[youtube=http://www.youtube.com/watch?v=YBhi6ibRiBU]
Today, the Seanad got an opportunity to speak on the business plan for NAMA in advance on the Bill coming before the House late next week. Minister Martin Mansergh was in the chamber to listen to the contributions from Senators on all sides. Above is my own contribution.
If you are free this Wednesday 16th September please come along to Labour’s STOP NAMA Protest at 1pm outside Leinster House, Kildare Street, Dublin 2. We want as many people as possible to join Labour’s TDs, Senators and activists to oppose NAMA.
The Labour Party has been consistent in our opposition to the NAMA plan since it was first mooted by Fianna Fail. Our banking system has been brought to its knees by the rampant greed and speculation of our banks and developers. Together with Fianna Fail they make up a ‘toxic triangle’ that has destroyed our economy, sending Ireland into the deepest, and maybe even the longest, economic depression of any advanced economy since the Second World War.
There is the real danger under the NAMA plan that the government will end up paying grossly inflated prices for properties, placing a financial millstone around not just the current generation of taxpayers, but possible the next generation also.
I know that it is a working day and that not everyone will be available, but I am appealing to you to turn out on Wednesday. Let your family, friends and work colleagues know that it is on. Encourage them to turn out. Use word of mouth, email, text messages – whatever you can do.
Help us make this demonstration a success and it will greatly increase the pressure on Fianna Fail and the Green Party to abandon this plan. NAMA must be stopped.
Last night, Fine Gael used their Private Members Time in the Seanad to put forward a motion relating to banking in Ireland. Naturally, the Government side put forward their own amendment. Below is my contribution to the debate. Click here to view Labour’s proposals on the dealing with the banking crisis.
I am glad to have the opportunity to support the Fine Gael motion. I have noticed repeatedly on Private Members’ business and across the board that Senators on the Government side of the House frequently complain about the Opposition’s refusal to be positive and co-operative. Senator Boyle got particularly exercised in this regard this evening in his contribution. Senator Hanafin mentioned this too, but was somewhat less exercised on the issue.
I find it difficult to take the frustration of the Government side seriously because the Fine Gael motion is very reasonable. I cannot see how any reasonable person, including Members on the Government side, can argue with the motion. However, the Government side proposes to delete the Fine Gael motion and substitute its own for it. This goes to the heart of the issue of co-operation and Opposition politics. If Senators Boyle, Hanafin and others are serious about wanting co-operation, why do they wish to delete the Fine Gael motion and replace it with their own?
I can understand that some aspects of the Fine Gael motion might give some pause to the Government side of the House. It might find it difficult to agree to phraseology that calls on the Government to take more decisive action to restore the reputation of the Irish banking system. I understand too it might find it difficult to accept one or two other aspects of the motion, and if I was on that side of the House, I might want to amend or vary those aspects. However, I see no reason for the Government side to strike down the basic thrust of the Fine Gael motion.
The motion recognises that the reckless and incompetent management, regulation and oversight of the domestic Irish banking system has damaged domestic and international confidence, that the Irish economy cannot recover from the deepening economic depression without a functioning banking system that enjoys the trust of depositors and everybody else and the public perception that the resolution of the banking crisis is being manipulated in the interests of powerful and wealthy elites. Perhaps the Government spotted itself in that phrase, but it does not necessarily refer to the Government.
I appeared on last night’s edition of The Late Debate with Fergal Keane. The other panellists were Sean Connick TD, John Lee of the Mail on Sunday and RTE’s David Murphy.
Topics included the current state of the Banking sector and the news that TDs and Senator will be taking a pay cut. You can listen to the show in full by clicking here.
We keep returning to the issues of accountability and the role of the Houses and the committees. These Houses are not providing any real forum for accountability, and that is the problem. There is fury and outrage and there must be an opportunity for the Minister to come to the House to answer questions. However, Ministers regularly come to the Seanad. The Leader can agree to invite the Minister to the House next week or the week after, be it Deputy Mansergh or Deputy Brian Lenihan, if he has the time, but it will not make any difference because we do not get any answers.
What is the point? I do not say we should not invite them but what is the point?
Senator O’Toole said the committee is not a Star Chamber. Nobody expects it to be a Star Chamber, but people are crying out for accountability and for questions to be answered. They are not being answered anywhere else so why can they not be answered in the Parliament of the people? If the Minister comes to the House, can it be on the basis of a real expectation that he can give answers to questions?
I recall the Minister for Finance being in the House last September, on that long dark night of the soul we experienced. I recall asking him what exactly had happened on the day the Government extended the guarantee. We never got an answer as to what happened in the room that night. Does anybody, apart from the Minister and those who were present, know what happened that night? It has never been revealed to the public. What precisely was said by the bankers and their advisers to persuade the State effectively to commit the deeds of the State, as others have described it, in a guarantee to the banks? What was the reason for this? It might have been the right thing to do, although I believe it was not and many commentators are coming around to that view. I might be wrong but we will never be able to assess that or work out who is right and who is wrong until we are told why. I mean something more than the bland statement the Minister constantly makes about the system and the worries about it, with this and that bank having systemic importance, and all of this kind of stuff that we can get through. What was said and what was going to happen if the decision was not made? As somebody asked this morning in the Seanad, what was said in the immediate lead-up to the nationalisation of Anglo Irish Bank? What was the trigger reason that was done on the occasion when it was done?
We cannot have any debate, whether in a committee, here, in the public press or anywhere else if we are not being given the information. What is the basis upon which these decisions are being made? None of that has been provided here in the other House or in the committee, and we need to wake up to that fact because we are only fooling ourselves.
In relation to that, in the newspapers today there is a report of the Minister wanting to revisit the question of TDs’ and Senators’ expenses, allowances and otherwise. This is a sensitive topic for my colleagues in the House but look at what is happening. People are losing their jobs. There are people in this building, public servants, who are having the State delve into their pay in respect of their pensions. Are we seriously going to maintain the position that as Members of these House we ought not to sacrifice something as well? Is there anybody in this House who will take that view? If so, he or she should stand up and say so because this is a very serious situation.
There should be transparency, but it looks as if there needs to be more than just transparency, there needs to be a significant reduction in these matters. Personally, I support any suggestion that has been made, whether it is from the Green Party or from the Minister, that there should be moves on this and it should be done soon.
I was struck by the following curious point in regard to the reports today about the banks. A new group of investors have offered the Minister for Finance a solution to the problem. Last week, another group of opportunists, investors with international connections, offered a solution to the Minister for Finance. A picture comes to mind of the Minister for Finance sitting in his office, tapping his fingers on the desk almost waiting for people to come to him with suggestions. Surely, it should be the Minister who makes such bold moves. I do not agree that there is not a requirement for recapitalisation of the banks. Manifestly, there is such a requirement. There needs to be a debate on how it should be brought about and on the controls that should be put in place by Government in that regard.
I would like to hear from the Minister for Finance what he and the Government proposes to do other than waiting for others to come to them with suggestions. This seems to be the manner in which Government is being run in regard to these serious issues. The Taoiseach, when Minister for Finance, made a reasonably thoughtful speech a year ago at the Indecon conference.
I wonder if he would take out that speech, dust it down and read it again to see what it is he would propose by way of addressing the palpable sense of not alone uncertainty but real fear, which is increasing by the day and almost by the hour, across the community. Everybody is seeking a solution to the problem. We accept the Government cannot solve every problem. However, we are looking to it for some measure of inspiration and hope and for a plan, but we are not seeing anything of that nature. The budget was botched and there is a failure to face up to many of the problems that led us to where we are now. One cannot work out one’s future course until one is clear about how one arrived at where one is. We must face up to rather than dwell on the fundamental mistakes of recent years.
The extraordinary, treacherous and reckless priming of the property sector happened under the watch of this Government and this must be faced up to. Decentralisation - it appears it will be reversed in the public service reform document - was a serious mistake and a shocking proposal, one that ought never have been brought forward. We are now seeing it being at least partly reversed in the new proposals on efficiency in the public service.
The collapse in State revenue in this country was well underway before the international banking crisis emerged. That is a fact, not an opinion. We must face up to these facts and have a proper debate on them. I respectfully suggest that the Seanad is a good place to have that debate, a somewhat more relaxed and thoughtful debate than is possible in the other House.
More :: After the opposition’s repeated calls, it has just been announced that there will be an all-day debate in the Seanad on the state of the economy with the Minister for Finance present. It will take place on Friday 5 December.
Labour leader in the Seanad, Senator Alex White, described the announcement in the Budget of the new levy on income tax as the most “dishonest tax increase ever seen”.
Speaking during the Order of Business, Senator White said: “The levy represents the crudest, most regressive and most dishonest tax increase ever seen.
“It is a tax increase, yet the Government dares not speak its name.
“Recently, the Minister for the Environment, John Gormley, appeared to advocate higher taxes for the higher paid, the rich and the super rich, with which I agreed. He stated that he would try to achieve such in Government, in which respect I would have supported him. Regrettably, he did not achieve it.
“Let us face up to the taxation system and the dishonesty and unfairness therein. The Government appears to want to have it both ways. The Government is telling us to leave the debate on tax to the Commission on Taxation next year. But it then introduces an aggressive tax, undermining any suggestion of equity,” said Senator White.
Senator White added that the Government appeared to have embraced the notion of performance-related pay.
“Members of the Government have taken 10 per cent cuts, presumably based on their performances in recent months. I hope that they will revert to the House in the coming months regarding proposals on the inevitable further cuts in pay that they will need to take. The ultimate cut that they should take is not 10 per cent or 20 per cent. Rather, it is 100 per cent.”
I support and agree with concerns about the delay in bringing forward the scheme which the Minister for Finance said would come before both Houses. We have seen what happened this morning in the UK. I do not believe it is accurate to say that the UK Government has copied the Irish Government. That is not true. The UK Government has taken preference shares in the banks it has proposed to assist and it has included a requirement that any bank wishing to participate in the scheme must sign up to an agreement on executive pay and dividends. There are many other differences between the UK Government’s proposal and what has been done here.
The Financial Regulator has said there is no difficulty with the capitalisation of the Irish banks. However, we have been asked to accept other statements from and about the banks in recent months which have proven not to be true. I note a nuance in the comments of the Minister for Finance this morning. He says he does not believe there is a difficulty with under-capitalisation. However, the Minister for Finance rather ominously stated that things are changing by the day. Therefore, it is not at all clear that there is not a difficulty with under-capitalisation in the Irish banks. What is the current position in Ireland with respect to the guarantee?
There is no guarantee is the answer.
The Minister for Finance and the Government announced an intention to provide a guarantee, which was a plan for the future, but there is no guarantee for today. This is a serious situation of which I do not make light as a topic for debate. However, the seriousness of the situation is increased with a further delay in the presentation of the scheme.
The delay also raised the question of what we were doing here last week in the overnight session. What was the point of it? We passed enabling legislation which has not been acted upon. Therefore, apart from the amendments to the competition legislation which, although important are marginal, the content of the legislation, the scheme and the guarantee are meaningless because nothing has been carried out. What were we doing here overnight last week? I do not have any difficulty with making myself available, nor do my colleagues. However, the sum total of our efforts add to nothing as nothing has changed. Our job is not to provide an overnight supporters’ rally for the work of the Government or the Minister for Finance. We are legislators and we are constitutionally required to scrutinise proposed legislation. The scheme was supposed to be brought before the Houses. Unless and until this happens there is no Irish guarantee; it simply does not exist yet. This is a reflection of the seriousness of the matter.
The Government’s intentions are becoming less, rather than more, clear with each day. The Minister for Finance has now indicated, perhaps correctly - I do not claim he has no basis for the comments, but it shows how unclear the position is - the possibility of a limit on the amount of deposits banks can take on. The developments in the UK this morning will have implications for foreign owned banks operating in Ireland. That may have implications for our scheme and there is the wider EU context. The situation is sliding by the day. All of the talk and congratulation we indulged in last week for being first into the breech now rings hollow. It looks like we are now one of the last into the breech in completing a proper scheme to put before the Houses and implement a guarantee. At present there is no Irish guarantee.
More :: I raised these issues in the Seanad and they were featured on RTE’s Oireachtas Report. Click here to view the programme (from 6min 10secs onwards).
Today’s Order of Business focused on the continuing story of the financial situation and the news that came from Aer Lingus last night. Here’s an edited transcript of what I said:
Some humility is called for from the banking community and especially its leaders. We have all suffered from sleep deprivation in recent days given the onerous task which was before us. However, I had to rub my eyes when I heard that one of the individuals concerned made a series of demands regarding what the Government should do with universal child benefits, which he believed should be attacked, State pensions, and that medical cards for the over 70s should be abolished. This proposal comes from one of the people who were saved and whose bank was in some difficulty last week. If this person has trouble with his day job, which appeared to be the case last week, perhaps he could have a future in the entertainment industry as a comedian of some sort?
For this person to suggest to the Government that it should consider such cuts when he has been the beneficiary of such largesse, the extent of which we do not yet know, seems extraordinary.
Today the Irish Congress of Trade Unions sponsors a very important event, called the world day for decent work, which I wish to comment on briefly. Such days come and go and frequently they do not mean much, but this is important. The notion and principle of regulation have been dirty words for two decades. However, they are suddenly back in vogue in certain quarters because of the banking crisis. Aer Lingus announced today its intention to chop off whole sections of its operation, replacing reasonably well paid jobs with what inevitably will be lower paid jobs.
In those circumstances, it is timely that we should draw attention to the fact that approximately 200,000 people in this country earn less than €10 an hour. That is the reality of what an army of low paid and low skilled employees are facing. I call for a debate on unemployment but we must look to see what we are talking about in that regard. It is not just a notional issue. These are real people who face real challenges in terms of living their lives on low pay and without much hope being offered to them by the Government. We should have that debate.
Everybody is now coming around to the view held by those on these benches that regulation is something that should be examined again.
My speech in the Seanad in relation to the Financial Crisis featured on RTE’s Nine O’Clock News. I was speaking during the passing through of the Credit Institutions (Financial Support) Bill 2008 early on Thursday morning.
You can see the report by clicking here.
