John Browne (Wexford, Fianna Fail)

I wish Deputy Seamus Kirk all the best in his new position as Ceann Comhairle. I thank Deputy John O'Donoghue for his courtesy and kindness to me while I was in the Chamber, speaking or kicking up from time to time.

The National Asset Management Agency Bill has been widely debated inside and outside the House over recent weeks by the public, economists and those who have expertise on finance and banking. Everyone has a view on how NAMA will work, how it will help the banking system, how it will get us out of this situation and how it will help the future of this country. The Minister for Finance, Deputy Lenihan, stated: "NAMA will facilitate the speedy removal of higher risk property related assets which are clogging up the banks' balance sheets and greatly hampering their ability to lend to creditworthy individuals and households and thereby support economic activity." The Government is determined to ensure the Irish banking system can provide the credit and financial services the economy needs for sustainable economic recovery. This should be fully and properly regulated and supervised in the future. For this reason the Government has taken decisive steps over the past year to stabilise and reform our financial system. This is a process that must continue. The purpose of the activity is not to benefit bankers or major borrowers but to protect the security of bank deposits, reduce the risk to our economy and ensure we have a future based on sustainable economic development supplied by, but not led by, an efficient financial system. The Government will continue to implement the programme for Government in a way that protects the taxpayer. It is important the taxpayer is protected.

Having stabilised our banking system, the Government will ensure a root and branch reform so that we never return to the reckless lending practices that led to the banking crisis. Participating banks will be required to submit detailed restructuring and lending plans, dealing with the key elements of their business strategy. This will include lending targets to different business sectors and the future balance between the Irish and international operations. The Government and the Financial Regulator will develop a new code of conduct for the treatment of non-performing loans of small and medium-sized businesses. The principles of the combined code of corporate governance will be set on a legislative footing so that all banks, public companies and State-sponsored bodies deal with key areas of governance of institutions, including board composition and independence, segregation of the chief executive officer and chair, clear definition of executive and non-executive responsibilities, audit committee composition, segregation of committee chairs, risk management, selection of non-executive directors and sanctions for non-compliance.

The Government is in the process of drafting legislation for the reform of the regulatory system for financial services. People are very concerned that the regulatory system in place over recent years did not work. It is one of the causes that landed us in the mess we are in at the present time. In preparation for this the Government will shortly restructure the boards of the Central Bank and Financial Regulator and select members having regard to the renewed mandate and focus on the central banking and regulatory structures. Within the new structures for regulation of the financial sector, a specific executive will be assigned responsibility for all Central Bank issues regarding ongoing oversight of State-owned and State-supported institutions. The Government's approach to asset valuation within the NAMA initiative is a carefully balanced and reasonable approach having regard to the need to stabilise the financial system and to ensure the economy has access to credit and financial services. Alternative approaches risk leaving the banking system impaired and without access to funds or capital for future development.

Many Members have come across problems in recent months in respect of the lack of credit from banks. This applies to small businesses, farmers who had overdrafts and people who have loans for houses but are unable to meet repayments. In recent months banks have adopted a tough attitude, especially towards good customers. I do not believe that the banks lack finance. We hear regularly that the banks have no money but I do not believe that is the case. The banks are using NAMA and therefore I am concerned that NAMA should go through Second Stage in the House as quickly as possible, while having the proper debate, onto Committee Stage and be enacted.

There will be many amendments along the way. Finance spokespersons in the Labour Party, Fine Gael and other Opposition parties in this House will provide many good ideas and amendments. The Minister for Finance stated that he is prepared to listen carefully to amendments from the Opposition. This is the way it should be done. No one has a monopoly on wisdom on how we should deal with the financial situation in this country. We need all sides on board to deal effectively and quickly with the legislation so that banks lend to those who deserve loans.

Other Members from Wexford are in the same position as I am, having met people, particularly farmers, who had overdraft facilities of €25,000 or €50,000 in recent years for restocking purposes or other purposes. They receive a letter in the post telling them that the overdraft facility has been withdrawn completely or reduced by half or quarter. There is no discussion or dialogue. That is not good enough. Where people have proved to be good customers in the past, banks should be prepared to allow them to continue as viable family businesses or farming businesses. To pull the rug from under people at this late stage in the year will make people non-productive. This will lead to job losses and people will be unable to continue as viable propositions in farming or small businesses.

It is very important that the Minister for Finance and the Minister for Enterprise, Trade and Employment continue to have dialogue with the banks to ensure credit is available. The Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, has this structure in place to encourage the banking system to lend. Sometimes I get the feeling it is not working properly. There is a need for a hands-on approach by the Tánaiste to ensure people who deserve credit and who have good repayment records are able to avail of it in the coming weeks and months.

Recently, I received a letter from a person who has been an employee of AIB finance and leasing for more than two years. Perhaps my colleagues in Wexford received the same letter. He is seriously concerned about recent developments in the financial services sector and from a professional point of view he is very concerned that while we discuss NAMA, deal with those who owe the billions of euro and are concerned with the income of farmers and small businesses those working in banks who were in no way to blame for the banking crisis may lose their jobs, be left behind and be forgotten about. He is very anxious that this should not be the case.

The letter states:

I believe that as part of this debate some thought should be given to the future shape and functioning of our financial institutions to ensure that the lessons of the current crisis are fully learned and taken on board. ... Furthermore, in considering how financial institutions should function in the future, it is clear that not only does the industry need much closer scrutiny in terms of regulation, but the culture of banking also requires a major overhaul to restore the traditional values of prudence, integrity and long-term stability. ... What emerges from the crisis is not a damaged banking system sustained by a piecemeal patchwork of short-term fixes - but rather a reformed system underpinned by a comprehensive approach designed to ensure that it can function effectively in support of economic recovery and social solidarity. Such a system should have due regard to the interest of staff, customers and shareholders as well as the public good.

The letter writer urges us as politicians "to ensure that the considerable outlay of public money being committed to address the current crisis does not become a catalyst for an assault on the jobs and livelihoods of staff working in the financial services sector".

From time to time, we politicians must call to the bank and speak with bank officials, although the wider world might believe that we do not have to and that we do not have any financial problems. I know from speaking with people working in banks that they feel very annoyed and concerned that ordinary working people are being made scapegoats for crazy decisions taken by people at a higher level. As a result, the general public feels aggrieved towards people working in banks and this should not be the case because ordinary bank employees work from nine to five on an ordinary salary and they are in no way responsible for the problems we now face.

The family home is an issue about which I am concerned. Many people will be looked after and catered for but those living in a family home who secured mortgages to build that home and have lost their jobs in recent weeks or months are under very severe pressure. A section in the new programme for Government deals with the protection of the family home. This issue requires much thought and debate as the NAMA Bill goes through the House. Will the Minister for Finance seriously examine how we can implement a system that will ensure the family home is protected and that people who may find it very difficult to meet repayments at present will receive a stay to allow them to pay back a small portion of their mortgage? They are not in a position to pay back the full mortgage at present.

Senator Marc MacSharry and other Senators put forward a number of options to the Minister for Finance, including interest-only payments, permanently extended mortgage payments, renting back property from the lender, a moratorium on fixed rates and redrafting mortgage terms. I will throw in a further suggestion. As Deputies Howlin and Kehoe know, the local authority operates a differential rent system whereby one pays rent based on one's income. It is very important that the Minister for Finance considers, in conjunction with the banks, how a differential repayment system could be initiated for a period of two, three or four years to enable people to make their repayments based on their present income. When things pick up and they secure a job - as they will - they will return to making full payments. During the debate on NAMA, there is a serious need to examine a system to facilitate people who are now finding it very difficult to meet mortgage repayments. It is very important that we examine this.

Some of the mortgages loaned to people were very high. People come to me who have mortgage repayments of €1,200 or €1,400 per month. How they ever secured a mortgage based on their income at the time baffles me; it shows that at the time the banks were prepared to throw money at the ordinary public regardless of their income. Now, when difficulties are arising, the banks want to put in the boot. That should not be tolerated. Will the Minister of State, Deputy John Moloney, take back the message to the Minister for Finance - we will do so ourselves at parliamentary party meetings and other fora - that the family home should be included in the NAMA debate? Concrete proposals should be put forward that will allow the banks and the Minister for Finance to come up with a satisfactory solution.

Deputy Kehoe and I attended a farming meeting last night where approximately 200 farmers were present. They were very concerned about a taxation proposal and that the 80% rate might affect land they would provide under CPO for road widening or bypasses. The Ministers for Finance and the Environment, Heritage and Local Government have confirmed to us that this is not the case and that the 80% rate will not be any way related to CPO land. When the Minister for Finance replies tomorrow will he confirm to farmers that they will not be liable for this 80% tax rate? Last night, we did our best to confirm to the farmers of Wexford that it will not be the case that CPO land will be included in the 80% windfall tax, nor should it be. The Minister should keep the IFA and the farmers of the country happy and confirm that this will not happen. Public meetings have taken place in various parts of the country where concern has been expressed on this matter.

This is about getting people back to work. We need to correct the country's finances as quickly as possible. While we hear about green shoots we have a long way to go. Every 1,000 people on the dole costs the Exchequer an estimated €20 million in social welfare payments and lost tax. That is a lot of money being lost to the Exchequer. It is also a lot of heartbreak and job losses are causing problems for many families throughout the country. Many worked in the building industry and earned good money and in County Wexford we were very dependent on the building industry which employed huge numbers of people. It is about time we examined how to get the building industry up and running again. Certainly, there is not a hope we will get it back to the way it was but there is still room for a certain amount of building to develop and I hope it does as quickly as possible.

I welcome the NAMA Bill. I hope it passes through the Houses as quickly as possible and that we can get on to lending to people throughout the country.

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