Joan Burton (Dublin West, Labour)

This Bill must be judged as part of an overall banking package which the Minister has proposed on several occasions to introduce. It seems he has now decided, perhaps for tactical and strategic reasons, to split the package into several separate legislative proposals.

The Bill before us was published at the end of May. Last Friday the Financial Measures (Miscellaneous Provisions) Bill 2009 was published. I understand it will be taken in the House next week. The latter will afford the Minister for Finance the right, by ministerial order, to extend indefinitely the infamous bank guarantee of 30 September 2008. There is broad agreement in the House on the provisions in the Bill before us today to guarantee the deposits of ordinary depositors. However, under the scheme introduced in September, the Government undertook to guarantee bondholders and various classes of bond debt in a way which the Labour Party pointed out at the time was deeply reckless and unfair to ordinary taxpayers, yet the Minister will propose next week, in parallel with this Bill, to have a ministerial order power conferred on him and his successor in order to facilitate the extension of the guarantee to bondholders.

Another of the Minister's promises, apparently taken from a proposal made by my party some months ago, was to establish an expert banking commission to reform the Irish banking and central regulatory systems so as to regain the international esteem in which Ireland was once held in financial matters. This esteem was lost during the tenure of the Taoiseach at the Department of Finance and, most especially, during that of Mr. Charlie McCreevy. They acted recklessly in stoking the property market, leading to the current collapse which is causing great suffering for individuals and businesses throughout the State.

Why is the Minister, Deputy Brian Lenihan, bringing forward legislative proposals in a piecemeal fashion when what is required is an overreaching and thorough discussion of the implications of the policy the Government is pursuing to address the problems in the banking system? We were told last week by the chairman of Anglo Irish Bank and the two public interest directors, as well as by the Minister and officials from the National Treasury Management Agency and the shadow NAMA body, that up to €4 billion of taxpayers' money would be required by the bank. The delegates who appeared before the Joint Committee on Finance and the Public Service last week did not deny this. Nor did they deny that the €4 billion would effectively go down the tubes because it was more than likely, given the losses to which the chairman, Mr. Donal O'Connor, confessed at the meeting of the committee, that we were looking at a distressed loan book of almost €29 billion, comprising various loans in difficulty, deterioration and various stages of distress. A recent paper by Professor Patrick Honohan, the foremost authority on this subject, and an article by Cliff Taylor in the Sunday Business Post both predicted that the €4 billion being invested in Anglo Irish Bank would almost inevitably be lost.

The willingness to sink money into a bottomless hole at Anglo Irish Bank must be set against the failure to prevent the loss of 1,200 jobs at SR Technics in my constituency which is also the constituency of the Minister for Finance. Every Deputy in the House can point to large-scale job losses in their areas. It is incredible that the Minister and the Taoiseach have brought us to this pass. They came into the House at the end of September to announce that their bank guarantee scheme was the cleverest thing in the western world and would safeguard the fundamentals of the banking system. We have been living with the consequences of that decision ever since. Our children and grandchildren will have to live with the debt accruing to the State as a consequence. It was clear from the expert testimony given to the Joint Committee on Finance and the Public Service that the NAMA situation is unlikely to work itself out for between ten and 15 years. This and the next generation of taxpayers will pay for the errors made.

From the beginning of 2008 I tabled a series of questions to the Taoiseach, then Minister for Finance, asking the reason the existing bank guarantee scheme was not being revised, updated, enlarged and renewed. On 16 September 2008 I called for the limit applicable under the bank and credit union depositors scheme to be increased to €75,000. The Minister for Finance, Deputy Brian Lenihan, dismissed the idea, even though people were continuously calling radio programmes such as "Liveline" to ask whether their money was safe. This was in the wake of the queues outside branches of Northern Rock. Earlier in the year I asked the Minister's predecessor about reviewing the deposit guarantee scheme.

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