Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)

This has been described as a technical Bill. In one sense it is but it also provides for what is potentially one of the most momentous decisions that will ever be taken by the Oireachtas in our time. The Government is to commit the people's money, in the form of the National Pensions Reserve Fund, to recapitalise AIB and Bank of Ireland. Sinn Féin has argued repeatedly for productive investment of the National Pensions Reserve Fund in projects that will develop infrastructure and sustain employment in our country. We argued against the gambling of the fund on the international stock markets. In the boom times we argued for sound investment in sustainable development. We were not alone in that argument but it was ignored by a succession of Ministers for Finance.

What have we now? The greed of the banks and their wealthiest clients, their indulgence by successive Fianna Fáil-led Governments and the neglect of the so-called regulators have brought the financial sector in this State to its knees with appalling consequences for the wider economy and society. To prop up the two main banks, the Government is raiding the National Pensions Reserve Fund. It is like a family having to hand over its savings to pay off the gambling debts of the landlord.

It is important to recall that in 2004 there was a series of scandals involving AIB. It is easy to forget in the current circumstances but it is instructive to recall some of them. The revelations at that time came not as a result of investigations by the Central Bank or by the Irish Financial Services Regulatory Authority but from whistle-blowing within AIB itself. Foreign exchange customers were overcharged from 1994 and it was shown that this was known at the highest level in the bank from 2002. From 2000, between 500 and 600 mortgage holders paid up to €50 extra per month for mortgage insurance without their approval in a rip-off of customers by AIB. To top it all we had the admission that senior AIB executives were evading tax through special offshore accounts, including Faldor registered in the British Virgin Islands.

No one was surprised at any of this because scandal and AIB had become synonymous for years. Let us not forget the backdrop to all this. One scandal in particular should have been a warning then and should be a warning now. Who now remembers how AIB was bailed out by the Fine Gael and Labour Government in 1984 after the collapse of the privatised Insurance Corporation of Ireland which AIB had bought and which failed on the international market? The State bailed out AIB to the tune of many millions and got absolutely nothing in return. From 1986 AIB was centrally involved in the DIRT scandal which deprived the public purse of significant amounts of revenue at a time when health and education cuts were being imposed on our people. The Committee of Public Accounts found most of the senior management team in AIB were well aware of the existence of bogus non-resident accounts.

I stated in this House in 2004 that we must avoid a situation where only the financial institution was held responsible, with fines and penalties inevitably being passed on to customers. I said the individuals concerned in AIB were some of the most highly paid individuals in the economy and worked for a company which had made record profits. I said they must be held accountable but they were not and now we see the results.

AIB made a profit of €1.375 billion in 2002, which was the highest ever recorded profit for an Irish company up to that time. Under the policy of Fianna Fáil, AIB, Bank of Ireland and other financial institutions benefited significantly from the Government's cut in corporation tax from 16% to 12.5%. The drug of escalating profits for shareholders and escalating pay for executives fuelled the reckless lending, which in turn inflated the property bubble.

All of this was based on irresponsible borrowing by the banks and locked the Irish financial system into a cycle which could only, as we have previously highlighted in this Chamber, end in disaster. It was not the case that no one shouted "Stop". Sinn Féin shouted "Stop" but the problem was the Government refused to listen. The people are now paying the price for rampant greed and irresponsibility. They are paying it in public service cutbacks, new levies and taxes on the low paid and growing mass unemployment, and there is more to come as the Government well knows.

There are two figures which sum it all up. AIB and Bank of Ireland were bailed out to the tune of €7 billion. There were €7 million in so-called savings achieved by abolishing classes for children with special needs. The contrast is stark and tells its own story. There can only be shame on this Government in its approach to dealing with this crisis. I reject this Bill for the very sound reasons I have already explained.

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