Michael D Higgins (Galway West, Labour)

I will be very glad to achieve an equivalence of slippage for the Ceann Comhairle.

I want to make some points of public economy. The Minister for Foreign Affairs referred specifically to the Labour Party. Last Thursday, we launched a policy document about a strategic investment bank that would be funded with €2 billion from the National Pensions Reserve Fund. The document specified a number of ways in which we could create employment. This is relevant to the speeches I have heard because the real issue is the question of what we could have been doing with money the State could have guaranteed and provided.

Last Sunday week, in another capacity, I was presenting medals at a soccer final attended by a couple of hundred children. Their community had built an all-weather pitch for €900,000. The cost of running it is approximately €20,000 and the income is approximately €97,000. Instead of charging, those who run the facility make sure it is available to all the local schools for free. Effectively, the cost was less than €1 million. This creates a capital provision for a facility. Since the annual cost of running the facility is €20,000, there is a surplus of €70,000 or €80,000, which can be used for other purposes. A free facility is provided for schoolchildren that addresses the national problem of obesity.

There are dozens of such projects that could benefit from immediate investment. Lest people believe we are not real in the Labour Party, they should note that every €1 million spent in construction creates 9.1 jobs of full-time equivalence. This is relevant because the Government is transferring what it accepts are astronomically large sums to keep in existence Anglo Irish Bank, the case for whose systemic status has never been made. Consider the Labour Party's position last September when we argued against a blanket guarantee that regarded Anglo Irish Bank as systemic. One did not need to be a genius to see the difference between the gamblers' club that was Anglo Irish Bank and Bank of Ireland and AIB. I challenge the Ministers to say in their replies whether it was not the case that the documents prepared by the Department of Finance to brief the Minister acknowledged that difference and the Department had prepared alternative strategies for the future of Anglo Irish Bank.

I have listened to the Minister for Finance talk, in effect, about the great things they supposedly are saying about us around the world. This type of Ireland's Own approach to the Irish economy is very interesting because they were not saying great things about us when the Government was flying. A friend of mine describes the reputation that Anglo Irish Bank and Irish Nationwide had in London as the building societies on crack cocaine. The Government is rightly concerned about reputation management, but can it answer this question. If it were to calculate the consequences of the different decisions available to it on that September night, did it not take into account the difference of allowing Anglo Irish Bank to be phased down and the calculated reputational responses?

If one believes one must not frighten anybody, even those investors taking a high yield from subordinated debt, one has to justify it by saying, in effect, that such investors are so nervous and highly tuned on their high yield that the slightest action from the Irish Government would upset them. If that is what the Government believes, it is a genuine position. It may be compared with other positions, however, for example, the fact that such investors have regularly taken discounts.

I am glad the Minister for Communications, Energy and Natural Resources, Deputy Ryan, has returned because I want to address something else to him. I regret that he was not in the Chamber for my previous example of what investment will not take place because we have had to give such a high proportion of our income towards keeping the ratio right in the banks. That is the choice. The flexibility we had in terms of the proportion of borrowing relative to gross national product is, in fact, the flexibility one has, and that is where the politics plays a part in how to do something different. That is the argument in Greece as well, and it is a political one.

Let us discuss it in a sane manner in that regard. One of the documents floating around today from the National Asset Management Agency suggests that the agency has secured a combined investment of €51 million from three institutions, €17 million each for a 51% shareholding in National Asset Management Agency Investment Limited, the NAMA special purpose vehicle. I was in the House during the long night when we debated all this and one of the points the Minister for Finance seemed to accept was the social dividend. In the loans being transferred and the heavy discount being applied to those, where precisely is the social dividend? Going back to the example I gave about the all-weather pitches, this could be achieved with lighting, security and management for about €900,000. If these were to be on public lands, where is the transfer of assets to build all those facilities – the community halls, libraries and schools - and the social dividend that was at the heart of the argument we made when we were debating this issue in the House during that night?

How can this be squared with the three bodies I have just mentioned and can it be put on the record of the House that there is not the slightest suggestion of a conflict of interest between these bodies and, for example, Allied Irish Banks investment managers and the banks that are being released by taxpayers' money? These are basic issues that are very important, rather than getting the lecture we have just had to the effect that we are going to bring Ireland back to 1929. I am glad the Minister for Foreign Affairs, Deputy Martin, mentioned 1929. Had he remained in the Chamber, I would have reminded him that in May 1929 the concept of rational markets was introduced by an economist in Chicago. Two weeks later the crash happened and he died many years later in poverty, getting food vouchers through his relatives. The debate about rational markets went on and on through many different distinguished economists. Towards the time just before the most recent crash, it was suggested that there was no such thing and if sufficient resources were fired into the system – a continual expansion in a cosmic-type manner – a type of order might emerge. That is what has gone down.

If the Ministers, Deputy Martin or Deputy Ryan want to do something, they can promote the Tobin tax which the Green Party favoured along with me a long time ago. They can deal with the international side of things, but at the moment the Minister for Foreign Affairs is just travelling the world picking up opinions to the effect that they said in France we are great. In this manner, when it comes to explaining the cuts where special needs assistants posts should be created, more carers employed, etc., the Government will be able to say they think we are great in Germany too. Such mantras may be kept up, but they are nonsense. The fact is that there are political choices to be made.

It is necessary to be real in a way that anyone can understand. I believe I am being fair to every ministerial speech I have heard in saying that the only construction to be taken from what they said is, in effect, that when the banking system is stable, we shall then get on with the other matters, that the demands of the real economy are somehow residual to all this. Meanwhile, small retailers throughout the country are having their arrangements with local banks changed. Why should the banks do otherwise, since they can take Government bonds, exchange them for real money with the European Central Bank and get about 2% above anything that may be had in the national economy? There is neither compulsion nor attraction for the banks to put any money into the Irish economy, so let us get real.

We are always being told this about Labour's practical proposals. These entail recognising the liquidity needs of the real economy, having a strategic investment bank and using some of the National Pensions Reserve Fund before it is eroded in the mad caper that was Anglo Irish Bank. At the same time the real economy should be restored to the banking sector, as should a version of political economy that recognises real political choices.

Every speech today on the Government side had the same message, to the effect that they are all impressed abroad at the grief we have been able to visit, fairly silently, on the people at home. That is a miserable argument. It is Dickensian and is illiterate in its economics. What we are listening to is, in fact, the justification of the consequences of a bad night at the casino.

See this speech in context