I welcome the Bill tabled by Fianna Fáil in so far as it attempts to address the issue of profiteering by the banks at the expense of mortgage holders with variable interest rates. This is a positive move. It is equally positive to try to introduce measures whereby the State, the Government and the Central Bank would intervene where the market has failed or is failing. The market is failing and there is profiteering going on so I welcome this.
Much of the media commentary about the Bill has missed the important point, which relates to the issue of the new politics. Much of the media narrative is that what is significant is that the Government may be defeated this evening. This is very interesting media stuff, but it has nothing to do with the Bill. Whether the Government wins, loses or presses amendments - and I will discuss the amendment shortly - is not actually the issue. The issue is what is in the Bill. I appeal to the media to embrace a little of the new politics and recognise that we are starting to move towards discussions of substantial policy as against the back and forward and the Punch and Judy show of political parties. In that context, this is a positively motivated Bill which tries to do something to address the profiteering and market failure in the area of mortgage interest rates.
I do not accept the Government's amendment that we should examine the Bill but send it back to the pre-legislative stage. If the Government thinks a little more time is required to consider the provisions of the Bill, it should allow it to proceed to Committee Stage and leave a sufficient gap after Second Stage to allow for further consideration. It is the old politics to try to bat it backwards. The Government should pull back from this. This needs to be given serious consideration and we need an in-depth debate on Committee Stage.
Having said that, we would like to see the Bill pass Second Stage. There is a similarity between the method running through the Bill from Fianna Fáil and the Government's opposition to it. The Government is essentially stating that the problem with the Bill is that it would interfere with the market, that we need the market to determine interest rates and that competition is the way forward. Interestingly, this is what the Bill says to a large extent. On substantial policy grounds, while I agree with a number of things Deputy Michael McGrath is trying to do, in terms of empowering the Central Bank to intervene with banks which are profiteering and charging excessive interest rates in respect of the cost of their own borrowing on the international markets, I totally disagree with the Bill in so far as, in essence, it is trying to establish a perfect market and speaks about the Central Bank trying to enforce a perfect market, with the assumption that competition between the banks will address this issue. It will not. There is a serious danger; if we think back to the pre-crisis period it was precisely competition between the privately owned banks for profit that caused the bubble and crash that followed. While I am in favour of the Central Bank having the power to intervene, I do not believe this is the basis on which it should intervene to create a perfect market.
What we need is public banking. We need a banking system that runs on a national level in the same way the credit unions operate. They are not run for profit and their purpose is to lend money to people for things they need and not to extort from them through the charging of interest. We should have social objectives for the banking system as a whole and the Central Bank should allow this. In fact, the Central Bank is blocking the further expansion and development of credit unions and I can only conclude this is because it wants to protect private banks. The Bill should pass Second Stage and the Government should not block it, but it needs a hell of a lot more discussion and I do not agree with everything in it.