Seanad debates

Tuesday, 27 April 2010

2:30 pm

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
Link to this: Individually | In context

On 30 March life changed dramatically for people in Enniskillen, Navan, Blanchardstown, County Cavan and neighbouring counties. Thousands of individuals and their families were plunged into uncertainty about their future following the hasty and undue action taken by the Financial Regulator to have provisional joint administrators appointed by the High Court to Quinn Insurance Limited. This action was taken without notice being given to the company. Four weeks to the day since the decision was taken, it is apparent that in excess of 1,000 jobs hang precariously, threatened increasingly by the Financial Regulator's refusal to permit Quinn Insurance to engage in a meaningful way in the United Kingdom market. The minor respite allowed in respect of the provisional driver UK market, while welcome, is not sufficient to safeguard the jobs in question. This market segment equates to only 10% of the UK business.

Most, if not all, insurance customers of the Quinn Group report satisfaction and better value that enables them to keep costs down and continue a viable business. The jobs we seek to maintain are not only those in Quinn Insurance but also those made possible by the competitive access to insurance facilitated by the presence of Quinn Insurance in the market. Individual companies have stated this publicly.

I am asking for every possible step to be taken to preserve and secure these crucial jobs, and to give reassurance to those families who do not know what the future holds and who now are facing anguish in respect of their homes, their bills and their children. The most crucial step that can immediately be taken is for Quinn Insurance to be allowed to resume its place in the UK market immediately. Whatever steps need to be taken to ensure proper practice must be taken. Perhaps it is here that the Government can provide practical help. Action to secure and preserve the jobs at Quinn Insurance is not just necessary for the retention of those jobs, it is also essential for all the additional jobs in many other areas as a direct result of these jobs. I cannot stress enough how urgent it is for Quinn Insurance to be allowed to trade in further business lines in the Northern Ireland and British markets. Every hour is crucial. Every day is a lost opportunity. I support fully the request of the employees that this access to the British market be finalised in a satisfactory manner with the utmost urgency. The Quinn group continues to provide employment, employment opportunities and economic development in some of the most marginalised areas of the country. These jobs are largely irreplaceable. Many people were afforded the opportunity to return to their native county to work and raise families.

Before the intervention of the Financial Regulator, Quinn Insurance had plans to create another 630 jobs over the next three years on top of the 1,430 who currently supply export services into Britain and Northern Ireland. It also expected to create another 90 jobs as a result of increased business in the Republic of Ireland over the same period. That is 720 jobs in the next three years in the insurance company. The Quinn Group has planned the creation of another 300 full-time jobs in various other divisions, including new product lines. That comes to more than 1,000 new jobs in the next three years in addition to the 7,000 existing jobs, 5,500 of which are on this island. These proposed new full-time positions do not count the construction elements which would employ significant numbers of personnel during construction. The overall impact of the group is immeasurable. Therefore, the consequences of any actions which might threaten the survival of part of or the entire Quinn group is too calamitous to contemplate. It would be Armageddon for counties Cavan, Fermanagh and Leitrim. It would have a catastrophic economic and social effect on the entire island of Ireland. In essence, Cavan would be plunged back to the 1970s, if not indeed the hungry 1950s.

I know personally a large percentage of the employees in the company's headquarters in Cavan and they are very skilled, capable and committed workers. They want to remain in employment. They must not be denied that opportunity. I urge the Minister to provide some peace of mind to those thousands of families and to County Cavan which is fearful for its very survival.

Photo of Conor LenihanConor Lenihan (Minister of State, Department of Education and Science; Minister of State, Department of Communications, Energy and Natural Resources; Minister of State, Department of Enterprise, Trade and Employment; Dublin South West, Fianna Fail)
Link to this: Individually | In context

I thank the Senator for raising this matter on the Adjournment. The Quinn group is a major employer in Ireland and Northern Ireland and we are all very anxious to see a satisfactory outcome to the current situation. The Government is obviously concerned about the employment situation and about the Quinn group generally. That is why the parties involved must continue to work to find a solution that addresses the issues of putting the company back on a sound commercial and financial footing. This is the best way of protecting jobs and it is in the wider interests of the taxpayer.

Quinn Insurance was established in 1996 and is the largest Irish-owned general insurer. The Quinn group employs more than 6,000 people directly in its worldwide operations across a number of countries and encompasses a wide range of activities, including financial services, glass, building products, radiators, plastics, property and hospitality. Approximately 1,800 people are employed in Quinn Insurance in Ireland, with a further 650 employed in the UK, including Northern Ireland.

The Quinn group is a valuable part of the Irish enterprise base. It contributes to our economy through direct and indirect employment, through its spend on Irish materials and services, and through capital investment and tax revenues generated by employment and corporate taxes.

The appointment of the administrators, pursuant to the Insurance (No 2) Act 1983, to take over the management of Quinn Insurance was taken in the best interests of the firm's policyholders. The appointment will allow the firm to remain open for business and to continue to be run as a going concern with a view to placing it on an ongoing sound commercial and financial footing. I have been advised by the Department of Finance that one of the major concerns of the administrators has been to try to ensure the value of the business is maintained to make it as attractive as possible to potential buyers. The key factor here is the reopening of profitable parts of the UK business.

The first step has now been taken, as the Financial Regulator has modified the direction issued to Quinn Insurance to permit the company to underwrite motor insurance cover for provisional driving licence holders in the United Kingdom, including Northern Ireland. This took effect from 21 April. The Financial Regulator took this decision after careful consideration and analysis of information provided by the administrators about important improvements in the company's underwriting model and a significant strengthening of its pricing structure. The Financial Regulator consulted closely with the UK Financial Services Authority prior to making its decision. It is hoped that further lines of business can be re-opened soon.

Enterprise Ireland has supported the Quinn group over the past four years by providing grant support towards the creation of new jobs in Ireland and promoting the company's international growth. Enterprise Ireland continues to support the Quinn group through this difficult period. The chairman and chief executive met the senior management of the group earlier this month and there has been ongoing contact. Enterprise Ireland will provide all possible support to the company with a view to maintaining the maximum number of jobs.

There is no doubt that these are difficult times for everyone involved with the Quinn group. I am conscious of the effect the uncertainty has on the workers involved and their families as well as on the communities in which they live. I assure everyone that the State agencies will give every support they can to Quinn employees to make this business viable.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
Link to this: Individually | In context

I thank the Minister of State for his reply. He stated that one of the reasons the administrators were appointed pursuant to the Insurance (No 2) Act 1983 was to: "allow [it] ... to continue to be run as a going concern with a view to placing it on an ongoing sound commercial and financial footing". How in the name of God can the administrators run this business as a going concern when they are prevented by the Financial Regulator from underwriting new business in Britain and Northern Ireland? He also prevented them from renewing existing business. A total of 55% of Quinn Insurance business is in the UK, while 95% of the workforce are in this country. When the Financial Regulator tied the hands of the administrators by preventing them from underwriting insurance cover in the UK, it affected the business and more than 1,400 individuals who are in danger of losing their jobs. One does not have to be an expert economist to realise that if one cuts off the supply funds, they will eventually run out.

I take the opportunity to thank all of my Oireachtas colleagues in the constituency of Cavan-Monaghan who have worked so hard for the past month, since news came that the Financial Regulator was going to the High Court to seek the appointment of provisional joint administrators to the Quinn Group. They were joined by MLAs in Fermanagh and south Tyrone, as well as representatives of the Labour Party from outside the constituency of Cavan-Monaghan. They have all been working with the Minister for Agriculture, Fisheries and Food, Deputy Smith, and me to try to find a solution to this totally unacceptable situation. I am aware that the Minister is involved in intensive discussions, the details of which he cannot disclose to me or others outside the Cabinet. I know that work is continuing.

I ask the Minister of State to draw this urgent matter to the attention of his Cabinet colleagues and assist the Minister in getting the message across that we are within 72 hours of 1,400 individuals losing their jobs. The bigger picture is that if the Quinn Group is not facilitated in continuing its ownership of the insurance company, some 5,500 direct jobs will be affected and at least double that number of indirect jobs. That is how serious the problem is. These 1,400 individuals are directly affected by this ludicrous decision of the Financial Regulator to stop Quinn Insurance writing new business in the United Kingdom. I ask the Minister of State to please try to have this situation sorted out before we run out of time.

Photo of Paddy BurkePaddy Burke (Fine Gael)
Link to this: Individually | In context

Does the Minister of State wish to comment?

Photo of Conor LenihanConor Lenihan (Minister of State, Department of Education and Science; Minister of State, Department of Communications, Energy and Natural Resources; Minister of State, Department of Enterprise, Trade and Employment; Dublin South West, Fianna Fail)
Link to this: Individually | In context

I thank Senator Wilson for his contribution and understand this issue is the source of extraordinary emotion in Cavan in his constituency. We all know the extent and influence of the Quinn Group in terms of its contribution to employment and wealth generation in the country. It is most extraordinary that the Financial Regulator has had to act in this way. Everyone in government is working extremely hard to ensure the jobs are maintained, as opposed to the Quinn Group, its owner or those on high salaries. The main priority of Government policy is to ensure the jobs are maintained. It may be the case that they will be maintained by someone other than the Quinn Group, there may be someone else who will purchase it.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
Link to this: Individually | In context

If it is not allowed to write new business, there will not be jobs for anyone, but that is a story for another day.

Photo of Conor LenihanConor Lenihan (Minister of State, Department of Education and Science; Minister of State, Department of Communications, Energy and Natural Resources; Minister of State, Department of Enterprise, Trade and Employment; Dublin South West, Fianna Fail)
Link to this: Individually | In context

The Government's efforts are directed at trying to preserve jobs. That is the important point we are trying to make.