Friday 28 October 2016

Out-of-touch watchdog isn't defending public

Published 08/10/2016 | 02:30

Oireachtas Finance Committee chairman John McGuinness Photo: Collins Dublin, Gareth Chaney
Oireachtas Finance Committee chairman John McGuinness Photo: Collins Dublin, Gareth Chaney

A slip of the tongue or a chilling insight into the attitude of a toothless watchdog?

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Under fire over the role of the regulator in a motor insurance market where premiums continually spiral, Deputy Central Bank Governor Cyril Roux was asked at an Oireachtas committee if he was defending insurance companies or the consumer, when he blurted out: "I am not defending consumers."

Fianna Fáil TD John McGuinness, the chairman of the Oireachtas Finance Committee, summed up the views of many exasperated members of the public when he curtly replied to Mr Roux's confession: "That's for sure."

Central Bank officials say it was a slip of the tongue and, of course, the regulator is there to defend consumers.

However, Mr McGuinness also told Mr Roux that consumers don't feel protected by the Central Bank.

Moreover, the Central Bank appears out of touch with the plight of consumers, for whom it is supposed to be standing up. The regulator stands accused of acting slowly as it simply doesn't appreciate the hardship imposed by rising premiums. The failure to force insurers to shore up their reserves when problems first emerged is costing motorists.

Premiums have shot up by 70pc in the past three years, as insurance companies have been accused of under-pricing motor policies and of not putting aside sufficient reserves to meet claims. Where was the Central Bank then?

What's more, the Central Bank doesn't seem to believe that achieving a level of public confidence is a priority for the organisation. After the economic crash, the regulator's reputation was enormously damaged. Mr Roux's predecessor, Matthew Elderfield, took tough decisions on issues like Quinn Insurance, but he saw a necessity to bring the public with him. The same cannot be said now.

Pre-Budget squabbles must now be put aside

Budget 2017 ought to be something of a cakewalk given that most of it was already signed off in a deal between the Government and Fianna Fáil. But a Budget without a row would be like a cigar without smoke. No surprise then that something of a phoney war has been joined over reports about moves by the Government to delay a €5 increase in the old-age pension until the middle of 2017.

It is hard to take this showdown seriously. One can anticipate a degree of huffing and puffing and then, before any Band Aids are required, Fine Gael and the Government will retreat and the Soldiers of Destiny will be able to claim that they are not there to be trifled with, before emerging as the champions and protectors of the elderly, and thus the true heirs to the grey vote.

In any event, there is something absurd about putting back the increases until July of next year. The Budget is, after all, supposed to set out the spending limits for the year as a whole and not just a portion of it.

If the Government really was looking to pick a row, it is unlikely it would be so foolish as to pick one with pensioners, who have proven in the past that they are not to be taken as a pushover. Pitching in for Fianna Fáil, Dara Calleary said: "Some in Fine Gael have had a Damascus-like conversion to caring and public service in recent weeks."

He may be right, but much of the hardship visited upon the elderly - and the country - was because of irresponsible governance by his own party. The fact that Fianna Fáil agreed to back the Government and avoid a re-run of the election showed a mark of maturity and responsibility that squabbling over the Budget simply undermines.

Irish Independent

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