Martin Heydon (Kildare South, Fine Gael)

I welcome this opportunity to speak on this motion. With unemployment, the issues raised in the motion are among the biggest facing the country and its citizens. The resolution of these issues would bring us a long way on the road to recovery, which is why they are a priority for the Government.

Like all Deputies, I deal with constituents every day of the week. This evening, I will note some of the financial difficulties experienced by some of my constituents. I know two experienced entrepreneurs who attempted to start a new business. Between them they have more than 60 years experience and have never missed a bank repayment, but they cannot get funding. A post-graduate student who has funded her years in college through loans which she has worked to pay off every year, in her final step to what would be a valuable post-graduate qualification has been refused any form of credit to complete her education. A working family man with five years remaining on his mortgage and no mispayments is unable to get a new mortgage to buy a larger home.

Changes must be made and I welcome the stability that has been brought to many elements of the banking system this year, but we must continue to improve the situation. The establishment of the Credit Review Office, CRO, is very welcome. It is a valuable resource for many small businesses and farmers. Deputy Ross took a pop at the office but he failed to mention that almost 50% of the cases that went to the Credit Review Office succeeded in having decisions overturned. Instead of knocking the CRO we need to see its remit growing and to put more resources into it.

I have already raised this point with the Minister and I call on him again to consider the extension of the services of the Credit Review Office to cover individuals who have been refused credit or given reduced credit facilities for a viable business proposition. A CRO for individuals would give them an alternative if they are refused by a bank and would make sure their voices are heard. It would encourage the banks to fully consider all applications received on a full commercial basis and would provide us with valuable information on the number of applications being refused and an indication of whether these refusals are based on valid commercial considerations.

Our banks are still not lending enough money and this is affecting the growth of our economy which is so important. Businesses are going to the wall because of a lack of funding. It was recently reported in the media that banks are borrowing from the ECB at 1% and buying government bonds at higher rates to make a return, instead of using the funding for what it was designed, which is to get money circulating in the economy. This issue needs to be addressed. The purpose of the ECB money is to get money back into businesses and into the economy.

I am aware of the difficulties being faced by holders of variable mortgages with Permanent TSB. At present, neither the Central Bank nor the Department of Finance has a statutory function in the interest rate decisions made by individual lending institutions nor has the Central Bank requested additional powers over the setting of retail rates. There is a balance to be struck between a nationally controlled banking system which could end up answerable to many public interests and a system that would allow us to exert more control over the commercial decisions of banks. It is imperative that we get that balance right.

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