ACC Bank, Jobs Initiative & Agricultural Motion

Not an easy week. Many people would say that I wouldn’t be content if it wasn’t complicated. I beg to differ. My financial problems with the banks have been well aired long before now – I was on Prime Time nearly three years ago explaining that I couldn’t pay the interest on development land loans and claimed that most builders were in the same boat, despite protestations to the contrary. When the government nationalised Anglo Irish Bank I challenged Finance Minister Brian Lenihan on the madness of such a move but he insisted that the majority of the main lenders in Anglo were paying their interest. It was not true. The news of ACC Bank placing a receiver against the assets mortgaged to them against money loaned broke on at lunchtime on Tuesday 24 May. Phone lines were busy – Aindréas Doyle doing most of the talking. Experience has taught me lots about the press, and how they function, I decided to give no newspaper interviews and confined myself to speaking on RTÉ’s Drivetime with Mary Wilson, RTÉ television news, South East Radio, and TV3’s Tonight with Vincent Browne. When I speak live I am in control of the message, when I speak to a journalist in the papers I lose that control. They have the opportunity to report the news in an honest fashion or they can choose to twist it to suit their own agenda. As the week progressed, the papers showed their colours. Taking their information from the Mary Wilson interview on RTE Drivetime, they reported the issue as they saw fit. Some did so accurately, others lazily, some falsely, some both. When companies refused to deliver fish and bread to the Wine Bar Restaurants and others proceeded to cut our credit terms because of lies they read in some papers, I decided to issue a press statement, which went as follows:

“To clarify issues relating to the appointment of a receiver by the ACC Bank to the assets held by that financial institution, I should make it clear that it does not affect the standing of the construction company, M&J Wallace Ltd., otherwise known as Wallace Construction. The company has dealings with four of the major banks and continues to work with the remaining three. Wallace Calcio which runs the wine bars and coffee shop, is a separate company and is not affected by the action of ACC Bank. Likewise, the Wexford Youths football club, based at Ferrycarrig in Wexford, is leased from the construction company and its survival is protected by that same lease.

As I have admitted more than three years ago, the construction company has suffered badly due to the financial crisis but it continues to do its utmost to work towards its survival. I have not given interviews to any newspapers in the last week, despite some choosing to quote me in error.”

Surprise, surprise, the papers were less interested in printing the press statement – it wasn’t as juicy as the stuff they could make up themselves. It did manage to throw some cold water on the subject as the media moved on to the next story. But don’t hold your breath, part two is coming soon to a newspaper near you.

Meanwhile, back in the Dáil I had an opportunity to discuss the Finance Bill in relation to the Jobs Initiative – here are some extracts from it, better to keep it short to retain your interest:

“I reassure Deputy Durkan that I too am very keen to stay in Europe. I am also an optimist at heart and believe everything is possible but I also believe we should get a fair deal from Europe which is not the case at present. I say to the Deputy that when a person goes into a bookie’s office and backs a horse, if the horse does not win, the person loses. I agree with him on that point. However, if a person bought bonds in a bank and lost on them, that person would still get the money back under the present arrangement. That is a bit different.

There are many elements I like in the Finance (No. 2) Bill, especially the VAT proposal which will be an enormous boost to the hotel and restaurant industry. I believe in the principle of investment. Investment stimulates an economy whereas austerity drains it. Unfortunately, we are probably not getting as much investment as we would like and are getting much more austerity than we would like. Unfortunately, too, austerity probably hits the less well off in our society more than anybody else.

There is a big problem in regard to getting things moving in this country, namely, the lack of a banking system that functions. We were told about a strategic investment bank. Perhaps it is still on its way but it is really needed. Bank lending is a problem - banks are not lending. They do not see our businesses as safe to lend to and do not believe in them. I read an article in the Financial Times today about the HSBC in Britain which stated that in the first quarter of the year HSBC’s lending volumes rose by €28 billion. The writer asked where most of that money had gone. It went to the fast-growing markets in Asia: “in stark contrast to western markets like Britain and Ireland, where, more than two years after the peak of the financial crisis and despite repeated agreements with governments to boost the availability of finance banks are still reluctant to lend to businesses”.

Believe it or not, the Irish Government is in a privileged position in that it owns a couple of banks. I might prefer if it did not but it does. We must stop asking the banks to lend money to us and must tell them to do so, given that the State owns them. It would be a great boost to our economy to have again a banking system that functions.

The biggest problem with the Finance (No. 2) Bill is the pensions element. A great number of people have telephoned me to express serious disillusionment with what has happened. One might claim that 0.6% does not seem to be very much but that amount is calculated on the full value of a pension each year. What really worries people is that may only be the beginning; it may not be the end. It will be perceived as the thin end of the wedge. For the past number of years we have talked a great deal about the need to encourage people to begin a pension. It is difficult enough to do that because one is asking people to store away money for 30 or 40 years in the hope it will be there ultimately when it is really needed. When something like this happens it dents people’s confidence and there is no doubt that confidence has left many people. It was bad enough that many pensions suffered badly because of the recession but it was a new phenomenon to find that the Government would raid them. This will have a really negative impact on trying to persuade people to invest. We have an aging population and we need to work at persuading people to have pensions. Robbing them is not a good idea.

If we are not going to rob the pensions where will we get this €1.9 billion? Deputy Peter Mathews spoke very well today. He suggested there must be a negotiated restructuring of €75 billion; €50 billion with the ECB and €25 billion with the bondholders. He suggested the money should be cascaded down and invested in the economy to deal with household debt…In the short term, while we wait for the Europeans to see some sense, salaries over €100,000 must be dealt with. An annual income-linked wealth tax of 1% on assets valued over a million would bring in €1.2 billion. The wages, benefits and pensions of Deputies and Ministers are outrageous and there are people with State jobs getting over €500,000 per annum and still we are cutting Resource, Language, and Learning Support teachers in schools. It is immoral that people get more than €200,000 for any State job in this economic climate.”


Later in the week, I had an opportunity to speak on an Agricultural motion before the house. My father was the proud owner of 86 acres of land so I do have an agricultural background and I have dabbled in the industry myself in the past. I have raised chickens, pigs, sheep and calves and I’ve leased land to grow sugar beet. I also tend to wine plants in Italy where I am gradually learning that good wine is made in the field, not the cellar. I was amused during the election campaign when I stopped to speak to a farmer at the side of the road. “Looking for votes are you” he said, “You must realise that none of the farmers will vote for you because they think you are a communist”. Life is full of surprises. My contribution was as follows:

“We are all fairly well aware that we are short on indigenous industry and very dependent on multinationals to provide employment and to drive the export market. Of the indigenous industry, farming accounts for approximately 60% of exports and it plays a significant role in the domestic economy. There is little doubt that the deal the farmer gets from supermarkets leaves much to be desired. I note the farmer’s share has changed in a number of years. The report, Equity for Farmers in the Food Supply Chain, states:

The farmer’s share of the retail price has declined significantly in the major commodities over the last 15 years. For example, since 1995 the farmer’s share of the retail price for liquid milk has declined from 42% to 33%. For cheese, the farmer’s share has fallen from 34% to 20%, for pigmeat from 51% to 27%, and for beef from 60% to 50%.

The multiple chains have grown stronger in this country. Successive Governments have allowed the small shopkeeper and small farmers to be pushed out. We are familiar with the practice of hello money which enabled farmers and producers to put their products on supermarket shelves but this practice has been banned. However, it is alive and well today under a different name. They call it advertising marketing contribution. This allows the multiple to dictate who will survive and who will not, with the result that many small farmers have been driven out of business. They are unable to compete. The person who grows 10,000 tonnes of tomatoes has a significant advantage over the person who grows one or two tonnes of tomatoes. There is no fairness in the system. This country has an obligation to protect agriculture which is the one of the few decent indigenous industries we have.”


Running out of space as usual. Just to mention a few things squeezed into a busy week – still pressing on Education cuts with parliamentary questions, met a lively group of girls from Holy Faith, New Ross, got to Gorey to look good in pink for a charity ‘Buy My Dress’ sale, got to London to see Barcelona perform poetry in motion, and got to Ferrycarrig to see the Youths robbed by Shelbourne.