Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I understand that completely, but this Parliament approved the provision that AIB and Bank of Ireland would be restricted in offsetting historic losses against the tax they owe the Irish people when they return to profitability.

I do not want to get into a debate about the banks that the Irish people, for the right or wrong reasons, whether they wanted to or not, saved. It was decided in the legislation that when the banks started to make huge profit again the losses incurred when the Irish people saved them could not be written off against the profit so that they just soak up the profits. AIB is a unique case because we own almost 100% of it. Bank of Ireland is a different case. We own 15% of it, which may decrease as it issues new equity shares on the market in the coming days. We do not get all the profit from this measure for the Bank of Ireland. Its shares may increase from the 15% that we own but others such as Wilbur Ross will benefit significantly from this. If we are doing this for the sake of the core tier 1 capital ratio, so be it. I have no problem in treating AIB and Bank of Ireland in the same way if it is to help the definition of capital adequacy ratios since this measure was brought in.

I had tabled a later amendment that has been ruled out of order. It proposed that the levy on any financial institution benefiting from section 33, AIB and Bank of Ireland, which allowed them to benefit from carrying 100% of their losses forward, should be adjusted in accordance with the estimated revenue lost to the State in each relevant year, resulting from lifting of the restrictions of the carry-forward. That deals with their capital adequacy ratio because they can carry forward the 100% losses and write them off against their tax liability to the State. We citizens are at a disadvantage when these institutions return to profitability in respect of the tax that they would pay to the State on their income. Through the back door we have under this Finance Bill adjusted their levy to reflect how they had benefited from the 100% of the forward losses.

The Irish people demand no less than that Bank of Ireland, which is predominantly in the private sector, make a return to the Irish State above and beyond the capital that we injected. This is not simply a question of arithmetic about how much we put in and how much we want back. That is not acceptable. The State paid €4 billion to Bank of Ireland but ordinary citizens went through pain and suffering and hardship as a result. This was not €4 billion that was stuffed under the mattress or waiting for a rainy day. It was €4 billion taken off citizens in the ways we have discussed, through sons and daughters who have emigrated, people who have been unemployed for long periods of time, benefits cut and entitlements slashed. The people therefore have a justifiable demand that banks will not be facilitated at a time of huge profitability by carrying forward the losses that they incurred in the past so that they write-down their income to the State.

The banks incurred the losses at an exceptional time. We are not treating them as ordinary banks. The Minister says that we should treat them as ordinary financial institutions like those in every other country in Europe. They are not ordinary financial institutions like those in any country in Europe. They are unique. They were bust. They were completely defunct. They are being investigated. They would not exist today were it not for the Irish taxpayer. We should not treat them one way when they are bust and when they are profitable say that this is what happens with profitable banks so let them write their losses 100% against-----