Seymour Crawford (Cavan-Monaghan, Fine Gael)

I support some of the comments made by the previous speaker. There are major questions over NAMA which need to be investigated and I am glad somebody on the Government side has admitted this.

I welcome the opportunity to speak on the National Assets Management Agency Bill 2009, which is supposed to deal with what Deputy Brian Lenihan admitted to be one of the more serious issues in the history of the State. He claimed that some of the commentary on the Bill was misinformed and even mischievous. However, I assure the Minister that from speaking to people at both constituency and national level I know there is still much anxiety and real fear because of the failure of the Minister to clarify many of the issues about which he was asked at committee meetings and, since then, in his Second Stage speech.

The Minister said the Government's proposal to establish an assets management agency had received the backing of the IMF and the ECB. It has certainly received support for increasing its share of our two main banks, but there is no guarantee for taxpayers and no funding through the banks to keep small industries and businesses alive. Only this morning I met a businessman in Monaghan who manufactures and supplies goods for the housing sector to county councils in Dublin and further afield as well as to the private sector. He advised me that he would have to put his staff on a three-day week from next Monday, not because he is short of work but because he cannot get his payments in from either the private or the public sector. Clearly the banks are not giving the necessary finance even to public-sector building projects, which should be a sure bet. This means more people will end up on social welfare.

Last night, together with my Oireachtas colleagues from County Monaghan, we met Castleblayney Town Council and the chamber of commerce, and it was simply impossible to explain to them how billions could already have been poured into the banking system while no relief is available for hard-pressed rate-payers in Castleblayney, which is on the Border and which receives the third lowest subvention in the whole of Ireland through the local government fund. During the discussion in Castleblayney regarding Irish and UK VAT rates and the price of alcohol, it was stated that 50% of alcohol sales in the island of Ireland are actually in the Six Counties. This is some indication of the loss of revenue occurring, especially in the Border area. We were also advised that business owners were not able to obtain the necessary capital to keep their businesses going. If NAMA does not provide this — and I do not believe it will — then some other rescue package must be put in place.

Those in the Border region are extremely worried about the fact that NAMA does not cover banks such as Ulster Bank, National Irish Bank and ACC. In fact, NAMA does not cover any borrowings under €5 million. I am sure the number of people in the Border region owing more than €5 million will be quite small, thus all the banks, including Bank of Ireland and the AIB, will be taking their customers, including developers down the legal path, leading to forced sales at low levels. This has already happened as has been well publicised in Ballinagh a few miles outside Cavan town. People who bought houses only a year ago are now seeing similar houses in the same development being sold at less than half price. How will NAMA, as it is now structured, deal with situations such as this and how can the Minister suggest that property prices are going to rise in the foreseeable future? This structure, whereby smaller groups are not underwritten will curtail increases in property prices because they are not receiving the same benefit.

Several years ago, I brought to the notice of a number of people the expansion of the housing boom. In a constituency like mine, where little or no efforts were being made to maintain or produce permanent jobs, how could planners and for that matter builders and banks justify the mass production of houses? In late autumn 2006 and again in February 2007, as we approached the then general election, I raised this issue with senior colleagues and members of my own Frontbench and advised them of what would be the outcome in this regard. Anyone who at that time questioned the situation was accused by the then so-called saviour of Ireland of being negative and ill-informed. The former Taoiseach of our country, Deputy Bertie Ahern, advised them to go away and commit suicide.

The property bubble could not and would not have existed without the involvement of incompetent senior bankers who convinced themselves that they knew everything and that they in turn deserved huge salaries and bonuses. It is impossible for the ordinary taxpayer to understand the role of the Regulator or Central Bank in this regard. Across the whole Irish banking sector there was a failure at board level and the question must be asked if boards were properly or legally informed by senior management.

One cannot help but believe that the principle of the Central Bank and Financial Regulator was to hear no evil, see no evil and speak no evil. One cannot but believe that the whole ethos of the builders, developers and banks was laid down by the Galway tent brigade where everyone worked together with senior politicians in one big happy club. The then Taoiseach and then Minister for Finance, Deputy Brian Cowen, now the current Taoiseach, gave out the money from the building boom like there was no tomorrow and as if it was coming from a permanent genuine base.

As far back as when the now European Commissioner Mr. Charlie McCreevy was Minister for Finance our party Leader Deputy Enda Kenny questioned the whole basis of the benchmarking structure and how it was put together but even then some of the relevant information had disappeared. We now find ourselves in a situation whereby people who benefited from the benchmarking structures, in particular young graduates, who purchased expensive houses with loans of up to 100% of the cost of an overpriced property find themselves with incomes inhibited by levies and pension funds and the benefit of mortgage relief removed. They now see themselves as victims of Government and bank mismanagement and they find it impossible to understand how bankers and developers are in reality the people who are being rescued. I have no doubt they as taxpayers, together with their children and grandchildren, will have to pay for Government mismanagement and for the mismanagement of banks and developers. While I appreciate there are some investigations into the activities of some people in Anglo Irish Bank and, possibly others, it takes a long time to come to grips with white collar fraud. No one can call it anything less.

The Minister for Finance, Deputy Brian Lenihan, stated in his Second Stage speech that the citizens of this country are understandably angry about the state of the banks. They are bitterly disappointed by the failure of our regulatory system and are appalled by the details of the reprehensible behaviour of some in the financial system and property sector in whom they placed their trust. They are also angry with the Government. Many ask why we are putting money into the banks while they endure the brunt of the difficult budgetary decisions which must be taken.

There is now, unfortunately, a breakdown of trust in the entire system, as was evident when we were out canvassing on the Lisbon treaty. My colleague, Deputy Richard Bruton, asked on 22 September what is the logic of using over €36 billion in taxpayers' money — 40% of the total NAMA bonds — to purchase toxic assets from two broken financial institutions, namely, Anglo Irish Bank and Irish Nationwide Building Society, that are almost certain never to lend again? What is the Government's strategy for these two broken institutions? What binding mechanisms can NAMA impose on the other banks to use the extra funding from the ECB to finance lending to households and struggling businesses rather than paying down other expensive sources of funding from international markets?

I want to return to an issue I raised earlier regarding the non-Irish banks. It is impossible for me representing a Border constituency to understand how NAMA can be responsible for one-fifth of its assets in Great Britain, 6% in Northern Ireland, only two-thirds in Ireland and the remainder in the USA and Europe. According to the Minister for Finance, Deputy Lenihan, those developers and customers dealing with the Ulster Bank, NIB and ACC are being ignored on the basis that they will be supported from their home base in the UK, New Zealand or Denmark. I would urge that this situation be re-examined as a matter of urgency to ensure there is no further damage to the Border area. If all the non-national banks follow the lead of ACC and withdraw their services from the area this will minimise competition in the long term. Of course, it will be customers, in particular small businesses, that will suffer. I believe the Minister for Finance, Deputy Lenihan, must, as has already been requested of him by Deputy Richard Bruton, contact his UK, Danish and other colleagues to ensure pressure is put on these banks to deal sympathetically with their customers in Ireland.

One other cross-Border group I must mention is the Presbyterian Mutual Society, which was clearly undermined by the introduction of guarantees to other banks. This group has a number of investors from the Border region, some of whom are in serious situations since it was put into administration. I am aware that the group's interests are under discussion at British Cabinet level and I, once again, urge the Taoiseach and Minister for Finance to show their interest in this issue as the amount of money needed to allow this organisation to survive in the interests of small investors is quite small. Clearly, the percentage of the funds in this all-Ireland institution from south of the Border would mean that any involvement by the Irish Government would be minimum as compared with the billions being committed elsewhere.

While I appreciate that if Fianna Fáil, the Green Party and the Independents, such as Deputy Mary Harney stick together the Bill will be passed through Second Stage, I urge the Minister and his officials to take seriously the well-intentioned, constructive amendments being but forward by my party Leader, Deputy Enda Kenny and our finance spokesperson, Deputy Richard Bruton. They proved on 29 September 2008, when called on by the Taoiseach to support the introduction of the State guarantee, that they can put the country first. Deputy Bruton's proposal for an economic recovery bank is clearly getting generous support from serious business people and economic advisors. In that context, one must be concerned to hear the Minister say that NAMA has been drawn up on the best expert advice and counsel available to the Government. Where was this expert advice and counsel during the past number of years which allowed us to walk blindfolded into this mess? We can only hope different personnel are involved.

With regard to Anglo Irish Bank and the type of personnel that were advising the Government on this issue, how can Minister for Finance, Deputy Lenihan, be so sure that Mr. Seán Fitzpatrick of Anglo Irish Bank will repay, to use his words "every cent" that he owes the current bank? If Mr. Fitzpatrick is unable to meet full interest payments on an estimated loan of €106 million, how will he ever be able to repay the capital? It is difficult for someone under pressure to pay his mortgage to listen to Mr. Lenihan making such comments when he knows that such repayments will not happen while nothing will be done for mortgage holders. Imagine the situation for someone who had a high interest fixed rate mortgage who is now being told he will have to pay a further increase when the fixed term is over.

The Minister and the Government have a major job to do to establish NAMA and, more importantly, to get it to work so business, jobs and private borrowers can see the benefit. We will not tax our way out of this situation, we will only lose more jobs. I was amazed to hear the leader of the Green Party on TV3 saying the Government would not deviate from the norm for Seán Fitzpatrick or anyone else. What is the norm? What was the norm as far as these people were concerned?

I received an e-mail asking why only loans over €5 million qualify for NAMA. What will happen to development loans of less than €5 million from Bank of Ireland or AIB Bank, the person asked. He wanted to know if these banks will be instructed by Government to offer the same terms to holders of loans under €5 million as those offered by NAMA to holders of loans over €5 million. The Minister for Finance in his speech to the Dáil referred particularly to the past conduct of the banks, as well as the distressed assets of developers as a consequence of the failure of the banking system and the economy. Surely this applies equally to those who owe development loans of less than €5 million, asked the person who wrote to me. How can we make fish of one and flesh of the other, he wanted to know.

For many, answers to these questions are critical. I have already stated that Ulster Bank, NIB and ACC should be included in these questions. When the banks came before the committees some time ago, everyone was assured that they were sound. The Comptroller and Auditor General and all these different people were in before the committees and we were assured there was no problem. I fully understand there have been international situations but they were not the main cause of our problem.

I support the Irish Farmers' Association in its opposition to a proposed 80% capital gains tax. This is a serious situation. Many good farms were divided by road building or similar infrastructure projects. The land was taken through a CPO and now 80% of that money would have to be paid to the Government. What will be left to restructure the farm or buy somewhere else? This must be examined. It is not a windfall if someone is forced to sell property, leaving his farm not viable. It is back hand work that such a suggestion should be brought in through the backdoor as an amendment to the Bill.

The idea must be reviewed because it will not bring in any money. The former Taoiseach, Deputy Bertie Ahern, used to blow about the lowering of taxes and how that led to an increase in receipts because there were more transactions. Here, capital gains tax will increase from 20% to 80%. It is absolutely outrageous and will hit farming and rural communities hardest. It will destroy any opportunities they may have and I beg the Minister of State, as someone with responsibility for agricultural matters, to deal with this promptly. It is up to the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, to make sure this ridiculous proposal does not go through this House. It is unacceptable, unrealistic and will cause serious problems. There is someone there who wants to get at the farming community and we must cry "stop" somewhere.

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