Pat Breen (Clare, Fine Gael)

He should note The Irish Times and the other broadsheets are widely read in County Clare and the people there are well aware of what is happening. I listened to Deputy Kennedy's speech over the past 20 minutes and international factors are not the sole reason for the difficulties in which we find ourselves. Policy failures by the Government involving reckless spending contributed much to the entire banking crisis. The collapse of Lehman Brothers brought a crisis of tsunami-like proportions to every country. I read recently that there have been 124 systemic banking crises since the 1970s but the latest occurrence is one of the most severe that Members have witnessed. A recent analysis of the American banking crisis in The Economist points out the vital importance played by policy in determining the pace of recovery. This is the reason it is so important to pursue the right policies as otherwise, future generations of Irish people will be obliged to bear a heavy financial burden.

As other speakers noted, the majority of people in Ireland are not in favour of NAMA. A recent MRBI poll published in that famous newspaper, The Irish Times, pointed out that only 26% of people support the NAMA proposal. The majority of Irish people believe it constitutes a recipe for disaster. No matter how one tries to dress it up, people are saying it is a bailout for banks and developers. How can taxpayers have faith that NAMA will work when the administration of the scheme will be conducted by the very people who got us into this mess? The IMF already has observed that Ireland will pay the highest price of any country to bail out its banks. The IMF also has stated that although Ireland's financial stabilisation costs will account for 13.9% of its estimated €171 billion in annual gross domestic product, the cost of bailing out banks in the United Kingdom and the United States will be slightly lower at 13.4% and 12.1%, respectively.

While this debate has raged on in recent months, unfortunately the recession in Ireland has deepened. The latest ESRI quarterly bulletin predicts the economy will continue to contract well into next year and that a modest rate of growth is only expected to emerge in mid-2010. Moreover, by the end of 2010, gross national product, GNP, per head is expected to be lower than was the case in 2002. The recession has taken an enormous toll in every sector of society. More than 430,000 people were unemployed nationally by the end of August, 10,500 of whom live in my constituency of County Clare. Moreover, many businesses in County Clare went to the wall during the summer. Even today, I note the loss of 60 jobs in the manufacturing sector at Beckman Coulter, a company located near O'Callaghan's Mills, County Clare. Although the banks are being bailed out, I believe the Government has little to offer to encourage job creation or to assist other sectors within the economy that are under pressure.

For example, the car industry has experienced great problems in recent months. There have been several high-profile garage closures, some of which took place in my constituency. I cannot understand the reason the Government has not emulated the actions of the United Kingdom Government by introducing a scrappage plan. I hope it will do so as part of the budget later this year. This was done in the United Kingdom and in August, car sales there increased for the second month in a row. I encourage the Government to consider this proposal. In addition to many high-profile job losses, many small to medium-sized enterprises have gone to the wall and many others are merely hanging on by a thread. Every day, people from County Clare ask me whether NAMA will save their businesses and this is the question all Members must ask. Credit flow is the life blood of any economy and in spite of statements from the banks to the contrary, many small businesses are being squeezed because they are unable to secure credit from their banks. I refer to the €54 billion being made available by the European Central Bank. The belief is widespread among Fine Gael members that many commercial banks, which have borrowed money at a rate of 3% and which will now gain access to this money at a rate of 1.5%, will repay their original debts instead of allowing credit flow to customers who badly need it.

I will cite the example of Parnell Street in Ennis, County Clare, with which the Minister of State, Deputy Killeen, also is familiar. Ten businesses have closed there in the past 12 months with the loss of more than 50 jobs and there are 20 vacant premises on that street now. The question must be asked whether NAMA will make any difference to the aforementioned traders on Parnell Street or to other traders throughout the county or nationwide. I concur with Fine Gael's spokesperson on finance, Deputy Bruton, and many other economic commentators that NAMA will make no difference to small business people. Thus far, I believe business people have heard nothing that would restore confidence or give them confidence. On the other hand, Fine Gael's plan to set up a State wholesale operation to fund recovery and the immediate financing of credit is important because it will take at least six to eight months or more to set up NAMA. Under Fine Gael's proposal, a system would be put in place immediately. It would be much like an examinership in that were the banks unable to deal with their problems on their own, the State would then in effect nationalise the good elements of the banks but the taxpayer would not carry the burden for the work-out of toxic loans.

During the summer recess, the reports by an bord snip nua and the Commission on Taxation were published and I hope they will be debated in this House at some stage. However, according to the Tánaiste this morning, most of the proposals will not be implemented. Who knows what will happen in this regard? However, were the reports' recommendations to be implemented in full, ordinary people would be obliged to pay a great price for the Government's mismanagement of the economy. I believe this to be the kernel of the problem.

Many young couples who bought homes at inflated prices now are in negative equity. I recently met a couple who bought a home four years ago when both were employed in Dell; one as an engineer. Both lost their jobs subsequently and now are on the brink of losing their home. The couple have pointed out to me that they are treated in a completely different fashion by the banks than are developers. One cannot blame people for being angry. It was suggested a few minutes ago that Fine Gael should get real. Its members are in the real world but the Government is not. Although the banks failed to establish a true picture regarding many developers when lending funds to them or sanctioning loans, even though major sums were involved, they put young couples under severe scrutiny. There is one law for young couples setting out to buy their first home and another for developers.

There is also significant demand for social housing. There are some 1,978 people on the housing waiting list of Clare County Council. In the period 2002-06, the council's rental stock increased from 990 to 1306, an increase of 316 houses. One can see the extent of the problem facing the council. There is no way it can keep up with the demand for housing, even though a fund of €20 million was announced for a new social housing scheme to provide social housing through long-term leasing of unsold, vacant houses in the private market. Only 2,000 units are available nationally and this will not be enough. I would like to make several other points but I do not have time.

Will credit begin to flow? That is the most important question. How much will the taxpayer have to pay and what substantial bills must the taxpayer pay? Will developers be able to buy back property or land and what is the cost of NAMA?

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