Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I want to get into the detail of this legislation because we do not have much time. The Minister addressed this to another Deputy, however. People are shocked that the Minister's parting gift as he leaves the office of Minister for Finance is a bonus for bankers and unlimited pay for senior executives in Bank of Ireland with an indication that the same will apply to AIB and Permanent TSB in the future. These are two banks that were levied the largest fine ever in the history of the State.

Where the Minister is sitting now, this committee had to bring in victims of the tracker mortgage scandal in order that this issue was dealt with seriously by the Central Bank of Ireland. These banks fought those victims tooth and nail for years. They reduced them to tears and stole their family homes from them. As I said, it was the greatest robbery in the history of the State and it was done by the banks. More than half a billion euro was taken from 40,000 accounts and 98 houses were lost. That is not something from history.

The Central Bank of Ireland found that when AIB was levied with the highest fine in the history of the State after having breached 96 regulations, with the 12,000 customers it and EBS affected, it continued to impact on its customers right up until March of this year. It was the same in other banks. Houses were repossessed, even during the inquiry period of the Central Bank of Ireland that went on for nearly five years. That is the culture we have. It is not something historic or something that happened during the banking crash. That is the culture we have today.

I agreed with the Minister when he said remuneration had to be linked to culture. The culture has not changed, but the Minister has given an early Christmas present to senior bankers. there is no appetite for senior executives in banks that were bailed out by the State to have a pay cap of €500,000 lifted. The Financial Services Union suggested that retention or the churn in banks at senior level is similar to that in banks that do not have pay caps in place. Mr. Philip Lane wrote to the Minister and said that the pay caps should not be introduced. People are motivated for different reasons.

There are serious problems the Minister should address. The housing crisis is one. The cost of rents is another. We have retention and recruitment problems now in education, health and other areas. However, the Minister decided yesterday to prioritise the issue of bankers' pay. It is completely tone deaf to where people are at and all the rest of it.

Deputy Barry is 100% right but the Minister took him to task. Therefore, he might answer this question. Did the Minister approve - and I support this - the three retail banks paying a €1,000 cost-of-living payment to their employees earlier this year? My understanding is that he did. Therefore, he does have a role with regard to the pay and in respect of workers. Deputy Barry is right in that regard.

The second issue is that tomorrow, the Minister could approve another €1,000 to low-paid staff if he wanted to. He said he has no control over who these bonus go to. That is because he decided yesterday to hand it away. Variable pay in the context of the €1,000 was already gifted to these staff just a couple of weeks ago. It could have gone up to €5,000 for low-paid individuals in the banks if the Minister wanted to. The difference is that he would have to sign off on it. What has happened now is that €20,000 bankers’ bonuses can be paid and who determines this? It will be the CEO, who can be paid an unlimited amount of money because of the Minister’s decision yesterday. That is the reality. Let us call a spade a spade.

The Financial Services Union will argue it and good luck to it. Fair play to it in achieving the 7.5% increase it got for its employees. It will try to make sure that ordinary workers benefit from this. We were lobbied on this, however. I do not know how many people in this committee were lobbied. I was lobbied by the CEOs of banks and by the banking spokesperson, the Minister’s former colleague and former junior Minister with responsibility for Finance. It is senior and mid-management levels they are talking about in terms of the bonuses. Not one of them talked to me about the person who needed a bonus who works in the bank in Falcarragh or on O’Connell Street or anywhere else. They are talking about high levels.

What the Minister did yesterday is completely out of touch with the culture. He said repeatedly in this Dáil that remuneration had to be linked with culture. One does not reward bad behaviour. What these banks did was unforgivable. This is not going back ten years. This is happening right now. I have sat in too many kitchens and watched too many women fall apart in tears over what the banks did during the tracker mortgage scandal. The banks were told over and over again to stop it. The Central Bank of Ireland told them to do no harm. Does the Minister know what they did? They continued with the harm principle. Those are not my words but those of the Governor of the Central Bank of Ireland in the findings. What the Minister has done is reward them. That is it. He can dress it up whatever way he wants. He had the power to control bonuses for low-paid workers in our banks if he so wished. He could have provided for that. He could have allowed banks to pay for childcare costs if he so wished, but he did not. He has now handed that over to the CEOs of the banks. He does not even know what way the bonuses will be applied in the future. There is a real issue in terms of the type of bonus culture we had in this State in the past that rewarded risk. The best way of increasing pay for low-paid workers is through their basic pay. These banks are profitable.

Therefore, I will make it clear to the Minister and again, Deputy Barry is completely right in this. There is a trajectory in the Government. I put it to the Minister, although he will not be here long enough to see this out, that this is and always was the plan. That is the reality. The reality is that the shareholding of AIB will be sold down as quickly as the Government can do so to get into a minority share hold. The report that suggested the Government allow unbridled pay at senor level will then take effect. The same will happen in Permanent TSB.

The Minister argued that the banks need to go back to normal. In the so-called normal phase, bankers in this country were being paid €3 million. They wrecked the country. They put the interests of themselves and their shareholders first. That is the culture that has not changed today. Every survey that is done, whether it is by the Irish Banking Culture Board or the Minister’s own retail review of banking, tells us that the culture has not changed. We do not even have to look at whether the culture has changed. We can see the proof of what senior bankers have done in this country. People who sit on boards today were breaching regulations and continuing to harm individuals right up until six months ago in terms of the tracker mortgage scandal. It is absolutely disgusting in my view that the Minister has given them this gift. The Minister can dress it up whatever way he wants with whatever focus group analysis he has got in terms of how he will try to spin it, but this is very clearly a gift to senior bankers and those on the highest pay. We have not had a situation where we could not fill the vacancy of the senior positions in any of those banks so far. None of them are vacant. Yet, the Minister said that in Bank of Ireland, €900,000 is not enough and in the future in AIB and Permanent TSB, €500,000 will not be enough. The public has a very different view.

The Minister will make the point about competitors and all the rest in what is happening. I have heard him make this argument that 40% to 45% of people who are leaving our banks are going to banks that pay variable pay. That means the majority of people who are leaving our banks are going to banks that do not pay bonuses or they are going to other institutions where they do not get bonuses. More than just money is motivating people in terms of leaving the banks. However, the difference in terms of other institutions that do not have those restrictions is that we did not have to bail them out. Collectively, according to the Comptroller and Auditor General, the net cost to be received back from the banks so that the State investment would be repaid is €45.7 billion.

That is just on the balance sheet end. However, the Government will never repay the suffering the Irish people had to go through because of all the other issues that led to emigration, poverty and people at risk. That is the difference. That is why, when these banks were rescued and were told they would not exist in the morning had it not been for taxpayers bailing them out at that time, there was an understanding there would be no more bonuses, that bankers' pay had to be capped and that the culture had to change. The culture has not changed. I will leave it at that but I think it is ridiculous.