Timmy Dooley (Clare, Fianna Fail)

That is not appropriate or acceptable. The fact remains that the PTSB is State owned and it has a duty of care to its customers. It also has a duty of care to its shareholders, who are all the citizens of the State, the taxpayers, and it is not in the taxpayers' interest. The fact the taxpayer is now the shareholder is different from it being a bondholder or somebody who has it on their books as an investment. The taxpayer has a different set of criteria by which it would measure the way the bank should operate. The fact is that the bank, levying punitive charges on mortgage holders, affects spending and confidence in the economy and reduces demand in the economy in an overly aggressive way.

The normal rules of the marketplace do not apply now and therefore one section of society cannot be treated out of step with the other but that is what is happening here. AIB, which is largely in the ownership of the State also, has a different approach to its standard lending rate and it is not fair to say it has a different business or cost model. This crisis will have to be resolved in a protracted way over a period of time outside the normal market conditions because there are not normal market conditions. Properties cannot be sold and there is very little movement of property in the market. The reality, and the Minster of State knows this better than I do, is that houses are being sold under pressure on occasions at a lower cost than one could afford to build them. That is a clear indication that we are not working in a normalised marketplace, therefore, the principles have to be suspended. I do not want to go back into who did what, when and where but the Government must treat this as a serious issue. It must suspend normal market conditions or the normal rules that apply and assist these people in a manner that is relevant, appropriate and in step with the rest of the marketplace.

Neither is this in the interest of the mortgage holder. The punitive rates in place are forcing many mortgage holders into arrears, which is not good for overall economic activity. In many cases people have been forced into a position where they are unable to meet their repayments and that has a huge impact on their health. It has an impact on the lives of many people. It is making it virtually impossible for them to live in a normal way. It is putting pressure on families and reducing confidence in the economy. If we cannot restore confidence in the economy we will not get growth, and if we do not have growth we will not have confidence. It is a chicken and egg situation.

I accept that the banks must become free-standing. We all accept that they must restructure their balance sheets. They must be able to find a way in a stand-alone capacity in the years ahead but that must be viewed in the medium to long term; it cannot be done over night. The PTSB is involved in an aggressive resolution of a crisis that exists across the economy, and it wants to be first up and best dressed. Effectively, it is now within the control of the State and the State has a duty, in terms of the points I raised regarding its stockholder, who is the taxpayer, and the mortgage holder, to ensure the overall benefit to the economy. It must be viewed in a holistic way.

Confidence and growth are inextricably linked, and while we have punitive interest rates we will not get confidence or growth in the economy. All we will get is a continuation of the misery being inflicted on so many people. Forcing people into arrears will drive people deeper into misery. They are being forced into delinquency. Many people have made the lifestyle choices and the changes in their spending but they are not able to meet that level of payment, and we have a duty to help them. Some would suggest it is a relatively small institution by comparison to the others, but up to 80,000 people are affected and that number equates to more people because in many cases we are talking about 80,000 family homes. Some people can pay and if they can that is fine, but the bank is still putting a drain on the economy because they are putting money into it that probably does not need to be there in the first instance and could be used in other ways.

The Central Bank has suggested that some lenders are trying to square the circle of the tracker mortgage issue. I welcome what the Government has talked about in terms of attempting to address the tracker mortgage issue. It has referred to creating a vehicle or some other means by which that issue can be parked which would allow the banks to strip away that problem and get back to taking a more aggressive approach to lending. That ties in with what Deputy O'Dea stated on the other book but the fact remains that in the short term the bank cannot balance between the tracker book and the standard book in an effort to resolve the mistakes it made in a manner that cannot be seen as acceptable to any sector of this society.

A more serious issue for many mortgage holders, and it goes to the root of the failure of the banking system, is their inability to switch between lending institutions. There is no marketplace and no capacity to do that because there is no competition among lending institutions, and that is probably one of the most serious issues that arises. There is no way out for these people. They are stuck, and they are looking to us. I do not want to get aggressive about this but I ask the Minister of State, the Minister for Finance and their entire team to find a solution to this issue.

It will not break the bank or the Government. It should get this done as quickly as possible and move on to the myriad issues we have to try to deal with.

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