Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I listened with interest to what the previous speakers had to say. I would like to focus particularly on what the Minister, Deputy Noonan, said. He was completely off the mark when he blamed the drop in the shares of Irish banks on the publication of this Bill or indeed, given that I do not think the Bill had been published when that decrease took place, on the media commentary on the likelihood that this Bill would be passed on Second Stage. The Minister will be aware that such a charge could equally be levelled against some of his own commitments in the programme for Government. The reality is that we need to stop the Irish banks fattening themselves off the backs of Irish customers. I refer particularly to standard variable rate customers, who have been ripped off over recent years. That is why I welcome Deputy Michael McGrath's Bill and pledge my party's support for it.

We live in an era of unprecedented low interest rates for states, banks and speculators. It seems that such rates apply to everybody except Irish home owners who have standard variable rate mortgages. The banks can try to confuse the issue by talking about their various sources of funding, but the truth is that standard variable rate mortgage holders can be gouged. Therefore, that is what is happening. The European Central Bank's current marginal lending rate is 0.25%, which marks a decrease from over 5% less than ten years ago. AIB's rate of 3.4% remains the lowest option for mortgage holders among the main lenders, with most of the options being well above that level, as we have heard. The previous Government failed spectacularly to address this issue, which is of huge importance for over 300,000 families. As it did with all issues involving the banks, in this case it chose to slink away from the fight and hid behind weasel words. The result is a huge and ongoing rip-off of Irish families and home owners, in many cases by the banks that were bailed out by the same home owners.

The Government and the banks can spin this all they like, but the truth is that we are looking at market failure. The banks operating here are failing to provide a functioning market in which normal market rules apply. My party supports a role for the State in banking, but that is not even the issue here.

8 o’clock

The issue is that when the market so clearly fails, the State has a duty and a responsibility, in the interests of the people and the economy, to step in. We heard those arguments from a Fianna Fáil Government many years ago when there was a market failure, a banking failure, and it demanded that the State step in. However, this time it is in response to the needs of the people and not those of the bankers, the developers and the speculators. Let us do this and stop whistling in the wind. Let us put the Irish people first and foremost. This is an issue which symbolises the unfairness of people's interests playing second fiddle to the banks for years and years and of a Government that is happy with that situation. This is the legacy of the reign of Fine Gael and the Labour Party. Bankers are protected, banks are protected at all costs and struggling families are being ripped off.

Last May when I introduced my legislation, the first such legislation to be debated and voted on in this House and which empowered the Central Bank with more or less the powers contained in Deputy Michael McGrath's Bill, the Minister gave us every reason under the sun as to why it could not be enacted. The Minister said he was not ruling out bringing forward his own legislation and he echoed some of the words uttered by the Taoiseach, Deputy Enda Kenny, many years previously regarding bringing forward this type of legislation but he said that he wanted to talk to the banks first. Let us see where that got us and let us imagine how things could have been different if the previous Government had grasped the nettle and adopted the Bill I proposed last May, the Bill Deputy Michael McGrath proposed in July or the Bill Senator Feargal Quinn brought forward in May 2015, all with the same objective and all using different ways and different language but all empowering the Central Bank to deal with the issue of the huge standard variable rates that were being applied to the banks' customers.

There is no doubt that pressure has been brought on some of those banks by those Bills, by campaigns by the general public and by a number of media commentators who have taken up this issue and done sterling work on it. However, the changes made and pressure applied have been few and many of the banks have not moved. It is interesting to hear the former Tánaiste's party will support this legislation, which I welcome, but I remember in 2011 when I first raised this issue with the then Tánaiste, Eamon Gilmore, he told me the same story that this Government is telling me now. He said "Deputy Doherty need be in no doubt that this Government will act decisively, forcibly and effectively with the banks." Basically that is what the Minister is saying today, that there is no need for legislation, we have got the commitment in the programme for Government, it is unethical and we will do whatever needs to be done to deal with this issue but yet there is no meat on the bones. The Minister has been telling us that for a number of years and we have not seen any real changes for many customers.

How many Bills need to be presented in this House or in the Seanad before reality starts to sink in for Fine Gael. What has been achieved by waiting? Of the main banks, only AIB has budged at all on standard variable rates. Others have tinkered around the edges but with so many conditions and catches that few people have benefitted. The Minister spoke of one bank but the rate only reduces if one's loan to value rate is less than 80%. That rules out the vast majority of people. He spoke about switching providers which is impossible for many people and it is not only a case of the banks frustrating the process, we have problems legislatively as well regarding securing assets, land registry delays and so on, which are issues for another day.

Earlier today the Government spin spoke about kicking this Bill into touch, back to pre-legislative scrutiny. Let me be clear - for my party that is not acceptable. If this Bill passes Second Stage, it must be brought to committee as soon as possible. We were told last year, when Sinn Féin introduced its Bill in May 2015, that we were premature. We were told we had to be patient and that the Minister was going into negotiations with the banks. I wonder if any group was more relieved when Deputy Noonan was reappointed as Minister for Finance than the bankers.

There are many new Deputies but I doubt any are naive enough to think that this Bill will automatically mean relief for home owners or an end to the rip off. We are all grown ups; we all know the potential pitfalls with this type of legislation. This Bill passes the buck to the Central Bank but, ultimately, it will have the final say on whether to act or not. All indications to date suggest it is not inclined to do so. This is where we need to strengthen Deputy Michael McGrath's Bill in making that aspect a little stronger. There also needs to be stronger public scrutiny of the Central Bank's role and decision-making on this issue. This means, as my Bill suggested and which I have committed to reintroduce, that it would allow for a greater prompting role for the Minister and a greater responsibility on the Central Bank to explain why it has not acted if it has not used the powers in the legislation. I hope it will be possible to deal with these types of amendments on Committee Stage, if and when that is reached.

I had to laugh at the Minister's comments that this legislation could discourage new entrants into the market. He has overseen entrants leaving the market. His record of attracting new entrants is a complete failure. The idea that the reason new entrants are not entering the market is because of potentially this type of legislation is not on. He also threw out scaremongering comments about the share price and so on and about our facing Armageddon in terms of our shares in the banks. He mentioned the ECB and the potential that we could be fined millions of euro if this passes Second Stage and the dramatics about informing the Ceann Comhairle and that perhaps it is his responsibility. Let me inform the Minister about this. I am sure he knows the number of Stages in legislation. It starts with First Stage, which is the Stage this House passed my Bill in May 2015 and Deputy Michael McGrath's Bill in July 2015. Those Bills have already passed First Stage in the legislative process. There was no mention at that time - this House did not oppose the First Stage - that we could be fined by the ECB. That is bluster from the Minister and his colleagues.

I acknowledge that the AIB has reduced its rate. I hope, as some commentators suggested, that it will reduce its rates further and thereby put pressure on other financial institutions to do likewise. We in this House should not have to discuss in 2016 the idea that we would give these powers to the Central Bank and urge it to use them. The financial institutions which are gouging their standard variable rate customers should reduce their rates appropriately. That is what should happen but, unfortunately, that has not happened. The time comes when the Minister has to stop talking, take up the mantle and take action.

The Minister keeps making the same mistakes; he never learns. He thinks that the banks can be trusted, that they can be cajoled into doing the right thing and that they have somehow accepted responsibility for past mistakes but he is wrong every time in his dealing with the banks. That is why we are here almost a year to the day since Fine Gael and the Labour Party rejected my Bill, four and half years since the then Labour Party leader told me that they would deal with the banks.

Sinn Féin will support Deputy Michael McGrath's Bill and we hope all Deputies in this House will do so. I have some concerns about the Bill but those are issues that can be dealt with on Committee Stage. The Minister mentioned one of those issues, namely, that of fair procedures in terms of an appeal. A provision on that was included in my Bill but that could be easily dealt with on Committee Stage. It is not a reason to kick this legislation into touch or to put it back to pre-legislative scrutiny stage.

The issue of this being unconstitutional is a new one the Minister has raised. No Member of this House wants to waste our time or that of the customers, who are under pressure as a result of the rates being applied, by debating and passing legislation that will ultimately be deemed unconstitutional at a later stage or by the President when the legislation goes forward for his signature.

I appeal to the Minister to accept that there is a new reality, that he is part of a minority Government and that the Irish people have spoken and have elected Deputies who made a commitment in the run up to the general election to bring forward this type of legislation. They have supported the Fianna Fáil party and this legislation was part of its pledge. Sinn Féin committed to this legislation in its manifesto and other parties and Independents are supportive of it.

The Minister needs to get with it. He needs to start to strengthen the Bill where he believes it needs to be strengthened. He needs to accept that there is a new reality and that this Dáil is going to move this legislation from Second Stage to Committee Stage. His responsibility, as someone who no longer calls all the shots, is to work with the Opposition and impart to it the legal advice he has received from the Attorney General on the potential pitfalls of the Bill, as well as the advice he has received from the Central Bank on this legislation. He should do this in order that we, as legislators, in dealing with the Bill on the next Stage can make sure these issues are dealt with effectively in order that we will have the best legislation. We need legislation that will stand the test of time and deal with all of the issues it is intended to deal with without risking the consequences, to some of which the Minister has referred, of putting off those who want to enter the new market.

I hope the Minister will engage fully with this new process. I believe the Bill is going to move to Committee Stage. I welcome this. It is always good to have pre-legislative scrutiny, but that issue has not been decided by the Dáil and I do not know how it can deal with it in terms of a Private Members' Bill. If we are flexible enough on Committee Stage and if the Government does not stall it for the maximum period of ten weeks that it can, we will have enough time to deal with all of the issues. If the information the Minister has in his office is imparted to other Members of the House, we can all work together to make sure we have the best possible legislation.

I remind the Minister that he suggested time and again in this House that he would introduce such legislation himself to empower the Central Bank to deal with standard variable interest rates. Surely to God, between the first time the Taoiseach raised the issue - I believe in 2011 - and the last time the Minister raised it in 2015 the Attorney General told him that it was constitutional somewhere along the line. There is a lot of scaremongering. I understand this is probably the first Bill the Government does not want to have introduced that will move to Committee Stage. I appeal to the Minister to work with the rest of us who want this type of legislation on the Statute Book to try to strengthen and improve it where that needs to be done.

See this speech in context