Michael D Higgins (Galway West, Labour)

I will be brief because there are other groups of amendments that we have yet to discuss. It makes some sense to group related amendments and to be flexible about that to use the time to hit the most serious issues upon which there may be disagreement. This group deals with a few core elements connected with the Minister's strategy for re-funding the banks and the real economy. The banking sector is not meeting the needs of the real economy. The Minister's statement that we need to get NAMA in place to ensure liquidity in the real economy becomes rhetorical unless there are mechanisms in place to ensure that there is a sufficient departure from the recent banking culture as to re-engage or engage for the first time with the real economy.

The Minister's response to the spirit of these amendments is his amendment No. 127 which recognises the importance of the connection but states that the Minister "may" which makes the sponsors of the other amendments perceive it as weak. A further problem arises where the amendment states:

The Minister may issue guidelines-

(a) regarding lending practices and procedures to facilitate the availability of credit to classes of borrowers or potential borrowers including small and medium sized enterprises,

The banks, feeling bound by that, will come to the Minister with the usual plethora of advertisements for new business and issue statements in different parts of the media to the effect that they are open for business.

The Minister's amendment continues:

(b) relating to the review of decisions of participating institutions to refuse credit facilities.

(2) A participating institution shall comply with any guidelines issued under subsection (1).".

The group of Fine Gael amendments, of which there are four in number, has considerable merit because they require publication of what happens with the guidelines. That kind of transparency is absolutely essential. Not only is general transparency required, there must also be measures that can call people to account. There are no sanctions and no procedures to ensure compliance. How will compliance be managed?

There is the keep-the-racket-on-the-road argument. If the Minister's wording were any stronger in his amendment, he would encourage the banks to take on a whole series of bad ventures which would in turn lead to a renewal of the problem. I do not accept that for a second. The Minister has gone some way. However, his rhetorical acceptance of the argument has to be translated into what he seemed to have accepted on Committee Stage - that is the importance of illegal prescription. The argument about amendment No. 127 is about its sufficiency to achieve what appeared to be consensus.

The Labour Party's amendments Nos. 10, 79 and 80 deal with the important issue of repossession. Some significant social benefit of the NAMA model must be shown as a reassurance to those who are finding themselves in mortgage difficulties. Such a move would be a significant benchmark to establishing some kind of principle that people could accept the NAMA measures. Regarding the behaviour being investigated by the Financial Regulator and even the Garda Síochána, there is no point in saying that we all are in this. We all were not in that. There is a definite group of people who destroyed the reputation of the country and brought the credibility of the banking system into disrepute. None of them is representative of general Irish society.

The legislation will benefit from reassurance that there will be breaks in repossessions that will allow people to enjoy the certainty of their homes. The home is not a simple asset, collateral or a gambling debt, like many of these debts in Anglo Irish Bank or other niche banks. All of this means - a significant concession - a straightening of the principle accepted in amendment No. 127.

Amendment No. 80 concerns itself with the supply of credit to small businesses. There is a huge gap between what is printed and what is said publicly on this matter. Deputies on all sides of the House have had the experience of outrageous examples being offered every day of people borrowing from family members to keep a small business payroll going. I repeat again for the record the cases of transferring illegally from other accounts to maintain term loans. Outrageous surcharges meanwhile are being introduced by the banks and many business people, believing they had a contractual relationship for their short-term needs, suddenly discovering it has all changed.

If the Minister wants public acceptance of this legislation, he must be able to say to the public that it will not be more of the same. He must say we will ensure those who were lured into having mortgages that they cannot sustain, those desperately trying to keep people in employment while facing credit flow problems and those being driven out of employment will have something to gain from it.

That was the importance behind the earlier group of amendments dealing with the concept of economic and social development and value. The Minister has an opportunity in accepting these amendments to put down benchmarks that will be of assistance to him even beyond the remit of this legislation. While the general public will take the burden of this and other matters, it must be able to perceive the clear dividends in an identifiable way.

How can we ensure the guidelines, which everyone accepts as necessary, will be complied with? With the State guarantee in place and when the bonds are issued, there is not a single jot of empirical evidence to suggest the banks will do anything else but use it to make their international trading environment better. Some may say they got such a fright, they will not try it again. However, there is no evidence that they will not do that. We need assurance on this issue.

Why are we making these points in the Parliament? Why do we not read more about it from IBEC and Chambers of Commerce meetings? The answer is that it is because of the disproportionate representation of bankers on IBEC and the Chambers of Commerce. They come up to you late at night and say we will probably be driven back to the old days. It is as if we were going back to a time when the bank manager would buy the pink pages of the Financial Times to show he was an intellectual who understood the stock market. No one is suggesting this; people just want them to be responsible. IBEC and the Chambers of Commerce are staying quiet as mice while all around them small businesses, employing three to 20 employees, are being bled dry by bankers who in turn will say they have no control over this. That is why Government action is necessary with the social guarantee across these dimensions that these amendments represent.

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