John McGuinness (Carlow-Kilkenny, Fianna Fail)

I compliment Deputy Michael McGrath on bringing this proposal to the House and on facilitating this debate. I have listened carefully to what most contributors have said. The financial collapse and the information provided by the banks to the then Government at the beginning of that time point to a banking and financial system which does not recognise its faults and failings and which is unwilling to come forward, put up its hands, admit it got things wrong and furnish the information upon which the Government should act. To put it mildly, the banks were economic with the information they brought forward to the State. Given that this was the case, how can the ordinary citizen trust the banks and financial institutions? This is the question posed by the Bill.

Reference has been made to the Office of the Ombudsman. What does the public and the ordinary citizen want from the Office of the Ombudsman? I believe the public envisages an office acting on their behalf with the interests in mind of the person who has been offended or who cannot get justice or fair play in the course of normal business. Consequently, I suggest that any legislation brought forward must strengthen the position of the Office of the Ombudsman. It must set out clearly the powers of that office and the consequences of not complying with it.

In the course of the last Administration I became aware of a case in which a compliant taxpayer was treated poorly by the Revenue Commissioners. The report contained much harsher words than I intend to use this evening. As a result of the examination by the Ombudsman, the Revenue was instructed to repay that person €600,000. It paid back €300,000 and no more. If the Office of the Ombudsman stands for anything, it is for fair play. The word of the office must be accepted by whatever agency or institution is under examination on behalf of the person represented by it. Therefore, the legislation must be changed and strengthened. The person who was repaid €300,000 rather than €600,000 should have the full amount repaid. We should do whatever is necessary in this House to ensure this takes place. In this case, the Government fell and this meant the report from the Joint Oireachtas Committee on Finance and the Public Service, which supported the person's position and that of the Office of the Ombudsman, fell as well.

I call on the Minister of State, Deputy Perry, to ask his party leader and the Minister for Finance about this case. This will demonstrate whether the role of the Office of the Ombudsman means anything. Both are aware of this case. It has been raised and supported across political party lines. I am speaking to the principle of supporting the office. I ask the Minister of State to seek a review of the case I have mentioned in this debate. This relates to the strength and respect the Office of the Ombudsman must have from this House in the context of legislation. This is hugely important.

It is equally important that the Government, in appointing directors, has the public interest at heart and that the extent of directors' power and position is specified in legislation. It must be clear what it is all about. If we are to represent citizens, that is what we must do. Nobody believes the bankers. I am aware as a business person that, as has been mentioned, small businesses all around the country cannot get money from the banks. However, the banks attempt to hoodwink all of us, including the Government. They tell us they are giving money out to small businesses and that they have spent the €7 billion or whatever they got from Government in doing so. However, they did not do that. If they did not use the money to provide the loans, we should ask them to give back the money and give it to some other institution. As I have often said here, unless we begin to take that strong action, the banks will continue to hoodwink the Government and all of us here. They received €7 billion, but only €1.7 billion has been provided in loans. This means the banks are not playing ball in the difficult circumstances surrounding this economy.

In 2009, the previous ombudsman, in communication with the then Minister for Finance, asked for the provisions and legislation sought in this Bill to be made. It shows how slowly the State moves on legislation that we are just debating this issue this evening, although the country is crying out for such legislation and those who have been hoodwinked by the banks and financial institutions are crying out for fair play. They are asking those that legislate to ensure that they have someone who will respond to them. However, they are being asked to wait again. I respect the fact that the Minister has agreed a Bill like this is necessary and that he will build on the Bill before us tonight. The Minister of State, Deputy Perry, has said this Bill is consistent with current Government policy, but that more work is required on its scope and detailed application. I understand that. However, I urge Deputy Perry and the Government to understand the need for speed and that it is vital to deliver this legislation as quickly as possible.

As we speak, people are trying to get their financial affairs in order, but are having enormous difficulty in their dealings with banks and financial institutions. People are being tied up in red tape and bureaucracy and pretence. They are being told they do not understand and that they signed up and should look at the fine print. This is not good enough. The provisions must be supported by legislation and similar instructions should be given to every Department with regard to legislation to govern sub-prime lending or money lenders. These people do not force people to take loans, but they are now the only people who will provide loans. However, these loans come with an enormous interest rate and a contract that is almost never ending but which doubles and trebles the amount of money loaned initially. It is not good enough that, as legislators, we would suggest leaving this for another day or say that we will strengthen the information made available to the public.

There is another serious issue to deal with in the context of the Government's consideration of the required legislation. We must ask how many accountants and solicitors teamed together to put tax relief schemes in place into which people bought. People bought into these schemes at the height of the boom, but they now find that the legal agreements around those schemes are not worth the paper on which they are written. In fact, some of the accountants and solicitors involved in those schemes have conflicts of interest left, right and centre. The people caught in these schemes have nowhere to turn to but to the courts, a costly exercise. We need to introduce legislation - it would be best to include it in this legislation - to offer some protection to the people whose savings and pensions were put into these schemes and are now worthless. What is even worse is that these people are now involved in bank loans covering those schemes. These are loans that may never be repaid and banks are chasing people for those moneys, but it seems there is no resolution to the problem.

If we are to fix the banks and the economic difficulties, this aspect of financial services - loans given out by banks and legal agreements almost falsely and inadequately put in place - must be examined and stopped. We must provide protection to these people if we are to rescue the economy and allow the good entrepreneurs locked into these schemes to be released and to work again.

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