Olwyn Enright (Laois-Offaly, Fine Gael)

There is no doubt this is the biggest gamble ever taken by an Irish Government and I have been struck in recent weeks by the Fianna Fáil grassroots line, echoed by the Tánaiste in reply to Deputy Kenny, to the effect that something has to be done. Something must be done but the right thing needs to be done. The right thing is not that which sees taxpayers foot the Bill for the greed and folly of a small number of people. The right thing is what sees taxpayers protected in so far as possible, although I understand this cannot be 100%, and those responsible for this situation take the greatest proportion of the burden. Having read the comments of the Taoiseach last week, there might be an inability to see what is best for the country and best for the citizens of the country. They ranked only second and third to the Taoiseach. Judging by the silence of the parliamentary party on this issue, we can assume the same principles apply to it. The Irish public cannot be blamed for being sceptical about what, rightly or wrongly, they feel is a bailout for bankers and developers when they realise that loyalty to Fianna Fáil is the guiding light of our Taoiseach and his Government.

Deputy Michael Ahern seems to know the party affiliations of all senior bankers, including CEOs. Is this because he asked to see their card on the way into the Galway tent? Obviously he is very close to them if he knows their party affiliations. It is important to dispel the myth the Minister for Finance tried to create last week in suggesting Fine Gael did not engage with the NAMA issue over the summer or by saying that Fine Gael did not take up the Government's invitation to discussions behind closed doors. I can understand the temptation to discuss this issue behind closed doors. One of the biggest concerns the public has with this legislation is the fact that it appears shrouded in secrecy.

Fine Gael engaged with the Government during the summer and set out its detailed concerns in writing to the Minister for Finance about NAMA as well as the Fine Gael alternative. We also suggested through our party leader and our spokesperson on finance that the Oireachtas Joint Committee on Finance and the Public Service should hear testimony from international and domestic experts on the positives and negatives of NAMA and the alternative viewpoints put forward by parties and other experts. We set out nine specific issues on which we wanted further detail from the Minister.

Deputy Bruton outlined clearly that our concerns arose from the potentially colossal cost of NAMA promising uncertain benefits and from the evident unfairness of asking taxpayers to take responsibility for the reckless behaviour of developers and banks. We remain concerned about the clear possibility of overpayment by Irish taxpayers to bank shareholders and bondholders for toxic bank assets with a highly uncertain value. The valuations provided by the Minister last week are short on specifics and short on certainty as to just how the figures were produced. Effectively, the Minister has made a series of assumptions on the value of property today and the potential value of property in the future. He has also made assumptions on how much property prices have fallen on the projects that are to be supported. Adding all these up he arrives at the figure of €54 billion, which is still highly questionable. Mr. Richard Curran undertook an interesting analysis of this at the weekend. Other property price reviews have shown different figures, some of which were mentioned by Deputy Noonan, and mostly larger figures for falling property prices. Indeed, many companies and brokers have written down the value of assets by significantly more than the figure the Minister is using in the supporting documentation supplied to us last week.

The Minister's assumption that NAMA would break even if property prices recover by only 1% per year is seriously questionable and is dependent on him being correct in his figures that property prices have fallen by 47% on projects. The Minister has little or nothing to back this up, except an 11 page report, the totality of which we are not allowed to see. We would need a far more startling recovery for NAMA to break even at any time in the next decade, possibly up to 50%, thus leaving the taxpayer dangerously exposed. The notion that there will be a 10% uplift in prices in a decade providing a break even position is nonsense. Fine Gael is also concerned and questions the impact NAMA will have on the current lack of bank credit for businesses and households. There is no doubt that this is one of the over-riding concerns of the public at this point in time.

In our day-to-day constituency work, particularly over the past few months, we have been struck by the massively growing number of people in dire financial straits. Every single clinic I have held across Laois and Offaly has had people come in who simply cannot afford to keep up repayments on their home. Many of these have applied for and have been refused help from the State to assist them.

The Government is able to refuse mortgage interest supplement to families on the verge of having their homes repossessed on the basis of the fact that they believe the person could never afford the mortgage in the first place or should not have taken the mortgage out in the first place. How does the Government set that beside what it is proposing to do here? How does the Government propose to explain to mothers and fathers facing home repossessions that the financial institutions cannot possibly be allowed to fail yet we are quite happy to let the financial institutions repossess homes and, no, the Government will not give any support to try to assist in paying the mortgage and staying in one's home?

I am currently compiling a report for the Joint Committee on Social and Family Affairs, with Deputy Thomas Byrne, on the high levels of indebtedness in Irish society. We have held hearings with many experts in the area. Mortgage borrowing in this country doubled since October 2004, with annual rates of increase of nearly 30%. Despite low interest rates, the High Court has seen a 100% increase in the seeking of repossession orders last year and is expecting an avalanche in the months to come, in the words of the master of the court. Luckily, according to Central Bank statistics, approximately 80% of our mortgage borrowing in Ireland is benefiting from the European Central Bank reduction in interest rates. The real concern this is masking is what will happen if the ECB rates start to increase or if, as the EBS warned last week, financial institutions start to increase their interest rates as a result of the cost of being involved in NAMA. We will then have an even greater number of people seeking relief, an even greater number being refused and an even greater number questioning why we are saving those who gave out these loans yet we are making no attempt to salvage the situation for individual home owners.

I welcome the one ray of hope that the code of conduct for mortgage arrears represents. Unfortunately, the Government omitted sub-prime lenders. This code has not addressed reckless lending by financial institutions. It is exactly this reckless lending that has led us to where we are with this legislation. It is ironic that we are going to support the financial institutions and the developers engaged in this level of reckless lending when the Government has no clear plan, if any plan at all, to support people who were offered loans on family homes that have proven unaffordable. They are just told that it is tough and that they should not have taken it out in the first place. We are not even resourcing organisations like MABS or the Legal Aid Board to ensure that people are able to get expert financial advice when they find themselves in this situation. MABS is doing good work but is neither staffed with enough people nor with people with the necessary expertise in this area to go up against the might of those in financial institutions whose job is to try to get as much money in as they possibly can from the small man. According to the Free Legal Aid Centres, the Legal Aid Board only took on four debt cases last year yet 276 people were jailed under the heading of offences relating to debt in the same period.

Unlike the Government, which is obsessed with the propaganda that there is only one solution, Fine Gael is not obsessed by this dogma. Fine Gael is guided by a set of core principles that this legislation does not address. We want to see legislation that protects the taxpayers from massive and unmanageable risks, that minimises and ensures a much fairer distribution of the losses associated with reckless lending by banks and reckless investments by developers, and with improving the financial stability and credit availability for businesses and families who are struggling at the moment.

I spoke to a businessman last week who runs a tight business that employs a small number of people and works extremely hard. His account was overdrawn by €56 recently and he was told by the bank that it was going to bounce his cheques. This is part of the reason we are seeing so many small businesses fold in the current climate. I know of other instances where banks have approached small businesses and have asked spouses to assign the family home in order to guarantee the loans the business had taken out. Surely this is a direct contradiction of what was achieved with the introduction of the Family Home Protection Act after the Bank of Ireland v. Smyth case in the 1990s, when the family home was finally secured. Obviously the banks will tell us that they will tell people to get legal advice but getting legal advice does not alleviate the emotional pressure on those running a family business if a spouse is asked to assign the home to try to help the business to survive. These are bullying tactics being adopted by institutions that we are now guaranteeing to support for generations to come.

The real concern I have about NAMA is the overexposure of the taxpayer to the risk. Everyone has a certain sympathy for shareholders, many of whom themselves were misled by the bankers. However, this does not change the fact that by its very nature investing in shares is a risk. The solution is not to transfer all of this risk to the taxpayers, the majority of whom did not invest in these institutions. We must adopt a model to see greater risk being retained by the bank and its investors.

An interesting aspect of NAMA is that it remains secretive even though it is funded by the taxpayer. As drafted, it will remain that way and the names of between 1,500 and 2,000 of the most powerful business people in this country will remain secret. The real difficulty with this is that we will not be told who they are or what sums relate to them and people are angry about this point. Virtually every sector that receives funding from the State, be it ourselves, doctors, pharmacists, solicitors or farmers through REPS and single farm payments have this information published and available. However, this will not happen in NAMA, which is unfair and a mistake.

The Government has made much of the fact that our economy cannot recover without a functioning banking system but it does not seem to place the same emphasis on how businesses and householders will have access to credit. In the Minister's speech last week, he stated that specific credit supply measures were incorporated into the Government's recapitalisation packages for AIB and Bank of Ireland. The Tánaiste could not answer questions on this today. However, 40% of the €54 billion to be spent on this will go into Anglo Irish Bank and Irish Nationwide and I do not believe there is any chance that either of these institutions will kick-start lending in the economy. Having listened to the Tánaiste today, I do not believe that people on the other side of the House believe that those two institutions will do so either.

I was struck by the fact that the Minister quoted President Obama on several occasions last week. Deputy Noonan was correct when he spoke about the tardiness of the Government on this matter. It makes the Minister's last quote from President Obama particularly interesting. This was on the need for nations to take early and aggressive action to get credit flowing again. This shows the Minister's thinking on this issue because there is nothing early about his action and while it may appear aggressive it will not achieve what he wants it to.

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