Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

The Minister's argument is that if we do not tax the banks, there might be a cheaper interest rate on mortgages, even though it is the highest in Europe, or the banks might lend into the economy. It does not make sense. He stated we treat them the same as any other bank but we do not. In regard to AIB, Bank of Ireland and Permanent TSB, there is a relationship framework with the Minister and there are restrictions on what they can do in making certain types of investment or disposing of assets. There are restrictions on the CEO remuneration and bonuses they can pay.

Those restrictions are all there for a reason. The then Minister, Brian Lenihan, brought forward another restriction, namely, that they could carry forward only 50% of losses, and that was there for a reason as well. While the then Government pumped tens of billions of euro into those banks, there was a recognition those losses would mean that when the banks were profitable, they would not pay taxes for decades, and that should be avoided.

That is what is at the heart of this. Anybody could argue the banks should be let go tax free and they might reduce interest rates or whatever. That is not a solid argument, particularly in the case of Bank of Ireland. The Government is disposing of the State's interest in that bank ,although I do not think it is the appropriate time, given the share price. The paper the Minister referred to discussed dividends back to the State but with Bank of Ireland that is not applicable in any meaningful way any more, yet that bank will continue to be able not to pay tax on its Irish profits, whereas it will pay tax on its profits recorded in Britain.