Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

On the face of it, one would say there is nothing wrong with this Bill. Its stated purpose is to promote more responsible lending, particularly in the context of the mortgage crisis the country faces and that this was a condition of the troika agreement. I have no doubt the Government and the troika will present this as proof that they are getting serious about regulating the banking and financial sector, as well as lending in general.

As an aspiration, that is not a bad idea, but what the Government is doing amounts to altogether fake regulation and reform and it is irrelevant to the real issues that are facing us in terms of the mortgage crisis and the behaviour of the banking and financial institutions. In some ways it is an attempt, rather cynically, to give the Government, the troika and the EU authorities some credibility and cover for the real and substantial policies being pursued in respect of the banks. It is, to put it mildly, closing the door after the horse has bolted. In fact, it is worse because the Government and the troika know that the horse has bolted and that the real issue is what the banks are doing now. The issue is what the banks are doing in this country and in Europe and what the Government, the troika and the European authorities generally are going to do about what the banks are doing now. The issue is what the banks are doing to the European economy and this economy, and what they are doing to 180,000 distressed mortgage holders. These are the things people are concerned about.

If there were some joining of the dots between this regulatory legislation and a serious policy to do something about what the banks are doing now, then one could take this legislation seriously. However, everything else the Government is doing with regard to the banks and everything else the troika is doing with regard to the banks and the financial system in Europe is, in real terms and in terms of the real policies, moving in exactly the opposite direction and amounts to continuing the same policy of allowing the banks to run riot and do what they want. In fact, the real policy is to continue to prop up an utterly dysfunctional failed banking and financial model but to cover it with a pretence of some regulation. That is what this is about; it is utterly fake, cynical reform. What do I mean by that? If the context of this legislation is the mortgage crisis that has ensued from the reckless lending of financial institutions, then one would expect that the Government and the troika would move to ensure the banks do not get more power to unleash the consequences of the mortgage crisis they created onto the backs of distressed mortgage holders. In fact, they are doing the opposite. While the Government is putting legislation through the House and pretending to deal with the banks, it is drawing up guidelines and legislation that will let the dogs off the leash, allowing the banks to repossess the homes of distressed mortgage holders and harass people who are in mortgage distress day in, day out. The Government is prepared to allow the banks to break through the current limit on the number of calls they can make to people to harass them about paying off mortgages they are unable to pay. The Government has said it will do away with those limits. The banks were not abiding by the limits anyway. In many cases they were terrorising mortgage holders, and they continue to do so. What is the response of the Government to this? It is to suggest that they should be allowed to do it more. The Government has decided to remove any restrictions on the rights of the banks to harass mortgage holders. In this context, how can one believe the Government is serious about monitoring the lending activities of the banks while, at the same time, it is moving to act in that way? At the behest of the troika, we expect legislation presently which will remove legal obstacles to the banks' repossessing the family homes of ordinary people. It is utterly unacceptable.

The approach is completely lacking and I simply do not get it. Sometimes at the Joint Committee on Finance, Public Expenditure and Reform or in the Chamber, the Minister of State, Deputy Cannon, joins us in lamenting the behaviour of the banks and their failure to deal with distressed mortgages, but at the same time the Government acts in this way. Why? Is the Minister of State simply playing to the gallery? I assume he is simply playing to the gallery, because he knows there is such anger about mortgage distress that he must be seen to express sympathy with those who are in mortgage distress. However, when it comes to real, substantial action, the Government is simply further empowering the bankers to impose more suffering, anxiety, distress and fear onto ordinary mortgage holders. Why is there nothing in the Government's legislation, plans or policies to stipulate that the banks must take most of the hit for their reckless behaviour? Why is there no substantial policy along these lines? Rather, we get exactly the opposite. Why does the Government not believe the banks should be forced to take the hit? When the question is asked, all we get is claptrap along the lines that we need to have a functioning banking system for the economy. Was there ever a moment in history when the banking system as it is currently constituted showed itself to be more dysfunctional, damaging or strangling of the real economy and society - and, most importantly, of the human beings who live in that society - than it is at this moment? Yet the Government insists that we must prop it up and protect it, and prop up private ownership of the financial system, even though that is the main problem.

I realise the Minister of State would not go as far as I would, as a socialist, and take the view that we need to nationalise the banking system to have real control over its policies, priorities and objectives, although that is clearly what is needed; it is crying out to us from the events that are unfolding in this country and throughout Europe that we need to control the banks democratically, because they are a law unto themselves. They are vultures. There is nothing they will not do to people to get money back. It is fair enough if the Minister of State does not accept that, but can he not at least accept that banks should be penalised and should pay the bill for what happened between 2000 and 2008? Let us forget about my aspirations for a different type of economy. If the Government does not take action to unload and transfer the burden of debt that was generated because of the activities of private banks and has been loaded onto the backs of ordinary mortgage holders, our economy as a whole and the European economy, then we are going nowhere and there is no way out of this crisis.

It is simply extraordinary that the Government is contemplating this new regime. The Government refers to the restructuring of mortgage debt, and there is debate about whether people should give up their second cars, whether women should have to give up their jobs and whether such people should have the money for private health insurance. I am in favour of a public health system, but against a backdrop in which the public health system is being savaged to pay off the banks, it is understandable that people feel the need for private health insurance, which might be considered a luxury under these new restructuring arrangements.

Not only is that cruelly unfair on the families that will be saddled with these arrangements as a result of the insolvency legislation and guidelines it appears are due from the Central Bank in regard to these arrangements, not only will this be the most bleak and grim prospect for 180,000 families for a decade or more, but these people will not have a penny to spend in the economy. Every penny or euro the banks or the insolvency practitioner or agency try to pinch from the distressed mortgage holder is a penny or euro that will not be spent in the domestic economy. Can the Government not do the sums on that? People need more money to spend.

Even people with moderate views have said that roughly speaking the international standard is that people should have approximately from 30% to 35% of their income to spend on keeping a roof over their heads, whether rent or mortgage. Why does the Government not introduce a simple measure providing for that? Why does it not decide that whatever the person's income is, it will expect the person to pay 30% of it towards the mortgage and do as they please with the rest? People should be able to spend the rest as they want, whether they are unemployed, lucky enough to still be in a job or whatever their circumstances. That would be the fair way to deal with the issue, rather than the invasive, cumbersome, slow and ineffective process the Government proposes, which will go on for years and years. Why can it not propose a simple model like that?

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