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

I move amendment No. 1:

In page 5, line 27, after "SMEs," to insert the following:"bodies seeking to provide social housing on a not for profit basis and households in mortgage distress unable to secure sustainable resolution arrangements with their mortgage providers,".

Whatever about disagreements and criticisms in terms of the timing of this Bill, the principle behind it enjoys general support in the sense that we need a strategic bank which fills the gap left by the pillar banks and commercial and private banks and so on who appear to be averse in investing in areas which are of benefit to the wider economy and our strategic objectives to develop it on a sustainable basis into the future. That is positive.

The focus on SMEs which is the declared priority of the Bill and is explicitly set out therein is right and proper for the reasons, as mentioned by the Minister and other speakers, that the SME sector is the lifeblood of the economy; 70% of people working are employed in the SME sector and if there is going to be meaningful economic recovery we need to help SMEs, which the banks have failed to do. To my mind, there is an unwillingness on the part of Government to tell the banks what to do despite that we own some of them and have bailed out all of them. Given they are clearly not doing what they need to it is right this bank should fill that gap.

There are other priorities, which I believe should be explicitly set out in the Bill. The amendments in my name seek the inclusion of two other absolute strategic priorities, including address of the issue of mortgage distress. The committee of finance, of which I am a member, was informed this week of the multiple failings of the pillar banks and mainstream banking system to properly engage with distressed mortgage holders and the MARPs process. At a briefing yesterday with Grant Thornton and the Irish Mortgage Holders Organisation we were told of the pathetic number of cases dealt with under the insolvency legislation.

When it was first put through, the then Minister, Deputy Alan Shatter, stated that 18,000 cases would be dealt with in the first year. In fact, only a few hundred cases have been dealt with. The Irish Mortgage Holders' Organisation told me yesterday that 10% of those on AIB's mortgage book had to engage with it because the bank would not engage with them. It is not capable of doing so. The banks, therefore, are not doing what we need them to do, nor are they doing what we hoped the insolvency legislation would force them to do. We have got to do something about this, not just because we care and should care about the 136,000 householders and families in arrears but also because it has to be a strategic priority. The Government stated it was a strategic priority to get the people concerned participating in the economy again, but they cannot do so if lumbered with mortgage debts. We will paralyse a very significant portion of the economy's capacity to recover unless we deal with this problem with much more urgency and speed than the banks have proved willing or able to demonstrate. That is why the series of amendments is proposing that a priority should be to offer a way forward for those in mortgage distress where they have been unable to get a decent, proper deal, or any deal, from the banks. It is proposed that their mortgages be transferred to the proposed bank.

I talked to Mr. David Hall and representatives of Grant Thornton yesterday after they had given a briefing in the audiovisual room on the whole matter. I asked them what they thought of my amendment and Mr. Hall was certainly very positive about it. He stated it represented a very good idea that could really work. We obviously need to tease out the details, but there are many that need to be teased out in respect of what the Minister put in front of us. Will it really deliver for SMEs? We need to think about how the measure would work. What I believe should be a strategic priority for the new bank is a no-brainer. It is in line with the consensus on the need to make progress a hell of a lot faster and more decisively for those in mortgage distress than has been the case heretofore.

I hope the Minister will consider the amendments seriously. There is a clause that refers to providing finance for those seeking to provide social and affordable housing on a not-for-profit basis. The Government has stated it wants to see this happen, but we have not seen much in the way of concrete moves to make it happen. When in the light of the housing crisis we on this side of the House talk about the need for a significant social and affordable housing building programme and the Government states there is a big problem of supply in the market which is creating a property bubble or the threat thereof, it seems obvious that we need a vehicle to provide the necessary finance for bodies that are willing to address this issue, be they voluntary housing associations or otherwise.

We should seriously encourage co-operatives. I am always being asked by people in my area about housing co-operatives because they were a feature in the past. Building workers and people on the housing waiting list could band together, obtain some finance and use land not being used by the local authorities to provide social and affordable housing. The proposed bank should have as a priority the financing of such projects. Owing to all the bloody EU rules on financing local authorities, there may be difficulties, but we must find a way, perhaps through trusts set up by or sponsored by the local authorities, to direct money towards the building of social and affordable housing.

These are very reasonable suggestions which I hope will receive the support of other Deputies. Others have mentioned in their Second Stage contributions that the mandate needs to be wider. The wider mandate has been talked about a lot in terms of the international banking system. Reference was made to the contrast between the focus of banks in Europe and that of banks in the United States, where the banking system, starting with the Fed, has a mandate that is much wider than just dealing with issues such as inflation and the bottom line. A key part of the mandate concerns employment and housing. These are imperatives for the American banking system as dictated by the Fed. We should follow suit, not that I am saying everything about the American banking system is wonderful. We need a wider mandate, particularly for the strategic State-sponsored bank. I hope the Minister will consider these amendments.

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