Joan Burton (Dublin West, Labour)

The motion concerns what is effectively a Dáil-based inquiry into the events that have led to the collapse of the banking system. We have had an hour or two to consider what the Government has proposed in its amendment, which proposes "to request the Governor of the Central Bank to report to him [namely, the governor will report to himself] on the performance of the respective functions of the Central Bank and Financial Regulator in the period since the establishment of the Financial Regulator up to September 2008 having regard to the statutory powers, roles and responsibilities of the Central Bank and Financial Regulator".

I wish to make three points in this regard. First, I have much admiration for Professor Patrick Honohan. I welcomed his appointment and I welcome the fact he now holds his office in the Central Bank. However, I have a feeling this is a poisoned pill the Government is passing to Professor Honohan because I find it extremely difficult to understand how he, as the boss and chief executive of the Central Bank, can actually carry out an inquiry that involves the staff, papers and policies of the institution of which he is now the governor. I believe the Government is seeking to put Professor Honohan in an invidious position, which is not helpful to the future proper governance of the Central Bank, and is unfair to him.

If the Government has in mind a mere review which, as it were, points forward to what Professor Honohan, as governor in situ of the Central Bank, has in terms of thoughts about the new Central Bank-Financial Regulator legislation, that is a different issue because that is looking forward. It is not actually carrying out any kind of a review into what happened in the Central Bank from the time there was a turf war between Charlie McCreevy, Michael McDowell and the Department of Enterprise, Trade and Employment as to who should control financial regulation in this country.

There is also the fact that, as the previous governor has been at pains to point out on several occasions, the Central Bank did in various reports include references to its concern about a property bubble. However, I have heard the previous governor comment on many occasions that he was powerless to impact and influence the banks because, if one likes, there was a zeitgeist, a political system in operation here then, led by the former Taoiseach, Deputy Bertie Ahern, and the former Minister for Finance, Charlie McCreevy, which said "Bubbles are good", "When I have it, spend it", and "Ramp up the property market, and help to ramp it up even further by means of tax breaks". Therefore, to ask the governor to make any serious inquiry is, as I said, to put him in an invidious and contrary position because he would be asked to report on, or perhaps review and comment on, papers and people who are on his current staff. I do not see how that proposal would run.

Second, the Government wants "to commission an independent review from a recognised expert or experts of high standing and reputation to conduct a preliminary investigation". In the Bill which Deputy Rabbitte and the Labour Party have put forward to correct the default in the Abbeylara judgment and the gap or lacuna in regard to powers of Dáil committees to inquire, we have sought to address this issue by providing for a preliminary investigation. As speakers on all sides have recalled, this was also done by the Comptroller and Auditor General in the preliminaries to the DIRT inquiry, which was a sub-committee of the Committee of Public Accounts but held its inquiry pre-Abbeylara. Abbeylara in its particular circumstances drew down a decision from the courts which has cast into doubt the power of an Oireachtas committee to ask questions and to get and require reasonable answers when put in an appropriate framework. The Labour Party, alongside this motion, has offered to the Government in a bipartisan spirit measures which will restore the proper powers of the Oireachtas to make reasonable inquiries into matters of public importance.

According to the Government amendment, these two reports "will consider also the international, social and macroeconomic environment". It almost sounds like an environmental impact statement. That part is probably attributable to the Green Party, although it does not mean anything.

The Government amendment also states "that these reports shall have regard as appropriate to the de Larosière and Turner Reports". The point about the de Larosière report is that it is designed to create a European-wide framework. Its French author has in mind a framework which would basically provide for what one might almost call a college of regulation, via and connected to the European Central Bank, which will try to ensure that the European banking system, particularly in the euro area, would not be subject to the kind of destabilisation that was visited on central mainland European countries, although not Ireland, because the reasons for the Irish collapse are absolutely different from the reasons that banks in Germany, Switzerland and so on collapsed.

We are being dishonest with ourselves if we do not recognise the peculiar homegrown banking collapse we have had. Our banking collapse is like what happened in Sweden in the early 1990s and to a lesser extent in Finland, which were caused by homegrown property bubbles. The de Larosière report is simply something to which future Irish Governments are likely to subscribe in a general sense as a reforming process, and in the context of a court of regulators or a college of regulators throughout the EU.

The Turner report obviously arises in a particular context. Lord Turner has been one of the principal advocates for open and accountable critiques of the financial institutions. His personal experience comes from working for a long period in the City of London.

The point is that bankers, wonderful people and all, are serial recidivists. If they sense any let up on the Government's part or believe the Government wishes to cosy up to them again, they will be out of the traps before one can snap one's fingers and, as we have already seen, will return to the bonus culture and Gordon Gekko's "Greed is good" and all of the other slogans that senior bankers have over their desks.

In the United States, the people at the top of Goldman Sachs are making a profound philosophical argument to the effect that, since they have made so much money and repaid the US Treasury for the bailout and more besides, they are entitled to recommence paying bonuses, given the market in the US. Irish banks cannot even put together a rights issue. What shareholder who has been already ripped and stripped by them would contribute tuppence to a rights issue? People who believe they can take comfort from what has occurred in the US should remember that the problems of the United States are different from ours.

I referred to a committee, just one of a number of American inquiries, that has begun its work. That commission is bipartisan and has the power to call and order papers. The Minister of State may have had an opportunity to listen into the Chilcot inquiry in the UK. Its members have been empowered to seek all of the papers, without restraint and as a basis for their questions, of serving and former Ministers and Prime Ministers in order that their country can get an answer as to why they went to war. Our equivalent question is why did our banks collapse and bring ruin to the general public.

This year marks the beginning of the decade in which we will celebrate the Easter rising and our first republic. If we cannot answer questions about our greatest financial collapse, Fianna Fáil should move out as soon as possible. There are those of us who want to see the establishment of a second republic that will have reform at its heart and will seek to defeat the corruption characterising so much of what has transpired during the past 12 years. The Labour Party is determined to embark on this political mission to bring about sustained change as soon as a general election is held.

I wish to address the business of inquiries. During the 1930s after the great crash, there was a major commission in the US called the Pecora Commission. The then financial oligarchs were brought before it in open inquiry. Startlingly, it emerged from their answers that some of the largest oligarchs paid no taxes at all. Finance capital was structured in the US much like it has been structured in Ireland during the past 12 years, namely, people at the top had arrangements that facilitated them in paying no taxes. Consequently, their super profits and accumulation of capital were so extraordinary that, as is usually the case in such situations, they began to believe they were more powerful than any mere democratic forum with all of its faults and weaknesses as well as its strengths.

It is historically disappointing that Fianna Fáil has tried to dodge the bullet of an honest and open inquiry. If we really want to give young people the hope of staying in Ireland and building their futures, we should opt for reform and openness. No matter how wealthy people are or were, they should be invited to come forward and tell their stories. There is nothing wrong with business failure. It is a feature of life in business around the world. People get up off the floor and rebuild their businesses. However, business corruption is wrong, as is a system that distorts a country's structures, including the tax system and access to credit or finance, and favours the creation of an oligarchy as has developed in Russia. The Government is throwing away an incredible opportunity to have a genuinely bipartisan examination of what went wrong and to face up to the situation. For some current and former members of the Government, this would involve difficult questions because they would need to acknowledge their parts.

On Christmas eve, I received a single sheet in an anonymous letter to which I will briefly refer in my closing remarks. It concerns my old adversary in the finance brief, the then Minister for Finance and current Taoiseach, Deputy Cowen. In recent years, I had two arguments with him. The first was about contracts for difference and what was done to make the Dublin Stock Exchange a casino in which the Quinn family sustained losses through those contracts. This matter must be examined. The second related to the fact that developers were constantly entering into arrangements to ensure that stamp duty could be avoided at the then rate of 9% compared with the 1% payable via a share transaction between companies.

The then Minister and I held long discussions about the wisdom of allowing this. I told him that, when one has no taxation structure in a bubble, no one will benefit. Rather, prices are encouraged to increase. The example I chose was one with which I had become reasonably familiar, namely, the Irish Glass Bottle site in Ringsend. All of this is on the record of the House and committee.

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