Dáil debates

Wednesday, 15 May 2019

Ceisteanna ó Cheannairí - Leaders' Questions

 

12:00 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
Link to this: Individually | In context

Yesterday, we went badly over time on Leaders’ Questions. I appeal to Members to adhere to Standing Orders.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Yesterday, the Taoiseach asked belatedly for the Opposition to back the Government's decision on the broadband plan. He did so in full electioneering mode with little genuine regard for people’s legitimate concerns about the Government's decision. I do not believe he has played up front with the Opposition or indeed the public on this issue. He did not engage comprehensively with the Opposition on the issue prior to making his decision as he said he would. Crucially, he did not reveal the serious and comprehensive opposition from the Department of Public Expenditure and Reform to the plan until after the Government’s decision was taken and at a late stage in a desperate bid to avoid any questions last week on Leaders’ Questions.

The primary function of the Opposition is to hold the Government to account and to ask the hard questions on value for money, the public spending code and the delayed roll-out of broadband. The public is annoyed and frustrated at the long delays because, after all, this project was announced back in 2012 but has not yet been delivered. Even with what has been announced, people are talking about another seven to ten years for a full roll-out.

Yesterday, the Taoiseach declared it would be an ambitious and expensive plan. I remind him that it is not his money but the taxpayers’ money. He is electioneering and playing politics with large sums of taxpayers’ money. Taxpayers are increasingly angry at the cavalier approach which has been shown to date. Signing this contract, for example, means an extra €500 million has to be found between 2019 and 2022. An additional €1.5 billion has to be found in the national development plan, over and above the €800 million already allocated for the plan. This funding is on top of the additional funding of €385 million required for the national children's hospital over the next three years. There is no provision anywhere for this funding, despite the Opposition asking basic questions as to where the funding will come from.

Yesterday, the Taoiseach stood over the cost-benefit analysis. The Department of Public Expenditure and Reform pointed out - I do not know if the Taoiseach has read the memo - that in the final version changes were made to the cost-benefit analysis reducing the benefits of the project by a total of over €1 billion. We learned from Harry McGee, who deals with this well in today’s The Irish Times, that as the benefits were reduced in the final version, the costs to the operator of the cost-benefit analysis were also reduced miraculously – “fortuitously” in the words of the Secretary General of the Department of Public Expenditure and Reform - by over €1 billion due to an error unspotted in all previous iterations. In summary, he stated the cost-benefit analysis is not credible and it is questionable whether it is consistent with the public spending code.

Will the Taoiseach agree to a full inquiry at the Oireachtas communications committee where legitimate concerns can be discussed and responded to? Will he tell me where the additional funds required for this plan, as well as the additional moneys for the children's hospital, will be found between 2019 and 2022? Does he still stand over the cost-benefit analysis?

On questions I asked yesterday on Granahan McCourt Capital, GMC, and David McCourt’s brother’s companies, what evidence was obtained by the Department to ensure it has full legal recourse to the resources of McCourt Global LLC and the Tetrad Corporation which GMC relied upon for its financial underpinning?

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

There is no electioneering going on when it comes to this decision. No matter when we would have made the announcement on the preferred bidder, we would have been accused of either electioneering or trying to bury it until after the forthcoming elections. The Deputy knows as well as I do that if we had put off the decision to appoint a preferred bidder until next month, he would have turned around and said this was a controversial project, the Government hid it until the local elections and only came out with it after them. It is more politics from the Deputy’s side when it comes to allegations about the timing.

I take seriously any reasoned or considered concerns that anybody in the Opposition might have about this project. I had reasoned and considered concerns as well. That is why when the Minister for Communications, Climate Action and Environment, Deputy Bruton, was appointed in October, I asked him to look at the whole process afresh to see if it was the right technology, as well as the best funding and financial model to use. I asked him to satisfy himself that this was the case and that the alternatives were not better. I wanted to satisfy myself that was the case as well, as did the Minister for Public Expenditure and Reform, Deputy Donohoe, and the Cabinet. We took some months and detailed consideration to do exactly that, taking into account all of the advice from different Departments, as well as independent advice.

All I am asking Deputy Micheál Martin and his party, along with the other Opposition parties, is not to rush to a conclusion on this, to keep open the possibility that they might be willing to support this, having heard the answers to the questions they asked, and consider whether the alternatives put forward are deliverable. I repeat that request to the Opposition again today.

I would welcome hearings at the Oireachtas joint committee. I would have no objection to that whatsoever. I just believe we should ensure there is reasonable timeframe around them and the terms of reference are agreed by the major parties.

The Government has been transparent about this. We have released the advice from officials in the Departments of Public Expenditure and Reform and Communications, Climate Action and Environment. We have released all the documents and independent analyses from different companies such as Analysys Mason, PwC and KPMG. There is also advice from officials from my Department in favour of this project. Usually, this material would come out later on, perhaps on foot of freedom of information requests and in a drip-drip manner. We took a deliberate decision to release all material which would be released early because we want to be transparent about this.

The Deputy is correct that this is taxpayers’ money. The value of this project, however, should not be forgotten. About half the money for this project is taxpayers’ money while the other half will come from investments from the bidder, commercial revenues and other sources and borrowings. This is taxpayers’ money well spent. It will end the digital divide between rural and urban Ireland. This is a digital divide which is widening and one which we will never close if we do not go ahead with this project. It will connect 1.1 million homes in every county. The Deputy is right to focus on the costs but he should not turn a blind eye to the benefits either.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Again, the Taoiseach did not answer the questions. Where will the additional funds come from over the next three years? What projects will be shelved to facilitate this plan? These are legitimate questions which are asked in the memo from the Department of Public Expenditure and Reform to the Taoiseach. We are entitled to an answer. We have got drip-drip. The Taoiseach did not reveal the documentation prior to making the decision. Belatedly, he then expects the Opposition to roll along with him.

Does he still stand over the cost-benefit analysis when in the final version €1 billion is lost on the benefits and miraculously found in terms of costs? I would not use the phrase “cook the books” but it demands some serious questioning by the Taoiseach and everybody on this side of the House as to the cost-benefit analysis. How was it only spotted at the 11th hour? What went on? We need to find answers to those questions.

GMC has to rely on another financial entity. This has been confirmed by the Department of Communications, Climate Action and Environment. It turns out to be the Tetrad Corporation and David McCourt’s brother’s company. Was the Department satisfied by a letter from Frank McCourt’s company to the effect that he could underpin the financial capacity of GMC? What level of guarantee did the Government get? What evidence was obtained by the Department to ensure it has full legal recourse to the resources of McCourt Global LLC and Tetrad Corporation, companies on which GMC relied, a fact stated publicly by the Department?

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
Link to this: Individually | In context

Please, Deputy, the time is up.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Did Peter Smyth talk to Frank McCourt during his inquiry?

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

There will be no budgetary impact in 2019 and a minimal impact in 2020. In fact, there may possibly be none as a result of carry-over. There will be a budgetary impact from 2021 onwards. The Minister, Deputy Donohoe, in the summer economic statement, due in a few weeks’ time, will indicate exactly-----

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Did the Taoiseach read the memo? The Taoiseach's own memo said the opposite.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
Link to this: Individually | In context

That proves that there will be very few people getting broadband until 2022.

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

-----how that will be provided for.

I stand over the cost-benefit analysis. Yes, errors were detected along the way but the final cost-benefit analysis after all corrections still showed that this is a positive project and that the benefits outweigh the costs in all scenarios-----

12:10 pm

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

It does not say that.

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

-----the pessimistic scenario, the core scenario and the most optimistic one. The cost-benefit analysis does not include many things which I think are very important.

Photo of Timmy DooleyTimmy Dooley (Clare, Fianna Fail)
Link to this: Individually | In context

Since when did the Taoiseach get to define a cost-benefit analysis?

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

When did the Taoiseach get the cost-benefit analysis?

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

These include smart farming, the potential positive impact it will have on rural isolation, e-health, e-government, and home working.

Photo of Thomas ByrneThomas Byrne (Meath East, Fianna Fail)
Link to this: Individually | In context

And Fine Gael votes.

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

None of those is taken into account by the cost-benefit analysis, and even then it is still positive. It should be born in mind that this was undertaken independently by PwC. Yesterday the Deputy cast aspersions on KPMG-----

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
Link to this: Individually | In context

I thank the Taoiseach.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Will the Taoiseach answer my question about Tetrad?

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

-----a company with thousands of employees and today he is casting aspersions on PwC. I think that is wrong.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Will the Taoiseach answer my question about Tetrad Corporation and Granahan McCourt?

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

It is wrong for the leader of the Opposition to come into the House and cast aspersions on two large firms and all their staff and to do so two days in a row. I think that is wrong.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Will the Taoiseach answer my question about the relationship between Tetrad Corporation and Granahan McCourt?

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

On the final question on financial requirements, these were set out in tender documents many years ago.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Yes, I have read them.

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

As the Minister, Deputy Bruton, outlined yesterday, there is no issue with any bidder relying on the resources of any companies.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

I did not ask that.

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

Granahan McCourt relied on Tetrad Corporation and McCourt Global LLC to demonstrate its financial and economic capacity. This was entirely appropriate given the scale of the investment required. This was allowed for by the project information memorandum and the prequalification questionnaire which were given to all bidders in 2016 and were published last week. This is a standard procurement procedure to ensure that the appropriate financial capacities and guarantees are in place.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
Link to this: Individually | In context

I thank the Taoiseach.

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

All other bidders to the process would have sought to do the same.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

I asked the Taoiseach when was that made manifest? How was it made manifest?

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
Link to this: Individually | In context

I call Deputy McDonald.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Was it by letter or was it by legal undertaking?

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context

Go raibh maith agat.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Can I get an answer to that question, please? There is no point in asking questions if we do not get answers. How was that made manifest? The Minister is beside him. He passed a note.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
Link to this: Individually | In context

The time for the question is over, I am sorry.

Photo of Micheál MartinMicheál Martin (Leader of the Opposition; Cork South Central, Fianna Fail)
Link to this: Individually | In context

Will the Taoiseach please answer?

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

I am sure the Minister will be happy to answer that.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context

Things are tetchy between the partners in government today. Yesterday it was announced that the European Commission, under the stewardship of the Commissioner for Competition, Margrethe Vestager, is to undertake a formal antitrust investigation into Insurance Ireland's data pooling system. I welcome that announcement. It is a decision which will be welcomed by motorists across the State who are being crippled by the increased cost of insurance. However, this is not only an issue which affects motorists. Rising insurance costs impact on people from all walks of life, on business, on farmers, on marts, and on community festivals up and down the country.

Very serious allegations are being levelled at the insurance industry here: that it operates a cartel to the detriment of new entrants to the market and ultimately to customers who are being fleeced. It beggars belief that it has taken the European Commission to step in here when it is clear that insurers have been ripping off policyholders for years and the Government has consistently refused to act on serious issues that have been raised.

In 2016, on the initiative of my colleague, Deputy Pearse Doherty, the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach produced a report on the rising cost of motor insurance. Its first recommendation was "an end to any sort of “closed shop” mentality prevailing among existing insurers in the market – full access to data must be made available to all new entrants." Since then, Insurance Ireland has continued to operate as normal and has brazenly opposed sensible attempts to bring greater transparency to the insurance industry. The Government must now regard insurers and their assertions in a manner that takes account of the very serious allegations that are levelled against them. That is why in addition to what I hope is a very speedy result to this investigation we see major reforms of how insurers do their business and treat their customers. We need to see a commitment to bring down prices as changes to awards are brought in and crucially we need new legislation to put manners on the insurance industry.

Sinn Féin has a Bill, the Consumer Insurance Contracts Bill, which passed Second Stage in the Dáil unanimously, and was supported by the Government, to reform and modernise the law in respect of insurance contracts. Since that passed Second Stage, the Government has stymied the Bill's progress and has blocked it from going any further. It has dragged its heels on this issue for far too long. It is clear that the Government's kid gloves approach towards the insurance industry has failed and that it must end.

Will the Taoiseach give a commitment that the Government will allow the Bill to progress? Will it ensure that it is passed to bring the insurance industry to heel and that it will act decisively in the interest of policyholders and consumers?

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

I thank the Deputy for raising this really important issue. It is one which is very much coming up on the doorsteps and has been for quite some time. Insurance costs in Ireland are very high. This impacts on drivers, patients or potential patients with health insurance, business people, farmers, community organisations and in particular, when it comes to motor insurance, people who have returned to Ireland from abroad who find real difficulties in getting insurance.

We all know that the Government does not set premiums. It is a private market and no matter what, it will always be the case that the amount coming in in premiums must roughly match the amount paid out in claims. That is the essential equation which is behind insurance, with the difference being the insurance companies profits.

This is a priority for Government. The Minister of State in the Department of Finance, Deputy D'Arcy, has a special role in this issue to bring down the cost of insurance for Irish people, citizens and businesses. We have seen some progress. Motor insurance is down about 20% from its peak in 2016. It needs to fall further. Health insurance which had been increasing every year has stabilised for the past two or three years, largely as a result of legislation we brought in on lifetime community rating which has succeeded in stopping the increases in health insurance prior to that. This year we have already passed about three new laws around insurance. However, it will take some time for the effects of those laws to be seen in the premiums charged to people and businesses. The next step is the Judicial Council Bill which is working its way through the Houses. It will enable the Judiciary to come up with new advice and guidelines on appropriate levels of compensation payable to people if they have been injured. Getting that through by the summer recess is the next important step, as well as having the judicial council set up and having it draw up guidelines ideally by the end of the year. As with all the reforms, and was the case with lifetime community rating in health insurance, it may be a year or two after the law is enacted before its results are evident in premiums moderating or falling.

Photo of Mary Lou McDonaldMary Lou McDonald (Dublin Central, Sinn Fein)
Link to this: Individually | In context

The Taoiseach has confirmed what we all know, namely, that insurance premiums having skyrocketed by 70% between the years 2013 and 2016 are only now moderating. We all know that drivers, particularly younger drivers, have been locked out of obtaining insurance for a long time. The Taoiseach talks a good game but his claim that this has been a priority for Government is at odds with the facts. The Bill I mentioned came through the House in 2017 and the Government has actively blocked it by refusing to sign a money message for more than two years. The Bill then went out to a public consultation that was not necessary. It is only now, precisely because this issue is arising on the doorsteps, that the Government has very reluctantly agreed to move and to act on the legislation. This Bill is about revamping insurance contracts and introducing a very necessary level of transparency.

I ask the Taoiseach again, in the interests of consumers, fair competition and above all people who are still being fleeced by insurance premiums that are through the roof if he will commit to allow the passage of this legislation without further impediment, put his money where his mouth is and demonstrate by action, however belated, that this is a priority for Government.

12:20 pm

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

I am afraid I do not have that particular legislation in front of me but I will examine it again during the week to see if we can work with the Deputy's party to progress it. However, in the past year alone we have passed three new laws that deal with the issue of insurance and another Bill is currently working its way through the Houses. We are certainly not new to the game when it comes to acting on this issue. As mentioned previously, motor insurance premiums are down approximately 20% from the peak and health insurance premiums are stabilising and falling because of legislative action that was taken by this Government, particularly when it comes to long-term community rating.

In the context of the investigation announced yesterday, I am advised this is a formal anti-trust investigation into Insurance Ireland. The opening of this investigation follows inspections carried out in July 2017. I understand that the purpose of Insurance Link is to facilitate the detection of potentially fraudulent behaviour by insurance claimants and to ensure the accuracy of information provided by potential customers to insurance companies or to their agents. The Commission does not question that data-pooling arrangements can contribute to effective competition. However, in the case of Insurance Ireland its investigation will assess, in particular, whether the conditions imposed on companies wishing to participate in and access the Insurance Link database may have had the effect of placing these companies at a competitive disadvantage in the motor insurance market in comparison to companies already having access to the database.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
Link to this: Individually | In context

I call Deputy Maureen O'Sullivan on behalf of Independents 4 Change.

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
Link to this: Individually | In context

Coming from a medical background, the Taoiseach will agree that we need sustainable models of medicine development and medicine procurement. We are seeing significant advances in drug treatment for life-threatening illnesses and also in respect of non-communicable illnesses, but there has also been a massive escalation in prices by the pharmaceutical companies. Some of the prices being charged are extortionate. There are many examples in this regard but I will just provide one that relates to overpricing. The University of Pennsylvania was able to produce a new treatment for cancer, CAR-T, for $15,000. Novartis is producing it at a cost of $475,000. We know here what has been happening with Orkambi, Spinraza and Prempro. Drugs for Neglected Diseases Initiative, DNDI, based in Geneva but with offices around the world, was able to come up with a plan using certain drugs for $150 million but big pharma has stated that it would cost €2.5 billion to do the same. It is also the case that Ireland is falling behind other European countries when it comes to access to medicines for illnesses such as MS.

Opposition is growing to this monopoly exercised by the pharma companies. Only last weekend, there was a lawsuit of over 40 US states against pharmaceutical companies for overpricing in respect of cancer and diabetes drugs. If one looks at the base level of development of these drugs, the research is being carried out by publicly-funded universities and research institutes. Phenomenal work is being done. The patents for newly developed drugs are then sold to the pharmaceutical companies and it is at that point that reform is needed in order that universities and research institutions are supported in challenging the pharmaceutical companies so that conditions are attached regarding the future affordability of medicine. If the latter happens, we will not be obliged to overpay for medicines that were originally development with public funds. University College London has done a serious amount of work on this issue. In 2016, the EU Council passed strong recommendations in respect of this kind of reform but these need to be implemented now with a co-ordination mechanism. I am asking that Ireland be involved in this regard. I am also asking that, as called for at a recent access to medicines conference, Ireland support the Italian resolution on transparency on this matter at the World Health Assembly in Geneva next week.

However bad the prohibitive cost of medicines here, we can only imagine what it is like in the global south, not only for the difficult illnesses but also for non-communicable ones. I refer here to certain basic illnesses from which people are dying. Sustainable development goal 3 is about access to affordable medicines. We also signed a UN agreement last year with an explicit commitment to promote increased access to affordable, safe, effective and quality medicines.

I ask that the Taoiseach consider three aspects: capacity-building and strengthening of the universities and research institutes when they are negotiating with the pharmaceutical companies which are driven by shareholder profit; retaining some drugs in public ownership, fully developed and distributed through the public health system, which model exists in both Cuba and Brazil, and in parts of the United States; and that the Government adopt a procurement policy which actively, and in a timely fashion, will take up the less expensive biosimilar alternatives when the patents relating to the original drugs expire. Otherwise we will keep on paying over the price for medicines that are badly needed.

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

I thank Deputy Maureen O'Sullivan for raising this important issue. I very much agree with her that the cost of new medicines is extremely high. That is the case across the world. Notwithstanding that, so far this year - it is only May - the HSE has approved 23 new medicines for use in this country and is considering a number of other applications. One of the most effective things we can do is co-operate with other countries when it comes to the procurement of new medicines. In the past year or so, we formed an alliance with Belgium, the Netherlands, Luxembourg and Austria - the BeNeLuxA initiative. In fact, there is a meeting taking place in Dublin today involving health officials from all five countries. The purpose of the initiative is so that all five countries can co-operate in the context of scanning the horizon for new developments and new medicines, sharing information on effectiveness and cost and, potentially, tendering or procuring as a group in the future in order that we get a better price for our taxpayers and citizens.

There should be a single process at EU level for recommending whether new medicines are reimbursed. We already have the European Medicines Agency, which can license medicines for use across the European Union but does not have a role in determining whether they should be reimbursed or at what cost. Sometimes some of the drug companies play countries off against each other. It is up to countries to stop them from doing this and that is where, at a European level, we should have a new initiative moving beyond an EU-wide licensing regime to an EU-wide regime for determining which medicines should be reimbursed and what is a fair price for health systems to pay.

I have not seen the Italian resolution the Deputy mentioned. I will ask the Minister for Health to contact her directly in the context of indicating whether we are in a position to support it. I absolutely agree that we need to make better use of biosimilars and that when drugs come off patent, we should be using the generics rather than the branded items. Those savings that can be created should be retained in the budget to fund new medicines.

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
Link to this: Individually | In context

The reality is that the cost of medicines is extortionate and that there is demand for them. We had the awful reality of the insured and the uninsured with the same life-threatening illnesses being treated differently. It is terrible for officials and doctors to have to weigh up the cost of medicine vis-à-visthe cost of a life and whose life means more and, therefore, gets the more expensive medicine. It cannot be a competition between, for example, a drug that will prolong a life for ten months and another that will prolong it for 24 months, as to which one we should choose. There should be equal access for everybody. A different approach to the pharmaceutical companies is needed at EU level, at UN level and nationally. I would be in favour of a working group here because there are practical suggestions being made that are achievable. Pharmaceutical companies provide jobs and corporate taxes. They are giving with one hand but what is the point in that if they are taking back with the other by charging Ireland and other countries so much more for medicines that should be much more reasonably priced. There is a more progressive model of research and development that is committed to access and affordability and that is what we need to pursue.

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

I broadly agree with the Deputy. In my conversations with the Minister for Health I will advise him that the Deputy has raised these issues. He will follow up directly with her.

Photo of Eamon RyanEamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context

The issue of housing is coming up at people's doors right across the country, particularly in my city of Dublin. My assessment is the Government has completely lost the trust of the Irish people in this regard. Political capital is an uncertain currency but we all know that it eventually disappears. It is evaporating for the Government at present in the context of the housing issue. This is because the Government is betting everything on a market that is not reliable. This has echoes of other debates that are taking place.

Regarding the HAP scheme, on which the Government has been relying, it is interesting to go back to the spending review by the Department of Public Expenditure and Reform from July 2018. Similar to the broadband one, it seems that the Department is critical. It said that it is estimated based on local authority areas analysed that the net present cost of delivering units through mechanisms such as HAP, RAS and leasing is higher than building or acquisition. Similarly, the leasing schemes the Government is promoting are very similar to the national broadband scheme. It is effectively saying to private developers that they have a no-risk guaranteed income for 25 years and at the end of it, they will own the asset - public housing that is being privatised. In respect of the reliance on the market, Mel Reynolds, with whom I spoke because he is probably the best person to throw light on what is happening with the real numbers, estimates today that we are still relying on the market for about 95% or 94% of all housing. Even with regard to the approved housing bodies and local authorities, they are conflating, as the national audit committee said last year, turnkey purchases with new build. We are relying on the market. From talking to people in the industry, it is clear that conditions in the market are starting to change and there is a real risk that if the capital leaves or the cost of capital goes up, that market will not deliver.

It is welcome to hear that the Irish Council for Social Housing has issued a report this morning that details the number of houses built last year but we must really analyse the figures to realise that the real numbers of real builds by the State is a fraction of what the headline figures would have us think. The council has two asks. First, it says that the Land Development Agency legislation should be produced straightaway and I agree. It was launched prematurely last September, probably for political reasons. Again, this is typical of Fine Gael. The Irish Council for Social Housing is saying that it must be issued quickly. Its second ask that we use State land extensively for the delivery of social and affordable rental housing.

Will the Government recognise that its way is broken and that it must change and that the way we could do that is to tell the Land Development Agency that on all State lands it will use, we should aim to have 50% affordable cost-rental housing, which will bring down market rents, and 50% social housing? That provides opportunity and a sense of hope not just for those who are homeless but those hundreds of thousands of young people and their parents and grandparents who have no sense of any possible future and who are paying through the nose in rent. Will the Taoiseach direct the Land Development Agency to pursue the policy his own party says it supports, namely, cost-rental affordable housing, and move away from a reliance on the market that is killing a sense of future in this country and costing us a fortune?

12:30 pm

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

Housing is a significant concern for citizens and families across the State, be they people on the housing list waiting for social housing, people who want to buy their first home or a new home and are struggling to do so or people who are facing very high rents that take up a large proportion of their income. It has very much been the priority of Government to get on top of these issues over the past couple of years. While we have a lot to do, we are making progress in some areas. One of the areas where we have made the most progress is in the area of supply. A total of 18,000 new houses and apartments were built last year, more than any previous year this decade. That does not include student accommodation and other forms of housing. Roughly one quarter of that new housing was social housing, which is a higher proportion than we have seen for quite some time. This year, we anticipate that somewhere between 20,000 and 25,000 new homes and apartments will be built in Ireland. Last year, the social housing stock increased by about 9,000 through many different mechanisms. It will increase by more than 10,000 this year and by 12,000 thereafter. Our objective is to double the social housing stock in this country over the next ten years. That is not a policy that is over reliant on the market.

We take a practical rather than an ideological view on this. We need the private sector and the State sector. We need social housing and private housing. We need houses for people on the housing list and houses for people who want to buy. The vast majority of people in Ireland still want to own their homes, which is a good thing and the reason we also need private developers. We also need a better rental model and better options for people who are renting, particularly the cost-rental model, which we are piloting in various parts of this city. I very much welcome the contributions of the Irish Council for Social Hosing today, a body that represents approved housing bodies. The council pointed out that approved housing bodies housed over 4,000 families last year and exceeded the targets set in Rebuilding Ireland. Approved housing bodies do this with public money. The money they use is taxpayers' money that has been assigned to them by the Government. That shows our commitment to delivering social housing through bodies such as those.

The announcement made last September about the Land Development Agency was not premature. It was the announcement of the establishment of the agency. The agency has now been established. It exists and has a CEO, board and staff. It was established by order. That was what was announced last September. The legislation is being worked on as priority by the Department of Finance and the Department of Housing, Planning and Local Government. The intention is for up to 50% of Land Development Agency sites to be used for social and affordable housing with the other half being used for homes for people to buy. This recognises that we want to see mixed integrated communities into the future, which is good policy, and that we also need to provide housing of all sorts - social housing for people on the housing list, homes for people who need to rent and homes for people to buy. We should never forget that the vast majority of people in Ireland want to be able to own their own homes. The rate of home ownership is 70%. That should be the case and we want that to increase, not decrease.

Photo of Eamon RyanEamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context

The real urgency is that people want low rent. Those caught in the rental sector are the ones who are caught - our younger generation. Fr. Peter McVerry, who I trust on this, said today that the primary responsibility for social housing lies with the Government and that it is falling short. Regarding all this talk about the numbers, if we parse it down, it is falling short because it is relying on the market. We are agreed. The Taoiseach has just said that cost-rental is the particular way to tackle that rental sector. It has the advantage of the land cost and the developer's margin not being included so the rent is reduced by about 35%. We know from the analysis carried out by the National Economic and Social Council and others that it is the best system because it will allow us ongoing funding through a cyclical counter cyclical period. We can bring the cost down because it will be cheaper for us to build than rely on the private sector, which is not reliable. Again, I go back to the question of State lands. I welcome John Moran's arrival in that office and I hope he does a good job. We will support him. We need to do this and not just give a fat cheque to the private sector for 25 years where we are paying over the odds. We need also to start recognising that we can do this ourselves and build cost-rental housing that is high-quality, close to the centre and delivers for a variety of different people - a mix of people in social and public housing - and at the end of it, we own the asset, not a private operator. This is the fundamental issue of our time. The Government is privatising everything. We want certain things to be in public ownership and social housing should be in public ownership for use forever and a day for the people of Ireland. In respect of small example projects on State lands, will the Taoiseach give the Land Development Agency a target of 50% cost-rental and 50% social housing? That is the way to rescue those people in the rental crisis.

Photo of Leo VaradkarLeo Varadkar (Taoiseach, Department of An Taoiseach; Dublin West, Fine Gael)
Link to this: Individually | In context

We both agree that this is a real problem. We need to tackle high rents. Where we disagree is that the Deputy thinks there is only one way to reduce rents while I and this Government appreciate that we must do it in a number of different ways. "Yes", we need more social housing. We added 9,000 units to the social housing stock last year because when we have more social housing, we are able to take people out of the private rental sector, bring them into social housing and free up properties for others who need to rent. That is one way of doing it. The second way is more private housing built by private developers because lots of people want to buy their own homes. If more people who are renting could buy their own homes if they were available, that would free up properties for others to rent and help bring down rents. The cost-rental model is also part of the solution and that is what we are piloting in Emmet Road and other places. There are also increased protections for tenants. The Deputy will be aware of the laws that have gone and are going through this House to increase protections for and rights of tenants so I do not think there is only one solution to this. We must approach it in four or five different ways and in a practical and non-ideological manner and that is what the Government is doing. What we are saying with regard to Land Development Agency lands is that up to 50% of those sites should be social and affordable housing and 50% homes for people to purchase so they can own them themselves and become homeowners but we must apply some flexibility around the different sites in different places. It may not always be practical to do that but that should be the overall objective.