Wednesday, 16 June 2010
Dáil Éireann Debate
commending the depth of analysis and conclusions of the Report on The Irish Banking Crisis — Regulatory and Financial Stability Policy 2003-2008 by the Governor of the Central Bank (the ‘Honohan Report’) and the Preliminary Report on The Sources of Ireland’s Banking Crisis by Klaus Regling and Max Watson;
noting the conclusion in both reports that the conduct of fiscal policy by the Government in the period 2003-2008 was a major contributory factor in the property bubble, the loss of export competitiveness and the subsequent banking and economic crisis, while also noting that it was beyond the terms of reference of these reports to examine the motivation behind these policy decisions;
noting the conclusion in the Honohan report that the then Minister for Finance, Deputy Brian Cowen extended property tax reliefs for developers in 2006 at the height of the property bubble, while also noting that it was beyond the terms of reference of this report to examine the motivations behind these policy decisions;
noting the conclusion in the Honohan report that the Minister for Finance and his officials exercised influence on the Financial Regulator in 2006 to the effect that a proposed tightening to the quality of governance of bank directors was not implemented, while also noting that it was beyond the terms of reference of this report to examine the motivation behind these actions; and
noting the conclusion contained in the Honohan report that an excessively generous bank guarantee issued on 30 September, 2008, has cost the taxpayer more than was necessary to protect the stability of the financial system, and that arguments were made at the time against such a blanket guarantee, while also noting that it was beyond the terms of reference of this report to examine the motivations behind this policy decision;
Deputy Kieran O’Donnell: Fine Gael has put forward this motion on foot of the two excellent reports published by Professor Honohan, Governor of the Central Bank and Messrs Klaus Regling and Max Watson, which are objective in their orientation and criticism of Government policy. What we are seeking is the context of the proposed Commission of Investigation, in particular the draft terms of reference in this regard as proposed by Government.
The motion commends the depth of reporting and analysis in the reports published by Professor Honohan and Messrs Regling and Watson. It also notes the conclusions in those reports on several issues including that our fiscal policy was very much relevant to our economy being dependant on property, thus creating the property bubble which had a major impact on our loss of export competitiveness and leading to the banking crisis.
I want to deal with a number of other factors and to give an objective critique of Government policy. I do not wish to personalise this matter but to deal with it as reported in the banking reports and to set out the areas I believe need to be considered as part of the Commission of Investigation to ensure a whole rather than selective approach which will provide extra weight to the initial reports and ensure that we not alone learn the truth but note the mistakes made and changes required.
The reports state that the issue of directors’ compliance statements was put forward by the then Financial Regulator but that this was effectively blocked by the Department of Finance and then Minister for Finance, Deputy Brian Cowen. The authority was informed in December 2006 that the Minister for Finance felt it was important to assess the competitiveness issue. Following a discussion with the Department of Finance it was agreed with the Financial Regulator not to implement the provision as set out in the Central Bank Act and to examine the requirements for compliance statements from financial service providers in the context of projects to consolidate and modernise financial services legislation. In essence, this never happened. The introduction of directors’ compliance statements would have improved immeasurably corporate governance within the banking system.
I turn now to the bank guarantee scheme. Professor Honohan’s report is an excellent and easy to read report. I have no doubt it will be easily understood by everyone. Professor Honohan stated that the guarantee scheme introduced on the night of 29-30 September was too broad and as a result ended up costing the taxpayer, in particular in terms of its coverage of subordinated debt. The Government came into this House on 30 September and stated that the bank guarantee scheme had to be introduced because the banking system was at crisis point. We now know from Professor Honohan’s report that in July 2007 a group had been established to review the banking system and that many of the issues were considered in the context of Anglo Irish Bank. A decision was taken by Government that no bank would be allowed to fail. Anglo Irish bank fell into a different category. The Government included in this regard lower tier II subordinated debt. The banks then effectively took more risky subordinated debt and allowed it to be converted into lower tier II, which brought it within the guarantee scheme. It is clear from Professor Honohan’s report that subordinated debt should not have been guaranteed as part of the bank guarantee scheme.
What we want in terms of the commission of investigation is for the two elements missing from the banking reports to be addressed. It was not within the terms of reference of both banking reports to consider the motivational aspects in terms of policy. Policy is determined by Government. During the crisis, in terms of the fiscal element from 2004 to early 2008, the Taoiseach, Deputy Cowen was Minister for Finance. We have no idea of the motivational aspect in terms of the policies he introduced or the official advice provided to him by the Department. It is a weakness in our democratic system that advice provided by departmental officials is not put into the public domain thus allowing us to know the background upon which Ministers made decisions. We are told this information cannot be disclosed. We have, therefore, an information deficit.
Professor Honohan and Messrs Regling and Watson appeared before the Joint Committee on Finance and the Public Service. When I asked each of them whom they interviewed I was told that none of them had interviewed the main player in this period, namely, the current Taoiseach and then Minister for Finance, Deputy Brian Cowen. This is a weakness in the reports and the proposal in this regard as contained in the motion should be included in the terms of reference of the commission of investigation. The Government has provided to the Joint Committee on Finance and the Public Service the draft terms of reference for the commission of investigation which it is to overview and make recommendations on.
The commission of investigation must take into account Government policy. We have within this House and at ministerial level the power to determine people’s future through Government policy. Professor Honohan, as Governor of the Central Bank, implements Government policy. We need to know why the Taoiseach, Deputy Brian Cowen, when Minister for Finance, indulged in pro-cyclical budgets and why in 2007 and 2008 we had an 11% increase in real expenditure, which effectively, according to Professor Honohan, worsened the situation. Why did this happen?
Professor Honohan is on record as saying that in a final twist real expenditure rose by 11% in 2007 and 2008 following the budgets of 2006 and 2007 respectively introduced by the then Minister for Finance and current Taoiseach, Deputy Cowen. There was an unfortunate late burst of spending, which boosted the underlying deficit at almost the worst possible time. That was at the end of his tenure as Minister for Finance. On page 28, the report says the following about the start of his tenure:
When Deputy Brian Cowen became Minister for Finance he presented budgets which turbo-boosted the economy when it did not need that. The Taoiseach has said that in December 2005, he decided to curtail, or disband, tax incentive schemes. However, the tax incentive schemes continued until 31 July 2008, two and a half years later, and bang in the middle of the financial crisis. The commission of investigation must establish the Minister’s motive for allowing the schemes to continue for so long. Why did he allow expenditure to increase at an alarming rate during his period as Minister for Finance, culminating in an 11% increase in real expenditure in 2007 and 2008? The commission must include the Department of Finance in its remit. We must know what advice the Department gave to the Minister. What was the train of thought in the Department and the reason for the advice given?
Until 2002 or 2003, we were, in the main, an export nation. The property crisis had not gone out of control and we were reasonably competitive. Suddenly, our exports fell, lending by the banking sector went out of control and the Minister for Finance was spending as though there was no tomorrow. The impression was given that, in the words of the Honohan report, “the party would never end”. The property market was fuelled by budgetary policy which fanned the flames. Between 2004 and 2008, we had inflationary budgets, which made us uncompetitive, and no check was placed on the banks. In the financial stability reports, the Minister would have seen references to the problems created by the increase in property prices and the loan books of various banks, particularly Anglo Irish Bank. Between 2005 and 2007, there was a doubling of the loan books of the other banks, much of it property related.
We want full and complete clarity as to what happened, why it happened and who were the parties to what happened. The key player is the Taoiseach, who was Minister for Finance at that time. I do not know why he did it or what information he was given by his Department. Why did he not allow the corporate compliance statements to be introduced by the Financial Regulator in 2006? That would have had a major impact, in terms of corporate governance.
The draft terms of reference for the commission of inquiry limit it, interestingly, to the period from 1 January 2003 to 28 September 2008. The last two days of September are left out. They were the two days when the major discussions on the Government guarantee scheme took place. Furthermore, on page 120 of his report, Professor Honohan said:
Why was the solvency issue not considered? Why were balance sheets ballooning in the banks? Was their solvency not considered at the time? Anglo Irish Bank’s position was particularly pertinent in this regard.
Members of the board of Anglo Irish Bank came before the Joint Committee on Finance and the Public Service today. They stated that €14 billion has gone into the bank. That money will never be seen by the taxpayer again. The board requires a further €8 billion, making €22 billion. Furthermore, they want another €2.5 billion of share capital to establish a good bank-bad bank. We need to know the details of these key fundamental issues.
I commend the motion to the House. The draft terms of reference for the commission of investigation must be widened by the Government. Fine Gael will propose this extension at the Joint Committee on Finance and the Public Service. The terms of reference should include the political and policy context for the conduct of budgetary policy in 2005-08, including official advice given to the then Minister for Finance and the lessons to be learned; the political and policy context for the decision to extend tax reliefs for property developers in 2006 up to 31 July 2008, including the official advice to the Minister for Finance and the lessons to be learned; the political and policy context for the failure by the Financial Regulator to implement tighter compliance rules for bank directors; and the political and policy context for the decision to extend the bank guarantee scheme on 30 September to invest in long-term subordinated debt.
As Professor Honohan said, only sketchy records remain. We need to know exactly what happened. What was the political and policy context for the failure of the Department of Finance and the Financial Regulator, in December 2008, to stop Anglo Irish Bank from publishing financial records that misrepresented the strength of its customer base? What are the lessons to be learned from that? Anglo Irish Bank’s deposits went to Irish Life & Permanent as bank deposits, in effect, and came back as customer deposits. Why were these accounts allowed to be published in that context? Who knew what?
I commend this motion to the House. I hope Deputies on the Government side will appreciate that all we want is an inclusive commission of investigation. The Government should have nothing to worry about, in terms of the context. The public is entitled to get the facts in a clear, concise and comprehensive report on the all the individuals involved. When the Taoiseach was Minister for Finance, what were his motives and those of his officials? I hope we will get support from all sides of the House. I commend the motion.
Deputy Seymour Crawford: I support the motion proposed by my colleague, Deputy O’Donnell. This important issue needs to be fully clarified and sorted out. Many small businesses and farmers in my constituency are under pressure because they cannot get proper banking facilities. That serious problem is a direct result of the crisis presided over by the current Government, as alluded to in the two reports. The preliminary reports on the banking crisis clearly blame the Taoiseach, Deputy Cowen. His economic policies were a major cause of the crisis we are experiencing. The Taoiseach’s only defence is that his policies were based on the best available advice at the time. This argument has not been tested at length by either report.
The Taoiseach’s claim needs to be examined by a private commission of investigation, in the interests of democratic and public service accountability. We are looking for proper terms of reference to be put in place so that the Taoiseach and those involved with him at the time are brought into the debate. They should be examined fully on their roles in what happened during the years in question.
When one examines the situation in Anglo Irish Bank, one must speak in terms of hundreds of thousands of euro. One of my colleagues chastised me when I spoke in terms of billions of euro the other night. I was told that people do not understand billions because they are not used to them. Hundreds of thousands of euro — taxpayers’ money — is going into Anglo Irish Bank. As Deputy O’Donnell has said, it is colossal and unforgivable. The bank in question has made it clear that unless it gets more money, the money it has received to date will not be of any service or use. Small industries and farmers are under severe pressure as a direct result of that. I emphasise that the people of this country, each of whom owes €20,000 as a result of this crisis, want to get a clear indication of how and why it happened. I do not believe those who caused the crisis can make sure it is rectified.
It is proposed that when the report of the commission of investigation is completed, it will be laid before the Oireachtas for further consideration. It will then be open to an Oireachtas committee to hold further hearings on it. The draft terms of reference require that the commission of investigation should complete its work within six months of its establishment. It is a joke that the terms of reference limit the issues to be covered to the failure of the bank managers, directors, auditors and regulators to protect the financial stability of their institutions and the country as a whole. I accept that all of these people played a role in the crisis, but it is completely unacceptable to suggest that the Government and the Minister for Finance of the time did not play a role in it.
The central findings of both of the preliminary reports — that the socioeconomic context for the individual failures of the banks and the regulator was the reckless and inflammatory policies pursued by the then Minister for Finance, Deputy Cowen — are being ignored. His policies ignored the contemporaneous warnings that the stability of the economy was being threatened and national competitiveness was being undermined. We have heard the Taoiseach say on many occasions that nobody warned him about what was happening. He was given umpteen warnings about it. He was Minister for Finance at the time when Deputy Bertie Ahern was Taoiseach. The only response the former Taoiseach gave at that stage was that those issuing such warnings should take a running jump and go somewhere else. I do not have his exact words to hand, but I recall that he said certain people should commit suicide. It is crazy for people to say the Government was not warned, or that nobody was angry or anxious about the situation.
I used to drive around villages in County Cavan on Sunday afternoons to look at the extraordinary numbers of houses that were being built. There was not a factory in sight. There was no word of any jobs being created, other than in the building industry. It did not make sense. Special arrangements were put in place in the Shannon basin so that those building houses could get tax relief. As part of the region was in County Cavan, in my constituency, I constantly received telephone calls from people in County Monaghan and other areas who wanted to know why developments in one area were eligible for tax relief but developments in other areas were not. It is bunkum for the Taoiseach to say he put an end to such arrangements as soon as he became Minister for Finance. The reports show clearly that did not happen — the tax reliefs were phased out over a long period of time.
No one is living in many of the houses that have been built in towns and villages throughout the country. We have to try to devise ways of ensuring those houses are used. Many people do not have their own houses at present. If we provide jobs in the areas in question, young people may use these houses in the future. It is not hard to see what has happened over the years. In my own county of Monaghan, just 400 jobs have been created by outside industry over the last 30 years. No effort has been made by the Government, IDA Ireland or anybody else to bring jobs to the area. The jobs have gone to Dundalk, Sligo, Dublin, Galway and elsewhere but not to the Border region. Some of these matters can be sorted out.
I beg the Minister for Finance to ensure a little common sense is applied in this context. We are not asking for much. The issues highlighted in these reports have to be discussed if the work of the commission is to be relevant. It should be allowed to consider the actions of the present Taoiseach and his officials, so that a clearer picture starts to emerge. We need to ensure nobody in the history of this generation or the next allows a debacle of this nature to develop again. We have experience of the work of the new regulator — major questions have to be asked about how he dealt with the Quinn affair. Jobs that should not be lost are being lost. We have gone from total under-regulation to over-regulation. The only way we can solve this problem is by agreeing the simple resolution before the House, which would allow the proper people to be questioned and a proper report to be made. That is all we are asking for. We are not asking for anything major.
Deputy Joe McHugh: On 3 July 2009, the Taoiseach said in this House that “nobody predicted what has happened globally or in Ireland”. The two preliminary reports into the banking crisis, which were presented to the Oireachtas earlier this month, suggest that the Government’s economic policies were a major cause of the crisis.
The Government’s draft terms of reference for the investigation are designed to protect the Government from being held publicly accountable. That is why Fine Gael, through this motion, wants to change these terms of reference. We find that the Taoiseach’s defence is unsustainable. His only defence has been that these policies were based on the best available official advice at the time. However, this argument has not been tested at length by either report.
On 3 July 2009, the Taoiseach said: “[N]obody predicted what has happened globally or in Ireland.” That argument is negated by the fact that among those who warned of the risks of the Government’s policies were Fine Gael — Deputies Kenny and Bruton warned time and again that the construction bubble was not sustainable — Professor Patrick Honohan, John FitzGerald and the ESRI, the National Competitiveness Council, the IMF, the OECD, The Economist, and, most importantly, the ordinary man in the street. Ordinary people had been predicting the bursting of the property bubble for more than a decade, and the Government, which has been in power for so long, had a responsibility to listen to these people.
Irish people are educated today. There was a time when a politician’s job was to form his or her own independent view; that time is gone. Our job as parliamentarians in this democracy — messengers of the people — is to listen to our constituents and use their views to inform our political decisions and choices. I challenge any politician who served in an Irish constituency between 2002 and 2007 to stand up in the House and say that the man in the street did not warn that the bubble was unsustainable.
These are also words spoken by me, on 5 July 2006. The Government should have listened to the people. We, as voices on the Opposition benches, tried to act as a conduit for the opinions of the people, but we were not listened to. This led me to form my own reply to the question: “What is the difference between the Seanad and the Dáil?” The difference is that in the Seanad one can say whatever one wants and nobody listens; in the Dáil one can say very little and everybody listens. These are two quotes from 2005 and 2006 that were not listened to by the Government.
The substance of the Fine Gael motion, which the Government wishes to amend, is a call on the Government to extend the terms of reference, as Deputy O’Donnell has already mentioned, to include the political and policy context for the decision to extend tax relief for property developers in 2006, including official advice given to the then Minister for Finance, who is now the Taoiseach, and the lessons to be learned. The then Minister’s failure in the final extension of the construction boom was the 2006 Act in which these reliefs were introduced.
Those who do not know history are condemned to repeat it. I am a practical politician; I am not interested in the prospect of punishing the Government for the sake of it. However, there must be accountability. These mistakes must not be made again.
Deputy Paul Connaughton: What the Opposition, and every person outside this House want is to find out the basis for what happened on that night in September 2008. They want to know the factors leading up to the decision that was taken to provide a blanket bank guarantee. It appears the Government is prepared to talk about everything and put every spin that is humanly possible on this scenario without coming to the point of how the decision was made.
Deputy Paul Connaughton: One would want a wheelbarrow of information to justify it, including the reasons for its introduction, its evaluation and so on. Can one imagine, while we are talking about the concept of €440 billion, that at least the next three generations——
I am delighted the Minister for Finance is here this evening. I have no doubt there was a particular reason, maybe a good reason, for the decision that was taken that night, but I do not know about it, and I am a Member of the Oireachtas. There are 4 million people here and they do not know. The least they would have expected, with all the investigations of every aspect of Irish life, is that everything up to and including the decision that was taken that night would be opened up to investigation; but this has not happened. It is a bit like holding an investigation into a house burglary which deals with everything up to the night the robbery takes place but leaves the actual robbery out of it.
Deputy Paul Connaughton: We will eventually become good at it. The Minister need not worry. In fairness, the Minister is a master at it. In spite of all the pointers, the Minister is now saying that nobody could have expected this; it was the Lehman Brothers collapse that was responsible for the whole thing. We never hear a word about the economy being overheated or our reliance on the building industry, although everyone in the country was talking about it.
I remember one famous occasion on which one of the Minister’s predecessors, Mr. Charlie McCreevy, gave his view on economics: “When I have it, I spend it and when I don’t, I don’t.” When he said that, he was sitting in the same seat the Minister is sitting in now. That is some basis for a rational way to run a country — when I have it, I spend it. Surely that is exactly what the Government did.
As far back as November 2005, the IMF explicitly warned the then Minister for Finance that “house price over-valuation in Ireland [was] large compared to other countries” and could not be explained solely by economic fundamentals. Just two months after that, the then Minister assured the national mortgage conference that there was “a consensus that the Irish mortgage and housing market has been strong over an extended period of years because the economic fundamentals of the Irish economy have been strong.” That is some statement. I assume that, and other similar statements, is to what Professor Patrick Honohan referred.
I agree with Deputy Connaughton’s last sentence and I will make the information in my Department about what happened on that evening available. I would be delighted to go before an Oireachtas committee to answer questions Deputy Connaughton or other committee members have. I do not wish to subject myself or the House to a tribunal that may last 14 or 15 years as these matters are examined.
Deputy Brian Lenihan: Fine Gael tabled a private Members’ motion on the draft terms of reference of the commission of inquiry before its members had an opportunity to hear from the authors of the two reports and before the committee dealing with the matter had an opportunity to consider the terms of reference. The Government made it clear in its decision on these reports that it welcomes the views of the Joint Committee on Finance and the Public Service regarding the terms of reference. I look forward to that discussion. I find it surprising the discussion has been pre-empted by the tabling of a motion. The Government submitted the draft terms of reference to the committee, drawn from the report of Mr. Watson, Herr Regling and Professor Honohan and carefully refined by the Attorney General.
Deputy Brian Lenihan: There is no question of a political attempt to exclude matters from the terms of reference or to make them less comprehensive than they should be. The terms of reference mirror the concerns of the reports and have been carefully refined by the Attorney General and the Government. This motion was tabled before Fine Gael listened to the authors of the reports, who have clarified a great deal of what was intended by the reports in their testimony before the Oireachtas committee. Apart from being bad mannered, it is an abuse of the good work of Professor Honohan, Herr Regling and Mr. Watson. It is clear the Fine Gael Party did not want a reasoned or informed discussion about the analysis in the reports. The name of the game is political advantage and that is fair enough but we must be clear that this is what is going on.
Deputy Brian Lenihan: Let us not hear any more about transformational change from Deputy Bruton and let us hear no more about political cultural change. Political cultural change is not happening in the main Opposition party in respect of the handling of this issue. Last Friday, at the meeting attended by Herr Regling and Mr. Watson, Deputy Bruton pushed very hard to have these experts join a witch-hunt against the Taoiseach. They refused, with Herr Regling saying “it would be quite easy to blame persons or institutions” but that this would be to miss the point and would be far “too simple”. The simple soundbite is the essence of populist politics and that is what we have got and what we will continue to get from Fine Gael whatever the new or continued dispensation may be later in the week.
The authors of these reports and the citizens of the country deserve more. Last February I set out a comprehensive framework of investigation for these matters. I said that a comprehensive understanding of the events that took place in the banking sector in this country was an essential component of recovery. We have a duty as Members of the Oireachtas to ensure not only that the origins of the crisis are understood but that lessons are learned and that the international and domestic confidence in our banking system is restored so that our economy can return to growth.
At the first stage of the process of investigation, these two reports provide an authoritative examination of the crisis in the banking sector in Ireland. They also provide a solid basis for further investigation of a number of significant issues. The reports will be considered by the Joint Committee on Finance and the Public Service with regard to the terms of reference. The committee has had two separate and lengthy engagements with the authors and I thank the members of the committee for engaging.
It is important to set out the issues that, in the Government’s view, require further investigation and how we propose to address these issues. I am more than willing to listen to different views expressed so we can try to come to a practical agreement on this matter. The Government has given extensive consideration to the two reports over several meetings. This has given rise to some criticism from the Opposition, who seem to think we should join them in the political football game they are playing with the reports. The Government proposes that the Oireachtas should begin to give serious consideration to the reports and the next steps leading to the establishment of a commission of investigation.
The report of Herr Regling and Mr. Watson examines the recent crisis in Ireland’s banking system as a whole to inform the future management and regulation of the sector. It analyses how different factors — external and domestic, macro economic and structural — interacted to cause the banking crisis in Ireland. The authors advised the Oireachtas Joint Committee on Finance and the Public Service that the factors involved were multiple and complex. No single factor lay at the heart of the crisis. This is clear from the report’s key conclusions. They point out that the crisis was influenced in crucial ways by global events but that our difficulties arose from a property bubble, compounded by exceptional concentration of lending for property, and specifically for commercial property, to a limited number of key developers. The report says bank practices and governance failings exacerbated Ireland’s credit and property boom, leaving the economy vulnerable to a deep crisis, and depleted its fiscal and banking buffers when the crisis struck. Lending trends in the Irish banking sector were analysed and the pace of expansion and the rise in asset and funding risks should have rung alarm bells in banks on the management side and on their boards and in the supervisory structures.
Deputy Brian Lenihan: The authors did not say this should have taken place in the Government; they refer to the supervisory structures. They say bank supervision in Ireland was weak and the response of supervisors to the build-up of risks was not sufficiently hands-on or pre-emptive and was in some cases too mild to make a major impact on the risks. There was a failure of checks and balances within the banks. The Governor of the Central Bank is also forthright in his conclusions that the failures of regulation stem from a regulatory approach that was excessively deferential and accommodating, insufficiently challenging and not persistent enough. He refers to an under resourced approach to bank supervision that relied on good governance and risk management procedures and neglected quantitative assessment and the need to ensure sufficient capital to absorb the growing property related risks and the unwillingness of the Central Bank to take on board sufficiently the real risk of a looming problem.
The Governor’s report shared the view of the other two authors that the macro economic and fiscal policy played a central role in contributing to the crisis. The Governor takes the view that such policies contributed to economic overheating, relying to a clearly unsustainable extent on the construction sector and other transient sources for Government revenue. It is worth noting that Professor Honohan points out that while three quarters of the crisis was homegrown, the primary culprit in the generation of the crisis was the banking sector, the secondary culprits were those in the supervisory system and the Government is in the bronze position in that race.
Deputy Brian Lenihan: Nobody can be happy with what happened here. Opposition parties did not identify these problems. I do not often make that point because I accept Governments must take responsibility for what happened. As far as the Opposition is concerned, the proposals formulated in the last general election would have exacerbated the problem substantially. I refer especially to the proposals on stamp duty.
Deputy Brian Lenihan: Let us not revisit those matters; let us consider the matters for further investigation. It is important to keep in mind that these reports are preliminary scoping reports that are intended to point the way to more detailed examination of specific issues by a statutory commission of investigation. It is important to state that the authors have all stated where the problems arose and that these reflected the actions of several elements, each of which interacted in mutually reinforcing ways. Both reports identified areas that should be investigated.  The terms of reference submitted by the Government faithfully reflect the concerns of the authors of the reports.
Deputy Brian Lenihan: He came close to saying that but the Government does not agree with the Governor in this respect. The Government believes there should be a commission of inquiry. The Governor did not make the case for the kind of investigation Fine Gael is calling for, and neither did Herr Regling and Mr. Watson. There is a reservation that must be entered and Herr Regling and Mr. Watson are careful to distinguish between key issues that are amenable to further investigation through a legally oriented process such as the commission of investigation and other issues that are less concrete and verifiable. Perhaps they are more appropriately the subject of policy review. A reservation must be entered and, in their report, Messrs. Regling and Watson are careful to distinguish between those issues which are amenable to further investigation through a legally orientated process such as a commission of investigation and other issues which are less concrete and verifiable and may be more appropriately the subject of policy review. The Government accepts this distinction and in its statement of last Wednesday set out how it proposed to take forward further consideration of these two different strands.
In regard to those areas for further investigation by a commission of investigation the report of Messrs. Regling and Watson sets out a comprehensive set of issues covering specific breaches of corporate governance and failures in risk management, which the report’s authors consider are amenable to a properly executed legally orientated process and a committee of investigation. For that reason, the Government prepared and published the draft terms of reference which seek to encapsulate these issues. The Government went beyond what the authors of the report suggested and also inserted the issue of any communications from the Department of Finance to the supervisory system.
Deputy Brian Lenihan: It was to the supervisory system. We shall come to macro advice in a moment. We are now at matters that can be subject to legally verifiable examination. Macro-economic policy is not one of those areas.
Deputy Brian Lenihan: It is not, according to any of the authors of any of these reports. It is a matter we can argue about in this House and we can set up a procedure to devise how we want to test it but it is not a matter that can be investigated in a commission of inquiry. That is very clear from these reports. What their authors suggest is that we should have terms of reference to look at the banking system. The Government agrees with that and has also made clear, so that there will be no question that the banking system is somehow being insulated from the rest of the system, that the supervisory system and the accountancy profession should be part of that process and that in so far as there are any communications from the Department of Finance to the supervisory system, they should also be within the terms of reference of the commission of inquiry.
Deputy Brian Lenihan: Within each of the institutions guaranteed by the Government the main causes of the serious failures to implement and adhere to appropriate standards and controls should be examined, specifically in regard to Anglo Irish Bank and Irish Nationwide building society, as should the main causes of the adoption by their senior management and the implementation by their boards and senior management of business models and strategies which caused severe financial distress in these institutions, the position of external auditors, supervisory system and any advices given by the Department thereto.
Let me draw the attention of the House to a number of points in regard to these draft terms of reference. First, both reports but, in particular, that of Mr. Regling and Mr. Watson, described in some detail the nature of the explosion in credit growth in the Irish banking sector and characterised the failures in governance and risk management in our banks as disastrous. This ultimately led to systemic difficulties in the banking system. Allied to the failures in internal controls is the need, as identified in both reports, to examine what exactly was said by the external auditors of these institutions. Second, it is clear that there were especially egregious failures in corporate governance and risk management at Anglo Irish Bank and Irish Nationwide Building Society. In this context there are specific matters which are subject to investigation by the relevant authorities but there is a clear need to delve more broadly into what went wrong in these organisations while taking account of these investigations. Third, and building on the analysis by Professor Honahan of the failures of the organisation he now leads, there is a need to probe in more detail the nature of supervision and oversight by the Financial Regulator of the covered institutions. Fourth, the terms of reference propose that the commission should also examine whether the advice or directions given by my Department to the regulator in regard to the supervisory role were in any way relevant to the failures of the Financial Regulator.
One of the primary purposes of the preliminary reports was to crystallise those specific issues that are capable of further investigation by the legal process. This has now been achieved and the draft terms of reference set out by the Government provide a way forward to get to the bottom of that aspect outlined in the reports. In this context there is a necessity to ensure the issues are clearly defined to enable the commission to investigate fully the issues that are to be referred to it by the Oireachtas in as timely a manner as possible. I point out that the terms of reference published by the Government are draft only. The Oireachtas is invited now to provide its views on shaping these terms of reference. I will attend the Joint Committee on Finance and the Public Service for that purpose. I did not wish to be present at the testimony of persons in respect of reports I had commissioned.
The Government proposes that when the joint committee has provided its views the final terms of reference will be put to a vote in both Houses of the Oireachtas in the form of a draft Government Order to establish a commission of investigation. I envisage that this vote should be taken by the end of June because I am anxious that the commission meet the six month deadline. Deputies and others have taken time, rightly, to discuss the terms of reference for the commission and put forward suggestions that they be expanded to include policy issues within the scope. The Fine Gael motion before the Dáil today proposes to add a number of policy related elements to the terms of reference. I question the benefit of this approach which is completely at variance with the recommendations of Messrs. Regling and Watson. It completely ignores their distinction between issues that are capable of investigation through a legal process and other issues which are more appropriately the subject of policy review. That is why the Government has decided to consider the policy issues separately. As a Government, we fully accept the policy lessons set out in the report by Messrs. Regling and Watson. Again, they have set out the key policy issues in their report. The Government proposes to invite the Oireachtas finance committee for its views on those key policy lessons in the report. It is important that we analyse them and see how they can be implemented in our financial system.
There are a number of points in the Fine Gael motion and a question on fiscal policy. My time is short and I cannot go through all the arguments. I went through some last night. It is important to note that the design of fiscal policies is being examined at a European level as well in the wake of current difficulties in Europe. President von Rompuy’s taskforce is formulating proposals in this area.
In regard to tax reliefs, I do not wish to go over the substantial argument that has taken place already. There is a very long history of these tax reliefs and a very substantial appetite for them on all sides of the House. It is clear their days should be numbered and if we are to learn one lesson from the report it is that.
In regard to the scope of the guarantee and the decisions surrounding it, the Governor has given what he believes is a comprehensive examination of the issues surrounding the guarantee. He had access to the files of the Department as well as of those of the Central Bank and the regulator. Herr Regling and Mr. Watson said the Government’s crisis management was superb throughout the period. There are questions that can be asked legitimately in regard to Professor Honohan’s report but it is clear the report is comprehensive in its scope concerning the guarantee.
I cannot think of a better person to conduct the report than the current Governor of the Central Bank, an international expert on banking crises, who was not present on the night in question and who brought his own detached and very nuanced view to an analysis of the question and a balanced way to his presentation of the issues. I am happy to accept his conclusions — would that others did. The primary objective of the guarantee was to bolster confidence among senior investors in the wholesale capital markets in so far as the funding position of Irish banks was concerned. Of course, there are questions which were raised by Professor Honohan about consultation with other European countries. He believed that within the short time available and the very limited timescale greater consultation might have taken place. He also raises the question of subordinated debt. It is worth noting that no dated subordinated debt, or guaranteed form of that debt, has been paid in Anglo Irish Bank or Irish Nationwide building society since the guarantee, nor will any sum be paid until the expiration of the guarantee. I have made it clear the guarantee will not be extended in respect of dated subordinated debt after the end of September. That said——
Deputy Brian Lenihan: The question regarding senior debt, which was already issued, was raised by Professor Honohan in his report but was not brought to a conclusion by him. If one examines the appendix to the report, he makes the point there is a fundamental distinction in law between the position in the United States, where, as a result of the bank resolution legislation, a distinction can be drawn between bondholders and depositors, and the position in the United Kingdom and Ireland. Many Irish bonds are subject to English law where no such distinction can be drawn. That is certainly an issue we should examine in the context of the resolution legislation for the banking system.
Deputy Brian Lenihan: I have made it clear I am prepared to make available to the finance committee the entire file of my Department on this matter, take whatever questions the committee wishes to ask me and be accompanied there by my officials. I did a similar presentation to that committee in February or March of the year before last and have no objection to attending the committee — nor has the Taoiseach — to clarify any outstanding questions committee members may have. I want to thank Professor Honohan for the comprehensive nature of his work on the guarantee.
Deputy Michael McGrath: I welcome the opportunity to make some brief remarks in support of the Government amendment to the Fine Gael motion on the two preliminary banking inquiry reports. When he came before the Joint Committee on Finance and the Public Service yesterday, Professor Honohan summarised succinctly the main contributory factors that led to the banking crisis. He pointed out the comprehensive failure of bank management and direction to maintain safe and sound banking practices. He referred to the failings of the regulatory approach to contain the breaches of proper banking practice. He highlighted the contributory role of macro-economic and budgetary policies as well.
It is important to point out that the Regling and Watson report emphasised to a significant degree the international factors that contributed to the crisis, including the monetary conditions that prevailed in the eurozone area and the availability of liquidity. They were circumspect in attributing a weighting to the various factors that led to the crisis. Professor Honohan did allocate 75% of the responsibility to domestic factors, but he put those factors in a hierarchy and he made it clear that the primary responsibility Ireland lay with the directors and senior managers of the banks. The secondary contributory factor was the catastrophic failure of the regulatory function, while he also referred to the macro-economic and fiscal policy of the Government as a third factor, “taking the bronze”, as the Minister put it.
Deputy Michael McGrath: It has been interesting to listen to Labour Party Members talk about the bank guarantee, which they opposed resolutely. Professor Honohan made it quite clear that the guarantee was required.
Deputy Michael McGrath: The Deputy needs to get her reading glasses. According to Professor Honohan, the guarantee was required, because otherwise there would have been a likely collapse of the Irish banking system within days in the absence of decisive, immediate action, causing immediate and lasting damage to the economy and society. There would have been additional lost income and employment, surely amounting, if it could be quantified, to tens of billions of euro. That was his clear conclusion, which completely contradicts the Labour Party policy on the guarantee——
Deputy Michael McGrath: Both of the main Opposition parties are in the dock in respect of Anglo Irish Bank. They have both been consistently saying that Anglo Irish Bank was not systemic and that it should have been allowed to go to the wall. Professor Honohan makes it clear that the bank was systemically important at the end of September 2008.
Deputy Michael McGrath: Professor Honohan made it clear that the bank was systemically important. He said that “There can be little doubt that a disorderly failure of Anglo would ... have had a devastating effect on the remainder of the Irish banks”. He went on to state that “in all likelihood the main banks would have run out of cash within days”. That is the summary of Professor Honohan’s ideas on the consequences of the Labour Party policy of letting Anglo Irish Bank go to the wall in a disorderly fashion.
Deputy Michael McGrath: I look forward to engaging further with the Minister at the Oireachtas finance committee, which has had very constructive engagements with Professor Honohan, Mr. Regling and Mr. Watson in the last few days.
Deputy Michael McGrath: We can hold an examination in public session of the macro-economic policy lessons and the fiscal policy lessons to ensure that they are learned. It is important to have some balance and put on the record the failings of the Opposition parties in this area.
Deputy Niall Collins: I am glad to contribute to the debate tonight. It is livening up nicely. At the outset, I would like to congratulate my Limerick colleague, Deputy O’Donnell, on his elevation to the Fine Gael front bench. I hope he has a long and fruitful career. I do not know whether it was because he declared or switched sides today, but we will leave that to some other forum.
Deputy Niall Collins: It is refreshing again to hear the Taoiseach and the Minister for Finance state that they will make themselves available to the commission of inquiry when it is constituted. All the factors need to be discussed and they also said they would make all the documents available.
Deputy Niall Collins: The Minister will appear before the Joint Committee on Finance and the Public Service to detail the events of that night, and it is right and proper that he has committed to make himself available to attend.
I welcome the two reports produced by our three independent learned friends. They are very good and I do not think anybody disputes their findings. The only quibble I would have with them is that they do not contain a critique of the policies of the Labour Party and the Fine Gael Party. The reports would be more complete if they contained such a critique. Their election manifestos promised spending left, right and centre based on a predicted growth of the economy——
Deputy Niall Collins: I have stated to Deputy O’Donnell on many occasions that Fine Gael has a fanciful policy in respect of the NewERA document, promising 105,000 jobs but not mentioning Limerick city or county once. We can confirm that by Googling Limerick on the document.
Deputy Niall Collins: What the people want to see is policy on crime, policy on jobs and policy on banking. The Labour Party is defunct in all those areas because there is an absence of policy. It might be riding high in the opinion polls, but as we get nearer to election time, the people will focus on its absence of policies and I wish its members the best of luck then.
Deputy Thomas Byrne: The most extraordinary case of a Labour Party member sitting on the fence was when a representative in my constituency came to a meeting and told the 300 angry farmers in County Meath — many of them angry with us — that he was not allowed to discuss his own personal position on the issue of stag hunting, because the Labour Party had not decided on it yet. That is indicative of what the Labour Party has been about.
Deputy Thomas Byrne: It has no policies. It has nothing. We have also had to listen to Deputy Burton tonight. Any independent person who has read Professor Honohan’s statement on the systemic importance of Anglo Irish Bank would be deeply shocked by what the finance spokesperson of the Labour Party has said tonight. Professor Honohan said there were three aspects of the test on whether a bank was systemic. He looked at academic literature on how to decide if a bank was of systemic importance. He concluded that a bank was of systemic importance——
Deputy Thomas Byrne: The factor that was crucially important was the impact that it would have on other banks. Any collapse of Anglo Irish Bank would have an immediate impact on the other banks in Ireland. When Professor Honohan says something that is liked by Opposition Deputies, they will all welcome it, but when he says something about Anglo Irish Bank with which they do not agree, then they will disagree with him. They have disagreed with him as well on aspects of the NAMA proposal.
Deputy McGrath told me that Mr. Aynsley, at the Joint Committee on Finance and the Public Service, stated that the winding down of Anglo Irish Bank over a year or two would cost €42 billion. This is a disgraceful situation, but it is not one that this party or this Government brought about.
Deputy Thomas Byrne: Listening to the Opposition, one would think that the Minister for Finance was sitting up in the Department writing out loan approvals. Nothing could be further from the truth. It is apt.
Deputy Thomas Byrne: ——any senior officials of Anglo Irish Bank. They have never dealt with Anglo Irish Bank. Those allegations will be refuted. They are not true. We have no connections with it whatsoever. We knew nothing about it.
Deputy Thomas Byrne: Deputy O’Donnell will not tar all of the party on this. It is apt that the Minister used the analogy of the bronze medal. Yes, the Government has responsibility for what went on but other people also have responsibility, including people outside the country. The only focus of the Opposition is on politics and policy. The place for politics and policy is at election time. Do not get too carried away by polls because last year, when The Irish Times had a party at 25% it received 15% in the local elections and I am confident it will happen again when the arguments are put forward to the Irish people. There is a complete lack of politics and policy.
Deputy Thomas Byrne: We are being criticised for a fiscal policy with unsustainable tax rates. The Labour Party made a policy decision to have low income taxes, which policy is now shown to have been unsustainable because if one has low income taxes one will be dependent on other taxes, in this case property stamp duty. We saw the Opposition seeking to abolish stamp duty, which would have massively inflated and increased the property bubble. I was glad the Minister reminded the House last night that Deputies Bruton and O’Donnell put forward a proposal earlier this year, in an amendment to the Finance Bill, for a property based tax relief for doctors.
Deputy Thomas Byrne: They all added up and contributed to the situation. One property tax relief abolished this year was for child care facilities. Who could argue against that? However, it did contribute to the situation as did all tax reliefs.
Deputy Joan Burton: I want to return to the Honohan report in view of the outrageous way the Taoiseach, Fianna Fáil Ministers and a number of Fianna Fáil Deputies with supplied scripts have tried to abuse the report.
Deputy Joan Burton: Professor Honohan enjoys an enviable and deserved reputation among his peers at home and abroad. That reputation was enhanced by the report he presented last week on the cause of Ireland’s banking collapse and he is entitled to have his findings treated with respect and due consideration by everyone in this House. I was pleased when the Minister for Finance, Deputy Brian Lenihan, chose Professor Honohan to be Governor of the Central Bank. It was a courageous and enlightened decision and I welcomed it immediately and publically on behalf of the Labour Party.
Yesterday, Professor Honohan expressed scepticism on the value of a special commission of inquiry. His reservations should be discussed by all parties represented in the House, perhaps in a private meeting with the Governor, and there could be common ground thereafter on how to proceed. The Minister should give due consideration to this.
The Governor enjoys confidence at the moment but that confidence could be eroded easily if Ministers act as they did yesterday and this evening to deliberately distort what he wrote last week. English is a flexible language but yesterday the Taoiseach stretched the ordinary meanings of words beyond belief to extract vindication for his past actions and policies from sections of both reports that quite unambiguously said the exact opposite.
I go back again to the section on the bank guarantee. I have read it again and again because I believe the decisions that have to be made about an exit strategy from that guarantee in a few months constitute some of the most critical decisions to be made this year, of equal significance to the budgetary decisions before December. If Ministers read the Honohan report with no motive other than to claim they were right all along on every banking decision they made, then they have a mindset that is truly frightening and dangerous for our country and our people.
On 30 September 2008, the Government gave a blanket guarantee to the major domestic players in Irish banking, including Anglo Irish Bank and Irish Nationwide. The Labour Party dissented that day from the blanket nature of the guarantee offered though we broadly supported a policy to protect depositors. I wrote to the Minister, Deputy Brian Lenihan, a week or two prior to knowing the bank guarantee was coming, to suggest that to him, and it is on the public record. Fine Gael was foolish to offer unconditional consent to the Government that day and ought to have joined the Labour Party in seeking to limit the scope of the guarantee. At the time the term I used was not to give a blank cheque and Fine Gael was foolish to offer Fianna Fáil a blank cheque in this respect.
What does Governor Honohan say about the guarantee decision in his report? Yes, he acknowledged that some level of guarantee was required. He uses the words “extensive guarantee” to describe what was necessary in the light of the undoubted turmoil in the international markets at the time. So far so good for beleaguered Ministers. This is where they choose to gild the lily and to twist the meaning of the Governor’s words for their own purposes. The plain word “extensive” has been stretched to a wholly new meaning. “Extensive” in the Fianna Fáil vocabulary now means “total” or “blanket”, which in his report the governor positively excludes.
Yesterday, the Taoiseach was barefaced in his arrogant twisting of language when he claimed the Governor’s endorsement of an extensive guarantee means total support for the specific blanket guarantee. If one were to read the entire section of Professor Honohan’s report one could not fail to get a very different view. This section concerns far more than the issue of subordinated debt. That part of the guarantee was bad enough in itself but as people have stated it amounted to only €12 to €14 billion, which is a lot of money but nothing compared with the totality of €440 billion. However, Professor Honohan goes much further than this and questions the nature of the given guarantee in a far more fundamental way than the question of subordinated bonds.
How can anyone with a grasp of plain English interpret these words as a wholehearted endorsement of Government policy? He clearly objects to the inclusion of subordinated debt. More than that, he explicitly questions the wisdom of extending cover to pre-existing bonds. Certainly, it was important to guarantee new bonds from that date but to give cover to existing bonds simply added to the level of State exposure to losses.
Ministers have repeatedly asserted that the Irish guarantee policy was followed by many other countries, which is not true. The Irish decision to guarantee the full stock of existing debt was unique and reckless. Many countries certainly covered new bond issues but not in the way the Taoiseach did and his particular Irish solution to an Irish problem has left our taxpayers on the hook for all of Anglo Irish Bank losses. Who did not hear Mr. Mike Aynsley today who said €22 billion is gone? The Fianna Fáil members whose eyes were going through the roof of whatever hair they have left could not believe it. He repeated it two or three times. He said we need to face up to the fact that €22 billion is gone. Think what €22 billion would do in Wexford.
Deputy Joan Burton: The overhang of these losses weigh heavily on our country’s capacity to source borrowings at reasonable cost. Yesterday the NTMA had another successful bond auction but at a price that must cause ripples of anxiety in the Department of Finance. Mr. Paul Krugman, in an article in The New York Times today, makes exactly the same point and compares our bond rates with those of Spain. The notion that Ireland is taking a huge austerity hit when the underlying fundamentals were weakened by the guarantee in precisely the way Professor Honohan points out is the cause of the continuing large premium which we pay over German bond rates because we have ended up with too much national debt as a consequence of the Fianna Fáil move. That is as simple an analysis I can make.
Deputy Joan Burton: There are none so blind as those who refuse to see. There are none so blind as those who refuse to read an official report in its entirety and want only to extract this or that paragraph they can twist and twist for their own purposes. It is most unfortunate that Ministers are unwilling to recognize the any flaws in the September 2008 guarantee. These flaws are honestly recognized by Professor Honohan. They are extremely serious and may prove to be very costly as early as this autumn when the banks have to roll over as much as a further €74 billion in debt.
We again heard some phoniness today, namely, that we are deeming the sub-debt at an attractive price and then rolling it over at a higher interest rate. To be honest one produces a book profit but the ongoing costs, as I am sure the departmental representatives know, are consequently much higher. I said that the Taoiseach cannot fully come to terms with what he did. When he was Minister for Finance he refused to recognise that the issue of the millionaires paying no tax was something which was rooted in the property-based tax breaks. It took him years to do anything about it. He referred yesterday to reigning in property-based tax breaks from 2005.
Deputy Joan Burton: In the large print he reigned them in and then extended them. It was like saying, “Roll up, roll up property developers. You have your last six months, year, two years or three years”. Mr. Regling, that very nice German man who is now, thankfully, in control of the stabilisation fund — I hope he thinks kindly of Ireland even though he was shocked by his experience — said to me after a committee meeting that he did not realise that the Irish situation in terms of tax expenditure on property was three times any other example he could find in the eurozone. He did not mop his brow but he gave a very good Germanic impression of being shocked and of never having heard the like of it before.
Let us get real. What else did the Taoiseach do? Stamp duty avoidance is covered in section 110. Developers could avoid stamp duty at a time when young couples were paying fortunes to trade up from a first property to become second time buyers and perhaps move from a three to a four bedroomed house. Developers could use pre-section 110 to avoid stamp duty, rest on contracts and various other devices. Goodbody Stockbrokers compiled a report which told the Taoiseach, the then Minister for Finance that it costed €250 million in 2005-06.
What did the Taoiseach do? Apparently a famous developer made an approach to the Department of Finance — this story has been told in several newspapers and I followed it intensely at the time — and the Taoiseach, the then Minister for Finance, introduced the section to the Finance Bill before the general election. He then had Goodbody Stockbrokers conduct a study, which was never implemented. That was giving in to vested interests by a serving Minister for Finance which was wrong.
What else did he do? I had a discussion with him in November 2006. I was the first person to mention companies such as Start Mortgages peddling sub-prime debt in the House. He told me to buzz off and that it was not a problem. People were knocking door to door in housing estates in my constituency and that of the Minister of State telling people if their debt was only €70,000 they could have a loan for €150,000 on the value of their house and could buy a car, go on a holiday, get a new kitchen and up their mortgages because they could meet the repayments. Many people who remortgaged are underwater. The Taoiseach is on the record. He would not even listen in November 2006 when it was specifically brought to attention.
Deputy Seán Sherlock: I will start by nailing the lie that is coming from the Fianna Fáil benches in regard to the Labour Party and any policies it may or may not have. I invite Deputies McGrath, Collins and Byrne to take a look at the Labour Party website. Therein they will see at least 50 position and policy papers on a wide range of subjects from tourism right through the economy. I invite them, in particular, to take a look at the Labour Party proposals on the creation of a strategic investment bank that will get this economy up and running again.
Deputy Seán Sherlock: It will create wealth and jobs and will be used in a manner which is productive and will grow the economy, through the National Pensions Reserve Fund and can be used effectivity to get this economy up and running again. I want to nail this lie which is now emerging from Fianna Fáil that somehow we are a party which is devoid of policies. It is an insult to the intelligence of anybody in the Labour Party who put their names to a ballot paper because it suggests somehow that we were devoid of any kind of substance politically before we ever decided to enter politics
We have always been a policy-driven party. I invite people to take a look at our record in terms of our involvement in this House down through the years and ages. The record will speak for itself on that matter. When we are in Government the people of this country will see that we will do our best for them and will not be pandering to vested interests.
On the reports, nobody, including me who is on my first mandate, had perfect knowledge on the fateful night of September on the Government’s position or the true picture of where the banks stood. It is right and proper that when we are legislating in this House that every single Deputy who is given a mandate in this House has perfect knowledge. It is very clear now — we do not seek to take political advantage from it — that the guarantee which was given on that night was too wide-ranging. It was too big a blanket, in terms of how it covered the individual banks.
Anybody who examines the reports in any objective fashion will see that it was too wide ranging. Anybody who is an ordinary decent citizen of this land will see that the cost of covering Anglo Irish Bank has been €22 billion so far, if I am not mistaken.
The €22 billion spent thus far is money that the next Government will be down in terms of being able to provide services to the ordinary decent citizens of this country. Fianna Fáil Deputies will be lambasting us from the other side of the House for not delivering services because we will be down €22 billion. This is Fianna Fáil’s classic game. It is acting as surreptitiously as possible and is spinning the story that winding down the bank in an orderly manner will cost a multiple of €22 billion, even though we do not know that for certain.
These independent reports clearly have not vindicated the Government’s position. Their criticism of past macro-economic policy and the over reliance on tax breaks is as clear as the nose on my face. The bottom line is good governance in the banks, a proper regulatory framework and a public inquiry that allows us to understand the relationship between politics and banking so that we can develop legislation that ensures the chicanery we have become used to over the past decade will be no more.
Deputy Arthur Morgan: I thank Labour Party Deputies for sharing their time with me. The House has become too quiet. Just before the Ceann Comhairle entered the Chamber, the debate was very interesting and the bell was going so often that I thought it was calling us to second mass at home on a Sunday morning.
Sinn Féin welcomes these reports but there is still a long way to go. The reports undoubtedly capture some of what happened but people seem to fall for the bluff every time. During the 2007 election campaign, Fine Gael and the Labour Party were substantially ahead of the Government until a little tremor occurred in the final few weeks. I will leave it to others to decide whether that was due to a television interview or a debate. The tax auction reached the point where I thought no tax would be collected in the subsequent year. The public fell for it when they were told the good times would last forever even though the more measured heads among us cautioned otherwise. The Ceann Comhairle will attest that land prices in our constituency were such that one could not afford to purchase a square metre. People had to borrow small fortunes to buy sites in the areas in which they were born and reared. In some cases, people were getting loans for house extensions without ever filling in or signing a form. How was that sustainable?
The crisis arose on two fronts, the personal and the corporate. I have just given a flavour of the personal aspects in my part of the world but the corporate aspect was really interesting. One of the best examples is the Glass Bottle site, which was sold for a multiple of its value. The story of that purchase remains to be told in detail but, of course, our old Seánie was up to his neck in it. He was not only in a conflict of interest by lending money to a body of which he was a board member but it is no secret who appointed him. The reports indicate that the practice of what some high office holders regarded as putting the right people in the right places was par for the course. The Honohan report states in a footnote: “Although it became quite clear to top FR decision-makers that senior Anglo figures were well-liked in political circles”. The author never quite explained what he meant by that fascinating insight when he appeared before the Joint Committee on Finance and the Public Service earlier this week. I will not rehearse further extracts from the report because if I did so, I would want to read it again in its entirety.
The motion also deals with the establishment of the commission of investigation. I am concerned about the exclusion of Government policy from the terms of reference of the commission because this was the main cause of the crisis. An all-party Oireachtas committee should be established to closely investigate what happened. It is critical that a consensus be achieved on the terms of reference rather than having them imposed by the Government. We need to merge the two reports.
Transparency in Government and the banking system is integral to the reputation of a financial sector which serves the needs of everyone in this State. Nothing short of public scrutiny is acceptable from the banking inquiry. We must call to account Ministers, leaders of political parties, top bankers and the regulatory institutions which succumbed to an unruly financial sector. The inquiry should be completely public and conducted on an all-party basis with the support of outside experts. The systemic failures that pre-empted this banking crisis and the fact that many of those involved are still in their positions requires a fully transparent examination of the facts.
The Government excluded its fiscal policy from the terms of reference for the commission of inquiry, focusing instead on the role of regulation and internal management within the banks. However, the Minister for Finance has asked the Joint Committee on Finance and the Public Service to prepare a report on the Government’s macro-economic policy. While this aspect of public scrutiny is welcome, the manner in which the inquiry is being conducted is unacceptable. The taxpayer is being put to further expense because we have, on the one hand, a Judiciary-led inquiry tasked with investigating some aspects of the crisis and relying heavily on the work conducted by Patrick Honohan and, on the other, an investigation by the joint committee into the Government’s macro-economic policies. This is being done on foot of the two preliminary reports released last week. The public deserves an holistic inquiry into the banking crisis. The crisis did not occur because of isolated and unrelated events and as such, the inquiry should be conducted jointly.
After all, Irish banks went on a reckless spending spree, having been encouraged to do so by venal politicians who actively discouraged regulation and provided a phenomenal array of tax breaks to developers at a time of cheap money and easy credit. As we all know, Fianna Fáil Party politics acted as a catalyst for the crisis.
The invitation extended to the Joint Committee on Finance and the Public Service falls short in that it is not an all-party committee and there would not be sufficient cross-party representation on the committee which is conducting the investigation into the Government’s macroeconomic policy. To lock this inquiry into a restrictive commission of investigation with inadequate terms of reference and a veil of secrecy is unacceptable. Furthermore, splitting the investigation into a two-pronged inquiry by the commission and Joint Committee on Finance and the Public Service is inadequate.
Those who have suffered most from the failures of the banking crisis will not be privy to full, open disclosure during the course of the commission inquiry. Rather, the commission and separate committee reports may end up couching the faults of the Government and letting it off the hook again, which would not be acceptable.
Today’s meeting of the Joint Committee on Finance and the Public Service heard that large swathes of the population are suffering, with people losing their homes and businesses. Many are tormented and cannot sleep at night, such is the level of debt they owe. In many cases, their problems are not of their own making because they did not have available to them the financial expertise available to bankers and lenders. Lenders failed to take cognisance of the financial constraints that should have applied in such cases. The consequences of this failure have been catastrophic.
Moreover, €22 billion has been invested in Anglo Irish Bank and the joint committee was informed this morning that a further sum of at least €10 billion will be required. What is taking place is frightening and unacceptable. Let us hope we can get a shape on it sooner rather than later.
Deputy Michael Ahern: I commend the Governor of the Central Bank, Professor Patrick Honohan, and Mr. Regling and Mr. Watson on their reports. I propose to refer to statements made at a meeting between the Joint Committee on Finance and the Public Service and Mr. Regling and Mr. Watson on Friday last, at which Mr. Regling stated:
I propose to address a number of issues arising from the motion. It notes, for instance, “the conclusion in the Honohan report that the Minister for Finance and his officials exercised influence on the Financial Regulator in 2006 to the effect that a proposed tightening to the quality of governance of bank directors was not implemented”. None of the reports mentions names or refers to any Minister for Finance.
Deputy Michael Ahern: The motion also states that the Honohan report excoriated the then Minister for Finance, Deputy Brian Cowen, for extending “property tax reliefs for developers in 2006 at the height of the property bubble”. The Minister reduced many of the tax reliefs available at that time. When asked the reason he did not abolish property tax reliefs immediately, it was pointed out that such a step would have had legal consequences.
Deputy Burton indicated that the Government’s policy on Anglo Irish Bank is costing €22 billion. As was explained to the joint committee, the closure and liquidation of the bank would cost up to €45 billion. The Labour Party should explain the reason it supports a policy that would result in a €45 billion loss to the economy.
Minister of State at the Department of Enterprise, Trade and Innovation (Deputy Billy Kelleher): I welcome the opportunity to speak to the motion. As the Taoiseach stated in another debate, history is continually being rewritten and a great deal of revisionism is taking place. While it is unusual to have history written as the relevant events are unfolding, we should not be in the least surprised by anything that occurs in this House.
If people wish to speak on this issue, they should read the relevant reports and listen to what the reports’ authors have to say when they appear before committees of the House. Professor Honohan, Mr. Regling and Mr. Watson have been at pains to point out that to point the finger of blame for the banking crisis at one agency, authority or individual or at Government fiscal policy is to engage in simplistic assessment.
I would like to address a number of issues but unfortunately I do not have sufficient time to do so. It is important to note, however, when analysing Professor Honohan’s report, that the Opposition’s contention that we should not have guaranteed Anglo Irish Bank because it was not of systemic importance is factually incorrect. In Chapter 8.43, Professor Honohan states:
This statement demonstrates that Anglo Irish Bank was of systemic importance and the decisions made on the bank guarantee were crucial in maintaining the integrity of our banking system and allowing the difficulties that were becoming evident in Anglo Irish Bank to be addressed in an orderly manner. It is equally important to note that there would have been systemic failure in the two major banks in a matter of days if the bank guarantee of September 2008 had not been introduced.
The Regling and Watson reports and the Honohan report outline the many reasons for the pro-cyclical fiscal policy and inflationary pressures building in the economy in the context of credit flows and the development of the property bubble. Equally people should be honest in this House. On trawling the Dáil records I have yet to find anybody who said the Government should have been spending less money on the needs of our people at that time in the area of health, education and social welfare and across the infrastructural development of the country.
Deputy Billy Kelleher: Nobody on that side of the House raised the issue. The Deputy can look at the record and will see that everything advocated on that side of the House was pro-cyclical and inflationary, and would have done further damage and added fuel to the fire. The two reports are timely and welcome. We should get on with the further investigations and inquiry into what went wrong. More importantly now is the time to be honest and deal with the challenging issues of that are a consequence of the difficulties nationally and internationally in the context of the world recession and our internal difficulties.
If not all, then certainly the vast majority of people in this House entered into public life in an effort to serve. Whatever our individual beliefs and convictions, I believe there should be a degree of parliamentary respect based on this. Stooping to the level of accusations of economic treason as was the recent case, discredit the Houses of the Oireachtas and those who make them. The Taoiseach has been unfairly accused of many things over the past week and in recent years. As a fair and honest man he has also had the courage to express regret for those things which he would, with hindsight, have done differently.
I know that the Members of the Opposition share our commitment to the country and to making it a better place, but I challenge their representation of the decisions and motives of the Taoiseach and the Government in the lead-up to the financial crisis. While we may attack policies and become impassioned in that attack, resorting to personal and populist attacks that call into question the personal integrity of the Taoiseach is never justified. The Taoiseach has given a lifetime of service to this House and to the country, and he will continue to serve until the people and not the Opposition or commentators judge otherwise.
Government policy, for as long as I have been a party to it, has been framed with a view to protecting the weak and vulnerable, allowing the young to make the best possible start in life and distributing what resources the State had available to it in line with the needs of its citizens. Economic growth was not pursued as an end in itself and was not pursued for the few, but for the many. Economic prosperity was the means by which employment might be created, the infrastructure of the country upgraded, the basic services upon which we rely — services provided by doctors, teachers, gardaí— improved and afforded, and living standards raised for all through shared prosperity.
There is no question but that living standards improved dramatically over the lifetime of the Fianna Fáil and Fine Gael-led administrations that governed since the mid 1990s. It is widely accepted that the seeds of this prosperity were sown during the more collegiate Dáil of 1987 — where the needs of the country and the common good were pursued at the expense of cheap political point scoring and a meaningless blame game. As identified in the Regling and Watson report on the banking crisis, the economic well being of the country led to an era of increased expectations and optimism for Irish society at large. One of the key challenges that the increased prosperity of the late 1990s and early part of the last decade produced was in the housing market. As many will recall, and as identified in the report on the banking crisis, there was and is a cultural predisposition in this country towards property ownership. Historically low and stable interest rates, low inflation, falling tax rates and increasing wages all contributed to higher disposable incomes and created a perfect storm that led to unprecedented demand for housing.
The Opposition contends that this and previous Governments took no action to cool the property market and that this, along with the failure to eliminate certain property-related tax incentives made a property bubble and crash inevitable. The first part of this thesis is factually incorrect and the latter part displays a wanton disregard or a lack of understanding of the role that tax incentives played in the property market.
The Opposition lays the blame for the property crash squarely at the door of the Government, largely for its failure to curb property-related tax incentives. While it is readily accepted that certain tax incentives could have been more targeted, it is important to be clear that these incentives were not introduced to enrich developers but rather to fulfil certain infrastructural needs that were identified by various Government agencies. Property breaks geared at increasing the number of hotels were introduced on the recommendation of the tourism industry as a need was identified in this area and some incentive was required in order to attract investment. Similarly crèches were required to empower working mothers and reduce child-care costs for young couples. Few would question the need to redevelop our inner cities or socially marginalised areas. Fine Gael and Labour introduced the seaside resort scheme. The late former Deputy, Jim Mitchell, said that I was the only Deputy he knew who successfully opposed the introduction of a property-based tax in his or her own constituency, which was the proposed islands property tax relief scheme. I would admit that in general without State stimulus through tax breaks the regeneration of these areas would not have occurred. Once the tax incentives that the Opposition so roundly condemn had fulfilled the purposes for which they were introduced, they were closed down by the Taoiseach as Minister for Finance.
The stark reality is that the most extravagant deals of the property boom were not fuelled by tax incentives but rather by easy credit provided through the irresponsibility of some of the people in the financial institutions. The astronomical prices paid for the site of the Berkeley Court, for the Irish Glass Bottle site in Ringsend, for the Veterinary College in Ballsbridge, for the Burlington Hotel, for the Bank of Ireland head offices and the AIB bank centre, and for numerous other speculative development sites were not fuelled or funded by the Exchequer or by tax breaks but by easy, cheap credit, provided on “mates terms” to over-extended developers by what were, in retrospect, over-extended banks.
It is useful to consider what happened in the regulatory sphere during this period. As is noted in the Governor’s report, there was a shift towards a principles-based rather than a rules-based regulatory system. In essence, this meant a move away from detailed rules and administrative actions relating to how financial institutions should run their business and towards more engagement with the senior management of those institutions with a particular focus on the object to be achieved. The purpose of this system was to encourage substantial industry self-regulation with a focus on good governance rather than on detailed regulations with the regulator assuming the role of enforcer. Such an approach, it was argued, was more flexible, market-friendly and cheaper than a more formulaic regulatory framework and therefore contributed to the development of a thriving financial services sector. This in turn encouraged further inward investment in the sector and consequently further growth. The Financial Regulator was not alone in pursuing this course. On an international level this policy was pursued by many jurisdictions where it was believed that market forces would result in banks self-regulating without the need for an aggressive system of enforcement. Such light-touch regulation was regarded as international best practice.
In Ireland, the Financial Regulator pursued this agenda by seeking to ensure that banks implemented risk management procedures and put in place robust governance structures. It was reasoned that once such structures were in place, the banks would be in a position to adequately assess all risks facing their organisations and be able to act accordingly. What we know now is that lack of a credible enforcement threat led to the banks paying lip service to the regulator, a regulator that eschewed decisive action, avoided confrontation and instead comforted itself with vague assurances that everything was in hand. The trust that was so fundamental to the principles-based regulation system was betrayed by the boards of management of the credit institutions under its supervision who abandoned their own stated lending policies and engaged in excessive risk taking. Following the adoption of the single currency, an excess of liquidity in the market, low and stable interest rates, low inflation and the increased cross-border integration of the financial sector in the eurozone led to unprecedented access to cross-border funding.
To say that the Government ignored or failed to follow the advice made available to it, or that it ignored the warnings of economists and other experts, is wide of the mark. The Government, as should be expected, is guided by and relies on expert advice from the Department of Finance, the Central Bank and to a lesser extent on the view of external sources such as the ESRI, the International Monetary Fund, the OECD, the European Commission and the Council of Ministers. At no point did the Central Bank or the Financial Services Regulatory Authority believe there were underlying difficulties in the market. Even the international markets in 2008 priced Irish Government bonds at very low yields, a sure sign that the international markets — which we have seen can be so adept at spotting and capitalising on any perceived weakness to make a quick turn — did not see any fundamental or underlying weaknesses in the Irish economy.
The Government was considered by many to be fiscally too conservative. The then Minister for Finance and current Taoiseach was described as “Ebenezer Scrooge” and criticised for underspending. A common and recurring theme from the current Opposition during the last term of Government and in the run up to the last general election was that the Government was underspending and that stamp duty should be reduced or abolished.
Deputy Éamon Ó Cuív: We must bring order to our finances; our ability to borrow money to provide continued services in education, health and social welfare require this. We are not unique in the world in having had to stabilise our public finances and our system of money but thanks to the decisive leadership of the Taoiseach and this Government we have been ahead of many countries in doing so quickly. This will stand us in good stead as we seek to create new sustainable jobs.
Deputy Margaret Conlon: I welcome the opportunity to make a brief contribution this evening. I welcome the reports and commend the expert analysis and assessment of the issues undertaken by Mr. Klaus Regling, Mr. Max Watson and Professor Honohan. We should not fool ourselves as everybody on all sides of the House knows mistakes were made. A number of factors contributed to the position in which we find ourselves, and the reports provide a timely insight into the factors that led to the current climate. Lessons should be learned in order to ensure that our children never experience another banking crisis of this magnitude.
In our clinics every day of the week we can see the effects of the banking crisis as we represent our constituents. I have lost count of the number of young couples who have approached me with pitiful stories about buying their dream homes at inflated prices, now to be saddled with enormous debt and an asset worth a fraction of what was paid for it. Some have lost one or even two incomes and their stories are very sad.
We can think that just a few years ago these people were some of the best-educated people in Europe with hopes and dreams and the world at their feet. As a public representative and a mother of teenagers, I do not want to again see such a reversal of young people’s fortunes. I do not want to again see this level of despair in young people, the unemployed and the heavily indebted. We must ensure that never happens again.
The banking crisis left the banks in a position where after years of unregulated and irresponsible lending, they are unable to lend to even the most creditable of customers. I have asked the question before in this House and I will pose again. What was the Financial Regulator doing at this time? He sat on his hands and closed his eyes, ears and mouth; he saw nothing and said nothing.
First-time buyers today may as well forget about applying for a mortgage and, crucially, small and medium enterprises are being strangled by the tightening of credit. Many people in business have come to me and told of banks cutting overdrafts overnight, with no hope of any further extension from any other financial institution. I have advised such people to use the credit review process and I believe their applications will be upheld. The result of all this will be the loss of jobs we can ill afford to lose if we are to maintain our economy’s development in the right direction. Once again it is the youth who will suffer.
I could continue ad nauseam about the consequences of the banking crisis but they are quite apparent for everybody to see. I do not believe we should get bogged down in the blame game, and as Mr. Regling and Mr. Watson stated to the members of the Joint Oireachtas Committee on Finance and the Public Service, it would be easy to blame persons or institutions but it would miss a very important point and be too simple.
I have said before but will repeat that I hold no court for any banker who behaved irresponsibly. I believe in natural justice and when the process is completed, such natural justice will prevail, with those who did wrong by the taxpayers and good people of this country paying a heavy penalty.
Whatever the view on Mr. FitzPatrick and Mr. Fingleton, there is a time to move on from an atmosphere of reprisal and recriminations if we are to get our banks and economy moving again. I am proud to stand up as a Government Deputy and defend our record since the banking crisis materialised. If hindsight was foresight, nobody would ever make a mistake.
I welcome the reports, which provide a valuable insight from which lessons must be learned. Standing still or maintaining the status quo is not an option and as a Government Deputy I am happy with the course of action being taken by this Government to address the problems.
Deputy Frank Fahey: I welcome the opportunity to participate in the debate and welcome the report from Mr. Regling and Mr. Watson, as well as the report from the Governor of the Central Bank. They are excellent reports and great lessons can be learned by everybody involved from them. The Government can learn lessons about macroeconomic and fiscal policy and parties on all sides of the House can benefit. The reality is that mistakes were made and I acknowledge that my party in Government made mistakes in the period between 2002 and 2007.
The greatest mistake was not to put in place the counter-cyclical policies necessary to deal with the stimulus created when we became members of the European Monetary Union and benefited from much lower interest rates — down to 3% from 6% — and the ability of banks to borrow from a large pot of euro currency having only been able to borrow in Irish punts before that. We had no borders, as has been well explained to us in the finance committee, and international borrowing became easy for Irish banks at much lower interest rates. There was no counter-cyclical policy put in place and that was the big mistake made from a macroeconomic perspective.
As the reports indicated, many mistakes were made. The key issue now is for all of us to learn the lessons. There must be a new approach to policy initiation and implementation from all parties in the Oireachtas and the Government of the day. This Government, and the Taoiseach in particular, has put up its hands and accepted some of the mistakes made on this side of the House and it is only right for the Opposition to acknowledge a number of fundamental mistakes made in their policies as initiated since the onset of the crisis.
We heard from the Governor of the Central Bank yesterday and the new chairman and managing director of Anglo Irish Bank today, who stated that to liquidate or run down Anglo Irish Bank would have been a clear and very significant mistake. They also indicated that this would have led to an additional cost of €20 billion on top of the €22 billion that has already been paid out.
The Labour Party should also admit that it got it completely wrong in respect of the bank guarantee. Labour has made great play out of the fact that it was the only party which opposed the guarantee. The reports issued by Regling and Watson and the Governor of the Central Bank indicate that there was a clear need for the guarantee. If it had not been introduced, our finances would have gone into a complete tailspin. I would appreciate it if Labour was honest with the people and admitted that it got it wrong in this regard.
Deputy Denis Naughten: I thank Deputy O’Donnell for moving the motion. I listened intently to the Minister for Social Protection, Deputy Ó Cuív, who referred to constructive opposition. He was correct in what he said. However, I recall what happened when Fine Gael introduced the Good Samaritan Bill, which dealt with those who might to go the assistance of people who suffered heart attacks or who were involved in road traffic accidents. Everyone agreed with the sentiments expressed in the Bill, which was originally proposed by the Law Reform Commission, but the Government voted it down because it was put forward by the Opposition. I take any suggestion from the Government in respect of constructive opposition with a large tablespoon of salt, particularly as it was not prepared to accept a simple item of legislation on which everyone was agreed.
Fine Gael also put forward a proposal in respect of a detailed job strategy, which would have created substantial numbers of jobs by means of investment in broadband and water and energy infrastructure. That proposal was welcomed by the then Government Chief Whip, Deputy Pat Carey, and the Minister for Finance, Deputy Brian Lenihan. However, it was rubbished by the Taoiseach because it happened to come from the Opposition.
Those in opposition have been prepared to put forward positive, constructive ideas. However, the difficulty has been that the Government has not been prepared to listen to what is being said by those on this side of the House. We have put forward constructive proposals that are designed to fix the public finances and the banking system, address the appalling vista that is our health service, support and foster innovation and restore competitiveness within the economy. However, these were all rubbished purely because they emanated from this side of the House.
Let us consider the recently published reports on the collapse of the banking system. The Honohan report points out that fiscal policy and budgetary measures aimed at boosting the construction sector were significant factors in contributing to the unsustainable structure of spending in the economy. As we are aware, the policy to which I refer was developed in the Galway tent at Ballybrit. It all revolved around the lead party in government, Fianna Fáil, ensuring that its nest was feathered. It was a case of “You scratch my back and I’ll scratch yours”.
Deputy Bruton and other Fine Gael Members consistently pointed out that it was wrong to base permanent spending commitments on unsustainable tax revenues. However, the Government ignored what was said. The reality is that the Taoiseach and former Minister for Finance, Deputy Cowen, and the banking and regulatory systems he oversaw were guilty of astonishing failures in the area of economic management. As a result, ordinary citizens are being obliged to pay the price through the imposition of pay cuts. These ordinary citizens include carers, disabled persons, the blind, young families who are being obliged to meet increased mortgage payments and those who have lost their jobs. FÁS has predicted that this year 335 jobs will be lost each day. As a result, many people are going to be obliged to emigrate.
Ireland is facing major economic challenges as a result of the mistakes made by bankers, the regulators and Government Ministers. Those mistakes have caused hurt to families and small and medium-sized businesses. The Government has ignored the expert advice that was presented to it. A couple of weeks ago, the concerns of Professor Morgan Kelly — who previously issued warnings about what was going to happen — in respect of the possibility of the country going bust were again dismissed by the Department of Finance. The Financial Regulator was both complacent and complicit in respect of what happened in recent years.
One of my constituents recently told me a story about his mother in law, whose sole income before she died was a non-contributory old age pension. When she passed away, it was discovered that she was €3,500 in the red on her credit card. When I asked what had been her credit limit, he informed me that it was €5,000. How could an old age pensioner in receipt of the basic payment from the Department of Social Protection be given a credit limit of €5,000 by any financial institution? The answer is that a blind eye was turned in respect of such matters in the past. That is the fundamental flaw that existed and it is the reason so many families are struggling to cope at present. The banks, literally and irresponsibly, shoved money at people and the Financial Regulator merely stated, “Well done, lads, keep at it”.
Deputy Ulick Burke: I thank Deputy Naughten for sharing time. I welcome the opportunity to contribute to the debate on this motion, which relates to the recently published reports into the banking sector and which refers to “the conclusion contained in the Honohan report that an excessively generous bank guarantee issued on 30 September, 2008, has cost the taxpayer more than was necessary to protect the stability of the financial system”.
Earlier today, the chief executive of Anglo Irish Bank, Mr. Mike Aynsley, informed the Joint Committee on Finance and the Public Service that the lion’s share of the €22 billion in taxpayers’ money that has been spent in rescuing the bank is gone and will never been seen again. This is the first evidence we have received from a senior bank official that the money in question has disappeared. In the past, we were informed that our activities in respect of NAMA and rescuing the banks might eventually yield profits. However, today we were presented with the first serious admission that this money has fallen into a black hole.
Deputies Bruton, O’Donnell and others on this side of the House previously stated that this would happen. However, those in Government denied it would be the case. Even though he was present at today’s meeting of the Joint Committee on Finance and the Public Service, Deputy Fahey, when making is contribution to this debate, deliberately chose to ignore what Mr. Aynsley said and instead focused other matters.
Despite all of the denials that have been issued, the reports into the banking sector clearly show that the blame for what happened must be laid at the door of those in the banking sector. The directors, senior management, auditors and accountants all conveniently or deliberately — we will never know — missed or ignored what was going on and this must be investigated. It is recommended in one of the reports that where auditors and accountants who should have scrutinised banks’ accounts and lending procedures but did not do so this must be investigated, a recommendation which I hope will be acted on as quickly as possible. These auditors and accountants should have alerted the authorities of the weaknesses in banks’ lending and financial positions and they must be investigated in the near future. This is the reason the crisis emerged.
The Honohan report clearly states that responsibility lies with the directors and senior management of the banks which got us into trouble. These people are the first line of defence, the ones who should protect us having been entrusted with our funds. The bankers blatantly denied right up to the end that there was trouble looming despite the writing being on the wall for all to see. There were numerous reminders in this regard from economists and Members of this House. However, when one highlighted this one was criticised and considered negative for doing down the country and the economy.
The other major cause of the crisis was the failure of the Central Bank and its regulatory functions. It was clear the banks were failing but this was ignored at all ranks within the banking structures and lending institutions. The Regling and Watson report clearly identifies the source of the banking crisis as a concentration on bank assets in terms primarily of their activities relating to the property market, in particular commercial properties. Thus, the banks were vulnerable to the bust that was obviously coming, about which they had been warned on many occasions.
I wish in the time remaining to me to highlight what the banks are doing to many small businesses in this country. Despite the fact that the banks have been supported and rescued with enormous and scarce resources of this country they are denying small businesses and those who were reliable clients in the past any leeway in terms of lending or funds to develop. This is causing serious havoc and serious unemployment in the country. It is incumbent on the Minister for Finance and the Government to ensure that once and for all the banking system releases funds to small businesses.
Deputy Andrew Doyle: I thank my colleague, Deputy O’Donnell, for moving this motion. The two reports on financial stability and the source of the banking crisis are to be welcomed. They are the first review we have had since the banking stability crisis of 2008. It is commendable that the reports are so detailed and informed given it is only four months since the Minister requested they be drawn up without the benefit of the documents needed owing to bank secrecy rules which, when one considers the Minister is now the sole shareholder in Anglo Irish Bank and is a prime shareholder in many of the other banks, should not be the case.
This crisis commenced in 2007 and came to a head in 2008. The basic questions that must be asked are why it has taken the Minister 17 months to commission a report and why he has avoided any review of the bank and Government actions since September 2008. There has been much talk about Iceland. Iceland has completed a full banking inquiry pre and post bank collapse which was published in April this year. We tend to forget — at least the Government does — that it is our duty and responsibility to account to every citizen in this country, who are paying the banks’ debts now and will continue to do so for many generations, for how this came about and the reason safeguards to protect the public against bankers’ debts have failed.
Both reports contain many illuminating facts that underline the essential conclusion that the bank crisis bears the clear imprint of global influences yet it was in crucial ways home made. It was stated in The Economist in November 2008, two months after the bank crisis, that Ireland’s economic difficulties are the result of a self-inflicted fiscal crisis that has been compounded by international factors. One would think listening to the Taoiseach and others during the past couple of days that the opposite was the case. The reports have found that the fiscal policies of the then Minister for Finance, our current Taoiseach, Deputy Cowen, bank governance and financial supervision, or rather a lack of it, from the period 1999 onwards left the economy vulnerable to a deep crisis with costly and extended social fallout.
The Minister for Finance does not appear to have realised or to have been aware that it was his job to ensure the national stability of Ireland’s financial system following its having joined the euro in 1999. Nobody argues with the critical importance of having a proper financial and banking system. The Minister appears not to have been aware that he had the essential tools to supervise the banking system and the availability of credit, tools which were never used effectively resulting in the runaway train of casino style banking with bankers’ principles based on how much they could lend to the highest bidder on the basis of receiving a bonus at the end of the year. What did the Minister do? He added to the out of control credit bill by introducing “extravagant and distorted subsidies for commercial real estate development”. By 2005, the Minister for Finance had introduced so many tax exemptions the revenue lost to the Government was larger than the remaining income tax receipts, which is hard to believe. We are now making cuts and increasing taxes to try to recover that revenue.
It is obvious that the out of control growth of the property and construction sector was an essential part of Government policy at the time as was the hands-off regulatory regime for the banks. One banker, Mr. Sean FitzPatrick, stated that over-regulation was stifling the Irish economy — he would say that — and, it appears, the Government believed all that he said. As stated in the Regling and Watson report, the Central Bank is also shown to have failed to sound the alarm to warn how severe were the emerging risks to bank soundness and, ultimately, the living standards of the ordinary citizen.
We were presented with these reports as though they endorse all that the Government has done. I fail to see how anyone can interpret that reading of the reports. Both reports end their review prior to end September 2008. If we are to move forward — I accept we cannot dwell on history — we need to know from where we came. We must know of all the mistakes made. The Icelandic Government has done this. Why are we any different? Why must examine all the practices that have taken place? We have had since September 2008 a rolling reaction and fire brigade response to the banking crisis. I am certain that not all the decisions made at that time were correct and proper. The least we should do is analyse them to ensure where wrong they are improved upon. Anything done right since then is acknowledged as being right. We on this side of the House have certainly acknowledged where prudent measures have been taken. However, this has not been the case all the time.
What we are left with is a legacy that intends to carry on regardless and to transfer the assets of the State from the people of Ireland to private investors in the banks, the greatest transfer since Cromwell landed in this country.
Deputy John O’Mahony: I am pleased to make a brief contribution to this debate. I was elected to this House three years ago and in that time I have listened to many debates and exchanges in this Chamber about the causes of the country’s dramatic economic collapse. The collapse was well flagged behind the scenes before that. As with all debate and argument, Government Deputies have said we were only scoring political points on this side of the House. Last week’s reports firmly put that issue to bed. The arguments in the independent reports are there for all to see. They clearly point the finger of blame at the mismanagement of the Government while it was driving the economy. All the arguments trotted out by Government spokespeople in the last couple of years have been shown to be false, flawed and inaccurate.
I was amazed when I read the reports last week and paralleled the events covered in the reports with political events that happened at the same time. In the run-up to the 2007 general election, we were told the economy was in overdrive and the good times were here to stay. A few months later, when Fianna Fáil was safely back in Government, we were assured that even if there was a slight downturn there would be continued growth and all would be well. Next we heard denials that there was a crisis, when the dogs in the street know that thousands of jobs were being lost throughout the country and across the economy. Then we were told it was not the Government’s fault. The latest spin is that they have taken decisive action, know how to solve the problems and have taken the hard decisions. This is unbelievable.
One of the reports, referring to wages and competitiveness in the late 1990s, states that wage settlements accelerated markedly from the late 90s and in relative terms. The trilateral wage agreements continued but became less relevant as workers negotiated supplementary wage increases against the background of full employment and an overheating economy. Compensation per employee, which had grown more or less in line with the euro average until 1996, increased at two and three times the euro area average from 1997 to 2008. In nominal terms, annual growth wages in Ireland were the highest in the euro area except for Luxembourg. Ireland had the highest price level in the euro area, according to Eurostat statistics. Competitiveness deteriorated significantly. From 1999 to 2008, Ireland’s real effective exchange rate increased more than that of any other country in the euro area.
Is it a coincidence that a Fine Gael-Labour Government handed over an economy that was creating 1,000 jobs a week and was being led by huge increases in exports because we were competitive and could compete in the markets of Europe? All that progress was frittered away by reckless lending, 100% mortgages and tax exemptions left, right and centre. All of this ensured it was going to be a crash rather than a soft landing when the good times ended.
The reports go on to say the fiscal policy — considered to be exemplary, because of surpluses, until 2006 — was, in reality, deteriorating long before that. The economy was, in truth, in crisis in the early part of 2007. That is another significant date but, of course, we were not given the real story then either.
One of the real stories did not emerge until today. Deputy Ulick Burke has told the House how the Joint Committee on Finance and the Public Service was told by Mr. Mike Aynsley of Anglo Irish Bank that the €22 billion has gone down the drain and will never be seen again. Someone has to be held responsible for this. The cover-ups must stop. The truth must be released. This motion will, if passed, help the truth to emerge and place accountability where it rightly lies.
I have heard the argument made that we all made mistakes in the last ten years. Who made the mistakes? Who was in Government during the last ten years? There is an attempt to implicate the Opposition in these mistakes. It is incredible, on the day the Joint Committee on Finance and the Public Service is told that €22 billion has gone down the drain that the Government would vote against a motion which seeks to know the political and policy context for the failure of the Department of Finance and the Financial Regulator to stop Anglo Irish Bank from publishing financial results in December 2008 that misrepresented the strength of its customer deposit base, and the lessons that need to be learned.
Deputy Jimmy Deenihan: Like previous speakers, I am glad to have an opportunity to speak on this motion. I have been listening to a number of speakers, including the Taoiseach yesterday. In the 1990s, I was associated with the seaside renewal scheme, which has come in for some criticism. The seaside renewal scheme revived and regenerated traditional tourist resorts which had gone into decline. It was a targeted scheme available to places like Tramore, Ballybunion, Salthill and Bundoran. It was in preparation when the rainbow coalition Government took over and was introduced by the Minister for Tourism, Deputy Enda Kenny. Where the scheme was properly administered and proper planning put in place, it was very successful. It has rejuvenated Ballybunion and changed the face of the town because Kerry County Council ensured that proper planning was put in place. One cannot blame the sprawls of County Clare, Achill Island and other places on the scheme itself. It generated economic activity and gave a facelift to places like Ballybunion but it was badly administered by some councils and developers throughout the country. The scheme could have been very effective if it had been properly supervised and if there had been proper local planning. Each resort should have formulated a plan before the scheme was applied.
When President Bill Clinton came to Ballybunion, the previous Minister for Finance, Deputy Charlie McCreevy, unveiled a statue of President Clinton. Deputy McCreevy claimed responsibility for the seaside renewal scheme. I heard him say it was his scheme and he was glad it was so effective and successful in Ballybunion. The Taoiseach should ask his predecessor, Mr. McCreevy, about his support for the seaside renewal scheme before he points the finger at Deputy Kenny. Deputy McCreevy was adamant on that occasion that he was responsible for the seaside renewal scheme.
Some of the most effective tax incentives were the urban renewal schemes. The first scheme, which was introduced by the FitzGerald Government of the 1980s, rejuvenated the inner cities of Dublin, Cork, Limerick, Galway and Waterford. It was a very successful scheme. Some schemes worked because we do need incentives. They went wrong when they became politically motivated and were not targeted but allowed to become too widespread. Both the report compiled by Klaus Regling and Max Watson and the report compiled by Patrick Honohan show quite conclusively that domestic macroeconomic policy got us into this banking mess. The regime of light regulation, bad governance and poor and reckless lending by the banks was supported fully by the Government.
I recall a statement made by the former Taoiseach, Deputy Bertie Ahern, at a banking conference three or four years ago — perhaps a year before he resigned as Taoiseach. He praised the banks as the real drivers of the economy. I remember seeing a report on his speech, which did not attract much comment, on the 6 o’clock news. During that period, the banks got every support and encouragement from the Government to give people as much money as they could. That is on the record of the national conferences of the banks at that time. I am glad to have had an opportunity to say a few words on this motion.
Minister of State at the Department of Finance (Deputy Martin Mansergh): That there is a need to learn and internalise the lessons of the crisis we have been experiencing is not disputed on either side of the House. This evening, we have started to debate the two excellent reports on the crisis. Of course, the reports do not represent the whitewash that was predicted by some Deputies. The motion proposed by Fine Gael is politically focused. The reality is that much broader national and international factors were at play. We need honesty and reflection on all sides. During yesterday’s confidence debate, I quoted the remarks of the President of the EU, Mr. Van Rompuy, in the Financial Times about the failure at EU level to understand how the euro was working and the imbalances it was establishing.
In the current situation, the Government has to be responsible out of necessity. For other parties, it is more of an issue of choices that will not necessarily have deep consequences. These reports should not be treated as a question of crude political reductionism. It has been amply demonstrated — I do not intend to argue it further — that there was, in aggregate, no superior foresight or virtue on the Opposition benches. I accept that Fine Gael’s NewERA document contains constructive proposals. I repeat that serious questions need to be asked about its compatibility with the widely recognised imperative to focus at EU level on reducing sovereign debt and indebtedness. One of the implications of the plan, in the short term, would be to increase indebtedness.
The report compiled by Mr. Regling and Mr. Watson referred to the culture of Irish society. They suggested that there is a strong and pervasive preference in Irish society for property as an asset. Their historical point that Ireland had never before experienced a property crash is slightly more dubious.
Reference has been made to various incentives. A Deputy on the other side of the House was right to say that the former Minister, Charlie McCreevy, claims credit for the seaside resorts scheme. However, it was Deputy Kenny, as Minister for Tourism and Trade, who introduced the scheme. I suggest that it was one of the less satisfactory property incentive schemes, even on its own terms. It worked well in Westport, to be fair, but it was not particularly good in many other seaside towns. I was amused by the reference in the Minister’s speech last night to lobbying for tax relief for medical centres. When I was lobbied on that issue, I said a firm “No”. Apart from anything else, those in the medical profession, who are among the better paid in society, are well capable of funding health centres themselves.
Although counter-cyclical budgets could have helped to moderate the boom, the introduction of such budgets would mark a significant cultural shift on the part of all parties in this House and all Governments. Governments are advised to act in a strongly counter-cyclical manner the next time the economy begins to party, to use the terminology of the report. That may be some years away. We all know that when there are ample revenues in the Exchequer, substantial pressure is put on the Government of the day to spend them. That is what I mean when I say we need to internalise the lessons of these reports.
Deputy Michael Ring: I wish to begin by speaking about these reports. Anyone who has listened to certain economists over recent years will wonder whether they are living in the real world. Many economists told us the boom would last for another 14 or 15 years. It is hard to believe economists. The same guys are now preaching and blaming everybody. The economists who were advising the Government, the Minister for Finance and the banks let the country down badly. What went on in the banks was criminal. There was no regulation. We have discussed this previously. The blame game is taking place at present. These reports have been published. We know what the problems were. I hope we have learned lessons for the future. I hope we will have strong regulation without any interference from the Government. The banks let down the people and the country. They have got away with murder. I spoke on these matters yesterday.
I read a report about tax defaulters in a newspaper today. They did not do half as much damage as the banks to this economy and this country. Their names are in black and white in one of today’s newspapers. It is rare to see professional bankers brought to justice. Party colleagues of mine have advised me not to give out in the Dáil about bankers. They say we should never give out about bankers. If some bankers do not end up in jail, it will be clear that there is no law and order in this country. The people are telling me the law is for the poor but not for the rich. I hope the fraud squad, the enforcement officers and the Garda Síochána do their jobs sharply. It is very easy to catch petty criminals and bring them before the courts. The Director of Public Prosecutions has no difficulty sending out warrants for them so they can be prosecuted in court. We want to see bankers prosecuted in the courts by the end of the year. It is not enough for their homes or offices to be searched by gardaí, in the presence of RTE cameras. We want to show the people of this country that law and order applies to the rich man as much as it does to the poor man. That has never happened in this country in the past.
This is not the first time we have bailed out the banks. We had to bail them out on many other occasions. Why would they not do it again, given that they got away with it previously? These reports have identified that the Taoiseach, the Government, the bankers and the regulators all failed to do their duties. The regulator was given a reward in the form of a big cheque. The Minister for Finance was made Taoiseach. The bankers were sent on holidays out to Spain. That is the kind of reward we have given to the people who put this economy and this country in the state it is in. Young families will be forever paying back their debts for property they will never own, for which they paid too much and which is now undervalued.
Deputy John Perry: How can anyone have confidence in a terms of reference for a commission of investigation into the banking crisis when the Fianna Fáil-led Government decides to exclude an analysis of the root causes of the crisis and to evade its role and responsibility in its creation? We now have the two independent reports into the Irish banking crisis, one of which addresses the causes of the crisis while the other addresses regulatory and financial stability policy in the period 2003 to 2008. The Government has now decided to draft the terms of reference for a commission of investigation in a very selective manner. All references to the role of successive Fianna Fáil Governments and the Department of Finance in the making of the crisis are excluded.
One of the most disastrous consequences of the economic crisis brought upon us by the Fianna Fáil-led Government is the loss of jobs and rising levels of unemployment. For every parent and grandparent in the country, the rising level of youth unemployment is one of the most obvious signs of Government incompetence. Today’s school leavers and graduates are experiencing the worst employment market for many years. They are ready and anxious to work, but now they cannot find jobs. They do not want social welfare. The lack of domestic job opportunities is forcing many young Irish people to take one-way tickets abroad to find jobs. This is a national tragedy.
Local small business, retail outlets and tourism and hospitality services are struggling and many of them are closing down. Thousands have lost their jobs as a direct consequence of misguided Government policies. A thriving SME sector is one key to Ireland’s recovery, but the Government is doing nothing to help this sector protect and create jobs. Two independent reports, from the titles on the cover pages through to the last pages of the appendices, state clearly that this was a home-grown crisis and the sole responsibility of the Government. The reports clearly state that Ireland’s leaders were guilty of pursuing policies that proved catastrophic for the nation. The independent reports make it clear that the Fianna Fáil-led Government was the chief architect of the catastrophic failures of policy that led directly to our current economic crisis. It cannot avoid this.
The Honohan report states in paragraph 1.3: “The Government’s procyclical fiscal policy stance [and] budgetary measures aimed at boosting the construction sector [. . .] were significant factors contributing to the unsustainable structure of spending in the Irish economy.” Those in Fianna Fáil were intent on helping their friends and backers in the building industry — the Galway tent — and they continued with this policy for far too long. The construction sector became a cash-recycling pyramid scheme. For every €100 million of investment in the construction sector, €40 million came back to the Government as revenue. Superficially, it looked great, but we have ended up with enough retail space for a population of 42 million people. The UK has 1,000 sq. ft. of retail space per head of population; the equivalent in Ireland is 13,000 sq. ft. We have 900 hotels and more housing and apartment space than we know what to do with.
People deserve answers about the root causes of this disaster. They deserve public accountability and not a private cover-up. If we are to move on, the public need to know the truth about how the country was brought to its knees. The consequences of Fianna Fáil’s policy failures will be felt for generations to come. In that context, we deserve the truth about who is responsible and we need to hear it in public. We must hear the details of how and why the Government and the Department of Finance got it so wrong.
The proposed terms of reference for the investigation into the greatest economic crash this country has ever experienced lack credibility and are completely inappropriate. They are designed exclusively to shift onto the banking sector the perception of how and why things went so badly astray. We heard this evening that €24 billion is gone. Can it be got back? If any valid lessons are to be learned from an investigation into this crisis, the terms of reference for the investigation must be widened to include the political content of budget and taxation policies, including the official advice given to the Department of Finance in the past number of years. The Government is in the dock and it is guilty. It cannot get away with it no matter what spin it puts on it.
The reason we tabled this motion is simple. Two excellent reports have been published but, as the Minister of State mentioned earlier, they are scoping reports. They are not conclusive. Within these scoping reports, a couple of things come to the fore. The Government is not responsible for everything; however, what we have been hearing from various Government spokespersons is that it is responsible for nothing. We now need to establish a commission of investigation that has credibility, is independent, and deals with all the issues so that the public can have total confidence in the findings. According to the draft terms of reference provided by the Minister for Finance to the Oireachtas Joint Committee on Finance and the Public Service, the commission will deal with the area of banking and the advice provided to the Department of Finance about financial regulation. However, the one element that is missing is that of macro economic policy. The Governor of the Central Bank, Professor Honohan, is on record as saying the Government makes policy, while the Central Bank and officials such as himself implement it.
We have suggested a certain number of items that need to be dealt with by the commission of investigation in addition to those specified by the Government. It should deal with macro-economic Government policy between 2005 and 2008, including the official advice provided to the Minister for Finance. It should also deal with tax incentive schemes. One topic missing from the scoping reports is the motivation that was behind the decisions made by the then Minister for Finance, which is critical. The Minister sits down with advice from his officials, which we need to see. Klaus Regling has stated that it is good that such information is available in many other countries. What were the sources of the advice based on which the Minister made his decisions?
The one criticism I have of both reports is that the Minister for Finance during the period under scrutiny, who is now the Taoiseach, was not interviewed. It is like “Hamlet” without the prince. The terms of reference should also include the bank guarantee scheme. Professor Honohan stated that the scheme was necessary but he was critical of the wide coverage of the scheme, including subordinated debt, which has resulted in the imposition of additional cost on the taxpayer. Within the report, Professor Honohan stated that the records of meetings that took place at the time the guarantee was established were “sketchy”. As Deputy Connaughton said this evening, if a farmer was trying to obtain a grant he or she would have to provide many long documents; yet the most monumental financial decision in the history of the State was accompanied by sketchy records. We are entitled to know what was discussed and decided.
We must find out what happened, why it happened, who made the decisions and whether all advice was considered. The chairman and management of Anglo Irish Bank, who appeared today before the Oireachtas Joint Committee on Finance and the Public Service, stated that Anglo Irish Bank will cost the taxpayer a minimum of €24.5 billion.
Deputy Kieran O’Donnell: That is the equivalent of three times the budget of the Department of Education and Skills. The money is down the toilet — it is gone. It would have cost €2.5 billion to set up a good bank, as we proposed. The only difference is that we wanted professional investors to take their share of the pain. What has happened here? The taxpayer is taking it. Services for children, the elderly and the vulnerable will be affected.
Deputy Kieran O’Donnell: ——and I hope that when Deputies across the House consider it, they will agree that in the interests of fairness and completeness, and as a House that represents all people, we should ensure the commission of investigation will get to the truth of what happened, so that we can learn lessons and establish controls to make sure it never happens again. They will say that in the interests of fairness, completeness and inclusiveness and as a House that represents all people, we should ensure a commission of investigation is set up to get to the truth so that we can learn lessons and put in place controls so that this never happens again.
|Ahern, Dermot.||Ahern, Michael.|
|Ahern, Noel.||Andrews, Barry.|
|Andrews, Chris.||Aylward, Bobby.|
|Blaney, Niall.||Brady, Áine.|
|Brady, Cyprian.||Brady, Johnny.|
|Browne, John.||Byrne, Thomas.|
|Carey, Pat.||Collins, Niall.|
|Conlon, Margaret.||Connick, Seán.|
|Coughlan, Mary.||Cowen, Brian.|
|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.|
|Haughey, Seán.||Healy-Rae, Jackie.|
|Hoctor, Máire.||Kelleher, Billy.|
|Kelly, Peter.||Kenneally, Brendan.|
|Kennedy, Michael.||Killeen, Tony.|
|Kitt, Michael P.||Kitt, Tom.|
|Lenihan, Brian.||Lenihan, Conor.|
|McDaid, James.||McEllistrim, Thomas.|
|McGrath, Mattie.||McGrath, Michael.|
|McGuinness, John.||Mansergh, Martin.|
|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.|
|Sargent, Trevor.||Scanlon, Eamon.|
|Smith, Brendan.||Wallace, Mary.|
|White, Mary Alexandra.||Woods, Michael.|
|Bannon, James.||Barrett, Seán.|
|Behan, Joe.||Breen, Pat.|
|Broughan, Thomas P.||Burke, Ulick.|
|Burton, Joan.||Byrne, Catherine.|
|Clune, Deirdre.||Connaughton, Paul.|
|Coonan, Noel J.||Costello, Joe.|
|Coveney, Simon.||Crawford, Seymour.|
|Creed, Michael.||Creighton, Lucinda.|
|D’Arcy, Michael.||Deenihan, Jimmy.|
|Doyle, Andrew.||English, Damien.|
|Enright, Olwyn.||Feighan, Frank.|
|Ferris, Martin.||Flanagan, Charles.|
|Flanagan, Terence.||Gilmore, Eamon.|
|Hayes, Brian.||Hayes, Tom.|
|Higgins, Michael D.||Hogan, Phil.|
|Howlin, Brendan.||Kehoe, Paul.|
|Kenny, Enda.||Lynch, Ciarán.|
|Lynch, Kathleen.||McCormack, Pádraic.|
|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.||Perry, John.|
|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.|
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