Banking Crisis: Motion (Resumed).
The following motion was moved by Deputy Joan Burton on Tuesday, 19 January 2010:
That Dáil Éireann:
noting the unprecedented crisis in the Irish banking system, the contribution of that crisis to the present economic emergency and the on-going implications of that crisis for employment and output;
noting the emergency measures that have already been taken to stabilise the banking system, including the blanket guarantee, the nationalisation of Anglo Irish Bank and the re-capitalisation from the public purse of other banks;
further noting the losses incurred by bank shareholders, taxpayers and the general public as a result of the banking crisis;
believing it is necessary to examine in detail the nature and causes of the banking crisis, including the manner in which relevant laws, regulations, administrative systems, procedures and practices were employed and applied, identifying in particular:
any defects in planning, information-gathering and information-analysis on the part of public authorities;
any other defects in systems of regulation and oversight on the part of public authorities;
any systematic default on the part of regulated persons or bodies in their duty to comply with relevant regulations; and
any defects in relevant laws or regulations;
believing further that it is necessary for this and other purposes that there be conferred by statute on each House of the Oireachtas and on both of them acting jointly, through committees, a power to appoint inquiries into and to commission reports upon matters relevant to the exercise of the legislative power of the State including defects in social, economic or administrative systems and systems of governance within the State, for the purpose of proposing legislation to remedy any defects so identified and to make recommendations for the better regulation and governance of the State; and
resolves to take all necessary steps for the establishment of an inquiry by a committee of Dáil Éireann into the banking crisis, including the consideration and passing as a matter of urgency of legislation along the lines of the Committees of the Houses of the Oireachtas (Powers of Inquiry) Bill 2010.
Debate resumed on amendment No. 1:
To delete all the words after "Dáil Éireann" and substitute the following:
"—commends the ongoing programme of actions being taken by the Government to restore banking stability and restructure the financial sector; including the recapitalisation of the two main banks, which will facilitate increased access to funding for SMEs and for first-time home buyers, as well as offering protections for existing homeowners in arrears;
calls for the transfer of assets to the National Asset Management Agency (NAMA) to be expedited in order to further enhance the stability and financial soundness of the institutions concerned;
notes the Government decision to introduce important reforms to financial regulation in Ireland which will secure confidence in the banking system through the introduction of new standards of banking regulation and corporate governance, will restore Ireland's international reputation and will reposition the country's regulatory system;
commends the Government's support for the comprehensive programme of reforms to financial regulation that are being put in place at the EU level;
notes that essential work remains to be completed in order to bring further stability to the banking sector; including the critical ‘transfer of assets' to NAMA, agreement on the bank's restructuring plans and their future capital requirements and expected early progress on the consolidation of the building society sector;
notes that significant resources are being devoted to these efforts and the officials involved continue to be fully engaged in achieving the objectives of banking stability and restructuring of the financial sector;
notes that any inquiries that are established must also have regard to the ongoing criminal and regulatory investigations into wrongdoings at certain financial institutions;
commends the decision of the Government:
to request the Governor of the Central Bank to report to him on the performance of the respective functions of the Central Bank and Financial Regulator in the period since the establishment of the Financial Regulator up to September 2008 having regard to the statutory powers, roles and responsibilities of the Central Bank and Financial Regulator;
to commission an independent review from a recognised expert or experts of high standing and reputation to conduct a preliminary investigation into the background to and causes of the recent crisis in Ireland's banking system up to September 2008 to assess what lessons can be learned and to inform the future management and regulation of the sector, both in relation to individual institutions and in relation to the management of risks and stability issues within the regulatory and governmental systems;
that these reports will consider also the international, social and macroeconomic environment which provided the context for the recent crisis in the banking sector;
that these reports shall have regard as appropriate to the de Larosière and Turner reports;
that both reports are to be initiated as soon as possible and completed urgently and no later than 31 May 2010;
that following completion of these reports, an independent, statutory commission of investigation is to be established by 30 June 2010, chaired by a recognised expert of high standing and reputation, to identify, examine and report on the causes of the systemic failures such as corporate strategy, governance and risk management in the Irish banking sector which culminated in the need for the State guarantee, the recapitalisation programme, the nationalisation and rescue recapitalisation of Anglo Irish Bank and the establishment of NAMA in order to preserve financial stability;
that the terms of reference for the commission of investigation will be informed by the conclusions of the reports of the Governor of the Central Bank and the independent review; and
that the report of the commission of investigation would be completed within six months;
notes that:
an appropriate Oireachtas Committee will meet both the Governor and the independent expert(s) at the outset of their work to be briefed on the Oireachtas's priorities for investigation;
the two preliminary reports, when completed, would be laid before the Houses of the Oireachtas and the appropriate Oireachtas Committee will be invited to consider the findings of the reports;
the terms of reference and draft Government Order to establish the statutory commission of investigation will be laid before the Oireachtas; and
the report of the commission of investigation will, when completed, be laid before the Oireachtas for further consideration and action."
—(Minister of State at the Department of Finance).
I welcome the opportunity provided to Members by the Labour Party to debate this issue. The Government must realise that there is great political and public scepticism about its attitude to investigating the banking inquiry. This is not a surprise because such scepticism has arisen from the Government's reaction whereby, from the very first day that such an investigation was mooted by the Governor of the Central Bank, the response was evasive. It was to the effect that the Government was too busy with other matters to have an investigation or that, while an investigation should by all means be held, it should be in the long-distant future. Members who were told it would be too costly or would be a political football now are expected to believe the Government is fully open about the investigation, which strains credibility. People's scepticism is greatly enhanced by noting that the form of inquiry being proposed by the Government is so constrained in respect both of its terms of reference and of the period over which it is to investigate.
It betrays the fact that there still remains a culture within the Government that does not believe public officers, whether elected or non-elected, should be accountable. Accountability is at the heart of this matter and a culture exists within the Government that simply does not accept that anyone is responsible or that anyone should take responsibility when things go wrong. The reason the public wishes to see an inquiry in the public domain is that in part, contrary to what the Government would suggest, this is not simply about finding out the reasons and causes but is about the very notion that people are accountable. Those who hold high offices in the country, whether it be a non-elected office such as the power to investigate and regulate the banking system and ensure that excesses do not occur or whether it be a political role, must be accountable in public for their stewardship. This is at the heart of any proper system and is at the heart of any democratic parliament that is worth its salt. Members should be capable of holding people to account and this simply has not been possible. It has not been possible for many reasons, some of which were created by the courts' circumventing of the Dáil's ability to perform such work properly. However, Members must return to a position whereby Parliament holds people to account. This is a fundamental point in this debate.
I have heard the terms of reference which have been set by the Minister described as being focused. The only thing on which I can discern them being focused is on ensuring that nothing involving political accountability will be properly investigated. The sort of focus involved is to keep it away from the Government at all costs. The Government has stated that an investigation of systemic failure in the banking sector is needed. This is to suggest that the commission of inquiry should have a narrow focus and simply is about the banking sector. The Minister of State is aware that in respect of what has gone wrong in Ireland, the banking crisis is a symptom of a much deeper systemic failure that has occurred. I refer to a failure of our system of governance and regulation, as well as the willingness and ability to hold power in all its shapes to account. That is what is at the heart of this matter. There has been regulation in Ireland in which no probing scepticism was exercised by the regulators. There have been unhealthy linkages between policymakers, regulators and those who stood to gain from their decisions. Such unhealthy relationships have been developed by a political culture that has occurred during the past ten years in particular. It has discerned no difference between personal and political donations, has appointed those who made donations to boards and has favoured some of those people in political decisions that were taken subsequently. Members have the evidence of that trail and the moral, ethical and accountability boundaries that should have prevailed and kept those matters separate simply were allowed to erode. This has formed part of Ireland's systemic failure.
Moreover, those who issued warnings about the impending banking crisis and the fragility of the economic model were treated with contempt by those at the head of the political system. Such warnings not only went unheeded but were dismissed contemptuously. The message was clear to those within the regulatory systems that the political system had a view as to whether the ongoing bank lending and property boom was sustainable. Clearly, the political system was stating repeatedly that this was based on sound economic fundamentals and was the route to take when this manifestly was not the case. There was no understanding and a political atmosphere was created in which regulation was encouraged to break down. While I do not exonerate from responsibility those who were directly holding those offices, a political climate was created that stated the property boom was based on sound economic fundamentals and that these banking models, which Members now know were so holed below the waterline, were to be encouraged and supported. This constituted a massive political failure that must be included.
Instead however, I read closely the Minister for Finance's discussion of what will be involved and the only reference he made to the Government and its Departments was to consider the Departments' response. Moreover, such consideration was mysteriously to end at September 2008. As for the notion that the Government was only responsible for the response to the impending crisis, it was at the heart of its creation. This must be acknowledged by anyone who is setting up the terms of reference for an inquiry. It is wholly inappropriate to ask the new Governor of the Central Bank to decide on or to shape the terms of reference of an inquiry into himself and his agencies, albeit before his time. This is inappropriate and trying to shape these terms of reference places the Governor in an invidious position.
There is a need to examine the manner in which the economy and the Government allowed policy development to occur that supported the banking sector. The collapse of banking did not take place in a political and policy vacuum but took place within a policy arena that was created by the Government. The shutting down of a veil of secrecy at September 2008 is completely unacceptable and inexplicable. How can one pretend that a forensic examination of facts, the purpose of which is to shed light on the development of future policy, should suddenly end when the policy decisions start to occur? Surely one should examine what sort of advice was being tendered by regulatory authorities and others and which shaped the public policy that has been adopted. Surely one needs to know the reason regulators were stating in September 2008 that Irish banks were among the most sound and well-capitalised in the world. Although this manifestly was not the case, it was being offered as an assurance and support to Government policy. However, the investigation is to be shut down as though, while one must know what happened in the past, one does not need to apply it to what is being done at present or that one does not need to know whether the policy decisions that have been adopted are best designed to be least costly to the taxpayer and most effective in getting credit to flow. The only reason such questions are not to be asked is that it is on the present Government's watch. This is not because the power of a forensic inquiry might not be able to investigate such matters or shed light on how one should modify public policy from henceforth. It is totally arbitrary and unacceptable that such a cut-off point has been proposed.
The issue of whether the inquiry the Government proposes to set up should be held in public or private is important. As I stated, I believe the conduct of public policy and the behaviour of those charged with its execution are properly matters for public accountability and the inquiry should be held in public. I accept that when one is making decisions or findings that could affect the reputation of an individual who is not a statutory officeholder, elected or otherwise, different rules apply. However, in shaping the terms of reference, one should make clear to the commission that the reason Members seek this investigation and a commission of inquiry is that certain matters must be held to public account. Consequently, one should create an environment in which a commission of inquiry will use the maximum discretion available to it to hold hearings in public and will confine the private element only to instances in which the reputation of individuals may be affected. If that were a term of reference, the Government would dramatically step forward, as Deputy Kenny said earlier, from the inquiry it proposes. The Taoiseach said he would welcome such an approach but, within moments, he replied to the Labour Party leader that if an inquiry were held in public, everyone would have to have legal representation. That is untrue. Legal representation will be necessary even if the inquiry is held in private if it impinges on an individual's reputation. However, there is no need for such representation if the inquiry investigates the conduct of public policy. The Dáil needs to find role for politicians in the investigation of banking and to show that, once and for all, politics can hold public offices accountable for catastrophic failures that have brought the ordinary people of this country to their knees.
Ba mhaith liom a chinntiú go bhfuil mé ag roinnt mo chuid ama leis na Teachtaí Thomas Byrne, Michael McGrath, Fleming, O'Connor agus Moynihan.
Tá an ceart ag an Aire Stáit.
Níl mé cinnte mar gheall ar an Aire, an Teachta Ryan.
I am seeking that whatever can be established be agreed by all sides of the House, which is an effective and thorough inquiry into the reckless behaviour that left our banking system in such a sorry state. The sooner we can have that inquiry the better. The Green Party Leader, Deputy Gormley, was the first member of Cabinet to call for such an inquiry publicly in December. We will have an inquiry that will ensure full public accountability for the actions that need to be taken and the findings that need to be arrived at, which we cannot predetermine. It is important that we do not fall into the trap of rushing to predetermine the outcome as this would jeopardise the effectiveness of such an inquiry, although I agree with Deputy Noonan who stated last night that the public feels a need for a catharsis and that will not happen if an inquiry is held behind closed doors.
It is important to read the terms of reference in full. As my colleague, Deputy Mary White, said, the digging will be done behind closed doors in the same way one would conduct research or do homework but the grilling will be in public and the effectiveness of the grilling will determine whether we achieve the public accountability that will be the measure of this inquiry. It is unfortunate that Members have described it as a "whitewash" before it even commences. Such a prejudgment will play into the hands of the very people who do not want an inquiry or to be found out and who want to get away with the actions in which they mistakenly engaged. I urge that we have faith in people such as Professor Honohan who is well recognised for his independence and rigour, not only in this role as Governor of the Central Bank but prior to that. That is the reason faith is being put in somebody such as him when it comes to the commission of investigation's terms of reference. It must be recognised, whether one is in Government or in Opposition, that, given the nature of politics, one is compromised from being quasi-judicial because for obvious reasons there is a political point to be made from either being in Government or in Opposition and it is important that there will not be the makings of a Star Chamber which would make for an interesting spectacle from a political and media point of view but it would not be effective.
This inquiry will adopt a similar approach to the Murphy commission regarding what must be done on the ground and that commission report resulted in resignations. Nobody said it was a whitewash. The proposed inquiry will be more public than the Murphy commission in that there will be accountability to the Oireachtas, an Oireachtas committee will be involved and questioning will be conducted in public. I urge all Members to refrain from a prejudgment or political point scoring, as this will play into the hands of the very people who do not want this inquiry.
Tá áthas orm labhairt ar son rúin ón Rialtas.
The message the Opposition must take from the Government's decision and this debate is "Be careful what you wish for". The Opposition parties thought they would finish us off with the McCarthy report. They were then certain NAMA would be the undoing of this Government and, subsequently, they pinned their hopes on the budget but they have been proved wrong time and again. If they think they will get the head of the Taoiseach or the Fianna Fáil Party on a plate, they will be wrong again.
And Deputy Bertie Ahern and Charlie McCreevy.
The sole focus of the Labour Party in tabling this motion is that a tribunal will be up and running in the run up to the next election. Deputy Burton was welcomed on to my local radio station this morning and, as I said to her on that programme, this did not work during the last general election campaign and it will not work for the next general election.
The focus of the Government must be on encouraging lending into the economy and getting the banking system up and running again. The Labour Party has opposed every measure brought before the Oireachtas. When Deputy Burton raised a banking inquiry, her total focus was on whether the Taoiseach would appear before it. That should not be the focus. The focus for Labour Party Members is the next general election but the Government is focused on getting people back to work.
What is the Deputy's focus? He is desperately hoping to be re-elected.
Allow the Deputy to make his contribution.
I presume every Member running for election is hoping to be re-elected. I do not deny that but the Deputy will have a battle on her own hands in her constituency. If the Labour Party thinks it will take my seat at the next election, it has another think coming. The Labour Party was completely absent on the ground during the winter gritting crisis in my constituency.
Now we are getting to it.
The banking system, however, is a much more important issue. Let us have a banking inquiry as soon as possible. That is what the Government has proposed. The appointment of Professor Patrick Honohan, a recognised expert who has previously worked with a Fine Gael-led Government, was the best decision the Government ever made according to a number of Opposition Members. Now that he has been put in charge of an inquiry in which his independence can be assured, doubts are being cast by the Opposition on his ability to do that because of his position in the Central Bank. He is completely independent of the Government and the Fianna Fáil Party and he is the right man to undertake the aspect of the inquiry for which he is required. An expert will be appointed to examine other issues and this will be followed by a commission of inquiry, which can hold its hearings in private or in public. It was intended that the Iraq inquiry would be held in private but there was provision to allow the judge in charge to hold hearings in public, which is what he decided to do. Perhaps that will happen with this inquiry.
It is important that the public obtain answers. Every Government Deputy wants to know what went wrong with the banking system. The system went awry in other countries but we must primarily examine what went wrong with regulation and within the banks and what caused the problems we have. The inquiry must get on with its business and answer these questions as soon as possible. The entire focus of the Government must be to allow the banking system to continue its recovery, to allow the NAMA process to continue and to do whatever needs to be done in terms of recapitalisation to ensure our banking system remains safe. This will be done in the face of opposition from the Opposition, but we must do this. No matter what proposal is put before the House regarding banking, it will be opposed by the Opposition.
Did the Deputy sign the motion seeking an open inquiry?
Much has been done and much of the guarantee money has been repaid to the Exchequer.
Recapitalisation money for AIB and Bank of Ireland will also be paid back at an interest rate and that is an important point that they keep forgetting but which is beginning to show dividends. We look forward to the results of the inquiry but it should be left to get on with its job.
I am pleased to have an opportunity to contribute to the debate. Everyone in the House shares a determination to understand the reasons behind the banking crisis, to get to the bottom of why it happened and to ensure to the greatest extent possible that lessons are learned so that such a crisis can never happen again. A number of key questions need to be answered by the inquiry. These include why Irish banks, which historically have been conservative, departed from the traditional model of banking where the level of deposits on hand determined the amount of money lent out. Why did they become over-reliant on international lenders to fund their operations? Why did they engage in a frenzy of reckless lending to a property and development sector, thereby jeopardising their entire business model? Why did the financial regulator not shout stop? Did the regulator not recognise the risks associated with what the banks were doing or did the regulator turn a blind eye? Why did the Central Bank not ring the alarm bells much louder during these years?
Of course the role of Government policy during these years must be examined and this side of the House must be mature about that issue. Was the legislation that established the financial regulator robust enough? Why did the risk management functions in individual banks fail so miserably to identify the risks and address them in a comprehensive way? What about the role of the external and internal auditors in these financial institutions? Why did they not identify the risks and shout stop when it was clear for all to see that the risks associated with the banks' practices were very significant? The bonus and reward system in place for bank executives clearly rewarded the level of lending that occurred and encouraged such risky practices to continue.
What is important for me, everyone in the House and the Irish people is to get to the truth. We would all love nothing more than to bring in some of the leading lights in the banking world over recent years and subject them to a public grilling and put all of these questions and many more directly to them. However, I would be gravely concerned that if we went down that road the outcome would be to prejudice the investigations under way to which we all want to see a successful and speedy conclusion.
The inquiry being established by the Government is not about the individuals. The investigations under way will deal with those issues, it is hoped, in a comprehensive and quick manner and I will return to this point if I have time. It is an independent statutory commission of inquiry preceded by two preliminary reports that will feed into the process. Let us be honest: if we were to deal with the issue solely by way of a fully public Oireachtas inquiry, the temptation would be to bring partisan politics into it on every occasion. Consider the debate we have had in the House since the banking crisis emerged in 2008. It has been characterised by partisan politics from day one. If we were to bring this into the environment of an Oireachtas committee, there would be division along party lines. There should not be but it is inevitable that there would be.
I am all for restoring the primacy of the role of Parliament and the elected Member but this is an issue on which a judgment has to be made on the role of Government. It is better that judgment be made outside of the heated political environment which would inevitably dominate any public inquiry conducted in full by an Oireachtas committee. Comments made in recent days about Professor Honohan have been somewhat unfair. He is completely untainted by some of the practices that led to the banking crisis in Ireland. He was among the first to suggest an inquiry a number of months ago. He is a man of the highest integrity and he is well placed to review the role of the Central Bank during the period when the crisis took root.
The inquiry must work quickly, it must be efficient and it must be cost effective. I am glad to see that deadlines will be placed on the completion of the inquiry. This is particularly important. The Oireachtas Committee on Finance and the Public Service, of which I and Deputies Bruton and Burton are members, will have an important role to play at various stages of the process.
We need to see real progress in the investigations by the Garda and the Office of the Director of Corporate Enforcement which are under way. They have been going on for quite some time. Yesterday, I saw news reports on the case involving DCC and Fyffes which went on for nine years and concerns a transaction from February 2000. It was finally brought to a conclusion in January 2009. I would be utterly depressed if that were to be repeated in the investigations into the practices at Anglo Irish Bank and other institutions. They must be brought to a head very quickly so public confidence can be restored. What certain individuals in some institutions did during those years was patently wrong and there can be no question about that. The decisions they made had real consequences for individuals and families in this country, for pensioners holding shares, for people who bought property at the height of the boom and who are now suffering with negative equity, and for those who lost jobs because of the crisis of confidence and the recession which has taken root partly because of the banking crisis. We need an urgent conclusion to those investigations and the people directly involved must be held to account and brought to justice.
I welcome the opportunity to speak on the debate this evening. It is important to state what is involved and what the Government is setting out as outlined in the amendment to the motion before the House because it has been lost in the flurry of activity in recent days and the wish to report not what is happening but one's individual bias. I am sure it has been stated several times that we will have a report produced by the Governor of the Central Bank and an international expert or experts on the recent banking crisis and both will include in their terms of reference the national economic environment. This will take into account the overall fiscal and policy positions of the Government and the overall national finances and the macroeconomic environment of the country. This is specifically stated in the amendment tabled by the Minister for Finance.
The Governor of the Central Bank and the international expert will receive a briefing from the Oireachtas on its priorities prior to commencing their investigations and they will then produce a short report. I presume that briefing will come from the Oireachtas Committee on Finance and the Public Service. When the short report has been completed and the key issues to be dealt with are known, the Government will bring forward terms of reference to establish a statutory commission of inquiry. That will commence very promptly thereafter with a view to producing a very short report which will be returned to the Oireachtas for full debate and elaboration and enhancement through the Committee on Finance and the Public Service. I do not know whether the work will be done by the joint or select committee. I would prefer to see Senators included in the process. I notice the motion tabled by Deputy Joan Burton proposed that the work be carried out by Members of Dáil Éireann. She seems to be specifically excluding Senators from any role in the process.
When the commission of inquiry is established, which is a few months away, I suggest that the Government is very careful when choosing who to chair and lead it. It will be an investigation and I would like it to be chaired by somebody with particular expertise in banking or economics, a forensic accountant or a retired Garda assistant commissioner with the appropriate legal support. I would not like to see it being automatically headed by a barrister or a judge from the Four Courts. The reason I state this is that many tribunals headed by members of the legal profession get more involved in the legal process of how they go about the work rather than the job at hand. It would be far better if a different approach was taken to the appointment on this occasion.
The process has been criticised because there will be an investigation prior to its return to an Oireachtas committee. However, I remind Members of the House that this is precisely what happens week in week out at the Committee of Public Accounts. The Committee of Public Accounts carries out a detailed investigation every Thursday, cross-examines witnesses and re-examines them, all based on an initial report produced by the Comptroller and Auditor General. In September 2010, the Comptroller and Auditor General will produce a report on the activities of all agencies and Departments under his remit in 2009. Towards the end of 2010, when the report is fully assessed and laid before the House, the Committee of Public Accounts will carry out a detailed examination. Nobody in their right mind would suggest that Members of the Oireachtas should carry out the audits of the Departments. It is right that a report be produced by the experts, so that the Oireachtas can examine it in further detail.
Deputy Burton made a case personally by her own actions and by demonstrating her own bias. She has drawn firm conclusions on what she would like to see as the outcome of this. She had demonstrated that Members of the Oireachtas would not be free from bias, would not be neutral, and therefore would not be capable of carrying out such an inquiry. It is important that Members from the Government side and from the Opposition do not carry out this kind of work on that particular occasion.
There has been a backhanded criticism of Professor Patrick Honohan suggesting that it is unfair to ask him to do this job. If Deputies think that he does not have the gumption to examine the Financial Regulator's office and the Central Bank, then we are damning the man with faint praise.
Nobody criticised Patrick Honohan.
Deputy Bruton said that it was almost unfair to the man to ask him to do a job in an organisation that he will have to deal with.
That is not the same thing.
Allow the Deputy to finish. The Deputy should conclude.
I would see it as a first test for Professor Honohan. To think that he is not up to that test is to give him faint praise.
That is extremely disingenuous.
I think the man has the ability to do it, and I look forward to him producing his report.
Deputy Fleming is up there like a Koala bear——
On a point of order, I do not think Deputies should be seeking to distort what others say in the House. There is a principle of reasonable debate that should be observed.
There are procedures to deal with such matters. I call on Deputy O'Connor. I remind the Deputy that there are eight and a half minutes left in the slot.
I welcome the opportunity to make a brief contribution to what I consider to be a serious and worthwhile debate. I hope that my position is not misunderstood. I am happy to be adjacent to the Labour Party benches, but this is where I always sit.
The closer we get to a general election, the closer the Deputy gets to the Labour Party benches.
Let nobody misunderstand what I am doing.
There is no need to repeat what Deputy Fleming has said, but it is important to point out that people want us to talk about this. I compliment the Labour Party and Deputy Burton on putting down the motion, because it gives us an opportunity to talk about something about which people want us to talk. I accompanied a Tallaght businessman to a meeting with a banker in the city. I jokingly said to the banker that he was in a profession that was less popular than my own. That is the reality and people want it to be corrected. I would have thought that bankers should understand that.
These issues have been raised in other places in this House. The Joint Oireachtas Committee on Social and Family Affairs, under the chairmanship of Deputy Healy Rae, has held a number of hearings over the past few months on issues that fall within the remit of this debate. The Opposition spokespersons, Deputy Enright and Deputy Shortall, have been involved in those discussions. I am Vice Chairman of the committee, and in December we sent correspondence to the Minister and to the party spokespersons on finance. It followed a presentation to the joint Oireachtas committee by officials from the EBS, when we were very anxious to get a hold of their proposals and their vision on mortgage arrears. I hope they will get back to us and tell us precisely what they feel about those proposals.
We are all politicians and we all have our political perspectives. There will always be differences and we will sometimes need to dot the i's and cross the t's, but I hope that we all have concerns about those families in our communities who suddenly find themselves in seriously challenging positions. People who were quite comfortable until fairly recently, suddenly have challenging issues facing them. They have to go to the local social welfare office and the CWO. They have serious issues relating to their mortgages and other expenses. The Government should be concerned about these things. They are nearly as serious as security. I hear everybody saying that the first priority of the Government must be the security of its people. Security does not just mean keeping us safe from terrorism. It also means keeping us safe from everything else that will affect families. It is a fact that people are being affected by the current situation, particularly in respect of mortgages. Families are often finding it quite a struggle to deal with these issues.
I have been made redundant in my lifetime, and I am now dealing with constituents who have those same difficulties. They want to know from politicians what is being done about it. People are saying to us that there should be some process where the Government looks at the difficulties encountered by families. Something should be done about assisting families. We know that there is huge demand on local services in our communities. MABS is doing a great job under a lot of pressure. Workers from the Society of St. Vincent de Paul in every community can tell us what they have had to do in recent times. We all have tried to help. I was involved in a number of initiatives with other colleagues over Christmas where the society had to respond in an even more difficult way than it ever did before. People's homes and livelihoods are being threatened, and I think they will look at this debate and ask what will be done about the bankers. There is much politics flying around in this debate and I suspect there will be more to come in the next 40 minutes, but people want to know what will be done to assist them. Everybody is saying — even on the Opposition benches — that things will improve and the recession will be over, but in the meantime people are suffering.
A number of initiatives have been taken by the Government in recent times on general banking issues, including the introduction of a bank guarantee scheme in September 2008 that covered seven institutions, including branches overseas in certain subsidiaries. Other colleagues have spoken about the recapitalisation of a number of banks, and it is fair enough to talk about that in this debate. A new code of conduct on mortgage arrears took effect on 27 February 2009, and a new code of conduct on business lending took effect last March. These things should be reviewed again, because we have found in the past year that things are changing more rapidly than ever. People want to continue to review these matters and to develop good ideas across political parties. I do not have a difficulty listening to good ideas proposed by colleagues from other parties. I hope the Government will continue to adopt an open approach in these difficult times by considering these matters. If the telephone ringing in the Chamber is for me, I will conclude.
I wish to share time with a raft of colleagues.
I understand they are Deputies Sherlock, Kathleen Lynch, Upton, Costello and Ciarán Lynch.
The Leas-Cheann Comhairle is very kind.
Yesterday was a bad day for Parliament. "It goes without saying that the worst financial crisis this country has ever experienced requires an inquiry." That was the opening sentence of yesterday's speech by the Minister for Finance, Deputy Brian Lenihan. While I agree with the Minister, what he should have said was, "The worst financial crisis in this country's history requires a public inquiry." The inquiry is not public, Parliament has been sidelined and the critical events of the months of September and October 2008 are excluded. We have a private inquiry that is designed to shelter the key players in our economic downfall from public scrutiny. With evangelical zeal the Green Party continues to see white blackbirds. So much for its demand for "an open public inquiry with meaningful Oireachtas involvement."
If "the worst financial crisis" in our history is not the business of Parliament, what is Parliament's business? The Irish people who are paying the piper want accountability. They expect to see those responsible for the banking crash made amenable and want to judge for themselves why and how the crash happened. The Government has relegated the process by having it behind closed doors. When the report is finished — hopefully some time in 2011, although it may well be later — Dáil Éireann will be invited in a routine way to discuss its findings after the event.
I am sorry Deputy Fleming has left the House. I have some reservations about the wisdom of imposing on the new Governor of the Central Bank the obligation to investigate his staff, nor is it clear that Professor Honohan can discharge such a function without breaching section 33AK of the Central Bank and Financial Services Authority of Ireland Act.
The Dáil is being diminished in relevance, while the executive and the judicial arms continue to develop. The Labour Party is convinced that the parliamentary model of inquiry can be a focused, cost-effective, expeditious and fair means of dealing with issues of important public interest, legislative proposals, public accountability of the Executive and its agencies and value for money in respect of public moneys, whether voted by the Dáil or raised from other sources. Our conclusion is that an effective parliamentary power of inquiry is essential to the relevance of parliament to public life in a modern day, representative democracy.
The parliamentary inquiry, properly organised and conducted, is a natural extension of parliamentary oversight. The Labour Party Bill would enable such an inquiry which, in turn, would have enhanced Parliament and satisfied the demands of most people who are being burdened with higher taxes and pay cuts to rescue the banks from their reckless behaviour.
Our main argument for strengthening the Dáil is that it enhances public accountability. A vigorously active and independent parliament with the powers to investigate matters of serious public importance would ensure the systemic abuses and breakdown of good government highlighted by the DIRT inquiry, the various tribunals and other inquiries would be less likely to recur.
This secret inquiry is an old style Fianna Fáil stroke. Members of the Fianna Fáil Party know well what they are doing. Members of the Green Party, on the other hand, are like those people who visited Knock and damaged their eyesight while staring into the sun. Being in government has dazzled them so badly that they do not recognise that the only thing public about this inquiry is their humiliation by Fianna Fáil. It is amusing to note from the contributions of Fianna Fáil Deputies that an outsider would be forgiven for believing that the motion was tabled by their party. My friend and neighbour, Deputy O'Connor, like many of his colleagues, is upset about partisan politics.
I did not say I was upset.
It is extraordinary, it seems, that there should be politics of any kind in the Chamber. Instead, we should all row in behind the Green Party and sail in to the sunset. It is a disgrace and a missed opportunity that this inquiry is being conducted in secret behind closed doors to shelter from public scrutiny the key figures responsible.
Where else in the world would a government hide behind a Supreme Court judgment and use it as an excuse for not holding an open and informed inquiry? In no other liberal democracy would a Minister for Finance stand before the legislature and, in addressing his justification for an inquiry behind closed doors, refer in one form or another and on no less than six occasions to the global international crisis, while omitting to refer to the political climate underpinning the anatomy of the crisis or the political decisions made that were inherent to its very character.
It is extraordinary that the commission of investigation will not reach into the domestic political decisions which gave rise to the crisis. That Ministers for Finance will not be subjected to examination or held accountable for their actions is ludicrous. I am not sure if Deputies on the Government benches are aware of how ridiculous this sounds to people.
The Labour Party does not seek retribution, an issue alluded to by others, but it is entitled to seek to have answers provided in public to questions surrounding the role of the Financial Regulator. Why was the regulator able to ride out of "Dodge City" with a €600,000 pay-out without being subjected to an analysis of his performance or at least some scrutiny of his decisions? We also seek an answer in public to the question as to why Anglo Irish Bank continues to exist. We want to know the reason analysts in the city of London were baying for a kill when a substantial shareholder in the bank could no longer cover his position. How could one individual build up a stake of 28% in Anglo Irish Bank through numerous contracts for difference? The hedge funds had a field day on that issue and no one in the Office of the Financial Regulator called time on the madness. I am sure we will never know the reason because an open inquiry will not allow us to ask this very question. Instead, we will have to continue to read the business pages of the broadsheet newspapers to glean the knowledge we so desperately need to make honest appraisals.
If there is a sound economic logic for the continuance of Anglo Irish Bank, let the case be made publicly in order that those who elect us can adjudicate for themselves. As a society we need to learn valuable lessons from this period in our economic history. We want Ministers for Finance to be subjected to rigorous questioning in the public interest. The only way we can achieve this is through a transparent process that stands up to political scrutiny. By not having this inquiry in public we add to the moral turpitude that has underpinned this society for too long. We want the facts to fit the preconceptions. As long as a veil of secrecy exists, we will not make the changes that are necessary to move on in a real sense.
While every area has suffered as a result of the weather conditions of recent weeks, I can speak only for the area I know best. Before the President visits my area on Friday, the road to Donoughmore will have to be completely resurfaced and rebuilt. It is the only road in the area which will resurfaced because the county council does not have sufficient funds to do what is necessary.
This story could be repeated all over the country, including Wexford, Dublin and Tallaght. The unusual event that will occur on Friday is that the president will accept that all roads in County Cork are as perfect as the one she will drive on. She will be like a queen, thinking there are new roads everywhere she goes. The county council does not have enough money to redo the roads. In Cork the water system is turned off at 9 p.m. every night because the water system cannot hold the pressure. This is as a result of our economy going down the tubes. We have a country in dire need of infrastructure such as schools, roads, water and all of the facilities a developed economy should have. Instead we are bailing out the banks to such an extent that our economy will take years to recover. The people expected to bail out the banks are those who sit here every day and serve this country, firemen and county council workers. They are all taking a hit in order to bail out the banks. The Government has decided that the inquiry into the failure of the banking system will be held in private. The Government knows that if this was to be done in public, those who are angry at having their pay cut and not having decent roads to drive on would revolt when they see what really happened.
I refer to the lack of regulation and the Minister who continually told us that regulation is a dead hand, that regulation should be lighter or that we should have none. That is the scenario that brought us to where we are. We have heard this scenario from Fianna Fáil backbenchers, telling us of the trouble their constituents are in with mortgages and telling us about companies going out of business because they cannot get cash flow from the banks. We are not to know what happened and we will never know what happened.
This inquiry is designed to take Fianna Fáil past the next election. A Fianna Fáil backbencher said today that the only focus is on Brian Cowen. It is not. We would like to know what Charlie McCreevy did during all of this and we would like to hear from Deputies Bertie Ahern and Mary Harney. I will not mention the Green Party at this stage because its members do not appear to want to come to the House. The Minister for the Environment, Heritage and the Environment, Deputy John Gormley, is like the Saatchi & Saatchi of this Government. He is on the television every time I look and on the radio every time I listen but he is never in the House.
The economy is going down the tubes as a result of greed and lack of regulation. We will not be able to see the very people charged with investigating what happened in this country, who they are questioning and what are the answers. We will eventually get a report that will lead us to another report yet the ordinary person who works every day of the week will pay not just for the crisis but for the investigation this Government has decided we are not entitled to see. It is a disgrace and I am more than surprised at certain members of the Government who are allowing this to happen. I know that certain Members on the Government side are distinctly uncomfortable with what is happening. It is about time their voices were heard.
The Government's decision not to hold a public inquiry into the banking crisis is nothing short of a disgrace. It is an insult to our intelligence to pretend this is a public inquiry; it is anything but. Anyone with an interest in politics and current affairs has read the many books dealing with how decisions were taken in smoky rooms, almost always by men who claim to know what was best for their country. In politics, construction and banking, it appears a small coterie of people effectively decided the policy of the State and the impact this would have on citizens. They behaved as if they had all the answers and were masters of the universe. They were wrong then and Government is wrong now to hold what is in effect a private inquiry.
It seems this Government is so desperate to protect itself and the bankers who ran rings round it for years that it has truly lost touch with the people of the country. The citizens of Ireland realise that they and their children will pay for the mess the Irish economy is in for years to come. They know the excessive mortgages, which hundreds of thousands of people are saddled with, are a direct result of the banking policy to triple bank credit relative to GNP in just 11 years. They realise the banks will not lend enough money for years to come as they desperately seek to repair their balance sheets.
The public wants openness, honesty and a real investigation into what went wrong in the Irish banking and financial sectors, why it went wrong and who is responsible. This requires a public investigation, not a report conducted in private. The only Oireachtas oversight proposed is that of the committee packed with and chaired by Fianna Fáil Members. The Government is so petrified of having to take responsibility for its actions during the Celtic tiger that it is willing to sanction a whitewash. If we are to learn the lessons from the collapse in Irish banking and to ensure this will never happen again, we must have a public inquiry that deals with every facet of the crisis in an open and transparent manner.
I listened to Deputy Mulcahy last night when he was asked about the timeframe of this inquiry and whether it would include September 2008. He gave the usual evasive answer about his opinion. We are not interested in opinions; we want facts. From reading this, it appears to the rest of us that anything beyond September 2008 or from the beginning of September 2008 is outside the remit of this investigation. So much happened beyond that date but we get opinions and no facts. This means the banking guarantee is not within the remit of the investigation. Is this because the Government does not want it to emerge how it was hoodwinked by the bankers into offering blanket support to the Irish banks? Is it because the Government does not want the public to realise how much it knew about the perilous state of Anglo Irish Bank? To limit the terms of the investigation to September 2008 is a whitewash. Everything the Government has done with the banking system flows from the bank guarantee scheme hatched one night in Government Buildings. The Labour Party voted against the bank guarantee, which was the right decision. Bailing out banks to the tune of €11 billion, nationalising Anglo Irish Bank and establishing NAMA all became necessary because the Government had to take these actions once the guarantee was in place. Otherwise, the guarantee would have been called upon, thus bankrupting the State.
Another matter must be addressed by an inquiry and may not be addressed by the Government's private inquiry. I refer to the complicity of the media in stoking the property bubble. A few years ago, property was such a big earner for newspapers that the properties sections were often as large as the rest of the newspaper. The media happily quoted the pet economists of the banks, who told us the property sector remained strong and the fundamentals were sound. One could hardly open a newspaper without being told of the mythical property ladder. Where is the property ladder now? Is it stored away in someone's garage, has it been repossessed or is the property ladder to be purchased by NAMA, perhaps with a 30% discount meaning the loss of the few steps? The role of the media and others with a financial interest in effectively scaring people into purchasing houses at grossly inflated prices, with the threat that they had to get on the ladder, needs to be investigated by a public inquiry.
Conducting what is a private inquiry that does not cover September 2008 means we run the serious risk of getting very little real information, not getting all the answers and not learning from our mistakes so we can ensure this will never happen again. The amendment from the Government is designed to provide a convenient smokescreen that edits some of the most important timeframes within which the major decisions were taken. We need an opportunity to see the uncut version of the film and read the unedited script.
I thank my Labour Party colleagues and others who have spoken on this motion. The most-read document in Ireland this month will not be a book on the bestseller list — it will be the individual payslips and social welfare receipts of thousands of people whose household incomes are dropping month by month. The Government's proposals for bailing out the banks are linked to the decisions it announced in the recent budget. As they look at the bottom right-hand corner of their payslips, people will ask why their simple expectations for themselves, their families and their children have vanished without a trace. They do not understand why they are being told to take responsibility for picking up the pieces after the biggest economic crisis this country has ever faced. Why are they being asked to take a share of the responsibility, having received none of the benefit? To answer this question, we must understand that we face a political crisis as well as a financial one. The crisis has been caused by Fianna Fáil's governance of the economy and the policy decisions it made over the past decade. I refer to decisions on issues like property tax relief; soft touch regulation; the triangular relationship between the Fianna Fáil-led Government, developers and bankers; and the operation of our system of political funding. Such decisions were not made in the boardrooms of AIB, Bank of Ireland or Anglo Irish Bank, or on a building site — they were made in this House. Those who implemented such policies should be held accountable to this House through an inquiry conducted by their peers.
It might be difficult to state when exactly this financial and political crisis started, but we know for sure that it did not end in September 2008. The proposal to undertake an inquiry that does not extend beyond that date is simply outrageous. It is proposed to examine how the heat was applied, but not to question how the Government reacted on the night the pot boiled over. At that time, the Minister for Finance said in this Chamber that the fundamentals were sound, that everything was in place, that there was nothing to be worried about and that the banks had the cash they needed to hand. In October 2008, the Financial Regulator told us that the financial fundamentals were sound. On the morning we were due to travel back to Dublin after the summer recess, Members of the Dáil woke up to hear that following major negotiations with the banks, legislation was to be introduced to guarantee bank deposits. The Minister told us at that time that the system to be introduced would deal with the financial situation without costing the Exchequer a cent. We have moved so far since then that matters of Exchequer accountability are now discussed in terms of billions and trillions of euro, with millions of euro being in the tuppenny ha'penny place.
Rightly or wrongly, a significant percentage of the public believes there was collusion, if not a conspiracy, between Fianna Fáil, developers, builders and bankers and that this ultimately led to the crashing of the economy. It is rightly regarded as suspicious that 40% of disclosed donations to Fianna Fáil between 1997 and 2007 came from the construction and development sector. Does this explain why over 80,000 houses that were surplus to requirements were built at the height of the property bubble, when house price records continued to be set? Does it explain why rules governing mortgage lending went out the window and repayment periods were extended from 20 years to 35 years and beyond? Does it explain why trusted banking approaches, involving a duty of care to customers and strict income lending and property value ratios, no longer applied? Does it explain why, according to this morning's newspapers, 300,000 homes are lying empty throughout the country at a time when 56,000 people are in need of housing? Ultimately, does it explain why so many home owners are facing negative equity and living with the real fear of having their homes repossessed? If, as Fianna Fáil frequently asserts, there is no conspiracy, it is in that party's interests to provide for a full public inquiry and thereby assert its good name.
In his response this evening, I would like the Minister for Finance to state without any mental reservation that the system of inquiry he has proposed will suffice to examine thoroughly all the evidence and to allay public suspicion on this matter. The Green Party have suggested that they will demand the assertion of certain principles during this investigation. It seems to me that a quotation from Groucho Marx applies in this context: "those are my principles, and if you don't like them... well, I have others." Obviously, that is what the Green Party has said to Fianna Fáil in recent days. It was suggested last evening that the judgment in the case of Maguire v. Ardagh prevents future parliamentary inquiries from dealing with certain matters. However, research conducted by me, and by the Oireachtas library and research service on my behalf, shows that the ruling does not in any measure prohibit or prevent the Oireachtas from inquiring into policy matters or into the activities of the holders of public office. On that basis, those who hold or have held public office can be questioned in this House and in public view. There is no impediment to such an inquiry, regardless of the fig leaf behind which Fianna Fáil or the Green Party might choose to hide. There is a facility whereby former and past members of the Government can be questioned in public on their activities and roles over the past ten years.
Taken together, the collapse of our banking system, the failure to monitor the system and the manner in which lending, prudence and financial governance were allowed to get out of control represent one of the biggest scandals in the history of the State. It is crucial to our country's future that a banking inquiry works and is seen to work. Ultimately, such an inquiry should relate not only to the reputation and management of the banking sector, but also to the reputation of this House and the manner in which we conduct our business.
I thank my colleagues for sharing time with me. I am glad to see the Minister, Deputy Brian Lenihan, in the House. I consider this to be the biggest crisis and scandal in the history of the State. If we are to deal with something of that nature, it is extremely important that we do so in a proper fashion. Our democratic proposal would include the Oireachtas in a public, rather than a secret, inquiry. It is not good enough that the Government is proposing a convoluted hybrid tripartite inquiry, with no guarantee of any element of it being in public. It is an insult to taxpayers, who are having to take up the burden of underwriting the €500 billion guarantee scheme and the €7 billion recapitalisation programme, as well as NAMA and the taking into public ownership of Anglo Irish Bank.
Taxpayers are already paying through the nose as a result of the three most recent budgets, which hit them very hard. It is likely that similar bills will come from the Government for four more years, in order to pay for what the bankers have done. If we cannot respond by telling the taxpayer we will do a decent job of exposing those who bought us to this stage, what are we doing in this House? As public representatives, we have been elected by the taxpayers to represent them. The least we can do is provide a thorough, comprehensive and transparent inquiry for them. If such an inquiry is to deliver the goods, it should reveal how it happened, why it happened and who is responsible for it. It should make it possible for the relevant sanctions to be imposed on those people. That is what we are doing here tonight. The Minister is trying to turn down the covers. Keep it as tight as possible and do not allow questions on the €500 million guarantee or the decisions made by successive Ministers and taoisigh. It will not be relevant unless we can get to the nub of the problem, namely, where and how decisions were made. The public must be able to see that we are properly representing them in this House.
I welcome that the House is in agreement on the need for a preliminary inquiry. The reports of the two preliminary inquiries will shape the terms of reference of the commission of inquiry. The Oireachtas will also be consulted on these terms of reference.
It has been suggested by the Labour Party that the legislation controlling the Central Bank may constrain the ability of its Governor to carry out the inquiry on the lines proposed by the Government. The advice of the Attorney General is that such an exercise is within the scope of his functions. Legal constraints certainly exist in regard to what the Central Bank or its officers may say in public about confidential data relating to financial institutions but the same applies to regulators throughout Europe and the rest of the world. These constraints arise in part from EU law, which protects certain types of data collected by central banks and financial regulatory bodies, but that does not mean the Governor cannot undertake the preliminary inquiry requested of him by the Government. Professor Honohan is in an especially good position to carry out this inquiry because he has full access to papers and information within the Central Bank and is therefore in a better position than an independent person. Using this unique access, he will be in a position to report fully on the performance of the respective functions of the Central Bank and the regulator in the period since the establishment of the regulator, having regard to its statutory position. There is no prohibition on the Governor giving his analysis of the performance of functions within the regulatory system or presenting in his preliminary report appropriate conclusions based on his study of the relevant documentation. He is not barred from expressing in a report his opinion on these matters or on the financial system generally. Most important, there is no prohibition on the Governor giving his guidance and advice on the appropriate scope and terms of reference of the commission of inquiry based on his research and access to data. For these reasons, I believe the Governor is in an ideal position to carry out the task the Government has requested him to perform.
Questions were raised by Deputies Burton, Kenny and Noonan in regard to the time limit of September 2008. The Government has taken the view that the purpose of these inquiries should be to identify, examine and report on the causes of the systemic failures which have occurred in the banking system and which require the State to allocate significant amounts of scarce resources to financial institutions. That is the matter for which the public wants answers. If we do not understand how and why this crisis arose, we will not learn the lessons that will prevent it from ever happening again.
The inquiries are not being established to investigate the present Government's response to the crisis.
The Government's response is a matter of extensive public record and has been intensively debated over many hours in both of these Houses and in the public arena. The Taoiseach has answered questions in this House twice per week since the crisis began 18 months ago.
The Government remains fully accountable to the Oireachtas on all matters of policy. Deputy Burton made the criticism that wrong practices which may have occurred in the banks or regulatory system since September 2008 will not be investigated. I want to make it clear that such wrongdoing was a continuation of previous practices and can as such be investigated in the preliminary inquiry.
Deputy Noonan asked whether the inquiries will investigate the response of Departments and State agencies. The Government's amendment to the motion clearly states that the preliminary reports should consider the international social and macro-economic environment which provides the context for the recent crisis in the banking sector.
The old Jesuit education cannot be beaten.
Although we should not pre-empt the issue given that the Dáil will undoubtedly express a view on the terms of reference, one of the themes which the Government believes the statutory inquiry should examine is the response of relevant Departments and State agencies, including the linkage between the banking crisis and overall economic management. The role of Ministers as heads of Departments clearly falls within this examination. That is a matter the Government would like to be included in the terms of reference.
Deputy O'Donnell raised the question of why an inquiry cannot be held in public. The Oireachtas will be involved in public and once disputed issues of fact are determined by the commission, the entire matter can proceed in public.
Will that be written into the legislation?
The framework for investigation chosen by Government is the most effective and efficient available to it. In order to establish the facts, it is necessary to provide an investigation with statutory powers. We are all aware of the limitations placed on the Oireachtas by the Supreme Court in this regard. A committee of the Oireachtas cannot be a court of judgment on private individuals and cannot find on matters of fact.
For an investigation to proceed speedily and in a cost effective manner——
As the Labour Party takes the view that a toxic triangle is in operation, clearly it has already judged the facts before hearing the case.
The judgment has been misrepresented.
For an investigation to proceed speedily and in a cost effective manner, it must be able to conduct its business in private.
I wish to share my time with Deputy Eamon Gilmore, with the permission of the House.
This is my first opportunity to address the Minister for Finance in this House and I wish him well in his personal battle.
Time allows me to make three points very briefly. We have just heard some evidence of the first, that Fianna Fáil is staging a cover up of its administration since 1997 and particularly since 2002. We will undoubtedly pursue that in due course.
My remaining two points are more important to our current situation. The reasons given for preventing this Parliament from conducting its affairs are an insult to republican democracy in this State.
It is outrageous to think that Fianna Fáil could mobilise weird decisions and interpretations of a Supreme Court judgment to justify the Minister's decisions.
I recall when the corruption of the beef scandal, which was closely associated with Fianna Fáil activists and others, was uncovered by the media in 1989. Demands for a tribunal of inquiry were vigorously resisted. The then Minister for Agriculture and Food, Michael O'Kennedy, was on his feet where the Minister for Finance now sits to explain why an inquiry would not take place. However, a very courageous minority leader in the coalition Government of the day, Mr. Des O'Malley, warned the then Taoiseach that he would leave Government if an inquiry did not take place. Over the weekend, a would-be courageous leader of the Green Party who has exactly the same leverage called for an open inquiry which would be conducted by the Oireachtas and accountable to the citizens of this State, yet he does not have the courage to enter this Chamber. The Green Party has rolled over on the matter. What was promised by Senator Boyle through the media over the weekend and articulated with great passion and conviction by the Minister for the Environment, Heritage and Local Government, Deputy Gormley, has simply been swept aside.
We all know that the glue which holds Fianna Fáil together is its everlasting desire for power. The Taoiseach would no doubt have responded in exactly the same way as Deputy Bertie Ahern and Charlie Haughey. If the Green Party really has the courage of its convictions, the Minister for Finance would be announcing the same U-turn as his predecessor, Mr. O'Kennedy, made in regard to the beef tribunal. Sadly, we have the Minister, Deputy Gormley, rather than Mr. O'Malley.
I join my colleagues in wishing the Minister for Finance well in the personal challenge he faces. I thank Members for their contributions to this debate and my colleague and Labour Party finance spokesperson, Deputy Burton, for proposing the motion on a public inquiry into what happened in the banking system.
In ten minutes' time, every Member of the House will have a choice to make. That choice is either to vote for the Labour Party motion proposing an open public inquiry into what happened in all aspects of the banking system or to settle for the Fianna Fáil amendment to the motion which proposes some type of private, behind-closed-doors exercise that will be limited in its scope and which may well be restricted in its legal capacity. It will be no more than an inquiry in name.
Let us be clear about what the Labour Party is calling for. We are proposing a public inquiry to be conducted by an Oireachtas committee, that is, a committee of the elected representatives of the people, whose hard-earned tax money is going to fund the banks and whose businesses, jobs and earnings are being sacrificed so that Irish banking can be subsidised by the State. We propose that this Oireachtas committee should under legislation be given the power to appoint an investigator to carry out an investigation on a professional basis and to produce a book of evidence on which appropriate witnesses, including bankers, regulators, public officials and Ministers, will be questioned in public about what happened to the banking system and its consequences for the economy. The Government has sought to represent this choice as one between what the Government is proposing in its amendment to the Labour Party motion and a tribunal of inquiry that will cost a lot of money and might last forever. That is a false choice because nobody has suggested — certainly not the Labour Party — that there should be an inquiry of tribunal. We have proposed that there should be an Oireachtas committee, similar to that which undertook the DIRT inquiry, and that such an inquiry be carried out expeditiously.
Second, the Government line has been that one cannot have the type of inquiry that is proposed by the Labour Party because somehow it would be legally impeded from carrying out its work. In defence of that position the Government cites the Abbeylara judgment. We have addressed that difficulty by proposing a Bill which was prepared by Deputy Rabbitte and published last week which would give the Houses of the Oireachtas the power of inquiry available to every other Parliament I know of, would afford the committee the right to appoint an investigator and would delineate the difference between that type of public inquiry and the type of liability that would be imposed on people for criminal or civil purposes.
The arguments being made by the Government in opposing the Labour Party motion are false. The true Fianna Fáil position on this motion is that it does not want an inquiry into banking at all. When we first raised this with the Taoiseach before Christmas, it was clear from his response to me that he and his party did not want an inquiry. Instead they wanted this matter brushed under the carpet. However, faced with the prospect of the Labour Party motion on this week's Order Paper the Government has cobbled together an amendment, a set of proposals it is calling an inquiry. Fianna Fáil is spinning it to those gullible enough to believe that what it proposes would somehow be as effective as a public inquiry.
It will not be effective for several reasons. First, what Fianna Fáil is proposing would be unnecessarily lengthy, comprising three or four stages, including a report by the Governor of the Central Bank, a preliminary investigation to be conducted in private and a commission of inquiry which would conduct its business in private. Only then would a report be presented to us. Although dates are indicated by which various stages of this process should be completed, we all know that, as has happened in the case of every commission of inquiry that has been appointed to date, additional time will inevitably be sought if those dates are not met. If a commission of investigation is established at the end of June, as proposed by the amendment, the summer will intervene and it will be autumn before it starts its business. We can safely predict that by the end of 2010, the first report that will come from the commission of investigation will be one seeking additional time.
Second, the role being proposed for the Oireachtas is purely minimal and superficial. The Oireachtas committee or Members of the Oireachtas will be briefed on what the private investigations and commissions are doing in the early stages but thereafter it is only at the end of the process that the report of the commission will be laid before the Oireachtas in the same way as the annual report of a State body, with no commitment that the Oireachtas can do anything about it and certainly no commitment that the Oireachtas can follow it up by examining those who are brought before it.
Third, what is being proposed in this amendment is legally restricted. I heard the Minister for Finance argue, as has been pointed out by the Labour Party, that there are certain restrictions on what the Governor of the Central Bank can do and say. Section 33AK of the Central Bank Act 1942, as amended by the Central Bank and Financial Services Authority of Ireland Act 2004, clearly states that the Governor may not comment publicly on matters that are regarded as commercially sensitive involving the regulated institutions. Of course the Minister is correct that the Governor is not prevented by that provision in the legislation from making a report, offering his opinion on the terms of reference of a commission of inquiry or any matter, or reaching general conclusions about what happened in the banking system. He could probably do that now without any need for the provisions in the Government's proposal. However, he cannot comment on the relationship between the Central Bank and the individual institutions, an issue that is central to the entire matter. Without that relationship being examined, an inquiry would be quite weak and worthless.
Perhaps the most significant omission from the Government's proposal is the exclusion of its own role in the process. The Minister has said that the purpose of the so-called inquiry now proposed by Fianna Fáil is to examine the causes of what happened in the banking system. Deliberately excluded from the process is Fianna Fáil's own role in the handling of the banking crisis, including what happened in September 2008, namely, the series of meetings with representatives of banking institutions which led to the Government's decision to introduce a blanket guarantee that has ended up with the taxpayer having of necessity to take responsibility and carry the can for what happened in banking. An issue deserving of particular consideration is the situation where Anglo Irish Bank was given a guarantee in circumstances where we now know it was a delinquent bank engaged in irresponsible lending and had to be nationalised within months of securing that guarantee. All of this will be excluded from the terms of the inquiry. I challenge the Minister for Finance to show how one can properly examine the causes of the banking crisis if one cannot examine the management of the crisis by the Government and make connections between that and the causes of the crisis, particularly in so far as those causes relate to failures of policy.
I am not surprised Fianna Fáil has taken this position in regard to the Labour Party motion. That party clearly does not want an inquiry that would at a minimum expose the policy failures of various Ministers for Finance, the present Taoiseach in particular, and the obligation that would be on them to account for their policy handling and management of banking during their terms of office. That is the least worse scenario as far as Fianna Fáil is concerned. At worst what might be exposed is the pivotal role of the party in the toxic triangle that brought about the banking crisis, the collapse in construction and the consequences for the economy.
What I am surprised and disappointed at is the position of the Green Party.
Deputy Gilmore is making allegations to the House.
The Minister should allow the Deputy to conclude.
He is making allegations.
The Deputy is making allegations about a party.
Will the Minister allow the Deputy to conclude?
Allegations are being made.
The Deputy is concluding. Please allow him to do so.
The Deputy is making allegations. Talk about independent views in the Oireachtas.
The Chair heard allegations against no one.
I heard them where I am sitting.
I believed him when I heard Senator Boyle outline the Green Party's principles on this matter, that the inquiry would have to be open, public and have Oireachtas involvement. When I heard that the Minister, Deputy John Gormley, was going to see the Taoiseach, and was going to insist on a public inquiry——
Deputy Gilmore would come to an inquiry with preconceived views, as would his whole party.
——because I believed that the Green Party, of all parties, understands what has happened in the economy and what has happened in banking is a consequence of bad planning, and the political relationship to bad planning is as a consequence of property speculation——
That is absolute nonsense. Talk about playing to the gallery.
——and of unsustainable practices and lending by banks.
We will be blamed for Lehman's next.
What I did not expect, and what I am grossly disappointed about, is that the Green Party should have so easily sold the pass.
Deputies
The Green Party has a decision to make tonight. It is a decision that goes to the heart of everything the party has stood for, namely, matters relating to planning and the sustainability of the economy, principles that the Labour Party shares with it. This decision goes to the heart of everything the Green Party stands for. If its members decide that they will stand not with their principles, but with Fianna Fáil tonight, then they have come to a position where they are not even passengers in this Fianna Fáil Government——
That is because the Labour Party is looking for their votes.
——they are merely hitchhikers who will be ditched out at the first crossroads.
Deputies
We will never get them to get out of the car voluntarily.
Amendment put.
The Dáil divided: Tá, 78; Níl, 73.
Tá
- Ahern, Bertie.
- Ahern, Michael.
- Ahern, Noel.
- Andrews, Barry.
- Andrews, Chris.
- Ardagh, Seán.
- Aylward, Bobby.
- Blaney, Niall.
- Brady, Áine.
- Brady, Cyprian.
- Brady, Johnny.
- Browne, John.
- Byrne, Thomas.
- Calleary, Dara.
- Carey, Pat.
- Collins, Niall.
- Conlon, Margaret.
- Connick, Seán.
- Coughlan, Mary.
- Cregan, John.
- Cuffe, Ciarán.
- Curran, John.
- Dempsey, Noel.
- Devins, Jimmy.
- Dooley, Timmy.
- Fahey, Frank.
- Finneran, Michael.
- Fitzpatrick, Michael.
- Fleming, Seán.
- Flynn, Beverley.
- Gogarty, Paul.
- Gormley, John.
- Grealish, Noel.
- Harney, Mary.
- Haughey, Seán.
- Healy-Rae, Jackie.
- Hoctor, Máire.
- Kelleher, Billy.
- Kelly, Peter.
- Kenneally, Brendan.
- Kennedy, Michael.
- Killeen, Tony.
- Kitt, Michael P.
- Kitt, Tom.
- Lenihan, Brian.
- Lowry, Michael.
- McEllistrim, Thomas.
- McGrath, Mattie.
- McGrath, Michael.
- McGuinness, John.
- Mansergh, Martin.
- Martin, Micheál.
- Moynihan, Michael.
- Mulcahy, Michael.
- Nolan, M.J.
- Ó Cuív, Éamon.
- Ó Fearghaíl, Seán.
- O’Brien, Darragh.
- O’Connor, Charlie.
- O’Dea, Willie.
- O’Donoghue, John.
- O’Flynn, Noel.
- O’Hanlon, Rory.
- O’Keeffe, Batt.
- O’Keeffe, Edward.
- O’Rourke, Mary.
- O’Sullivan, Christy.
- Power, Peter.
- Power, Seán.
- Roche, Dick.
- Ryan, Eamon.
- Sargent, Trevor.
- Scanlon, Eamon.
- Smith, Brendan.
- Treacy, Noel.
- Wallace, Mary.
- White, Mary Alexandra.
- Woods, Michael.
Níl
- Allen, Bernard.
- Barrett, Seán.
- Behan, Joe.
- Breen, Pat.
- Broughan, Thomas P.
- Bruton, Richard.
- Burke, Ulick.
- Burton, Joan.
- Byrne, Catherine.
- Carey, Joe.
- Clune, Deirdre.
- Connaughton, Paul.
- Coonan, Noel J.
- Costello, Joe.
- Coveney, Simon.
- Crawford, Seymour.
- Creed, Michael.
- Creighton, Lucinda.
- D’Arcy, Michael.
- Deasy, John.
- Deenihan, Jimmy.
- Doyle, Andrew.
- Durkan, Bernard J.
- English, Damien.
- Enright, Olwyn.
- Feighan, Frank.
- Ferris, Martin.
- Flanagan, Charles.
- Flanagan, Terence.
- Gilmore, Eamon.
- Hayes, Brian.
- Hayes, Tom.
- Higgins, Michael D.
- Kehoe, Paul.
- Kenny, Enda.
- Lee, George.
- Lynch, Ciarán.
- Lynch, Kathleen.
- McCormack, Pádraic.
- McEntee, Shane.
- McGinley, Dinny.
- McGrath, Finian.
- McHugh, Joe.
- McManus, Liz.
- Mitchell, Olivia.
- Morgan, Arthur.
- Naughten, Denis.
- Neville, Dan.
- Noonan, Michael.
- Ó Caoláin, Caoimhghín.
- Ó Snodaigh, Aengus.
- O’Donnell, Kieran.
- O’Dowd, Fergus.
- O’Keeffe, Jim.
- O’Mahony, John.
- O’Shea, Brian.
- O’Sullivan, Jan.
- O’Sullivan, Maureen.
- Penrose, Willie.
- Quinn, Ruairí.
- Rabbitte, Pat.
- Reilly, James.
- Ring, Michael.
- Shatter, Alan.
- Sheahan, Tom.
- Sheehan, P.J.
- Sherlock, Seán.
- Shortall, Róisín.
- Stagg, Emmet.
- Timmins, Billy.
- Tuffy, Joanna.
- Upton, Mary.
- Varadkar, Leo.
Tellers: Tá, Deputies Pat Carey and John Cregan; Níl, Deputies Emmet Stagg and Paul Kehoe.
Amendment declared carried.
Question put: "That the motion, as amended, be agreed to."
The Dáil divided by electronic means.
Given that I was a teller in the vote, in accordance with the Standing Orders of the House and given the importance of the matter before us, I think it only appropriate to give an opportunity in particular to the Green Party to take a walk of shame through the lobbies. I call a vote to vote be taken by other than electronic means.
Question again put: "That the motion, as amended, be agreed to."
The Dáil divided: Tá, 78; Níl, 73.
Tá
- Ahern, Bertie.
- Ahern, Michael.
- Ahern, Noel.
- Andrews, Barry.
- Andrews, Chris.
- Ardagh, Seán.
- Aylward, Bobby.
- Blaney, Niall.
- Brady, Áine.
- Brady, Cyprian.
- Brady, Johnny.
- Browne, John.
- Byrne, Thomas.
- Calleary, Dara.
- Carey, Pat.
- Collins, Niall.
- Conlon, Margaret.
- Connick, Seán.
- Coughlan, Mary.
- Cregan, John.
- Cuffe, Ciarán.
- Curran, John.
- Dempsey, Noel.
- Devins, Jimmy.
- Dooley, Timmy.
- Fahey, Frank.
- Finneran, Michael.
- Fitzpatrick, Michael.
- Fleming, Seán.
- Flynn, Beverley.
- Gogarty, Paul.
- Gormley, John.
- Grealish, Noel.
- Harney, Mary.
- Haughey, Seán.
- Healy-Rae, Jackie.
- Hoctor, Máire.
- Kelleher, Billy.
- Kelly, Peter.
- Kenneally, Brendan.
- Kennedy, Michael.
- Killeen, Tony.
- Kitt, Michael P.
- Kitt, Tom.
- Lenihan, Brian.
- Lowry, Michael.
- McEllistrim, Thomas.
- McGrath, Mattie.
- McGrath, Michael.
- McGuinness, John.
- Martin, Micheál.
- Moloney, John.
- Moynihan, Michael.
- Mulcahy, Michael.
- Nolan, M. J.
- Ó Cuív, Éamon.
- Ó Fearghaíl, Seán.
- O’Brien, Darragh.
- O’Connor, Charlie.
- O’Dea, Willie.
- O’Donoghue, John.
- O’Flynn, Noel.
- O’Hanlon, Rory.
- O’Keeffe, Batt.
- O’Keeffe, Edward.
- O’Rourke, Mary.
- O’Sullivan, Christy.
- Power, Peter.
- Power, Seán.
- Roche, Dick.
- Ryan, Eamon.
- Sargent, Trevor.
- Scanlon, Eamon.
- Smith, Brendan.
- Treacy, Noel.
- Wallace, Mary.
- White, Mary Alexandra.
- Woods, Michael.
Níl
- Allen, Bernard.
- Bannon, James.
- Behan, Joe.
- Breen, Pat.
- Broughan, Thomas P.
- Bruton, Richard.
- Burke, Ulick.
- Burton, Joan.
- Byrne, Catherine.
- Carey, Joe.
- Clune, Deirdre.
- Connaughton, Paul.
- Coonan, Noel J.
- Costello, Joe.
- Coveney, Simon.
- Crawford, Seymour.
- Creed, Michael.
- Creighton, Lucinda.
- D’Arcy, Michael.
- Deasy, John.
- Deenihan, Jimmy.
- Doyle, Andrew.
- Durkan, Bernard J.
- English, Damien.
- Enright, Olwyn.
- Feighan, Frank.
- Ferris, Martin.
- Flanagan, Charles.
- Flanagan, Terence.
- Gilmore, Eamon.
- Hayes, Brian.
- Hayes, Tom.
- Higgins, Michael D.
- Kehoe, Paul.
- Kenny, Enda.
- Lee, George.
- Lynch, Ciarán.
- Lynch, Kathleen.
- McCormack, Pádraic.
- McEntee, Shane.
- McGinley, Dinny.
- McGrath, Finian.
- McHugh, Joe.
- McManus, Liz.
- Mitchell, Olivia.
- Morgan, Arthur.
- Naughten, Denis.
- Neville, Dan.
- Noonan, Michael.
- Ó Caoláin, Caoimhghín.
- Ó Snodaigh, Aengus.
- O’Donnell, Kieran.
- O’Dowd, Fergus.
- O’Keeffe, Jim.
- O’Mahony, John.
- O’Shea, Brian.
- O’Sullivan, Jan.
- O’Sullivan, Maureen.
- Penrose, Willie.
- Quinn, Ruairí.
- Rabbitte, Pat.
- Reilly, James.
- Ring, Michael.
- Shatter, Alan.
- Sheehan, P. J.
- Sherlock, Seán.
- Shortall, Róisín.
- Stagg, Emmet.
- Stanton, David.
- Timmins, Billy.
- Tuffy, Joanna.
- Upton, Mary.
- Varadkar, Leo.
Tellers: Tá, Deputies Pat Carey and John Cregan; Níl, Deputies Emmet Stagg and David Stanton.
Question declared carried.
