Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I take it from the Minister's reply that he is not as hot about the idea as he was when Construction 2020 was announced, when he said that this would definitely be included in the Finance Bill. I welcome that. The Government must proceed with extreme caution on this. I do not like the idea. It smacks of the type of ideas that got us into this problem in the first place. I am not saying that it would create a massive housing bubble overnight, but this, along with a number of other initiatives, could be among the ingredients that causes another housing bubble. Indeed, aside from a housing bubble, the problem is allowing people to avail of mortgages which they simply cannot sustain. It is obviously the banks' job to lend and make as much profit as possible, and if the State is going to take on some of those liabilities it makes it easier for the banks to lend. The banks' culture is already creeping back in. We have seen the advertisements from AIB telling people not to wait to get paid before they buy their tickets for Electric Picnic and other banks are saying they will pay people's stamp duty on the purchase of their house. This is already happening. Loan to value ratios are a crucial element in mortgage lending and the State moving in to increase the loan to value ratios is wrong. I urge the Minister to proceed with caution.

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