Donie Cassidy (Fianna Fail)
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The Order of Business is No. 1, statements on education, to be taken on the conclusion of the Order of Business and to conclude not later than 7 p.m., if not previously concluded, with spokespersons having 15 minutes, all other Senators ten minutes, on which Senators may share time by leave of the House, and the Minister to be called upon ten minutes from the end of debate for concluding comments and to take questions from spokespersons or leaders.

Frances Fitzgerald (Fine Gael)
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I welcome the decision of An Bord Pleanála to turn down the application for an incinerator in Rathcoole. I compliment the communities of Rathcoole, Newcastle and Saggart on their energetic campaign against this incinerator. I welcome, and I think many Senators will welcome, that costs were awarded to the community groups because if one wants to have an equal playing field in planning, it is important that local communities are given a strong voice, and this is certainly a step along the way. I look forward to the outline to be given by the Minister for the Environment, Heritage and Local Government, Deputy John Gormley, on his proposed policies on the area of waste and I hope we will have an opportunity to discuss that outline very soon.

I am concerned about a number of aspects of the national debate on the economic situation, especially the polarised debate that is emerging between the private sector and the public sector. One way to avoid this is if the policies pursued by the Government are seen as fair and equitable. People are very concerned when they see the proposed capitalisation of the banks that the Government will not take action to ensure fairness and heavy regulation, something we have not seen to date. It is the will of the people that the bonuses, salaries and excesses we have seen in banking would be dealt with if we are to put this amount of money into capitalising the banks. There are big questions about the level of bad debts, which have not been answered. In the spirit of co-operation, I hope the Government will examine today's proposals from Fine Gael on this issue. It is extremely important that they should be examined. We have seen other countries recapitalising banks but it has not been successful and they have had to revisit the matter There is concern that taxpayers' money is being put into the banks, while we are not quite sure what we are dealing with in terms of bad debts.

Energy costs are also of great concern to householders and businesses. On Joe Duffy's radio programme in recent days we have all heard about the huge bills that consumers are receiving. I wish to propose an amendment to the Order of Business that the Minister for Communications, Energy and Natural Resources should attend the House to discuss this matter. There have been major cuts in the price of oil, yet we have not seen Government action to ensure the domestic economy benefits whether in householder bills or the cost to industry. Senator O'Reilly has raised this matter as has Senator Healy Eames who cited the example of a Galway firm that had to reduce its staff due to rising energy costs. We should be discussing this critical issue which affects everyone. If we are to regain competitiveness, energy costs will have to be part of the solution.

Joe O'Toole (Independent)
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I have regularly raised the issue of bank recapitalisation, but every time I raise this question people tell me why we need to do so. I have no problem with recapitalising the banks but can someone explain to me how that can lead to the release of credit to small shopkeepers and other small businesses?

David Norris (Independent)
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Hear, hear.

Joe O'Toole (Independent)
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It has not been explained. It has not worked in the United Kingdom or the United States. The British chancellor was almost in tears because after giving billions to the banks over there, they told him to go away. I am not trying to catch the Leader out on this, but if he does not know the answer I would like him to check it. Banks are owned by their shareholders who decide what is to be done with the money. If we put money into the banks, which is described as recapitalisation, the bank management decides what happens next. They can only do what is in the best interests of shareholders, not what is in the best interests of the Government, the economy or the country. That is the law of the land. I want to know how putting money in at one end ensures it will come out the other. I cannot simplify it any more than that. Since last September, I have asked this question of everyone who has anything to say about the economy, but nobody can indicate to me how it can happen. I had a discussion with the Leader about ways to release money when we had the issue concerning the ACC, the ICC and credit unions. As of now, however, I do not see how it can be done.

As regards the pension levy, I agree with Senator Fitzgerald's point that we have managed to split the workforce between the public and private sectors. We should look at this on the basis of what is right, fair and honourable. If public servants need to pay more for their pensions, they should do so. On the other hand, there is absolutely no justification, understanding or equity in a situation when people earning huge amounts of money — the 35,000 millionaires that the Minister for Education and Science, Deputy Batt O'Keeffe, refers to regularly in his weekend speeches — are not asked to pay one shilling above and beyond the 1% levy that everyone else is being asked to pay. The Government should face up to the difficulty and recognise that it should introduce an extra tier of taxation. That would at least let people see that there is fairness and equity in what is happening. Until that happens, people will react against the measure.

Somebody asked if strikes are a good thing. They are never a good thing but there is a time when people must express their views on something — not to achieve an objective but simply to say "We will not accept this. It is not good enough". That is the danger of what is happening now. The Government should look at the proposals, deal with them in the broader context and tell us where they lead. It should also tell us how it is going to deal with high earners who are not being asked to pay extra.

Alex White (Labour)
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We expect clarity and coherence from the Government on its proposals. Last week we were told there was a €2 billion gap in the public finances. A number of bullet points were announced to the Dáil ——

Jim Walsh (Fianna Fail)
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It was €16.5 billion.

Alex White (Labour)
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The Taoiseach said €2 billion.

Jim Walsh (Fianna Fail)
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On a point of information, it is €16.5 billion.

Pat Moylan (Fianna Fail)
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That is not a point of information.

Alex White (Labour)
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I accept fully that is the global amount. However, last week the Taoiseach said that what the Government needed to do now was to fill the gap of €2 billion. He proposed to do that, including a figure of €1.4 billion in respect of a pension levy. It now turns out that the amount to be yielded from the pension levy is not €1.4 billion, but €900 million. Rather than it being taken off the top or gross amount as announced, which would have yielded €1.4 billion, it now appears from the statements by the Minister for Justice, Equality and Law Reform and others on radio and television that the levy is on the net amount and that it will only yield €900 million. If I am wrong about this, I will be happy to accept I am wrong, but will the Leader or Deputy Leader confirm for the House whether the figure to be raised is €1.4 billion or €900 million? We expect clarification and coherence from Government on what it proposes. People expect clarity and a responsible approach from the Opposition, but it must have some confidence the Government knows what it is doing and is clear on its proposals to be able to respond.

Will the Leader either arrange for a debate in the House on the question of the minimum wage or, if that is not appropriate given the issue is before the Labour Court, ask the Minister with responsibility for labour affairs to indicate what he intended this morning when he raised the question of the minimum wage in the manner he did? It appeared to me he was flying a kite and suggesting the Government believes the minimum wage should be reduced. If he was doing that, it appears he believes the minimum wage should be reduced, from €8.65 per hour, approximately €350 per week for a person on the minimum wage. In the context of the issues raised by Senator Frances Fitzgerald in respect of banks, does he seriously propose that the wages of people earning €350 per week should be reduced? Is that a Government proposal? The Minister of State made the extraordinary statement that it was not a matter for him, but that he would leave it to the social partners. It is a matter for him. What the level of the minimum wage should be is a matter of ministerial order. Again, rather than kites being flown, we want clarity and coherence from the Government as to what it believes.

Hopefully, we will have a debate on the issue of the recapitalisation of the banks at some point. I appeal to the Government to get things right when it brings its proposal to the House — the fifth proposal now relating to the banking crisis. It must provide clarity and be able to answer the fair question raised by Senator O'Toole. I have a sense of what the answer ought to be in that matter, namely, that if we recapitalise the banks and put State moneys into them, we must require, demand and achieve a sense of influence over what the banks do, short of taking equity in them. All the issues must be answered. I plead with the Government to get the answers together before it comes to the House, so that it knows what it is talking about. If that takes another week, that is alright.

Denis O'Donovan (Fianna Fail)
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Will the Leader ask the Minister for Foreign Affairs to come to the House in the near future to deal with an issue about which I feel strongly, namely, the persecution of Christians throughout the world? There is an organisation in Ireland called Church in Chains. It came as a shock to me when I did some research on the issue that in many countries there is both a failure to have regard for human rights and a widespread level of persecution of Christians.

It was a particular surprise to me that in Turkey, a country with high hopes of joining the European Union and one that is being pushed by the US to become a member of it, there is major persecution of all Christian religions, not just Catholics. Another country that came as a surprise to me as one where persecution is widespread is Belarus, which is closer to us. In this day and age, human rights issues are raised and the persecution of Christians is common in many of the most populated countries in the world. It would be appropriate that this small nation, which prides itself on the freedom of speech and religion and human rights, raises the flag. Will the Minister, Deputy Micheál Martin, come before the House to debate this issue on a broader scale and discuss not only the persecution of Christians but also the deprivation of human rights in countries with which we do much business and which have ambassadors here? This issue should be raised and is most appropriate in this century.

Joe O'Reilly (Fine Gael)
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The most serious matter confronting the House and the country today is the recapitalisation of the banks. Unfortunately, I have received practical information over the past couple of days at home to back up what I will state and I want the Leader of the House to take it on board. At present, the banks are solving their problems on the backs of small businesses. They are ignoring the reduction in ECB rates, removing overdrafts willy-nilly to pull in cash and increase charges and cutting off credit to small businesses. On a recent "Prime Time" programme a Mr. Wallace openly admitted — fair play to him for his courage — that he is among a number of developers who are not paying interest rates to the banks. It is a disgrace that our banks are solving the problems they created by exploiting small businesses, consumers and individuals. It is an extraordinarily serious matter and I have example after example of it from local constituency work.

It will not be acceptable if we get an aspirational statement on foot of the next recap of the capitalisation matter. We need practical detail on how the banks will give credit to small businesses and how they will stop exploiting small businesses by refusing to pass on interest rate reductions and putting all sorts of bizarre charges on small businesses. Our banking charges and interest rates are among the highest in Europe. This is most unacceptable and needs to be sorted out in the short term. If we do not get a result on this and get a very clear policy statement, a statement on what will happen rather than aspirations, the recapitalisation should not continue.

It is not enough that we get symbolic gestures such as the removing of bonuses, reduction of salary and removal of certain directors and staff members. That is fair enough, that must happen, but that is for optics. There must be proper treatment for the consumers of the banks, such as ordinary business people who are trying to make a living and create and keep jobs. That must happen. I thank the Cathaoirleach for his indulgence on this serious issue.

I second the proposition of the leader of the Opposition, Senator Frances Fitzgerald, with regard to energy charges, which are criminally out of joint at present.

Terry Leyden (Fianna Fail)
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Will the Leader arrange for the Minister for Transport, Deputy Noel Dempsey, to come before the House to discuss the taxi regulator? The number of taxis in Dublin is 26,843 and the number of taxis has increased in smaller towns throughout the country. It is quite clear that a cap on the numbers is required because it will not be viable for those self-employed individuals who have taxi plates and who find it very difficult to survive.

I cannot understand why the regulator introduced an 8% increase in fares last November despite the objections of taxi drivers themselves. Oil and diesel have decreased in price since then. The regulator should reverse the increase. Taxi drivers do not want it. This morning as I passed Heuston Station 68 taxis were queuing to meet the 12.15 p.m. train. That is soul-destroying for those people trying to make a living in this difficult time. We can do something very positive and the Minister can intervene. We have too many regulators who do not really regulate the business. They are not doing a great job in the circumstances.

With regard to bank regulation, the legislation we passed would allow Members of the Oireachtas to serve on the boards of banks. Having listened to the views expressed this morning, I believe there are many Members of this House who would be delighted to serve pro bono on the boards of the banks.

Senators:

Hear, hear.

Terry Leyden (Fianna Fail)
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It would be a wonderful exercise to have Members of the Seanad or Dáil serve on those boards. They would do an excellent job because they are the people who know what is happening. In the circumstances, they would not ask for large fees and would work pro bono. A few Members are eligible and I hope they forward their names to the Minister.

Pat Moylan (Fianna Fail)
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Is the Senator including himself?

Terry Leyden (Fianna Fail)
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I would not object.

Pat Moylan (Fianna Fail)
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Of course the Senator does not.

David Norris (Independent)
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I read an article in a newspaper during the week that suggested the word "crisis" derives from two ancient words, one meaning "danger" and the other meaning "opportunity". We need to consider the idea of opportunity. We are in very difficult circumstances and there is a crisis, at which the banks are at the centre. My problem is that we do not know the extent of the deficit. It is like one of those old brain teasers in which one has to fill up a hole with a bucket with a leak without knowing quite how deep the hole is. We do not know the volume of assets that will be needed.

As a taxpayer, although in a fortunate position, like most of us present, I do not particularly want taxpayers' money disappearing down an endless gully. We should sequester the assets of those property speculators who have caused this problem, remove them from private ownership and place them under the aegis of what one could describe roughly as a national property management agency. If the developments become profitable, a proportion can be returned to the private investors. While I know private property is protected by the Constitution, the overriding principle is the public good. I very much doubt that any Irish citizen believes the public good is served by pouring money into the pockets of those people.

Denis O'Donovan (Fianna Fail)
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The Kenny report.

David Norris (Independent)
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I compliment the Leader on the way he has fought stubbornly to have a reduction in the electricity tariff. He was supported in doing so by a number of Members, including myself. Circumstances are becoming increasingly worse. It is not just a question of the horrifying extent of the increases to bills, about which we hear on Joe Duffy's "Liveline" because the regulator is apparently preventing a decrease. Will the Leader find out whether this is a fact? We privatised the electricity industry to a certain extent and at the time of doing so, we had the second lowest electricity costs in the European Union. After privatisation and the introduction of competition, which is supposed to reduce costs for everybody, our costs have become the second highest. I wonder, as a simple man, how on earth that can happen.

Consider the pay rise of 3.5% for the bank staff. I heard some staff state on the radio that they did not want it and were embarrassed by it. They never asked for it, yet it was landed upon them automatically and nobody is saying "stop". In addition, we hear there is a €1.5 billion hole in the bank's pension fund. Surely it should be looking after its pensions before making an increase of this kind.

We discussed a motion on the Middle East, which could take in some of the matters raised by Senator O'Donovan. I have tabled a motion on a war crimes inquiry. The same motion is to be laid before the Joint Committee on Foreign Affairs this afternoon. It has been amended by the Chairman and I have accepted the amendment. I will forward the amended version to the Leader because it is very important to have a discussion on the Middle East, if possible this week. Perhaps a component of this could endorse the Government's action in seeking a war crimes inquiry. I am not saying yet that anybody is guilty. Let us have the inquiry and then ascertain where the guilt lies.

Ned O'Sullivan (Fianna Fail)
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Will the Leader arrange a debate on the future of the horse racing industry, which, like every other sector of the economy, is facing a rather uncertain future? It is a very big industry and creates many jobs at various levels, from breeding and training to racecourse management. It regularly injects a large amount of money into small towns such as Kilbeggan, Mallow and Thurles, in addition to the major festival locations such as Fairyhouse, Punchestown, Galway and Listowel. Sponsorship has been the most significant factor in making Irish racing so important and the generosity of sponsors has never been questioned. I was delighted to see that Punchestown was able to announce that it had secured its five major sponsors again for this year's festival meeting. That is wonderful but other stories are beginning to emerge about difficulties at smaller tracks. I ask the Leader to arrange a debate on what is a crucial industry for this country.

It would be remiss of me to talk about racing today without mentioning an outstanding sporting performance by A.P. McCoy who rode his 3,000th winner yesterday in a career which has been a showpiece for Irish racing and for the world.

Pat Moylan (Fianna Fail)
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That is not relevant to the Order of Business.

Paul Coghlan (Fine Gael)
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I agree very much with the points made by Senator Fitzgerald, Senator O'Toole, Senator O'Reilly and others regarding the banks. Apart from the business sector that we are all concerned about to get the economy moving properly again, and hard-pressed mortgage holders, Senator O'Toole asked a crucial question on the release of credit on foot of the guarantee scheme this House spent all night discussing some months ago — it did not seem to be as urgent as we were told — but that is history now. The Government has huge moral authority, and perhaps more than that, on foot of the guarantee scheme to ensure that whenever recapitalisation does happen — the Leader might confirm this — that X million will be earmarked for the business sector to help get our economy moving properly again. The recapitalisation and restructuring will not be much good if the investors — the markets so to speak — continue to be unhappy about the level of banks' toxic debts.

Does the Leader believe the Government will opt for a combination of an insurance scheme and the bad bank concept? We all want to see a rescue package in place. It is badly needed but we cannot afford any more dithering on it. Can that rescue package be led by the management? Will all the management be left in place, so to speak, to lead that rescue package? I refer to the people who brought our banking system to the edge of collapse. Let us be honest; those are the people who made such a liathróidí of the whole thing, or are we saying that all the cowboys were only in Anglo Irish Bank? Those are crucial questions. I would like to hear a response from the Leader on those matters.

Alex White (Labour)
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Our translation service seems to have broken down.

Denis O'Donovan (Fianna Fail)
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Cad é sin?

Paul Coghlan (Fine Gael)
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When it does happen — it is ostensibly earmarked for tomorrow night——

Terry Leyden (Fianna Fail)
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The Senator would make a great director himself.

Paul Coghlan (Fine Gael)
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No. When it does happen, we want it. The scheme is needed urgently but we are lacking the detail. We know talks are ongoing today. The talks with the Opposition are very important because, as I said several times in the House previously, we are all in this thing together and we want to work it out properly.

Terry Leyden (Fianna Fail)
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They have all the solutions.

Paul Coghlan (Fine Gael)
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We are all wearing the one green jersey. On that important point, will the Leader grant an immediate debate in this House if the scheme is announced tomorrow night because it is important we have that debate immediately and not next week or whenever else?

Larry Butler (Fianna Fail)
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I congratulate the Leader who has been consistent in putting pressure on the ESB and Bord Gáis to reduce their prices to industry. At this time it is key that we have a low industrial power base to ensure we keep the jobs we are losing. That would be a big incentive. I thank the Leader in particular for the work he has done in that regard.

I also welcome the Minister's scheme on retrofit and energy conservation. I raised the issue six months ago of how jobs can be created. This proposal in which the Minister has invested €160 million is very important. It will entail the development of schools and energy conservation. The scheme will also provide €50 million for local authorities to bring their housing up to the proper standards. It will further ensure that middle-income householders will be able to avail of it. That is phase one of the scheme.

What the Minister should do now that he has announced the grant scheme is to introduce tax allowances over a five-year period. That might be more efficient. Will the Leader ask the Minister to examine this? This would be a more efficient way of introducing the scheme. Every €25 million pumped into the scheme will create €100 million in investment, which will mean 4,000 jobs and a saving of €25 million to the Exchequer on dole payments. This is only phase one and the scheme will have to be examined seriously.

The Minister will have to extend this vitally important scheme to cover solar, wind and thermal power, which would reduce significantly the bills of householders. Now is the time to take this enormous initiative. An investment of €9 billion will be made in 1 million houses and if we do not make it, the State will face charges for not meeting its carbon emissions targets under EU agreements and the Kyoto protocol. We have an opportunity in this regard.

Joe O'Toole (Independent)
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Houses have been built for the past nine years under the wrong regulation and we have been aware of it. Nothing was done about it.

Larry Butler (Fianna Fail)
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The Minister has an opportunity to expand the scheme and invest in wind and solar energy. A total of 20,000 jobs could result from the scheme if it was developed to its full potential.

Pearse Doherty (Sinn Fein)
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When will the local government Bill be before the House? The Bill will give effect to the €200 levy on holiday homes, private rented accommodation and second houses announced on budget day. According to the schedule, it will be published some time in 2009. This gives us an indication of where the Government parties are at. Instead of taking in the €88 million that would result from the levy, they have sat on their hands for the past five months on this issue. We did not witness the same reluctance when it came to removing aids from the most vulnerable children in our schools or taking pensions off those who built the country in the 1940s and 1950s or collecting the 1% levy off those earning more than the minimum wage. Is it the Government's intention to bring the legislation before the House? Will those who are among the most wealthy in society and who can afford such luxuries be allowed to go on without paying their way?

I commend Senators O'Toole and Ó Murchú on raising the issue of the awakening the west report last week. I had the privilege of being the rapporteur for the committee for this report, which deals with the needs of the west from west Cork to Donegal. I have called on a number of occasions since I was elected to the House for a debate on the west and regional development, which has not been granted. While we need to discuss burning issues, we also need to discuss issues that affect the regions. The economic downturn is having a greater effect on the west than anywhere else. That can be seen in the CSO figures, which highlight the number of people on the live register, and in the Government's investment plans, such as the sustainable transport initiative which does not mention the west. Please God, the economic recovery will happen sooner rather than later and the west needs to be in a position to benefit. I support my colleagues who raised this issue last week and I call again for a debate on the report on the west, which was adopted by all parties at the Oireachtas committee.

I refer to the discussion on the banks and the need to get our act together. We are hearing the Government is thinking about imposing cuts on high earners in the banks. We are hearing it is considering a two-year moratorium on home repossessions. We are hearing it is considering that lending is made available to small businesses. These are the proposals that my party and others on this side of the House argued for when we dealt with the issue in the autumn. These are the same proposals we made when dealing with the Finance Bill a few months ago. The Government is behaving in a reckless manner by not listening to the concrete——

Pat Moylan (Fianna Fail)
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We cannot have a debate now.

Pearse Doherty (Sinn Fein)
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——proposals being made by the Opposition that make sense. This is the economy for slow learners. The Government is in the slow lane.

Pat Moylan (Fianna Fail)
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Does the Senator have a question for the Leader?

Pearse Doherty (Sinn Fein)
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Unfortunately it is not even moving forward; it is in reverse.

Pat Moylan (Fianna Fail)
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The Senator has made his point.

Pearse Doherty (Sinn Fein)
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There needs to be action on the matter. I welcome the Government's U-turn on these fundamental and important issues.

John Gerard Hanafin (Fianna Fail)
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I seek a debate on the credit institutions and their lending practices. I am particularly aware of a practice prevailing in First Active and Ulster Bank, both of which are owned by Royal Bank of Scotland. As we know Royal Bank of Scotland purchased a company in Europe called ABN-AMRO, which had €20 billion of toxic debt. As a result of this acquisition, Royal Bank of Scotland has almost been nationalised in the UK. Unfortunately for the Irish economy within those banks the word is that they are not interested in lending. If those two banks, which have a major sector of the Irish mortgage market at just under 40%, have a policy of not lending because they are building up their tier 1 capital ratios in the UK by taking in deposits here, it means the economy in this State is hurting significantly in that market. I have asked for representatives of Royal Bank of Scotland, First Active and Ulster Bank to appear before the Joint Committee on Finance and the Public Service. It is more than serious that this is happening.

I agree with the speakers calling for a debate on energy. Pay is not the only factor in costs. While the cost of energy has consistently decreased and given that oil is priced in dollars and the dollar has also weakened, we are not seeing the effect of the global downturn in energy costs, which is essential for us as a small open economy.

I notice there have been many calls for many positive things to be done. Among those are calls for pay cuts for those earning excessive salaries. I am sure these things will happen. However, they should not be predicated by saying that necessary adjustments should not be made until this is done. Necessary adjustments that have been and are being made need to be made. It is very easy to make a decision when one has no choice. Either we make the choice or the choice will be made for us. While we need to get things right, we also need to do what we have to do now.

Eugene Regan (Fine Gael)
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I refer to the Taoiseach's speech at the Dublin Chamber of Commerce function last week, in which he——

Terry Leyden (Fianna Fail)
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It was an excellent speech.

Pat Moylan (Fianna Fail)
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We are taking questions to the Leader now.

Eugene Regan (Fine Gael)
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I am introducing my question to the Leader. The speech showed a new realism by the Taoiseach and indicated he was getting a grip on the issues in the economy.

Camillus Glynn (Fianna Fail)
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He always had.

Eugene Regan (Fine Gael)
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It was an off-the-cuff speech, on which I compliment him. As speeches go it was a good speech. He said we all need to pull together and only on that basis will we get out of these problems, which is an important point. However, in our respective roles in this, the Government governs. The Taoiseach has earned the right to govern because at the last general election he convinced the country that Fianna Fáil was the only party to manage the economy, and govern he should. The role of the Opposition is to provide constructive opposition. We should not suspend our critical faculties, but assist the Government by pointing out the faults in legislation and also suggesting alternatives, which is what we have done. By way of engagement it was Deputy Kenny's initiative to seek a meeting with the Taoiseach, which will take place this evening along with our spokesperson on finance, Deputy Bruton, on ways to face up to the bank situation and their recapitalisation. It is important to note the role of Opposition and to recognise our respective roles. In that connection, the ECB has produced guidelines on bad banks and how to deal with the issue of toxic assets, insurance and recapitalisation. I ask whether the Government is taking full account of those guidelines which have just been issued by the ECB.

Jim Walsh (Fianna Fail)
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To follow on from the point made by Senator Regan, it is good to see the engagement between the Opposition and the Government because those of us who occasionally have the opportunity to observe what is happening in other jurisdictions will have noticed that the British Minister, Mr. Hill, made a comment at a party meeting that the world was facing the worst economic situation in 100 years. In a Freudian slip, the British Prime Minister last week in the House of Commons mentioned the word "depression". Yesterday the American President gave an indication that it could take 15 to 20 years before we come out of this situation. All the signs are that this is as bad as the Great Depression. Everyone knows it took 20 years for the Great Depression to pass and it took the Second World War to change the scene.

I agree with the request for a debate on the recapitalisation of the banks and in particular with regard to the releasing of credit. I refer to the Dutch Government model in which it took on board 80% of the debts of the Dutch bank. There was a devaluation of 10% which was given as a cash contribution to the bank and no other cash contribution was given, in the hope that by parking these debts and taking them off the balance sheets of the bank, this would release credit through the banks. Some business people who deal in fairly substantial sums with the Dutch banks tell me that the situation there seems to be better than in any other country in Europe. I suggest this should be considered as a model for us. It is a case of trial and error as no government seems to have come up with the recipe for a solution.

Senator O'Toole referred to the divide between the public and private sectors. This will be so destructive that it could accelerate the difficulties we face and insolvency could be the end game for many countries, including our own. As Senator Hanafin said, it could well be others who will be telling us what needs to be done.

Public service salaries are too high. Our pensions are unsustainable. The extra contribution we are now making towards pensions do not in any way meet the cost of those pensions. There is still a need to reduce salaries by a minimum of 10% across the public service and there is a need to reduce numbers by a minimum of 15%. These will have to be the people who are not performing in the public service. If we fail to do this we will not be able to address the difficulties.

I refer to the reasonable points being made by Senator Alex White. The Taoiseach has been saying for quite a considerable time that there is a hole in the public finances amounting to €16.5 billion to €17.5 billion and this must be addressed over a period of four to five years. Other economists are saying it could well be north of €20 billion. All we have done with our €2 billion is scratch the surface——

Alex White (Labour)
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It is one and a half——

Jim Walsh (Fianna Fail)
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——and everybody should recognise that. I appeal to the social partners to come and play their part as they have done in the past.

Pat Moylan (Fianna Fail)
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There can be a debate if the Leader agrees.

Jim Walsh (Fianna Fail)
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They have also been instrumental through benchmarking and otherwise in adding to the depth of the problems we face. We need solidarity from both the private and public sectors and turning on each other will be counter-productive. I hope we can move in that direction. The change in the mood in the House today has been a step in the right direction which I hope will last.

Eoghan Harris (Independent)
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Hear, hear.

Rónán Mullen (Independent)
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I wish to be associated with Senator O'Donovan's timely call for a debate on the persecution of Christians in other parts of the world. Sometimes there is a reluctance to focus on the persecution of Christian people, lest we be seen to be selective in our concerns. It is wrong to be selective in our concerns. It does not really matter what are the beliefs of the people in question. There is, however, a danger that we would forget our history. There are people in the world suffering pain and torture for having a Christian faith which would match what happened in our history. As a country with some moral influence in the world, we should make that issue a priority, as well as rightly focusing on issues such as China and Tibet. I raised that matter on several occasions last year.

I realise there is potential for considerable public unrest about the recent public service pension levy. Senator Walsh's comments were sobering in that respect. I want a debate on how we are communicating the current crisis and how to generate the necessary spirit of solidarity which we need to get through this. For example, when I heard the representatives of the Civil and Public Service Union on the radio today, I wondered whether some union leaders realise the gravity of the situation. We need an informed debate on the gravity of the situation but also one with an emphasis on the need for solidarity. Above all, we need leadership at this time, some of which must come from the trade unions. They must assist in getting the message across to their members that there are injustices inherent in the measures taken but solidarity is needed.

I was one of several Members who recently received a letter from two public service employees who set out in stark terms the pain they will face because of the levy. It will seem like injustice and, in an objective sense, what some people will be asked to bear in the short term is an injustice. However, it must be seen in the context that urgent action is needed. People need to hear clearly the message that going on strike is not the way to go. That is incompatible with the spirit of solidarity that we need. There may be a future reckoning where people who are asked to take a disproportionate share of the sacrifice now will have to compensated. Going on strike is not the solution, however, to any of our problems. The leader of the Labour Party showed the right spirit today when he made a similar point.

In such a debate, we also need to examine leadership from other quarters. Is it appropriate that anyone whose salary is funded, directly or indirectly, from the public purse would receive in excess of €150,000, for example? Will we examine if those in the Government, and outside of it, are willing to accept there may be a levelling at the top level of salaries?

Pat Moylan (Fianna Fail)
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The Senator has made his point. Senators will lose out on contributing on the Order of Business.

Rónán Mullen (Independent)
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We politicians need to look at our roles and the travel in which we engage, for example.

Pat Moylan (Fianna Fail)
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I ask the Senator to conclude. It should only be questions to the Leader.

Rónán Mullen (Independent)
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We need to ask if we are engaging in the necessary frugality with respect to the public purse.

Marc MacSharry (Fianna Fail)
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Is it possible to have an earlier debate on banking? We are aware discussions took place at Cabinet today on the recapitalisation of the banks. I welcome the fact the Taoiseach will brief and discuss this with Opposition Leaders later. At 4 p.m., the US President, Mr. Obama, will outline his plans for the banking system.

Over the past several weeks I have raised the concept of a bad debt or aggregator bank — I prefer the latter term — in which more difficult debts would be pooled and centrally managed, allowing the other banks to focus on providing credit to small business which will provide employment in these difficult times. It would be useful to have a debate on the banking system as early as possible to allow Members to contribute constructively on this issue. I do not know if the aggregator bank model is the best way forward but it requires a debate to examine its merits.

I also welcome the intention to limit executive pay within the banking sector. Such a limit would be appropriate because we cannot be seen to reward those who engage in the type of risk-taking and recklessness that contributed, in a major way, to creating the problems with which we are now faced.

Will the Leader make inquiries with regard to the degree of ambiguity that exists in respect of local authority funding, particularly that which relates to housing budgets, social housing, rentals etc.? Announcements were made in respect of this matter. However, there is some confusion among local authorities regarding the amount of money that is available to them to spend and a number of projects and developments, which were about to commence or which were in the balance, have been delayed as a result. There are countless numbers of people on housing lists. We need the type of housing to which I refer. In some instances, these projects and developments are quite specialised in nature and may involve the construction of small bungalows to suit the needs of people who are in wheelchairs. It would be of benefit if the Leader could clarify the position in respect of this matter.

Like Senator Doherty, I would welcome a debate on balanced spatial development. As Members are aware, for many years I have been seeking a debate on the national spatial strategy, the lack of progress relating thereto in recent times and how we intend to use this strategy in the future. I agree with Senator Doherty that it has been difficult to secure, from successive Administrations, a consistent supply of adequate resources for our part of the country. It will hardly become easier for us to do so in the future in light of the fact that there are fewer resources available.

Fidelma Healy Eames (Fine Gael)
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Members on both sides have acknowledged that the hole in the public finances is huge. However, the answer must be to save jobs and create new ones. I have no confidence that this will happen while energy prices remain as high as they are at present. The impact of what is occurring was brought home to me last week when I met representatives from Celestica, a company in Galway that is seeking 80 redundancies. It was indicated to me that these jobs are being lost as a result of the cost of electricity to industry. Since 1 October, Celestica's electricity bill has increased by €500,000. No business could sustain such a rise. The senior management explained that this makes the company uncompetitive in the context of bidding for new work. I was informed that there is work available but that the company needs to be able to control costs and keep them down.

I ask the Leader to encourage the Minister for Communications, Energy and Natural Resources and the Tánaiste and Minister for Enterprise, Trade and Employment to work together. There is an urgent need for joint action. It is no longer labour costs that are causing the difficulty; as Senator Hanafin stated, it is the cost of energy. I discovered that because the company is locked into a 12-month contract whereby it was obliged to buy electricity at 14 cent per kilowatt. If it was allowed to break that contract, it could be bought at 9 cent per kilowatt. The Government has the power to intervene because, as I discovered, there is no regulator for the industrial sector. Why is the Government not giving leadership.

I spent two hours talking to people on dole queues in Galway yesterday and I discovered that 13,000 people in the county are signing on.

Pat Moylan (Fianna Fail)
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The Senator has made her point. She can take the matter further if the Leader agrees to a debate on the matter.

Fidelma Healy Eames (Fine Gael)
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I wish to conclude what I am saying. Some 2,700 people are awaiting decisions. These individuals are out of work but they paid their stamps for many years. The Minister for Social and Family Affairs must examine what is taking place. Let us focus on job retention and job creation by reducing our energy costs. The solution lies in the Government's hands.

Feargal Quinn (Independent)
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A debate on energy prices would be well worthwhile and there is an urgent need for it. I am a great believer in competition, which is something from which our economy has benefited. However, I am at a loss to understand what has happened with regard to the regulator. I am opposed to and concerned about over-regulation. The energy regulator stated some years ago that the important thing was to bring about competition but that this could not be achieved because the prices were not high enough. As a result, he increased the price in order to encourage competition. The only reason for competition is to bring the price down. I do not, therefore, understand what has happened.

There is a need for a debate not only on energy but also on the levels of regulation and over-regulation that obtain. I do not agree with Senator Leyden's assertion regarding the taxi regulator. Less than ten years ago hundreds of people queued for taxis in Dublin every night because taxi drivers had a stranglehold. I strongly support full deregulation of the taxi sector to ensure the marketplace is competitive. We must consider the issue on that basis.

Approximately 160 people drown each year. While Irish Water Safety does a great job, I was stunned to discover that the life jackets councils place near water must be replaced within a short period. For example, I read the other day that they only last for ten days in one part of Dublin and 50% of them must be replaced every year. Assuming that children cause the problem, it is difficult to know whether to try to see if it can be solved through schools or whether responsibility rests with parents. We must find a solution because people are dying because life jackets are stolen.

Maurice Cummins (Fine Gael)
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In recent months, a number of Catholic members of the PSNI living in the Republic have received death threats from so-called dissident republicans. The individuals in question have been forced, for their own protection, to uproot their families and move from their homes overnight. I ask that the Minister for Justice, Equality and Law Reform come to the House to outline the steps being taken by the Garda Síochána to root out these terrorists who pose a threat to the institutions of this State and those of Northern Ireland.

Eoghan Harris (Independent)
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Hear, hear.

Pat Moylan (Fianna Fail)
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I call on the Leader to reply to the Order of Business. I apologise to Senators who were not able to contribute.

Donie Cassidy (Fianna Fail)
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Senators Fitzgerald, O'Toole, Alex White, O'Reilly, Norris, Coghlan, Buttimer, Doherty, Hanafin, Walsh, Healy Eames and Quinn gave the House the benefit of their experience, made proposals and expressed opinions on the banking challenge facing the country, Government policy and our low tax regime. Interest rates are at an unprecedentedly low level. Anyone who read page six of the Irish Independent on Saturday will have noted that Bank of Ireland and Allied Irish Banks are offering a rate of less than 3% to first-time house buyers. As someone who had bridging finance in 1980, I have seen both sides of the coin. Those with a secure job who have confidence in the market have an opportunity to buy their home because they will not get better value for money.

Recapitalisation of the banks is necessary. Many of us will have seen President Obama make his first address to the American nation. Yesterday, he visited small towns where unemployment has increased from 4.6% to 15.3% in 12 months. Some countries may be in a better position than Ireland but many others are worse off than we are. Members of both Houses will have to channel their energies, expertise and focus into job creation. This can only be done by looking after the small and medium-sized businesses which kept the country going in the 1970s and 1980s. During those difficult periods, we looked after these enterprises through the Government bank, the ICC. The ACC, as it was then, helped the farming sector in the 1970s when agriculture experienced major difficulties.

Anglo Irish Bank is now a State bank. Let us look after the innovators and creators who are creating wealth and jobs. We must seriously consider creating competition in the marketplace if certain banks refuse to play their part, especially those which did not accept the State guarantee. Senator Hanafin cited a number of examples. The Government and Legislature are duty bound to look after Anglo Irish Bank, a State bank which can provide credit and replace the ICC.

Senators have expressed diverse views on this issue. We must take steps to give hope and confidence. Ireland has some of the most able and creative people in the world and the economy is one of the most successful in the world. For the past 12 to 18 months, credit, the lifeblood of commerce and business, has not been available. It must be made available.

A number of Senators present in the Chamber have played a leading role in society over the years by giving exemplary service to the nation. In my humble opinion we must give serious consideration to creating competition for the banks. Senator O'Toole was a leading figure in the social partnership process, of which we are still part. As he correctly noted, in his experience shareholders come first. In that case, the only institution which will look after small family businesses and medium-sized enterprises which employ people throughout the country is a State owned bank. The Government will have to take a lead in this regard. Our only obligation is to look after the bank we own. Perhaps the Minister will outline whether this proposal is a runner. We should consider this approach.

Many Senators noted that energy costs are too high. I watched the programme "One to One" on RTE last night. I am an admirer of much of the work done by the ESB which has performed an exemplary role during the years in providing a service all day, every day throughout the year. The chief executive officer of the company, Mr. Padraig McManus, gave a magnificent interview last night on his vision for the ESB in the coming years. Under Mr. McManus and his predecessors, the ESB has been a success story both here and abroad.

Be that as it may, as Senators pointed out, we are in a time of crisis and energy costs are of the essence. It is unacceptable that energy charges to industry have increased by 25% in the past three or four months. The position is unsustainable and must be addressed by the Government or Commission for Energy Regulation. All sides of the House call for action to be taken immediately to keep the economy competitive. Energy costs for some private dwellings have increased by 50%. Senior citizens who need heat and electricity have been particularly affected and must be supported during the downturn. Senators must raise the issue of energy costs when the Minister comes to the House. At the start of the term, I stated the House would prioritise the issue of energy until a satisfactory outcome is secured from Bord Gáis and the ESB.

Senator O'Toole may not realise that top earners pay a levy of 3%, not 1% as he indicated.

Joe O'Toole (Independent)
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I accept that.

Donie Cassidy (Fianna Fail)
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When one adds income tax of 41%, they pay 45% of their income. They belong to the 6.5% of the population who pay 50% of all income tax paid in the State.

Pearse Doherty (Sinn Fein)
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Public sector employees who earn €40,000 pay more than 50% of their income in tax.

Joe O'Toole (Independent)
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On a point of order, we were warned by the Government not to call the levy a tax.

Donie Cassidy (Fianna Fail)
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On a point of information, whether it is a levy or tax, it comes out of one's wages.

Ivana Bacik (Independent)
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That is what we say.

David Norris (Independent)
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The Leader is learning.

Pearse Doherty (Sinn Fein)
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What percentage of the income of a public sector employee earning €50,000 is paid in tax?

Pat Moylan (Fianna Fail)
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I ask the Senator to resume his seat.

Pearse Doherty (Sinn Fein)
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It is a lot more than the top earners.

Pat Moylan (Fianna Fail)
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I ask the Leader to reply to the Order of Business without interruption.

Donie Cassidy (Fianna Fail)
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I am trying to bring balance to the House, given the comments made. We must not forget that 50% of all the income tax paid is paid by 6.5% of the people. Some 38% of people working pay no income tax. We must bear in mind that if there are no golden geese, there are no golden eggs.

David Norris (Independent)
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The goose is not golden but the eggs——

Donie Cassidy (Fianna Fail)
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We must know——

David Norris (Independent)
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That is a goose with magical properties.

Pat Moylan (Fianna Fail)
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I ask the Leader to reply to the Order of Business and there should be no interruptions.

Donie Cassidy (Fianna Fail)
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We must know from experience that those who take the risks must have a chance to make a profit. We must also know from experience that it is not a crime to make a profit.

Joe O'Toole (Independent)
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Hear, hear.

Donie Cassidy (Fianna Fail)
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We want to encourage the Irish-owned small and medium-sized family businesses, in particular, who employ 880,000 people. They will be here next year and in the years after that if credit is made available by the banks. As legislators, we have a duty to ensure we bring this point home. Our party leaders are meeting this afternoon. We are the representatives of the people who work for those who have provided employment for a long time.

Senator Alex White referred to comments made this morning. I will convey his views on the minimum wage to the Minister of State, Deputy Billy Kelleher. Senators Denis O'Donovan and Rónán Mullen asked for the Minister for Foreign Affairs to come to the House to debate the persecution of Christians. Senator O'Donovan referred to Turkey, Belarus and other such countries, and I have no difficulty arranging a debate on that matter.

Senators Terry Leyden and Feargal Quinn expressed opposite views on the number of taxis and the plight of taxi drivers. Most taxi drivers are taking home very low incomes. Perhaps this issue should be looked at as a matter of urgency. The number of taxi licences the taxi regulator has allocated might be sufficient for a Saturday night but, as far as I can see from driving to this city from Mullingar on a daily basis, there is not enough work for taxi drivers on the other six days of the week. I have no difficulty passing on the Senators' strong views to the Minister.

Senator David Norris called for an urgent debate on the Middle East, Gaza and Israel. I informed the House last week that I will endeavour to hold such a debate on Thursday when Senators can express their views.

Senator Ned O'Sullivan called for an urgent debate on the future of the horse industry which is a major industry which is extremely important to our nation and in which many people are gainfully employed. I have no difficulty allocating time for a debate.

Senator Larry Butler welcomed the Minister's announcement on the €160 million for energy conservation. Citizens will be able to receive a grant to reduce energy use, and to increase the comfort, in their homes. Some €50 million will be allocated to local authority houses. It will put people back to work and will help those who have not had work for the past two to three months and who, in many cases, have no prospect of work in the future. I join in Senator Larry Butler's welcome. He also made a proposal for a five year tax allowance and I will pass that on to the Minister.

Senators Pearse Doherty and Marc MacSharry asked when the local government Bill would be before the House. I will come back to them on that in the morning. They also asked about Senator Pearse Doherty's report on regional issues, the OPW and balanced regional development. Senator Doherty was rapporteur of the committee. He is pushing an open door in regard to this request and I will endeavour to hold a debate in the next two weeks, to which I look forward.

Senators John Hanafin and Marc MacSharry called for a debate on credit institutions and lending banks. Senator Hanafin outlined the plight of First Active and the Ulster Bank. They are very reputable institutions with a huge share of the market and they played a major role in our country's success during the Celtic tiger years and for many years before them. I have no difficulty leaving time aside to discuss the situation in regard to the business they are doing.

Senator Eugene Regan congratulated the Taoiseach on his wonderful speech at the Dublin Chamber of Commerce dinner. I, too, wish to be associated with the congratulations on the truthful, frank and determined manner in which the Taoiseach made his speech. It was very uplifting. I have been a friend of the Taoiseach all my life——

Senators:

All his life.

Donie Cassidy (Fianna Fail)
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——as has the Cathaoirleach. It was very inspiring.

I thought Senator Eugene Regan was going to ask about the new guidelines for the local elections, in particular the spending guidelines. No doubt it will be raised on the Order of Business tomorrow.

Senator Marc MacSharry called for a debate on social housing and so on. I will seek clarification from the Minister in regard to his request. Senator Feargal Quinn referred to the great work being done by Irish Water Safety, but 160 lives are lost each year. Perhaps we should change the law so that the penalty for anyone interfering with a life jacket is increased. I have no difficulty passing on the Senator's views to the Minister and having a debate on this matter.

Senator Cummins, the Whip of the main Opposition party, asked what steps the gardaí are taking in regard to threats to PSNI members living in the Republic. I have no difficulty allocating time to debate this.

Pat Moylan (Fianna Fail)
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Senator Frances Fitzgerald moved an amendment to the Order of Business: "That statements on the huge increases in energy costs and bills be taken today." Is the amendment being pressed?

Maurice Cummins (Fine Gael)
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Yes.