Liz McManus (Wicklow, Labour)

While this debate is being overshadowed by other events, the division on the National Asset Management Agency Bill will be the biggest decision most of us in this House will make. This is all the more reason for Committee Stage to be taken in this Chamber and not condemned to the basement.

The stakes are enormous. In particular, there has been much criticism of the price to be paid by the State for impaired loans. As Deputy Upton noted, last night, the Nobel prize winner, Joseph Stiglitz, went so far as to describe as criminal overpaying the banks for loans. Professor Stiglitz argues that temporary nationalisation of the banks, if required, is a better way to go, a view shared by the Labour Party.

When the Minister for Finance published this Bill it was described as the "only show in town" and alternative propositions were rejected out of hand. No basis was provided for this extraordinary claim. Where is the empirical evidence? If a panel of objective experts from outside this country had given an assessment of the various options, we may have had a very different Bill to debate. Instead, we have spurious claims from the Government and the repeated "only show in town" mantra.

The Minister for Finance referred to reform of the banks. While there must be no return to the recklessness and greed of the past, it is not clear how the Government will ensure restructuring of the banks will lead to better banking. Many of the same people who were part of the problem are still in situ. More important, will credit flow to where it is needed? The Minister for Finance stated, "The Government has made SME lending a major priority." It is clear, however, that while NAMA is designed to protect the banks from collapse, it does nothing to create the conditions for facilitating credit for business. When it comes to securing credit from the banks at present, while it may be technically available, it is available only in the way that the Ritz Hotel is open to anyone.

Business overdrafts are being slashed and incredibly onerous conditions are being attached to securing mortgages. The legislation makes no mention of lending by the banks, let alone requiring banks to lend for viable business purposes in return for the bailout. The Labour Party does not advocate reckless lending to the business sector by the banks. We have seen enough of this practice for a lifetime. The banks have been lending hand over fist to the wrong people. It is this that has us in such trouble. We must now ensure they lend to the right people, namely, small and medium enterprises which form the backbone of our economy. We cannot depend on empty words of reassurance from the Minister.

International experience over the past year has shown that where a bank bailout has occurred, the focus has been on shoring up the capital base of the bank to satisfy shareholders and to pay bonuses rather than lending to businesses. The banks' purpose is to get back into profitability. That means achieving a balanced ratio between credit and deposits. In the current climate it means that businesses lose out. Dermot Desmond wrote a newspaper article recently which warned that NAMA would result in economic paralysis for decades to come.

What are the Government plans to deal with the issue of credit? How will the Minister use his influence on the banks to resolve it? It is a central issue, regrettably not just for the business sector. Already houses are being repossessed and families are losing their homes. When interest rates rise - as they invariably will - the trickle could become a flood and the Government has no strategy to prevent the consequences. That is insupportable at a time when so many people are at risk of losing their homes. An ESRI study predicts that 35,000 people may be unable to pay their mortgages next year. I urge the Minister to accept the Labour Party proposal for a home protection commission to address that issue.

Many speakers have raised their concern about the lack of credit being made available to SMEs and I have no doubt the Minister will refer to this matter in his closing speech, but there is a further aspect to this issue which may prove to be even more damaging in the longer term. We all look to signs of the future recovery whenever it happens. We need to be prepared to exploit its potential, whether by upskilling our workforce or improving our broadband infrastructure now, but when that time comes the priority for the banks will still be profitability not the provision of credit to businesses which want to expand in the upturn and take on staff. The prospect of ongoing stagnation referred to by Dermot Desmond could prove crippling for our economic growth and development and is why Mr. Stiglitz worries about what will happen not in 2010 but beyond it.

NAMA is a big gamble and the Government is intent on taking it, whatever we on this side of the House think, but I ask that the Bill at least be amended to provide safeguards for the public. For example, provision should be made for a whistleblowers' charter to cover staff in NAMA, covered institutions, debtors, advisers and service providers to ensure the highest ethical standards. Accountability needs to be stitched into the Bill so that robust checks and balances ensure Ministers cannot use NAMA for their own purposes. Under the Bill its chairman and chief executive are precluded from discussing policy matters with any committee of the Oireachtas; that restriction should be lifted in the interests of public accountability.

Concerns have also been expressed about the capacity of NAMA to address its brief. Managing a highly complex portfolio worth €77 billion, covering some 20,500 loans linked to almost 2,000 developers' business plans is an absolutely staggering challenge. NAMA could be managing one of the largest property portfolios in the world and it is hard to believe that the expertise and resources will be equal to the task. It is important that the Minister consider that point and address it in his speech.

I want to make some simple points. One concerns the situation which local authorities, mine in particular, have found themselves. As a result of the compulsory purchase legislation land was to be acquired and the local authority now finds itself, at the end of a fairly lengthy process, having to pay an enormously inflated price for land which is worth only a fraction of what it was because of the economic collapse. We should be carefully examining ways of ensuring that local authorises are not left in such a position, particularly at a time when they are being starved of funds, and that there is also a social dividend.

I noted on Monday the Labour Party Senator Dominic Hannigan published research he carried out into the recreation and social needs of young people in the commuter belt around Dublin. He made the point that there should be a social dividend. When one considers the amount of empty space that exists now and will become the responsibility of NAMA at some point, there needs to be a social dividend in terms of how NAMA operates, if it is, regrettably, passed by the House. At this point we still have the opportunity to find a better route and the alternative route which has been recommended by so many eminent economists. Unfortunately the Government is deaf to a clear analysis of what can and should be done, particularly taking into account the international experience and the needs of our country.

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