A Cheann Comhairle,
(1) That, having regard to section 12 of the Houses of the Oireachtas (Inquiries, Privileges and Procedures) Act 2013 and Standing Order 107C, a Select Committee be appointed, to be joined with a similar Select Committee of Seanad Éireann to form the Joint Committee of Inquiry into the Banking Crisis, to develop a relevant proposal for conducting a “Part 2 Inquiry” into certain aspects of the banking crisis for submission to, and evaluation by, the Committee on Procedure and Privileges under Standing Orders 107B and 107D.
(2) In developing the relevant proposal, the Joint Committee shall consider—
(a) the appropriate scope and terms of reference for any such Inquiry to be conducted, including the method by which the initial investigation into the matter the subject of the Inquiry should be made,
(b) the functions and powers required to be delegated to the Joint Committee to allow it to conduct such an Inquiry, and
(c) such other related matters as the Joint Committee considers necessary.
(3) (a) The Select Committee shall consist of seven (7) members, of whom—
(i) notwithstanding Standing Order 90, the Chairman of the Select Committee shall be Ciaran Lynch T.D., and
(ii) the other members of the Select Committee shall be Deputies Pearse Doherty, Stephen S. Donnelly, Michael McGrath, Eoghan Murphy, Kieran O’Donnell and John Paul Phelan,
and the provisions of Standing Order 92(2) and (3) shall not apply.
(b) The Chairman of the Select Committee shall be the Chairman of the Joint Committee.
(4) The quorum of the Joint Committee shall be five (5), of whom at least one shall be a member of Seanad Éireann, and that quorum shall be present for the duration of all meetings of the Committee.
(5) The Joint Committee shall have the following powers:
(a) the powers defined in Standing Order 83(1), (2), (2A), (4), (5), (7), (8) and (9); and
(b) the power to nominate persons to assist it in its deliberations; and such persons shall attend such meetings as the Joint Committee may determine.
Why we need a Banking Inquiry
A Cheann Comhairle,
The Irish people have suffered great hardship due to the banking crisis.
Hundreds of thousands of people lost their jobs. Many more have suffered pay cuts, while more again have been forced to emigrate.
A generation of people have suffered the consequences of negative equity and the following collapse of the construction industry.
Ireland lost its economic sovereignty and had to be bailed out. The country was placed under the supervision of the Troika while difficult decisions were taken to return the public finances to order.
In these circumstances, the Government believes that the Irish people are entitled to a full account of the banking crisis.
While there have been a number of useful public reports, and much public commentary, we believe that an investigation through an Oireachtas Committee is the most appropriate way to establish the full truth about the collapse of the Irish banking system.
It is important that people know the facts. It is for the Oireachtas to establish the facts behind the policy and administrative failures that led the banking system to the edge of collapse.
The matters the Committee will be investigating are important and serious. As members of the Oireachtas, elected by the people, we have a duty to ensure that the origins of the crisis are thoroughly investigated and understood.
It is clear that there was a breakdown in corporate governance and risk management in the financial sector. It is also clear that there were failures of public policy and regulation by the Government and public service.
We need to learn the lessons to ensure that a crisis of this nature can never happen again.
Process of Establishing an Inquiry
Since coming into office in March 2011, the Government has been working to facilitate an effective Banking Inquiry.
Deputies will be aware that a Bill to amend the Constitution to establish an Oireachtas Inquiry system was published in the summer of 2011 but the referendum held in October that year was defeated.
As a result, new legislation was required and the Houses of the Oireachtas (Inquiries, Privileges and Procedures) Bill was passed in July 2013.
In September 2013, I announced in the Dáil that a Banking Inquiry under the Act was the Government’s preferred option. New Standing Orders required under the Act were approved by the Dáil and Seanad in January and February 2014.
These Standing Orders create the Parliamentary framework for establishing an Inquiry. The Committee of Procedures and Privileges will have the power to:
– receive submissions from Committees,
– provide guidelines on how to conduct Inquiries,
– give compellability consent,
– have oversight powers over the Inquiry, and
– report to the Dáil before it votes on any terms of Reference for an Inquiry.
They also set out a mechanism for dealing with a perception of bias on the part of a Member of an Inquiry Committee. This provides for the Committee of Procedures and Privileges to consider any allegation of bias and having taken appropriate evidence on the matter to make recommendations to the Dáil.
In February 2014, all political parties and the Technical Group were offered a briefing by Oireachtas officials on the new Standing Orders.
On 30th April the Tánaiste and I announced our intention that an Oireachtas Inquiry be established under Act. As set out in the motion, the Inquiry will be undertaken by a dedicated Joint Oireachtas Committee chaired by the Chairman of the Oireachtas Finance Committee, Deputy Ciaran Lynch.
The Government Chief Whip recently consulted with the other political parties and the Technical Group about this proposal and signalled his intention to bring this motion to establish such a Committee before the Dáil.
It is intended that the Joint Committee will have seven Members – seven from the Dáil and two from the Seanad.
It is now for the new Oireachtas Committee, once established, to submit proposals to hold an inquiry including draft terms of reference for the Committee on Procedures and Privileges to consider and recommend for approval by the Houses of the Oireachtas.
To be effective, the Inquiry should have very clear Terms of Reference.
It will be necessary to put the necessary administrative and procedural supports in place for the Inquiry Committee.
The next phase will involve gathering of relevant information, after which the Committee will need to analyse the evidence and conduct oral hearings. The final phase involves the preparation and submission of a draft report to both Houses.
While considerable amount of work has already been completed at official level, a lot more detailed work will now have to be undertaken by the Inquiry Committee before public hearings commence.
Estimates of the cost will also need to be prepared by the Committee for the Houses of the Oireachtas Commission to agree with the Department of Public Expenditure and Reform.
Matters to be Investigated
While the terms of reference of the Inquiry is a matter for the members of the Oireachtas Committee to consider and for the Oireachtas to approve, I believe that the Inquiry should focus on issues surrounding the banking collapse that have never been fully explored and establish the facts.
The Inquiry provides an opportunity to consider the public policies and regulatory decisions which allowed the crisis to emerge, the actions of banks, auditors and other parties which led the banking system to the verge of collapse, and how the crisis situation was managed when it happened.
The people who made the policy decisions and those responsible for the implementation of those policies should come before the Committee and explain their role. Likewise, those in positions of responsibility in the banking and financial sector should explain their actions. Compellability powers are available to Committees under the Act.
I believe that this is an appropriate role for the Oireachtas as the elected representatives of the people.
This will be an all party Oireachtas Committee. The Oireachtas Committee system has been reformed in recent years and the Committees have a proven track record of working on a cross party basis, including investigations and the new pre-legislative scrutiny arrangements.
Restoring the Economy
A Cheann Comhairle,
As we are about to embark on this Inquiry it is timely to reflect briefly on the progress this Government has made in restoring the country’s economic stability:
· after three years of sacrifice, hard work, and rebuilding, Ireland successfully exited the EU/IMF Funding Programme last December
· we were the first country inside the euro area to successfully emerge from an EU/IMF bailout – a significant vote of international confidence and an important milestone
· we have completed our phased return to the international bond markets at historically low interest rates
· we have regained lost competitiveness and have rebuilt our international reputation as a fantastic location for investment and jobs
· the economy is growing, and unemployment has declined from a high of over 15% to 11.7% at the end of April, the lowest level for five years. While still unacceptably high, it is moving in the right direction with the private sector creating over 1,000 new jobs a week.
· the Exchequer returns for end-April show that we are ahead of our fiscal targets for 2014 and on track to reduce the deficit below 3% in 2015.
While we have no intention of taking our foot off the pedal, it is gratifying to see that the efforts and sacrifices of the Irish people are paying results.
Confidence in the Irish banks is returning and has helped reduce reliance on eurosystem funding and bring an end to the Bank Guarantee in 2013.
Much remains to be done in areas like mortgage arrears and credit for SMEs, but we are well down the path to a normalised banking system.
In addition to the significant overhaul of bank boards since the crisis, a new fitness and probity regime has been put in place for all regulated financial providers requiring prior approval by the Central Bank of key posts.
The Central Bank and Financial Regulator has been comprehensively overhauled and its powers and resources significantly increased. In addition, major changes to financial regulation are taking place at EU and eurzone levels.
In parallel with our response to the economic crisis, the Government is implementing an ambitious programme to reform the way politics and Government works in this country, including:
· comprehensive legislation to protect whistleblowers is currently making its way through the Oireachtas;
· reform of Ireland’s Freedom of Information regime to remove the substantive restrictions introduced in 2003 and to extend FOI to all public bodies;
· development of legislative proposals to regulate lobbying;
· work to overhaul the legislative framework in Ireland for ensuring ethical conduct by public officials;
· significant extension in the remit of the Ombudsman;
· two phases of Dáil reforms, including an enhanced role for Oireachtas Committees
· legislation for the establishment of a register of corporate donors, public disclosure of political donations and an obligation on political parties to publish accounts.
The Government also recently published a draft National Risk Assessment for consultation. This aims to help avoid mistakes of the past by encouraging open debate on the risks which Ireland faces and how these can be mitigated.
I hope that the work of this Inquiry will identify if there are any other reforms required to our financial, political and public service systems to ensure that the Irish people are never again failed so badly by the institutions of the country.
As I was preparing this statement I recalled the words of Albert Einstein which are quoted in the Programme for Government in the context of the Government’s commitment to honour the trust vested in it by the people:
“Learn from yesterday, live for today, hope for tomorrow.”
I believe these words are apt as we begin the process of establishing all the facts in relation to the banking crisis so that the mistakes of the past are not repeated.
I am confident that the all party Oireachtas Committee proposed, chaired by Deputy Ciaran Lynch, will prove an appropriate and effective means of achieving this objective.
I commend the motion to the House.