Wednesday, 19 May 2021
Ceisteanna ó Cheannairí - Leaders' Questions
The Government had two options last night - to propose a meaningful plan to stop cuckoo funds snapping up family homes and pushing ordinary home buyers out of the market or to tinker around the edges with measures that would have no real impact on the funds and not fix the problem faced by people desperately seeking to put an affordable roof over their heads. The Government made its choice, and we again see that wealthy investment funds and big developers always come out on top with Fianna Fáil.
People had low expectations of what the Government would do last night, given that it has supported these funds for years, but it has defied even those low expectations. It has done the bare minimum. The proposal to pitch stamp duty at 10% is too low. These wealthy investment funds will easily absorb that additional cost across their long-term investments. Stamp duty is the only tax measure the Government has touched. Some of these funds are the largest residential landlords in the State, yet they do not pay a cent on their rental incomes. One fund, IRES, paid zero in tax on the €75 million that it generated in rents last year, yet the Government will still allow such funds to get away with that while they charge our people extortionate, eye-watering rents. It is little wonder that IRES's share price rose by 2.6% overnight following the Government's announcement.
The Government has excluded homes that are not houses. Apartments have been left out. That is half of all homes built in Dublin last year and six out of seven homes in the city overall. It is open season on those. The Government has essentially waved the white flag of surrender and abandoned people in the cities and suburbs to the extortionate rents of these investor funds, not just here in Dublin, but in other places such as the Taoiseach's city of Cork. Even where the Government has introduced so-called controls, they have no retrospective effect, meaning they will not make a blind bit of difference to the 80,000 planning permissions already under way. That is another 80,000 houses that home buyers should have been able to make a pitch for, but they will now lose out to the funds. The cuckoo funds breathed a sigh of relief last night.
What the Government has proposed is a recipe for failure. The Taoiseach knows that these measures will not work because they are designed not to work. There is an acid test for the Government's proposal. First, will it reduce the rip-off rents that people pay? The answer is "No". Second, will it reduce house prices? The answer is "No". Third, will it stop investment cuckoo funds buying up family homes? The answer is "No". People expected their Government to step in and stop these funds in their tracks. Instead, what they got was a cop out. The Government may try to play people who are struggling to buy a home for fools, but they will not be taken in by this.
Last night, the Government had the opportunity to do the right thing, but it wasted that opportunity. I am asking it to do the right thing today. Do what will work, end all of the tax advantages for these funds, include apartments in these measures, and ensure that measures can be applied retrospectively to stop cuckoos snapping up the 80,000 homes that should and must go to ordinary home buyers.
I think the Deputy's response is now the typical Sinn Féin response - oppose everything, prevaricate, delay and endeavour to exploit the housing crisis for its own political ends and electoral gain as opposed to coming up with real solutions that matter out there. Our fundamental concern is with young purchasers and other people to enable them to be in a position to buy houses at affordable rates.
Last night's measures will be effective in that regard. The stamp duty going to 10% is much broader and more effective than the UK situation that Sinn Féin has cited, which, of course, applies to houses that are valued at more than £500,000. That illustrates the lack of detail and attempt to obfuscate, which is now part and parcel of the Sinn Féin presentation on housing.
It is remarkable that for the past number of months, the Sinn Féin leader has come in here and attacked investment funds and, week after week, attacked developers and so on, saying that it is all developer-led. What happened last evening? Her party's housing spokesman was on "Prime Time" appealing to all and sundry and saying the party wants more developers. "I welcome developers", he said, and he acknowledged there was a role for investment funds. Sinn Féin is having it each and every way. Which is it, Deputy McDonald? What is the true nature of Sinn Féin housing policy? There are gaps everywhere in the policy and she is not strong on the detail of it. She keeps coming out with big figures for this and that but they are not really grounded in reality in terms of providing housing for people on the ground.
Let us take the scheme the Minister launched this morning in Clondalkin, involving more than 1,200 houses. Sinn Féin held that up for a long time on the basis that it wanted 100% public housing on public lands. The party is very weak on the role of the private sector in getting houses built. It is very weak on the supply question. Its proposals would damage supply in housing and reduce the number of units available to people. The reality is we are not building enough houses and apartments in this country. Just announcing a figure, as Sinn Féin does, and saying, "Oh, we will do 40,000 this year, just like that", is not grounded in reality, as Deputy McDonald knows. However, that does not matter because her party is not about solving the crisis. It is about exploiting the crisis. That is its agenda at council level, national level and in public discourse.
Sinn Féin opposes everything. It opposed the help to buy scheme, which has helped 22,000 ordinary people to buy houses. It opposed the Land Development Agency Bill on some narrow ideological basis, even though it will give us the engine and the leverage to get houses built in this country. It opposed the shared equity scheme. It opposed 16 out of 21 development motions on Dublin City Council. The list goes on. Where is the constructive engagement? Where are the real policies from Sinn Féin? I do not see them. What i tis proposing in terms of an alternative proposal to the one the Government came up with last night, presented by the Ministers, Deputy Darragh O'Brien and Donohoe, would reduce supply. There are issues in terms of apartments and we acknowledge that. There are issues around financing developments and builders. We need private builders building housing estates and apartments. This is just one measure. The measure is about enabling people to buy houses and duplexes on housing estates and the funds will not compete with them. It is a good structured measure that people feel is sensible and will not have the negative consequence of reducing the supply of apartments in cities, which we need.
Let me give the Taoiseach some detail and move from the general to the specific to illustrate how flawed the Government's approach is. There is a sale happening as we speak that will see the largest private rental sector portfolio ever put to the market go to sale. It is being developed by Marlet and represents 2,000 homes across six locations here in Dublin: in Harold's Cross, Howth, Dundrum, Lime Street and on the south side docks at Grand Canal. These 2,000 homes will go to private investors. The process is under way. The Government introduced nothing to ensure that young first-time buyers or other home buyers can get access to purchasing and owning these houses. The Taoiseach says he is for home ownership, yet everything the Government does either locks people out of access to homes because of affordability or locks them into an endless cycle of extortionate rack renting from international funds.
We propose to end the tax advantages to these funds. We want to ensure that apartments are included in any and all protections and make sure, crucially, that the protections can be applied retrospectively. If the Taoiseach does not do those things, then he is leaving people in the lurch.
We need a rental market. Does the Deputy not get that? In addition to other markets, we need a rental market. We need more supply. We need affordable houses and more social houses. Last night is just one measure in regard to one area. The Government is coming up with a range of initiatives in housing, the most important being substantial allocation of funding for the largest ever social housing programme over the next five years. We want to provide 50,000 social houses. The Government has provided €690 million in the 2021 budget for affordability, including for the first national cost rental scheme, which will provide homes at 25% below market price. Those are the kinds of positive measures we are introducing and the Deputy is voting against. Why is she voting against good measures that will provide affordable housing to ordinary people? The affordable housing Bill will do just that. It will introduce the first scheme of direct State-built affordable houses. A total of €310 million has been allocated for the serviced sites fund to deliver approximately 6,200 homes.
It is five days since the ransomware attack was revealed. This is escalating into a pretty serious national security crisis and I am not sure it is on the radar to the level it should be. This morning when I was driving up to Dublin, one of my local GPs got in touch. One of his patients had been contacted by a medical organisation from outside the State with all his details as regards a procedure he needed and his medical history. This organisation knew, in effect, exactly what he required medically and was offering, in a short period, to be able to provide the operation he needed because it could see he was not going to get it for some time as a public patient. The family contacted their GP and An Garda Síochána and, in fairness to the GP, he contacted An Garda Síochána. I am not going to get into the details and I do not want to know the details of the individual. If this is happening on any scale throughout the country, we have a big problem.
The Financial Timeshas revealed, and the Minister, Deputy Eamon Ryan, said he believes the report to be accurate, that 27 files relating to 12 people, including laboratory results, admission records, etc., have been published on the Dark Web. This seems to align very much with the story I heard this morning from the local GP in my county. I want to know what is the plan in this regard and I do not want a generic answer. I say this with a sense of deep worry. As probably the only Deputy in Leinster House who asked about the security of the IT systems in the HSE over a number of years, including, last December, in regard to Windows 7 on 37,000 machines, I want to know what is the plan.
I have a number of specific questions. There is a duty of care to the tens of thousands of staff of the HSE regarding their personal data. What is the plan in this regard? How should people who are going to be contacted similarly to the person I described be advised in respect of what they should do? Is An Garda Síochána ramped up on this scale or the Data Protection Commissioner? What advice should be given to people? What is being done in regard to the prioritisation of bringing back services? What is the priority list, so that we can give some comfort to people as regards when they can expect services to be back? How do we ensure that the scaling up that is going to be done to deal with this issue is an investment for the future as well, given that I estimate the costs could run to more than €100 million?
Finally, when will we be able to give guidance to the public as to what to do when they see that potentially their medical information-----
I thank the Deputy for raising this issue and I acknowledge his consistency on it. I will say what I have said consistently since this attack. It is a despicable thing to do to attack a health service and to engage in theft of people's personal medical records. This is a criminal enterprise and this is what criminals do in situations like this. We have to be very clear on two things. First, people should contact the Garda if situations such as those the Deputy has outlined arise. The Garda National Cyber Crime Bureau is dealing with this issue on the criminal side and from an investigative perspective. The national cybersecurity team is dealing with external support and hundreds of people are working on this right now, and have been since the weekend, with a view to restoring services. The objective is to get services resumed as quickly and as safely as we possibly can. That involves a strongly co-ordinated effort across government and I assure the Deputy that is happening in co-operation with specialist private sector contractors. That work is under way. We want to get systems, including radiology, diagnostics, maternity services, infant care and radiation oncology back online. Regarding some of the voluntary hospitals, work is progressing. Vaccination and Covid test and trace are operating without the GP referral system for testing, and people with symptoms may attend test centres without an appointment. The HSE is providing ongoing updates on service availability on its website. We are not engaged, and as a State we cannot become engaged, in rewarding and funding this kind of criminality.
It is an important aspect of the issue.
I do not think the Deputy expects me to comment on the plan because those who are endeavouring to hold the State to ransom would be very interested-----
-----in finding out about the Government's response and the security advice we are receiving as to how to respond to this. The Deputy will accept that. There are, therefore, limitations to the degree of public comment I will make on the State's response to this beyond what I have said on the restoration of services. We are very conscious of our duty of care. It is appalling that people would steal-----
I take an interest in this. Before I was in politics, I worked as a manager in IT services. I asked those questions about Windows 7, working with some other people, purely because there was a huge risk. Following through on that risk, I understand exactly what the Taoiseach is saying about the volume of information he can give. As for the public's comfort, however, I am sorry but there is not enough information out there.
I have two questions. First, will the Taoiseach give some sort of indicative timeframe or a prioritisation order, perhaps not today but this week, as to when services can come back? Most importantly, for people whose information could be online or who could receive it in other formats, what are they meant to do? Not everybody knows how to ring up various organisations, so surely two things should be done. First, details should be put up online so people know where to go and, second, there should be two helplines, one for the public who have concerns about this and one for the staff of the HSE internally.
Again, every effort is being made. The HSE is communicating internally with staff about this on an ongoing basis. It is very difficult for the HSE at all levels and for all workers on the front line. The frustrations are enormous. This is a very serious attack on our health service, and the overriding priority is to get the systems back up and running as quickly and as safely as we can in line with the advice we are getting. The Deputy has worked in IT. My understanding is that the restoration is slow and has to be methodical and definite, so it is not possible to give an indicative timeframe right now.
The public should in the first instance, if they are contacted in the manner in which the Deputy's constituent was contacted, do exactly as his constituent did in contacting both their GP-----
The Government's announced proposals to deal with the activities of the vulture and cuckoo funds are hopelessly inadequate, completely pathetic and not a serious attempt to deal with these cuckoo funds at all. In reality, the Government is beholden to these funds and deeply implicated in having brought them into the housing market. The 10% stamp duty will not act as a disincentive. These firms have the funds at their disposal to outbid ordinary working people. The provisions will not apply to apartments, which is where most of these funds are active. The planning regulations, similarly, will not apply to apartments or to all the strategic housing development planning permissions that are in play, a flood of which have gone through recently. These proposals are therefore not a serious attempt to deal with this issue and, to use a phrase the Taoiseach often uses, they will not deliver one extra affordable house for working people or make the unaffordable rents in the housing sector affordable. Neither will they deal with the scandal that was revealed at the weekend. The explanation for the Government's not taking serious action against the vultures and cuckoos is that the State is up to its neck in investing in these cuckoos through the Ireland Strategic Investment Fund, formerly called the National Pensions Reserve Fund. I have just discovered that this includes investment in Bartra's co-living proposal in Dún Laoghaire. The State is building box apartments with Bartra. It is investing in short-stay aparthotels. This is unbelievable. Then in many cases these properties will be leased back to local authorities or they will fund the profits of these investors through HAP payments, 40% of the revenue from which go into the pockets of corporate landlords.
The paper I am holding shows what these funds are saying about the profits they can make through leasing deals with the local authorities. The crowd behind this paper is called Housing Together. It boasts of Government-backed leases of ten to 25 years, unrivalled covenant strength, net initial rental yield of 5%, being ideal for investors seeking high income at low risk, the opportunity to lock in rents linked to inflation, no management of tenants, no rental collections or chasing arrears, no internal maintenance, no voids, no letting fees, no advertising costs and no ongoing refurbishment costs. Why? Because the local authority will pay for all that and at the end of the 25 years, the vulture fund, not the State, will own the property. We are, therefore, paying for this, the vulture funds and the cuckoos are running off with the profits and we have nothing at the end - no security, no affordability and no affordable rents. It is a scam and a swindle of Mafia-style proportions. Why are we not paying to build our own stock that is actually affordable for ordinary working families?
The Deputy is wrong in his assessment of last night's measures because they will have an impact, both on the planning side and in respect of stamp duty.
The stamp duty will have an impact, much broader than just the funds. The stamp duty disincentivises multiple buying of houses or duplexes and gives the advantage back to first-time buyers and owner occupiers. It is a much broader measure than the Deputy, Sinn Féin or anyone else on the far left anticipated.
The Deputy's response is the expected one. As I have said, the Government has allocated about €3.3 billion to housing this year. That is State money, separate altogether from the Ireland Strategic Investment Fund, ISIF, or anything like that. That €3.3 billion includes a very significant allocation to social housing, with significant initiatives on affordable housing and a national cost-rental scheme which would provide houses to rent at 25% below market rate. The Deputy ignores all that every time he gets up to speak about housing. He narrows it down to one area and implies that is the broader picture of housing in this country, which it is not.
The fundamental issue with housing is supply. We are simply not building enough houses or apartments in this country. On the apartment front, there is an affordability and viability issue that needs to be dealt with. Hence the funds are in the marketplace particularly for apartments, as the Deputy just said. Many of those apartments would not have been built if it were not for the presence of funds, given that the banks are essentially out of housing to large intents and purposes, and are not funding at the level that they would have been in previous times. The State is now the big provider of social and affordable housing through the variety of initiatives we have taken, including the affordable legislation the Minister is bringing in, which will provide directly State-supported affordable homes that the State will be active in providing as well as social houses for people.
The Deputy knows the Government does not get involved in any of the decision-making of ISIF. Its objective is to try to leverage to get projects off the ground. Fundamentally, the ultimate solution is to increase supply. The State needs to play its part with very large social housing provision and very strong support as well as providing affordable homes and affordable rental projects. There will also be a need for the private sector. I know the Deputy does not agree with that. I think his view is that every house, perhaps, should be built by the State. That seems to be his position. I do not believe that is doable or feasible in the coming years.
I think the private sector should look after itself. The Taoiseach is absolutely right: the State is the main mover in the housing market. While it is spending €3 billion, the problem is it is spending it on lining the pockets of the vulture funds, the cuckoos and the speculators. The vast majority of the money the State is putting in, which the Taoiseach just described, is going on the rental accommodation scheme, RAS, housing assistance payment, HAP, and leasing payments. It is not going into building our own stock of public housing because the State only managed to build 2,000 of its own local authority houses, while there were 15,000 new HAP tendencies last year with more on RAS and leasing arrangements. Now it gets even worse; the State is working with private developers to deliver the tenements of the 21st century, co-living, which the Government claims it has banned, but the State is investing with these private developers in it.
If we are paying for it anyway through tax breaks, through RAS, HAPs and leasing, and through investment from the strategic investment fund, we should cut out the bloodsuckers, cut out the middlemen and invest in providing our own stock of public and affordable housing. By the way, as the Government has not built a single affordable house, the Taoiseach should not peddle that myth.
The Government has now been in office for ten or 11 months. Over that time, we have made it very clear that we would have a broad suite of initiatives for housing, the key part being social housing and the building of 50,000 houses over the next five years. The Deputy keeps ignoring that. That is part of the €3.3 billion. The €3.3 billion has nothing to do with it ISIF. HAP has been there since 2012 or 2013 to facilitate people on the social housing list to get housing. I would prefer, and we are moving towards, direct construction of social housing and affordable homes and to get more affordable homes for people at prices they can afford and also new initiatives on the cost-rental schemes and bringing back every available opportunity we have, such as voids, for example, through an initiative the Minister took in July 2020. We provided the funding and brought 2,500 units back into social housing last year and we will be committing to another 3,000 this year. We are sparing no effort to get houses up so that people can get opportunities. We are simply not building enough at the moment in this country. The Deputy's proposals would actually reduce supply not increase supply.
Data centre security and its impact on patients has rightly dominated the headlines this week. I want to focus on the related issue of data storage. We have taken a strategic decision to ensure that Ireland has become one of the key global centres for data storage. This has the potential to create and maintain long-term high-value jobs in the Irish economy. These jobs can be located in the most isolated house in Ireland. I fully support this strategy.
However, these data centres have significant demands for electricity and by 2030, 70% of this will come from renewable sources at a cost estimate of more than €9 billion, based on an Irish Academy of Engineering analysis. If this additional cost of data centres continues to be applied to all electricity customers and if we use the public service obligation distribution model across all customers, Irish families would pay an extra €123 per year just for the electricity going directly into data centres.
There is no doubt that electricity will increase in cost over the medium term to meet our renewable electricity target of 70% by 2030. In tandem with that we must actively support the retrofitting of every home in Ireland, including the homes of those who are reliant on social welfare, those who are working and those who are renting, to ease this burden.
Research commissioned by the Society of St. Vincent de Paul has shown that 43% of people reported experiencing at least one form of financial strain due to the Covid-19 pandemic. A quarter of them have cut back on food or utilities and 14% are behind in paying bills, such as electricity. While I support strategic data centre development, we cannot have Irish families subsidising the cost of their electricity on top of the additional cost of green electricity being supplied directly to their homes. This view is supported by the Government in a decision taken in June 2018, set out in the Government statement on the role of data centres in Ireland's economic policy to ensure that Irish families are not forced to subsidise the cost of data centre electricity supplies. However, this is yet to be implemented.
As we increase the level of electricity grid investment and renewable electricity to meet the needs of data centres, we must ensure that they pay for the cost of this additional investment.
I thank the Deputy for raising what is a very important issue. Without question, the expansion of data centres in Ireland has led, and will continue to lead, to a large increase in electricity demand, concentrated in the Dublin area, which raises challenges for the energy system. One needs to consider data centres more broadly, in terms of both the FDI situation and also in terms of the digital economy and the digital transformation that we are undertaking along with other member states across the European Union. The European Union next generation funding majors on two key themes: the green economy and digital transformation.
Data centres are part of the core infrastructure of the digital economy. They have become increasingly important for remote working as we have seen during the pandemic. They also support high-quality jobs and some of the companies involved are offsetting the impact through investment in either wind farms and other renewable energy or forestry carbon sinks.
That said however, the issue needs to be planned and we need a strategic approach. In order to manage data centres in a planned manner specific energy-related actions are required, including for EirGrid and ESB Networks to work closely and innovatively with data centre developers to maximise the capability of the network to support timely connection and operation of data centres. In 2020 data centres represented approximately 11% of the total electricity used in Ireland. EirGrid’s generation capacity statement of 2020 to 2029 projects that demand from data centres could account for 27% of all demand in Ireland by 2029. In that context, EirGrid has launched Shaping Our Electricity Future which is a comprehensive public consultation and I invite the Deputy to contribute to that. Its aim is to make the grid stronger and more flexible so that it can carry significantly more renewable generation and manage increasing demand from high-volume energy users such as data centres. One of the approaches in EirGrid's Shaping Our Electricity Future consultation focuses on a more plan-led approach to data centre development limiting further development in Dublin while other options revolve around major grid reinforcement projects and power generation technologies. The consultation on this strategy will open on 14 June 2021. EirGrid is the key agency involved here with data centres connections and related energy costs.
I take the Deputy’s point on fuel poverty. We have measures in place in the context of allocation of some carbon tax fund revenues towards alleviating fuel poverty more generally and to support people in difficult situations. This is an issue that is topical and is one that requires ongoing strategic engagement.
Real climate action is about encouraging people along the climate journey in a constructive and positive way with the aim of achieving the goal that we all want, which is a long-term sustainable planet for our children and for their children.
The new Climate Action and Low Carbon Development (Amendment) Bill can provide the legal tools needed to bring this about but in the rush to get things done families are being needlessly sacrificed when there are alternative approaches which could be taken to achieve the exact same goal. We must be honest and upfront with people regarding the costs involved and the sacrifices that will have to be made by everyone.
Can the Taoiseach give a commitment that before Dáil Éireann passes the new Climate Action and Low Carbon Development (Amendment) Bill that he will ensure that the McKinsey report on the cost of decarbonisation up to 2050 is published so that all of the options can be fully considered by Members before the enactment of that legislation?
I cannot give that commitment but I will talk to the Minister, Deputy Eamon Ryan, on that. We know that more demand will mean a higher level of renewable energy on the grid to meet Ireland’s 2030 renewable targets. The Government is now developing projects and policies to encourage the development of renewable energy by the data centre sector to meet its demand and to meet the target of 15% of electricity demand from corporate power purchase agreements by 2030.
The Sustainable Energy Authority of Ireland recently conducted a public consultation on options to deliver on this target. There have been some very encouraging signs and recent developments in the sector, with large multinationals concluding power purchase agreements, as I said earlier, directly from wind farms which will not be paid for by electricity consumers. That is the model that we need to progress, namely, that these companies would conclude power purchase agreements directly from the wind farms and that all electricity users, including data centres, will pay their fair share.