Thursday, 9 May 2019
Ceisteanna ó Cheannairí - Leaders' Questions
For the avoidance of doubt I reiterate Fianna Fáil's position, which is that we fully support the rapid roll-out of high-speed broadband to the 542,000 homes, farms, schools and business premises dotted throughout rural and semi-rural parts of this country. The Government announcement on broadband, within two weeks of the local and European elections, does not indicate a rapid roll-out, and the plan does not represent a transparent, value for money proposition for the taxpayer. It is an attempt by the Taoiseach to portray Fine Gael as the champion of rural dwellers. If people had any doubts about the motives behind the timing of this announcement, their suspicions will have been confirmed the following morning when each Member of this House was presented with a glossy pack specific to each constituency outlining the relevant positive aspects of the announcement to assist Fine Gael representatives attempting to convince rural voters on the doorsteps over the final days of an election campaign. It is a rather bizarre move when no contract has been signed and when we are told by Government that it may not be signed for a further six months. In fact, there are real concerns as to whether it will ever be signed.
I assume that at this stage the Tánaiste has realised this spin just will not wash with those people who have been waiting patiently for the broadband they have been promised on numerous occasions. The announcement is, in fact, a further betrayal of rural dwellers. Far from being a breakthrough, this announcement confirms further delay in broadband delivery on top of the many delays already experienced. The Fine Gael manifesto promised high-speed broadband to 100% of homes, farms, and business premises by 2020 but this week's announcement is a confirmation that this will not happen until 2027. That is the best case scenario; it is more likely to take much longer. Could it be 2030 or 2040?
Today's edition of The Irish Timescarries another leak from a Government source that indicates the total cost of the broadband project will be approximately €5 billion. It is clear that the motivation behind this leak is to imply that Granahan McCourt is investing €2 billion. However, any analysis of the redacted memo from the Secretary General, Mr. Watt, would conclude that the actual capital to be invested by Granahan McCourt is much less. Will the Tánaiste confirm that there is no commercial impediment to the publication of this figure? Will he outline to the House what that number is?
Over recent days the Taoiseach and a number of Ministers have sought to play down the value of the asset at the end of the 25-year period. This assertion is entirely disingenuous as their comments have concentrated on the value of the physical infrastructure after 25 years. Will the Tánaiste confirm that the real value at the end of the intervention period is the monopoly access to a customer base which, by the Government's projections, comprises more than 400,000 homes and premises? These homes and premises will have no alternative but to use this infrastructure, for which they will pay a monthly fee. Will he also confirm that Granahan McCourt's investment will be paid back after eight years and will continue to earn substantial returns over the remaining 17 years? Will he further confirm that, in the end, it will own the network and the potential revenue generated by those 400,000 customers while the taxpayer will have no stake and will receive no return on the investment?
I thank the Deputy for raising this question and giving me an opportunity to clarify matters relating to some of the concerns he has outlined. If the Government had not made the decision we have made, Opposition parties would attack us on the basis of delays, indecision, and a betrayal of rural Ireland. We made this decision as soon as we could stand over it. The Minister for Communications, Climate Action and Environment, Deputy Bruton, made a recommendation to Cabinet, which was accepted after approximately four hours of debate. I was not there myself because I was in the UK, but I have had long conversations with the Minister, the Taoiseach, and the Minister for Public Expenditure and Reform, Deputy Donohoe, on this issue.
The rest of the Cabinet and I are satisfied that we have made the right decision. We have not made it because the local elections are a few weeks away. This is a decision for the country for the next 35 years and beyond. It is about future-proofing rural Ireland for the technological change we know is happening. It is about ensuring that there is not a digital divide across this country based on where one lives or one's address. We are making the largest capital commitment in terms of investment in rural Ireland since electrification. I hope we will get support from other parties in our efforts to do that.
Of course, Opposition parties need to test the Government and to hold it fully to account. That is why we have released all of the information relating to the debate that took place within Government and within Departments before this decision was made. The Department of Public Expenditure and Reform has tested this decision very robustly. The Department of Communications, Climate Action and Environment has very robustly defended that decision and has made the case for it using independent cost-benefit analysis and so on. The job of Government, however, is to make decisions and to explain them. Its job is to make decisions in a transparent manner and in the full knowledge of the cost, which may be up to €3 billion but may well be much less in light of the different scenarios that may unfold. It should also be taken into account that the €3 billion includes VAT and a very significant contingency of more than €500 million. This is a significant decision, but it is one which will be transformative for rural Ireland in terms of opportunity. If we did not make it, we would restrict the availability of what will become essential services through high-speed broadband in the future.
Regarding what is commercially sensitive and what is not, the Government is not in a position at this moment in time to give a figure for what equity the bidder itself is putting in because there is still a negotiation to conclude with regard to finalising the contract. That figure will be published in time and it will be proportionate to the commercial return available to the bidder in the context of the infrastructure it has an obligation to deliver on.
If this was not an election stunt, I doubt the Government would have produced this document in advance of the contract being signed. Considering that the tendering process is over, there is no reason whatsoever that number cannot be published. As I have said, any analysis of the memorandum from the Secretary General, Mr. Watt, would show clearly that the contribution being made by Granahan McCourt is rather small in comparison to the return. I ask the Tánaiste again to confirm a number of things. Will he confirm that Granahan McCourt will have all its money back after eight years, that it will have the capacity to earn substantial amounts over the remaining 17 years, and that, at the end of that period, it will own the network and will have exclusive access to those 400,000 customers and the revenue they will generate? The Tánaiste is not prepared to tell us now what Granahan McCourt is putting up to get all of that money in the future. That is highly disingenuous of him and I suspect it has more to do with him not wanting to put that information before the electorate in the throes of an election campaign.
If the Government was in the business of trying to hide information, it would not have published what it published yesterday. The Minister for Communications, Climate Action and Environment will take questions on all of these issues for two hours after today's sos. I am sure he will appear before a committee on this issue for many hours over several months and, in particular, on the finalisation of the contract, which, hopefully, will happen over the next six months. What is being paid for, and what will be provided under a regulatory model, is a wholesale infrastructure proposition. Many others will also be able to use this infrastructure.
It is clear that without significant State intervention, the market would and could not have delivered this commercially. The State will be contributing up to and probably less than half of the cost of delivery of this infrastructure. The numbers bear that out. That is what we have negotiated over about 800 hours of negotiation with the various bidders during this process. After all of that, the Government has rightly concluded that this is the right decision. It does represent value for money even though it is a significant investment. The absence of this investment would open up a divide in Ireland that we certainly cannot support.
As a Deputy representing a largely rural constituency, I know first hand the importance of rolling out broadband to every home across the State. It is essential that we deliver high-speed broadband in rural Ireland. People want, need and deserve it. However, that actually means delivering it and being sure that the capacity exists to do so. Unfortunately, the national broadband plan as currently constituted could amount to a red herring, costing us up to billions of euro and still leaving homes and businesses without access to adequate broadband. That is the crux of the problem. This process began back in 2012 when the then Minister, former Deputy Pat Rabbitte, in the Fine Gael-Labour Party Government, promised high-speed broadband would be delivered to every home, farm and business across the State, ending by 2020. That promise has been broken spectacularly. Eight years on we do not have a yard of fibre laid under this plan. Under the new plan, many in rural Ireland will be lucky to have high-speed broadband by the later stage of the next decade. This simply is not good enough.
The documents published yesterday highlight serious significant flaws in the plan that no one in government has yet addressed. The documents we have seen from officials and the Secretary General in the Department of Public Expenditure and Reform raise questions about the capacity of the bidder to deliver this project. I share those concerns. They have called into question the capacity of the Department to oversee the project and I share those concerns. They recognise that the bidding process has failed to deliver a competitive tender and that the bidder has been able to name its price. They say the cost-benefit analysis is simply not credible and that it appears there has been cooking of the books in this matter. The strongest criticism, which worries me and my party the most, is that the bidder does not have adequate skin in the game and could walk away from this project any time after it has recouped its investment. That is highlighted in numerous documents and it is extremely worrying. It amounts to abandoning rural Ireland once again. What we have is a botched process. There is a big worry that it is not going to be delivered at all. Rural Ireland needs high-speed broadband: we can all agree on that and no one disputes it. However, the Government has made a complete and utter mess of this process and it is flawed. The unfortunate reality and real casualty of all this is the 500,000 houses and businesses that are still without broadband. Many will be without broadband for years to come.
There is time to put things right. No contract has been signed. There are alternative solutions that need to be considered in a serious light, giving the stinging criticism from officials in the Department of Public Expenditure and Reform. The Tánaiste says they have been robustly tested. They could not have been. The criticism only landed on the Minister's desk last week. He had no chance to test them. The memo was only sent to the Minister on 3 May. There are options there, for example a State-wide provider to deal with broadband, as we called for many years ago. Will the Tánaiste look at the other options? Will he give us full clarity as to how much skin this private equity firm has in the game? We might then at least be confident that the Department's comments may not be credible when it tells us time and again there is no incentive for the bidder to complete this project.
I am glad we agree on one thing, namely that rural Ireland needs broadband. We have been talking about this for far too long and not delivering it for homes and businesses in what is now referred to as the intervention area. There are 540,000 premises that have no prospect of getting the kind of high-speed broadband that most people in this House would accept that everyone - homes and businesses - will need in the not-too-distant future. We now have a plan that the Government believes will work. It has been robustly tested. It is true that concerns have been raised but those concerns have been responded to in a lot of detail. One of the letters that was released yesterday from the Secretary General of the Department of Public Expenditure and Reform, which is three pages long and outlines serious concerns, got a comprehensive response from the Department of Communications, Climate Action and Environment.
It is a letter of 14 or 15 pages. That is why the Government spent four hours in its meeting on Tuesday talking through these issues and getting detailed explanations from the Minister, Deputy Bruton, as to the response to some of the concerns raised by the Department of Public Expenditure and Reform. I am satisfied that those questions have been answered. This is about laying 147,000 km of fibre. It is about delivering speeds of 150 Mbps increasing to 500 Mbps from year ten. It is about ensuring that customers in rural Ireland are charged the same as in urban Ireland, which costs the State significant amounts of money. That is what we are committing to. The contract is not just about rolling out fibre and delivering the speeds, however. It is also about operating it for the next 25 to 35 years. It also ensures that the risk management linked to this project is by and large carried by the bidder. If there is down-side risk, in other words, if there is not sufficient uptake of this infrastructure, that risk is carried solely by the bidder. If there is more uptake than is anticipated, the benefit is shared by the State in terms of claw-back. Let us not forget that there are conditions in this arrangement, which will become a contract, whereby the State essentially pays in arrears. The infrastructure is delivered first, we meet certain targets and then we pay out. The bidder needs to provide the working capital, which is significant, to be able to build out that infrastructure in the meantime until they meet the targets which will trigger staged payments as the infrastructure is rolled out. As the Minister, Deputy Bruton, has said, they have looked at the risk and management of this up, down and inside out to ensure we have provided as much certainty as possible from the State for one of the most important infrastructure roll-outs that we have seen in a generation.
The final submission from the Department only arrived a couple of days ago. How the Government looked at it upside down and inside out and all over the place beggars belief. The problem is that there are serious criticisms and question marks over whether this plan will ever be delivered. They have not been answered. A senior official is saying there are questions whether the bidder has the capacity to deliver it. Set that to one side. It is repeated in three different documents that there are questions about the bidder abandoning the process using language stating there is no incentive to honour the contract for its duration, risking further losses. This is because there is so little skin in the game on the part of the investor. He will have recouped all of his investment before the project has been delivered. The Tánaiste has failed to address those issues. They have not been addressed by any official or by anybody. Rural Ireland has had to wait and listen to promise after promise being made by political parties in government that this will be delivered. Now there are serious questions from senior officials and other officials saying the project may never be delivered because the Department does not have the capacity to oversee it. The cost-benefit analysis is not credible; they are saying there was cooking of the books.
They are saying that the bidder does not have the capacity and that there is no incentive for the bidder-----
-----to deliver on this project after a number of years if further losses are incurred.
What I want on behalf of my constituents who do not have broadband is certainty. If we are going down this road, we need to be sure it will be delivered. Those questions have not been answered. This is why there is an onus on the Government to consult with the rest-----
I will finish with this. There is an onus on the Government to consult with the rest and look at the alternative options that will provide certainty that we will finally have broadband in our rural communities.
The Deputy asked whether the alternatives have been assessed. They have been assessed through this process but also before it. Some people ask why we are committing this amount of money when technology may change over the next 25 years and we may be able to do this through mobile networks, wireless systems and so on. This argument has held up progress in Ireland for decades. If we look at what the private sector is doing today, we can see that it is investing in fibre because that is what is being demanded in the marketplace, households and businesses. That is what the State is also committing to do now - investing in rolling out 147,000 km of fibre on existing poles.
We are satisfied that through this bidding process, which one should not forget has taken three years, there has been the appropriate due diligence to test the capacity of the remaining bidder to be able to deliver on the scope of this project, which, after all, is about rolling out fibre. It is not rocket science. It is about rolling out fibre into more than 500,000 premises. That is what this is about - providing a wholesale platform to be able to ensure that rural Ireland paying effectively a subsidised rate can ensure it gets access to the services that infrastructure is providing to urban Ireland today.
The EU is losing 1,000 farms each and every day. That is the stark finding from a recent report from the European Court of Auditors. I want to raise it today because it brings some additional context to the challenges faced by rural Ireland apart from the farcical roll out of the national broadband plan. I believe we will never see the contract signed. The issue of generational renewal - getting young people to take up farming - has been described as the single greatest threat to agriculture and the fabric of rural Ireland as we have been privileged to know it.
According to the report from the European Court of Auditors, the first problem is the large reduction in the number of farms. In 2005, there were 14.7 million farms in the European Union. The latest available data put the number at approximately 10 million. Almost 5 million farms have disappeared in the intervening period. There is no indication that the speed of this trend is slowing down. This was recently confirmed by the Western Development Commission when it found the number of people working in agriculture in the west of Ireland has decreased by 41% in the past 20 years. We know that and the Government knows that. Its candidates are finding out on the doorsteps. What is equally disturbing is the finding that not only has there been a reduction in the number of young farmers, there is also a serious reduction in the amount of land held by them. The problem is that 80% of European farmers are over 45. One third of farmers are older than 65. The outcome of all this is that the threat to the family farm is growing at an alarming rate. We are now at a point where the largest farms, which make up just 20% of farms, received 80% of European subsidies for agriculture while the other 80% received only 20% of those subsidies. This is a disgraceful figure. According to the European Court of Auditors, this is the political choice we face in deciding the future CAP agreement.
Will the Tánaiste, therefore, accept that we are facing an unprecedented threat to the fabric of rural life in terms of the inability to make farming financially attractive to young people and young families? Small farms right across this State and indeed Europe are being gobbled up daily by large conglomerates. It is happening in my own county, in south Tipperary, with Coolmore's equine industry. Gobbled up and not in the interest of farming. There is no commitment to rural Ireland. They are only interested in bank balances and corporate affairs. They are corporate investments. There is no interest in our schools, our future or our clubs. This was made explicit by members of the European Court of Auditors when they appeared before the Oireachtas Committee on Agriculture, Food and the Marine. They accepted that there was a long discussion of a proposal of the European Commission to cut the payment for the big farms and to give more to the family farms. However, the proposal was not accepted because the strength of the big industrial farming lobby. This is outrageous. Will the Tánaiste provide assurances as to the measures that we are adopting here to combat this trend of family farms vanishing from the face of the earth?
I know a bit about this issue because I was very much involved in the last discussion on the Common Agricultural Policy and how we would structure both Pillar 1 payments, which are direct payments, and Pillar 2 payments in terms of supporting more sustainable agricultural activity and maintaining and protecting the family farm structure, which is core to the make-up of rural Ireland. If we want to talk about investment in rural Ireland in terms of the volume of money, this round of the CAP will invest €12 billion in Ireland in the form of supports for food producers and farmers in many different ways. My view is that it represents good value for money for consumers because of the guarantees that it provides in terms of food safety and quality and environmental protections and it protects and sustains the fabric of rural Ireland, of which the Deputy is very much part and as I have been.
It is important that the Deputy does not misrepresent what we tried to do in the last round of the CAP and what I certainly will advocate for in this round as well. The idea that everybody who owns land in Ireland would get the same payment per hectare with no differentiation and taking no account of history or productivity in the past would be a fundamental mistake because one essentially would be paying people for land ownership and not farming. I suggest that the Deputy talks to the farmers in Tipperary, who lobbied incredibly heavily to ensure that I managed what was called the equalisation of funds in a way that was progressive but gradual and did not see dramatic changes in the income of full-time farmers, which is what would have happened if some people had their way, to ensure that we maintained farming as a productive sector, rather than some kind of social engineering project in rural Ireland. Farms and farmers can be and are profitable across the country if we can provide the marketplace that allows them to survive, grow and expand. The CAP needs to be a combination of things from protecting food quality and safety, animal welfare and a broader environment that we all have a responsibility to protect, to keeping productive farming intact and in parts of the country where it is not possible to make money in the marketplace through farming, keeping people on land as stewards of the countryside. It can do all of those things if we ensure that it is appropriately funded in the next round of CAP, for which this Government will fight.
We need the Government to pay attention to them. We need the Government to look at the likes of Coolmore Stud buying up 27,000 acres and driving all other family farms out. I thank the Tánaiste for the reply but, ultimately, the issue is the result of political choices on the part of the Tánaiste and his party but it was always the party of the landed gentry, not na daoine beaga or the small farmers. This was made clear by the members of the European Court of Auditors who appeared before the Oireachtas Committee on Agriculture, Food and the Marine. Indeed it was well said that a core problem of European agriculture is that although we plan the CAP from a seven-year perspective, I believe it should be a 27-year period. Seven years is too short a timeframe. The Government needs to pay more than lip service. The Tánaiste talks about farmers being profitable. Tell me what sector is profitable at the moment? Dairy farmers are profitable by the skin of their teeth. All other sectors are slipping significantly. Things are very volatile with weather conditions and the onset of Brexit and the protracted negotiations, delays and uncertainty. What the Government needs to do is reassure farmers. We need to bring back something like a land commission to stop corporate conglomerates buying up land willy nilly.
They can do it because they can avail of tax incentives in the equine sector and everything else. What is required is a level playing field. We need support for the daoine beaga and the small farmer because without families living on farms and people living in villages, we can see what is happening in the case of our schools, GAA clubs and other sporting clubs with people fleeing the land. I gave the Tánaiste the figures. One thousand farmers a day across Europe are leaving the land. It is a perilous situation and we need to respond to that.
There are issues in what the Deputy has raised, which I do not want to dismiss. We need to be careful though not to interpret trends in Irish agriculture on the basis of what is happening broadly across the EU. The starting position of many of the newer member states when they joined the European Union was one of very small farmholdings, in many cases with dairy herd sizes of five or six milking cows, which is a totally different farming model from what we have here. What we need to focus on is Irish agriculture and its future, how we facilitate the sustainable growth story that currently is happening in the dairy sector and how we support the beef sector through what has been a very difficult two-year period, particularly linked to Brexit and the uncertainty surrounding it.
It is not a coincidence that my party and this Government advocated to get the agricultural commissionership for Ireland because we prioritise farming and agriculture as an essential part of rural Ireland-----
The housing crisis continues unabated with people on average incomes essentially being locked out of the prospect of buying a home of their own and a great many people literally being bled dry by soaring housing rents. The number of people who are homeless continues to rise and, most shameful of all, there are now almost 4,000 children among this number. The cost of housing is now the single biggest driver of the high cost of living for people yet the Government continues to drag its heels in responding adequately. Throughout this crisis Fine Gael continues to pretend that the market can solve the problem. It has taken the least effective and most expensive approach to increasing housing supply. Over-reliance on the private sector has gone hand in hand with the stated objective of raising house prices. That was first made clear by the then Minister, Deputy Noonan, and continued by successive Ministers. What has mattered most to Fine Gael is the balance sheets of our disgraced banks and bailing out speculators and developers. This has taken complete precedence over what should be people's right to affordable housing. How else can the Government explain the failure to build on the substantial public landbanks that we have? How else can it explain the inordinate delay in finalising an affordable housing scheme? That scheme has been promised for years and it has yet to take effect.
A number of the larger approved housing bodies have come together to respond to this crisis and are putting it up to the Government to support them. They have capacity to provide a major social and affordable cost rental building programme commensurate with the scale of need that exists. To do so, however, they have three asks of Government. First, tier 3 approved housing bodies need to be reclassified as off-Government balance sheet in order that they can avail of funding, which is available and being offered to them on a constant basis, and which should be utilised. The Minister, Deputy Eoghan Murphy, has promised this but there was no timeline set out for when this will happen. It seems we are yet into another long period of promises from the Minister without any action. Failure to act on this will have a negative impact on the potential major output of social and affordable homes from this sector. Second, new and sustainable, affordable, rental and cost-rental schemes beyond the current small pilot schemes are urgently needed. Why is Fine Gael delaying the introduction of these schemes? Action is urgently needed to accelerate the availability of social and affordable homes. Third, changes to the capital advance leasing facility have caused cashflow problems for these housing bodies and these constrain output. They need to be reversed as soon as possible.
I do not believe we disagree that we need to significantly increase the output of housing of all types but the Deputy, like many others, misrepresents what the Government is doing in terms of its housing policy, and whether it is deliberate or not, I do not know. The idea that the Government has an ideological approach of relying on the market to solve the problem is simply not borne out by what we are doing. We have spent €2.4 billion this year building public housing. We will add an extra 10,000 housing units this year to the social housing stock. Next year, the number will be higher than that, probably close to 12,000. We have committed over a number of years to dramatically increase our social housing stock. What we must do in the meantime, because of the pressures in regard to social housing, is to try to find accommodation for people in the private rental market where possible. Last year, approximately 25,000 housing solutions were provided for people in need through social housing, as well as through supported rental accommodation. Clearly, we want to move away from the current reliance on the private rental market to find homes for people who cannot afford to pay for themselves, but the social housing stock must be built up to do that. We have also committed to a €300 million affordable housing scheme, which was signed off in the last budget and which will be delivered over the next two years. We are strategically managing public landbanks in a different way now from what was done in the past. The rent Bill, which was finalised yesterday evening, provides more protections for tenants, as are needed, and changes to rent pressure zones to make sure that effectively we are putting in place limitations in terms of rental inflation in parts of the country where there are significant pressures.
The Deputy should not misrepresent what we are trying to do. There are genuine problems in terms of housing pressures. We are reminded every week, as we should be, of the challenge in regard to homeless families, homeless individuals and, in particular, homeless children. An urgency is needed from Government to solve the pressures that many of those families are under but we are not doing it, as the Deputy would suggest, by simply relying on the market to deliver over time in its own time. Quite the opposite is the case. We have intervened in the market in multiple ways and we are spending billions of euro over a number of years to deliver a social housing stock that can meet demand.
The Government's record has been appalling in this area. It is spending vast amounts of public money on housing but most of that is going into the pockets of private landlords or else it is buying expensive turnkey housing rather than building it directly through local authorities. It has promised for years to introduce an affordable housing scheme. The Tánaiste is still talking about it but it has not started yet. I have raised this umpteen times and he has denied that this is the case. We do not have affordable housing programmes under way at present. Local authorities are crying out for them. The approved housing bodies have the capacity to deliver large numbers of social and affordable rental schemes if the Government would take those three actions they require. Why is the Government holding back on those? What we need now is action not empty promises, which is all we have had to date. There are ways to address this effectively that would ensure we have an effective response and that it would be done in a cost-effective way. Unfortunately, Fine Gael is yet again using the most expensive approach to tackling a major issue.
-----and trying to take them out of inappropriate but improved emergency accommodation. By the way, I am a big believer in approved housing bodies, as they know from when I was Minister for Housing, Planning and Local Government, and the current Minister is as well. That is why we are funding them to the tune of tens of million of euro each year. That is why we brought the European Investment Bank into Ireland to fund approved housing bodies and build the estates that have been built and are housing people right now.
With regard to reclassifying approved housing bodies to take them off-balance sheet, we would like to do that and we are in process of trying to get that done with the European Commission through a review that is being held currently by the Department of Finance.
I have had direct conversations in that regard and it is not straightforward. It certainly is not being held up because of a lack of appetite from the Government. The issues raised by the Deputy are being addressed. We are not just talking about it; we are delivering thousands of homes now that were not being delivered a few years ago.