Joe O'Toole (Independent)

I welcome the Minister of State, Deputy Mansergh, to the House. In all honesty, as one who has admired the contributions he has made, his speech today was one of his weaker contributions. It is not a day to come in and tell us we must also take steps to improve productivity or that we must be committed to implementing responsible fiscal policies. That is not today's business — it is everyday business and is always the business. I am sorry the Minister of State rejected a question and answer session, which was not intended to pin him to the wall on any issue. I know he is constrained as he said at the beginning. However, I wanted to hear him say the Government had come to a conclusion that was announced at6.50 a.m. this morning and to outline how it came to it. He should have outlined the options it explored and possible alternatives. All I wanted was the opportunity to buy into it. I am still listening to hear that and I hope I will hear it later this evening. In responding to the debate the Minister of State might open up some more and take us through effectively the pain the Government went through.

Having said that, I agree with the point the Minister of State made about social partnership. As he said, he has been a consistent champion of social partnership. The most important statement in his speech was when he said the financial turbulence, which is the backdrop to this debate, has developed within a part of the private sector and the State has been called to provide the safety net. That is the crucial point and explains why I am prepared to be open and supportive of the proposals coming to us. I would be happy if the Minister of State takes the following message regarding the public sector to the Department.

On the Order of Business I made the point that we owe a great deal to the Secretary General, David Doyle, and his team for working with this. This is a creative and progressive proposal. I cannot say whether it will work. However, I certainly welcome it as being mould breaking. As Senator MacSharry said, no other economy in the world has made such a proposal. In terms of the general principle, I want it to work and I hope it will work. I look forward to seeing the details later today. The Minister of State could have used the occasion — perhaps he still can — to open up somewhat more on his personal views. It is easy for him to speak before the Bill is published in terms of how he sees things and how he feels it would go and what led him to that position. The message today is that the banks have let us down. The free market just did not work. I would ask the Minister of State to do this every time we get this matter to debate. The free market has failed miserably. That does not necessarily mean the market fails. It is the free aspect, the unregulated unrestrained greed that drove it that has been the problem. It is a question of how we should regulate it. Towards the end of his speech the Minister of State said we needed to protect "without being overpowering" which is the key. It is light-touch regulating but it must go right into the heart of the matter.

The Department of Finance has handled the matter extraordinarily well in convincing its political masters to move this forward. I do not know on whose initiative this was proposed, but it is important that it is there. I have been quick enough to criticise the Department of Finance over the years. I hope I am also quick enough to give it credit, as I often do, when I believe it has taken such an important step. The proposal is unique and creative after the appalling decisions of irresponsible bankers. Senator MacSharry mentioned the sub-prime market. While it appears we have not been exposed to that market, it is really annoying that we still do not know — this is why I do not trust the bankers — the level of exposure. We do not know the level of risk or what we are buying into. Perhaps the Minister knows from his meeting last night.

Representatives of the banks appeared before the Oireachtas Joint Committee on Finance and the Public Service a few months ago and assured us. However, they are not to be believed. The Government needs to be absolutely sceptical of anything it hears from the bankers. These are the people who gave 110% loans to mortgage applicants and increased borrowers' credit limits. I had to contact my bank to advise it I intended to close my credit card account if it increased my credit limit again without asking me.

The Minister of State and I both spoke in a debate here a few years ago when the banks proposed a daft idea of inviting people to convert their mortgage accounts into current accounts in order that they could use them to extend their debt. That was an appalling thing to do. Although the consumer director of the Financial Regulator, Mary O'Dea, spoke against it at the time, it simply went ahead. The regulator did not have the power to block it. We need to remember this is exactly what they did to the farmers in the 1970s. They shovelled out money to them to build milking parlours and other things they did not need. When credit became tighter they threatened to take their land and took them to court. The same thing is happening all over again. It comes around and goes around. It always will be cyclical.

I do not agree with the proposal to improve the situation for first-time house buyers, who are not the issue here. Every time we have done anything for first-time buyers it has gone straight into the pockets of builders. I do not want us to do that. I thought the Minister of State might have mentioned the following in his speech. The most critical thing was the Minister for Finance getting clearance from Europe for borrowings over the 3% cap under theMaastricht treaty for buying into the euro system. That was an important anticipatory move.

I agree with Senator MacSharry's proposal. This is the first time I have said this. I have agreed with the position of the former Minister, Mr. McCreevy, in establishing the pension fund. I had been on the Commission on Public Service Pensions and had been very much in favour of establishing a pensions fund. When that was established it was done on the basis that we would hit a pensions exposure crisis in 2011. The demographics in the country have changed significantly since then and if we are to hit a crisis in pensions it will occur much later than 2011. It does not make sense to borrow if we have the money ourselves. We should consider taking it out. I know the Labour Party has held that position for years. I did not agree with it previously, but I agree with it on this occasion because times have changed and circumstances alter cases.

In that regard also, credit should be given to the Labour Party for its recent publication. It is the way forward to take those items from the national development plan and build the infrastructure we need to ensure we develop and not to sit back. We need to take a further risk in that regard to ensure those aspects of the national development plan that are crucial to the development of the economy are taken on board.

I begrudge every cent to the bankers. It is crucial that the decision of the Government should not be seen as a bank-rolling of the banks and of the bankers. On the Order of Business Senator MacSharry referred to the economy. The economy is the people, it is nothing else. My first lecture in economics said the economy was well-educated healthy people. That is why the point has been made by Senator Healy Eames and others not to pull on support for education and health. The economy is the ordinary person, the small shopkeeper, the farmer, the small contractor and people who can only operate if they can access credit. If the Government's thinking behind this morning's move is to ensure that Irish banks can draw down credit then that makes sense for them do it.

I do not want anything made easy for the banks. When we see the legislation I hope the charges will be penal. The bank charges for money at present are very high. I checked with a bank this morning and found that the APR for A level risk borrowers is 9% per year. The level of charge is extraordinary. In moving forward there is a need to distinguish between the market and the free market. We need to see a market which is active but regulated. As well as a penal charge we need to look at the boards. I said earlier that I assume the Government will demand a place on the board. I assume and propose that the boards of all the financial institutions which have had to be baled out will be dissolved. If they had any sense of honour they would resign.