
I told the Deputy that on Tuesday the Government spent a considerable part of its meeting-----
-----analysing the issues in detail, including the fact that at this point in time the Irish Red Cross has given well over €500,000 to hundreds of businesses throughout the country, including some in the Deputy's county. I want to salute the Irish Red Cross. My Department has paid out very significant sums to over 400 families affected by flooding. In addition, the Minister for Defence and the Department of Defence have dropped fodder by airlift to farms in Galway affected by flooding.
The election is fast approaching. Once again, the Labour Party is throwing around election promises like confetti at a wake. Does the Tánaiste really believe that people have such short memories-----
Some five years ago, the Labour Party made a litany of promises in order to get into government. It promised to protect low and middle-income families from Fine Gael. Does the Tánaiste remember the slogan "Fine Gael: Every Little Hurts"?
We remember it. The Labour Party said it would oppose water charges. It broke its word.
It said it would oppose a property tax. It broke its word. It said it would protect child benefit. It broke its word. It said it would not raise taxes and yet a litany of taxes and charges increased. It said it would not cut social welfare but it cut rates and made payments harder to get. It promised that it would stand up to the European Central Bank, ECB, and burn bondholders, but then it buckled under pressure. It made working families pay the price for the economic crisis caused by Fianna Fáil and its banker and developer friends. It voted through five deeply unfair budgets that hit working families hardest. It failed to stand up to Frankfurt, and it failed to stand up to Fine Gael. It let Enda Kenny set the agenda. It broke its promises. It did not keep its word. It disappointed the nation and because of the Labour Party, people throughout the country are suffering yet.
As the Tánaiste and her colleagues once again promise to protect working families and the vulnerable-----
What the people believe is that there are 135,000 more people at work now. After the disastrous bank guarantee, a small footnote in history is that the Deputies opposite ran down the steps in this Chamber to vote for it, and they voted for it in the Seanad. That is only a footnote in history, and we know they have parted from that.
What voters are aware of now is that Ireland is in a dynamic recovery mode. What really counts, and what voters have to decide on, is whether we can seize the moment to build on the recovery so far in order that it extends out to every family, individual and community throughout the country.
-----not just an economic recovery but a social recovery as well. Hence, in this year's budget, I was very happy to be able to restore the Christmas bonus that Fianna Fáil abolished in 2009.
I was very happy, for the first time in about eight or nine years, to be able to increase the pension and other payments for people over 66. It was a modest increase but, nonetheless, the first increase.
I would be the first to acknowledge that these increases, which are the first increases after we increased both the Christmas bonus and the living alone allowance in last year's budget, are modest, but it is important that we prioritise people like pensioners.
In this year's budget, in last year's budget and in every budget we have provided an extra €200 million a year in social welfare spending for the extra number of people coming up to pension age and the extra number of people who are receiving, for instance-----
-----carer's allowance and the extra number of children in respect of whom families are being paid the domiciliary care allowance. All these increases in the number of people receiving important social welfare benefits in each budget have cost well in excess of €200 million. If Deputy McDonald knew anything about social welfare, she would know that the actual time it takes people to make an application and receive their payment, when it is awarded, has been cut by more than half because we have invested in completely new-----
The fuel allowance scheme was cut from 32 weeks to 26 weeks. The fuel, rent and clothing and footwear allowances were cut. That was the Tánaiste's message about shopping around to families who were struggling. The age was raised for disability allowance entitlement. Carer's allowance was cut. I could go on and on. That is the Tánaiste's track record. That is what she has presided over and if that were not bad enough, she slapped a water charge into the equation as well, with no regard for ability to pay.
This advertisement I am holding up was the Labour Party's ruse in the previous general election. Does she recognise this advertisement?
The news is that people have woken up to the Labour Party. They have wised up to the fact that far from protecting working families and low and middle-income workers it is happy to allow Fine Gael set the agenda, happy to run down public services, happy to agree to tax giveaways and bonanzas for the rich, and happy to ignore any promise it might make. That is what its track record reflects.
As for the bank guarantee, the Labour Party's record is that it renewed that numerous times when in government.
The Tánaiste said that in her view the recovery is dynamic. The recovery has not visited the vast majority of communities and families throughout the country, and she remains blind and indifferent to that.
In this general election will the Tánaiste come clean, put her hands up and accept her party's dismal record in government? I ask her not to insult the intelligence of the electorate and people who deserve a level of certainty and protection in the next Dáil. Please do not insult their intelligence by re-running this kind of scam.
First, this month we will have removed 700,000 low paid workers from the USC net. That is a move that has been widely welcomed by workers and employers throughout the country. Second, on 1 January we increased the minimum wage by 50 cent an hour.
During the Labour Party's time in government, that is the second time the minimum wage has been increased, and somebody on a very low wage has benefited from that increase in the minimum wage over the life of Government to the tune of €3,000 an hour.
Three thousand euro a year. Third, from 1 January civil servants throughout the country have seen the rolling back over a carefully designed three-year period of the financial emergency measures in the public interest, FEMPI, legislation, which saw their Civil Service pay being reduced. That means that many workers have seen increases in their wage packets this month of approximately €10 to €20 a week.
I am the first to acknowledge this is not a vast sum of money, but what is also important for the same workers and their families is this year we will see the first reduction in class sizes since the crash happened. We will see class sizes reduced in all primary and secondary schools-----
-----and to people aged over 70. If returned to government, we will do this for all children under 18 over a five-year period, and roll it out to older people as resources permit.
On Anglo Irish Bank and the other banking matters, if we took Fianna Fáil's proposal and its agreement with the troika, last year would have seen Ireland pay €11 billion in interest costs. We cancelled the promissory note and replaced it with longer-term loans-----
In the scheme of things we now have a dynamic recovery in the economy, but Sinn Féin lives in an economic bubble of its own in which inconvenient facts do not matter. It has no jobs plan for getting the country back to work.
Over the lifetime of the Government a number of serious concerns have been raised about probity and accountability. Today I want to discuss yet another which I believe merits scrutiny. This is the awarding of the call centre work for Irish Water to the Cork-based company Abtran. The Tánaiste will recall that Abtran got the contract for the Student Universal Support Ireland, SUSI, grant system, and came under serious criticism, and rightly so, for its failings. It cost an additional almost €6 million. Despite this, it went on to be awarded the property tax contract and Revenue had to step in because initially it failed to cope. After both of these high-profile failings it was awarded the call centre work for Irish Water. We know that Abtran has at least ten other Government and public contracts. One of the criteria for the tendering process for the Irish Water contract was the company had to have a turnover of €20 million for the preceding three years. Given that Abtran had a number of lucrative State contracts prior to the Irish Water contract, the State certainly improved Abtran's ability to meet the criteria laid down in the process. What is interesting is how the contract was awarded and the obvious questions it raises about probity and the awarding of the contract.
Through freedom of information I have established that on 15 February 2012 the private secretary of the then Minister, Phil Hogan, received a fairly informal e-mail seeking a meeting with "Phil" to lobby on behalf of Abtran. On the same day at 5 p.m. an e-mail was sent stating the Minister had agreed to meet the company. On 27 February of the same year we know from Gavin Sheridan's publication of the Minister's diary that the Minister met the person who sent the original lobbying e-mail, Mr. O'Byrnes, and the co-owner of Abtran. In March 2013 the company was awarded the contract.
The Irish Water call centre contract is lucrative. It is worth approximately €50 million over four years. We know through freedom of information that one of the key criteria for the firm to which the contract would be awarded was to have a proven track record. I presume this means a good proven track record. Given the criteria, is the Tánaiste satisfied that despite the very public failings of Abtran on SUSI and the property tax that it was still awarded an extremely lucrative contract by the State? Is she aware that in late 2015, a State investment vehicle invested an undisclosed sum of money in Abtran? Does she know what the money was for and how much it was? Is she concerned about what appears to be the favouring of Abtran for Government funds?
My understanding of the SUSI development, which is the online system for students to get college grants, is the contract was actually awarded to the City of Dublin VEC, which subsequently became the City of Dublin Education and Training Board. It made the arrangements on how what was a new and very ambitious computer-based application system would be delivered. As the Deputy knows, contracts in Ireland are governed by Irish and European contract law. SUSI was a very new system established for a large number of students applying for student grants. Approximately 50% of students who go to college in Ireland get full or partial student grants, so we are talking about a lot of people. For years, until my colleague, the former Minister, Deputy Ruairí Quinn, set about mandating that a new system be established, the complaint had been that many students did not get their grants until months into their college courses. There was general agreement that this should be addressed.
There were definitely teething problems, which we read about, but the City of Dublin VEC, subsequently the ETB, was available to Oireachtas committees on a repeat basis to go through everything on SUSI. I am happy to say the SUSI system of college grant applications is now deemed to be one of the best new systems installed by any Irish Government. The Deputy probably knows from the university in her constituency that the feedback from students' unions, parents and individual students is that college grants are now paid on time. The overall SUSI project has worked extremely well despite teething problems.
The Revenue Commissioners are responsible for the administration of the property tax, and I can only go on their reports that there is a very high level of compliance with the property tax, and that it has worked in a very efficient and very effective way.
The Deputy asked for information on sub-elements of the contract. The Government has introduced legislation on lobbying and a register of lobbyists. We have expanded very significantly on the Freedom of Information Act, which was partially dismantled by the previous Government which brought in restrictions. All I can say is that, rightly in terms of accountability, all the information on contracts relating to all elements of public service is now available in a much speedier and more timely way as a consequence of the legislation the Government has introduced, particularly the broadening of freedom of information and the introduction of legislation on lobbyists.
These are both tremendous developments in terms of our democracy and the reporting and accountability that the Deputy rightly seeks.
I acknowledge that both of those Bills are very important, but "speedy" is not a word I would use in respect of some entities that are covered under freedom of information. It is not all of them; some Departments are good, but others are not. For example, the Irish Water call centre contract falls just outside the timeframe for freedom of information requests by a number of weeks. I can understand that there would be a confidentiality issue when a contract is being decided before it is awarded, but afterwards there is no reason that should not be fully transparent.
Getting certain information from Irish Water is like pulling hen's teeth. I looked for information on this very point last September and I got a reply containing information I could have picked off its website in December. I have had to seek a review on it, looking for the very information that would give me what the Tánaiste is telling me I can have. That is not a criticism of the legislation, but some entities are not using it as she described and it is very frustrating. Confidentiality and commercial sensitivity are routinely rolled out as a reason not to give information. In some cases that is reversed under review. Could the Tánaiste answer me that question in respect of the investment? Does she know what the investment into that company was? It happened in December 2015. What was it for and how much was it? If she does not know, could she come back to me with that information, if it is possible to get it?
In terms of freedom of information, even the company I raised is not served by the lack of transparency. Freedom of information is not functioning as well as it might be. If there is a Department that falls down on that, it is the Department of Finance that I find it most difficult to get information from.
I am not familiar with the detailed operation of the company about which the Deputy is concerned. My understanding is that it is a company based in Cork, which has a significant number of employees. I am not au faitwith the details of its financial arrangements or its financial standing or position, but if there is information we can acquire to assist the Deputy, I would be happy to seek to do that if she would let me know what her detailed queries are.
In respect of Irish Water, it has been a start-up over the last two years.
-----issued by my Department, including to people in rural Ireland on group schemes and with their own private wells, we received and were able, on behalf of the Department of the Environment, Community and Local Government, over a relatively short period, based on an online application system-----
-----but the point is that Irish Water is now providing a service. Even during the recent floods, thankfully, the standard of water quality, which was a major risk in terms of the flood episodes-----
I am happy to say that the number of episodes of water quality being affected was, thankfully, kept very low and they were of very limited duration. This the advantage of having a national utility-----
-----which is now cleaning up our rivers and lakes through an active programme of restricting the dumping of raw sewage into lakes in Ireland at about 42 different points.