John Whelan (Labour)
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I apologise to the Minister for inadvertently delaying him. I understood we would be dealing with this business at 2 p.m. and I beg his pardon. With the permission of the House, I wish to share my time with Senator Marie-Louise O'Donnell who has also expressed an interest in this matter and has also expressed strong views on it.

Pat O'Neill (Fine Gael)
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Is it agreed that the Senators will share time? Agreed.

John Whelan (Labour)
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I appreciate the Minister coming into the House to address this matter of extreme public concern. Many people are perplexed by what they see as Government inaction on what is viewed as excessive pay and pension entitlements which are paid from the public purse in particular, but not solely, within the banking sector. It applies across the board within the public sector and in the political ranks. I seek clarification on the reason the Government has not addressed this concern to date, particularly when people in the banks who have been supported by the taxpayer and bailed out by the Government are being paid well in excess of the pay cap agreed. One salary is reported to be as high as ¤830,000, which is ridiculous, and pensions of ¤500,000 and ¤650,000 within the banking sector are being paid out of the public purse.

I implore the Minister to intervene in this regard, particularly as many workers such as the Waterford Crystal workers have lost their pension entitlements through no fault of their own. I cite two examples of where there were interventions. The Government chose last year, rightly so, to put a referendum to the people to address the issue of judges' pay, which was carried. The other example, with which I am very familiar, dates back to 1985 when the then Minister, Des O'Malley, enacted emergency legislation in the Houses to enable the Government of the day to appoint an administrator to the PMPA group of companies. I implore the Minister to address this issue in the public interest because it is causing great anxiety and distress.

Marie Louise O'Donnell (Independent)
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The Minister will be aware of the stark examples of extremely high salaries and pensions. Where any organisation, quarter, public service, banking or insurance company is guilty of salaries and pensions outside the common good, I believe that as a Senator I have to ask the Minister to alter that and to viably do so. If I were to give one simple example it would be the 227 people who work for NAMA and the 962 who work for the Irish Bank Resolution Corporation who between them earn ¤140 million a year. We own NAMA and the IBRC and, as taxpayers, we pay that ¤140 million.

I do not believe in coming into the House and citing examples from The Irish Times, RTE or television programmes. Fintan O'Toole wrote an article last week about there being a sense of powerlessness, and I believe that is what people feel. The Minister will probably have very defined reasons for this and be able to allay many of our fears, but there is a sense of powerlessness around. The question I want to ask is where the expertise is of certain bankers who consider their banks to be commercial entities, yet the Irish people had to put ¤3.7 billion into them to keep them open. One has to ask why these salaries are so high. Are the people who have these salaries any good at what they do bar having downright self-belief and a bullish confidence in power gone mad? There is case for legislating against crude, offensive salaries or else perhaps we should ask the people to put their money elsewhere.

I would like to know how the Minister, in his portfolio of Finance, intends to have the runaway salaries of people who think they are marvellous at what they do controlled in the interests of the people. This is especially important when it comes to taking carers out of homes who play a hugely relevant role, who have a powerful job within our society and who should have equality of job opportunity and equality of salary scale. It has become an enormous issue in this country.

Michael Noonan (Limerick City, Fine Gael)
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I thank Senator Whelan for raising this issue. The outrage expressed by the Senator at excessive bank and pensions is shared by the Government. The allegation in the question is incorrect. Since the Government came to power, no breaches of the salary cap have been allowed by it, unlike the previous policy where exemptions were authorised and some of the Deputies who were part of that Administration are now asking me to repair the position. It is not that existing caps are being exceeded, it is that the caps were exceeded in the previous Fianna Fáil Government and there are legal difficulties in unwinding those caps both on pay and on pensions.

The Government has introduced stringent controls on remuneration levels under the conditionality imposed arising from the round of State investment in the banks in the summer of 2011.

We went much further than the previous Administration by including all elements in the pay package. Previous Administrations put on a pay cap and then one got an allowance for a car or housing. We brought the caps in and they are absolute, with one exclusion.

Jim Walsh (Fianna Fail)
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Not for Ministers' special advisers.

Pat O'Neill (Fine Gael)
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The Senator should allow the Minister to continue.

Michael Noonan (Limerick City, Fine Gael)
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Obviously the truth is beginning to hurt when I am being heckled by Senator Walsh.

Jim Walsh (Fianna Fail)
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There you are.

Pat O'Neill (Fine Gael)
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Please, Senator Walsh.

Michael Noonan (Limerick City, Fine Gael)
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The exclusion is for pension contributions. No individual at any of the covered institutions is allowed to receive more than the cap. This is being honoured as proven in the case of the new CEO appointments at AIB and Permanent Trustee Savings Bank, respectively, whose packages are contained within this policy.

The Government has also been putting downward pressure on pay levels throughout the State-owned banks. In 2012, AIB has introduced reductions in pay and benefits of 7.5% to 15% for its higher earners. These reductions and the overall restructuring of the bank mean that the number of AIB employees with a salary of over ¤150,000 will have more than halved by the end of this year, from where it stood at the end of 2008.

The Irish Bank Resolution Corporation or IBRC, the former Anglo Irish Bank, has reduced its overall staff remuneration costs from ¤206 million in 2008 to ¤107 million in 2012. Therefore, we are dealing forcefully with the issue. We will continue to deal with the issue but there are legal constraints which limit the course of action we can take.

In respect of IBRC, it is on the public record that I have written to the chairman, Mr. Alan Dukes, and asked that the board impose a 15% cut in their wages and salaries. He replied to say that the board did not think that was an appropriate policy for reasons of staff replacement in an institution that is going to run out eventually sometime around 2020. He also said they had issues about retaining key staff. Those are the arguments that were put forward. I do not regard that matter as finished, however. I regard it as the first exchange of correspondence that I have had with the chairman and that it will move on.

Senators will also be aware that we have retained the Mercer Group - since June, before any of this controversy emerged - to do a full review of pay and pensions across the covered institutions. They will report to me by the end of the year and we will see what action will be taken then. When I get that report I will engage with the chief executives of those institutions and with their boards to see if we can amicably work out a way that pay and pensions can be reduced, in a manner that is in accordance with law and without taking away from these institutions their authority to make commercial decisions.

Senators will also recall that on the issue of excessive pension payments funded from the public purse, my colleague, the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, dealt with this comprehensively in the other House when responding to a Private Members' motion on 7 November last. He explained in great detail what actions the Government has taken to reduce the cost of public service pensions both immediately and in future. I would encourage Senators, if they have not already done so, to study that particular debate closely.

As I have said regarding the options to reduce existing pay and pension awards in the banking sector, there are limits on the Government's course of action. This is because pre-existing contractual arrangements were entered into by the previous Government. The protection for pensions in the Constitution are those clauses which protect property rights. A pension is regarded as a property right. To move unilaterally against pensions is like taking a field from a farmer - it is confiscation. That is the legal advice.

Jim Walsh (Fianna Fail)
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The Minister is taking 0.6% from pension funds.

Michael Noonan (Limerick City, Fine Gael)
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That is not to say, however, that we cannot deal with this matter. We are examining ways of doing so. To give Senators the exact advice, pensions are generally taken to be deferred income and any action to reduce a pension payment needs to be comprehensively founded lest it run the risk of being considered an unjust attack by the State on the property rights of individuals affected by the proposed legislation. The Government will seek to explore any avenues and options to address this issue subject to the necessary legal constraints.

We are dealing with the pay issue. AIB has dealt with it already and has reduced pay. We have a pay review right across the institutions and I will act when I get the report. In respect of IBRC, it refused to do what I asked of it, but I do not regard that as finished business. We will discuss it again both with the chairman and the board of that institution. That is where we are going. However, I am as angry as any Member of the Oireachtas when I see what people are suffering across the community and the small incomes on which they are rearing families. We have these extraordinary legacy pensions and payments which were entered into by the Fianna Fáil-Green Party Government and in many ways have left us legally handcuffed to deal with them.

Jim Walsh (Fianna Fail)
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That is a fairy tale.

Michael Noonan (Limerick City, Fine Gael)
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No. The facts are there, although I know the Senator does not like hearing them.

Jim Walsh (Fianna Fail)
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It is a fairy tale.

Michael Noonan (Limerick City, Fine Gael)
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The Senator is a very good Member of this House.

Paddy Burke (Fine Gael)
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This is Senator Whelan's motion.

Michael Noonan (Limerick City, Fine Gael)
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He will only damage his reputation, however, by trying to defend the indefensible. It is always a bad idea. You owed them nothing; that is another thing the Senator should remember.

As regards Senator O'Donnell's remarks, I share her anger at what is happening. I think I have replied to the points she made in respect of banking and so on. There are also other institutions of which she has knowledge and with which she had relationships in the past. They have very high pay rates as well.

Paul Coghlan (Fine Gael)
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Tell us about those rates. We did not know about that.

Michael Noonan (Limerick City, Fine Gael)
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Perhaps the Senator will attend the House to tell us how we might deal with that, when certain individuals on single salaries are getting enough to pay for the President, the Taoiseach and going half way towards paying for the Chief Justice as well.

Paddy Burke (Fine Gael)
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A brief supplementary question from Senator Whelan.

John Whelan (Labour)
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I thank the Minister for coming here personally to take the question so seriously. I am somewhat relieved to hear that he has not finished with the matter, that it is a work in progress and that he is continuing to address this issue. I am, however, a little disappointed to hear that his hands are tied and that there are legal constraints. What is the scope, if necessary, to change the law to address this? It is unsustainable in the current climate. I agree with the Minister that we are not just talking about bankers or singling out any one sector of society. It should apply across the board where high pensions and salaries are paid from the public purse.

Paddy Burke (Fine Gael)
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Does the Minister have anything further to say by way of response?

Michael Noonan (Limerick City, Fine Gael)
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The Senator should not discount the strength of moral pressure and the strength of what he is doing today. AIB's board took this very seriously, wrote to their retired executives who had very high pensions and asked them to make a contribution to the State. One individual has made a very big contribution and has taken a reduction in his pension. I would advocate that all others who can see the public anger, as expressed by their representatives, do likewise. Therefore, we will do that in the first instance.

The second thing I will do is to continue my conversations with IBRC to see if it will comply with the request I made, which I thought was reasonable.

Third, when I get the report into remuneration across the covered institutions, which I will have by the end of the year, I will open discussions with all parties to advance this issue. This is work in progress, however, which I cannot resolve in one fell swoop by introducing a simple piece of legislation. Nonetheless, we have already made considerable progress in reducing costs across banks and in clawing back some of the outrageous contractual arrangements which were made with these individuals by the previous Government. We will continue to do so.

Paddy Burke (Fine Gael)
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We will now move on to the second Adjournment matter.

Marie Louise O'Donnell (Independent)
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I would like to speak, if I may.

Paddy Burke (Fine Gael)
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There is no provision for a supplementary statement to be made by a seconder.

Marie Louise O'Donnell (Independent)
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Maybe the Minister would allow me to respond.

Paddy Burke (Fine Gael)
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The Minister has no say in this and there is no precedent for this in the House.

Marie Louise O'Donnell (Independent)
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May I speak?

Paddy Burke (Fine Gael)
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I am sorry, Senator, but you cannot come in. I am calling Senator Walsh on the second Adjournment matter.

Marie Louise O'Donnell (Independent)
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I want to defend against a remark made that I worked for an organisation in which-----