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Credit Institutions (Eligible Liabilities Guarantee)(Amendment) Scheme 2012: Motion (Continued)

Thursday, 29 November 2012

Dáil Éireann Debate
Vol. 784 No. 4

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Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty This is the third occasion on which the Government has sought to extend the operating period relating to the eligible liabilities guarantee, ELG, scheme. In June 2011, under the secrecy of a Cabinet meeting, it extended the scheme by six months. Then, last December, the Minister for Finance came before the House and sought a 12-month extension. On both occasions, I said that the Government had no exit strategy in respect of the guarantee within the timeframe set down under the scheme. While both Bank of Ireland and AIB have started to return to the international money markets, there is still no sign that the Government has succeeded in its strategy for exiting the guarantee. It is clear that it has failed in its attempts in this regard. Not only are Fine Gael and the Labour Party continuing to accept the liabilities of the existing scheme; they have gone further and are insisting that the banks should continue to pay out in respect of unsecured and unguaranteed bonds that are not even covered by the scheme. The fact that the Minister of State is before the House to seek a further 12-month extension proves beyond any doubt that the Government has again failed to release the State from the grip of the guarantee.

As of the end of September, the total amount guaranteed under the current scheme was €78 billion. What the Government wants to do now is to reopen the guarantee after 31 December and allow banks to place new liabilities on the State and its taxpayers. How times have changed. When Fianna Fáil sought to introduce this scheme in December 2009, both Fine Gael and the Labour Party spoke out against the proposal. The Labour Party's Deputy Burton and Fine Gael's Deputy Bruton were both highly critical of the proposal. Deputy Burton opposed the extent of the liabilities being placed on taxpayers' shoulders and Deputy Bruton demanded that the banks should demonstrate that they had changed their errant ways before being given any further public moneys. Nine months later, when Fianna Fáil sought to extend the scheme, Fine Gael and the Labour Party - along with Sinn Féin - rightly rallied against the guarantee. Deputy Burton said it was yet more evidence of the failure of the then Government's banking strategy and informed the House that the Labour Party "does not write blank cheques". The Minister of State, along with the Minister for Finance, voted against the extension on the grounds that the then Anglo Irish Bank continued to be covered by the scheme. Yet here we are again. The former Anglo Irish Bank continues to be covered by the scheme, senior banking executives continue to receive pay and pension packages in the hundreds of thousands of euro and small and medium-sized businesses continue to be starved of credit.

All of the arguments used by Fine Gael and the Labour Party to oppose the ELG scheme while in opposition are just as valid today. The only difference is that the Minister of State now sits where Brian Cowen and the late Brian Lenihan previously sat. Like so many of its other broken promises, the Government has swallowed lock, stock and barrel the failed policies of that which preceded it. The motion before the House is proof, if more proof were needed, that Fine Gael and the Labour Party are now enthusiastic supporters of the failed banking policy of Fianna Fáil despite having opposed it only two years ago. Today, the Minister for Social Protection, Deputy Burton, and her Labour Party colleagues will write another blank cheque for the banks, the Minister for Finance, Deputy Noonan, will support the inclusion of the former Anglo Irish Bank's toxic debts in the extended scheme, the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, will agree to potentially take on more bank liabilities despite the banks' ongoing failure to lend to new businesses and Fine Gael and the Labour Party will do exactly what Fianna Fáil did in December 2009 and September 2010.

The Minister of State will be well aware of reports in this morning's newspapers to the effect that the number of families facing difficulties making ends meet has more than doubled in the past four years. The latest Growing Up in Ireland survey of 7,400 children and their families shows that 61% are struggling now, compared to a figure of 29% just four years ago. People across the State are gripped by fear as they wait to see what additional hardship the Government is going to impose on low- and middle-income families in next week's budget. Yet here we are once again throwing a lifeline to failed banks such as the Irish Bank Resolution Corporation, IBRC, which continue to cost the State billions of euro every single year. People want to know why there is one rule for the banks and another for struggling families. Why is there unlimited funding for bailing out the banks yet so little for investment in jobs? Why is there no action on the excessive pay and pensions of top bankers when struggling families are being hit with extra taxes and charges? Why has no attempt been made to use the guarantee in order to secure real reductions in payments to bankers or real increases in lending to small and medium-sized enterprises?

The bank guarantee is not just bad policy; it is a symbol of all that is wrong with the financial and economic strategy begun by Fianna Fáil and continued by Fine Gael and the Labour Party. What does it say about our Government that it is willing to guarantee the banks to the tune of hundreds of billions of euro but that it did not for one second think to provide a guarantee for citizens in order to shield them from the social and economic crisis created, in the first instance, by the reckless behaviour of the banks? The guarantee represents the great inequality at the heart of Government policy. The basis of that inequality is that the banks must be saved at all costs and the people must pay the price. This is the meaning of the word "austerity". The latter is the policy that protects financial institutions and their senior management while imposing the full burden of the economic crisis on ordinary people.

In my home county of Donegal last week we once again witnessed the human face of the burden to which I refer. An emergency call was made for an ambulance to attend to a young child who was unconscious. The ambulance was dispatched with only one advanced paramedic on board and that individual was driving the vehicle. At the scene, the paramedic made the clinical decision, based on the needs of the unconscious child, to travel back to the hospital. As the paramedic was the only staff member on duty at the time, the boy had to be transported to hospital in the back of his mother's car with the paramedic tending to him there. When I sought clarification from the HSE on this matter, it was confirmed that the advanced paramedic was working on his own from 5 p.m. to 8 p.m. on the evening in question. The HSE had failed to provide cover in order to ensure there would be two paramedics on duty at the time. When the paramedic to whom I refer was on site, I understand he requested that the HSE allow one of two paramedics who live a number of doors away from the unconscious child's home to assist him. This request was refused, all in the name of trying to keep costs down. This is the very real effect of Fine Gael's and the Labour Party's policy of austerity on our public services.

When the Government bails out banks to the tune of €21.4 billion, as it did last year, and then makes the State potentially liable for billions more through the extension of the guarantee scheme, it is making a very clear choice. It is choosing to follow the lead of Fianna Fáil. It is choosing austerity over recovery and banks and bankers over ordinary people. Let me be clear: Sinn Féin will be opposing the motion before the House. It was a bad policy in 2009 and 2010, when Sinn Féin, the Labour Party and Fine Gael voted against it, and it remains a bad policy today. The only thing that has changed is that Deputies Micheál Martin, Michael McGrath and the others in Fianna Fáil are no longer running our economy and society into the ground. That job is now being ably done by the Taoiseach, Deputy Enda Kenny, the Tánaiste and Minister for Foreign Affairs and Trade, Deputy Gilmore, and the Minister for Finance, Deputy Noonan.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt I call Deputy Boyd Barrett, who is sharing time with Deputy Ross. Is that agreed? Agreed.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett We are discussing the notorious blanket guarantee that Fianna Fáil gave to the banks, the major corporate donors, the bondholders and the speculators who helped to cause the crash in our economy and the wider European economy.


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