Is the Taoiseach satisfied about competition in the financial sector? I refer specifically to the announcement this morning by Allied Irish Banks of a profit of €1.7 billion for the year. Is the Taoiseach aware this is up from €1.37 billion last year? Does he also know this is the highest rate of profitability in Europe? Is he aware that, for example, the two major Irish banks take three times more in profit per customer than the average bank in Europe?

It is obvious some of this is excessive profit-taking in the Irish economy. There is a lack of competition. It is good to see the banks profitable but any reasonable person would say that a profit of €1.7 billion is completely out of kilter with the financial sectors in other countries in Europe. The Government's reaction has been to scrap the €100 million levy that was taken from the banks for the last three years. This was done in the budget by sleight of hand. There was no mention of it; it was merely terminated at the caprice of the Minister. Do we remember the former Minister for Finance, Mr. Charlie McCreevy?

Charlie; I knew him well.

He said of the banks when he implemented the levy: "It is not unreasonable to see some of their good fortune applied to assisting the public finances". It was the former Minister's view that the banks could afford to make a contribution to the public finances.

Where is he now?

The Government has terminated this levy which at least contributed €100 million to the Exchequer, an amount not to be sneezed at. There was then some vague talk about the banks, out of the goodness of their hearts, making a contribution in social finance terms. We know nothing about this social finance fund and no definitive figure has been put on it. We do not know whether it is a per annum contribution, the purposes to which it would be put, who would administer it, or whether it is forthcoming. Does the Taoiseach intend to revisit the levy in the light of this excessive profit-taking in the Irish economy? Will he tell us how much will be contributed in terms of social finance?

I am glad Allied Irish Banks is profitable. It is so because growth in the economy is so strong——

It is screwing the public.

——and our businesses are so strong.

And the Government is so weak.

Investment is very strong——

The Government had to bail them out before.

——such that our financial services are doing well.

Allow the Taoiseach to continue. This is the Labour Party's question.

I know that, but we had to bail out the banks previously and the Dáil was called back to do so.

Did the Deputy see the "Prime Time" programme last night?

We had to pay them back €100 million because they needed it.

That was in the mid-1980s when the Deputy's party was in power.

The Taoiseach's party never came to the west.

Allow the Taoiseach to continue without interruption.

It almost went down and I remember having to be convinced by the then leader of our party that it was a wise thing to do——

To save the banks.

——to invest money——

They should all be sacked——

——and not to let the bank go down.

——and all in debt.

I remind the Deputy and the House that this is a Labour Party question and that Deputy Rabbitte is entitled to exactly the same courtesy that was afforded Deputy Kenny when he was allowed hear the answer to his question.

Remember the PMPA.

The Taoiseach to continue without interruption.

I was resisting the calls from the Fine Gael Party to nationalise the banks.

It wants to close everything down.

No, only the link with the banks.

In reply to Deputy Rabbitte's question, AIB is a global company. Its profit is sizeable and it is making considerable money. The Government would like to see more competition. The Bank of Scotland has come into the market and is taking a good share of it and I hope more such companies will enter the market. The Government has been supportive of An Post becoming involved in the financial area and thereby, on a community basis, helping customers in that area.

As the Deputy will be aware and I restate this point, there was a solemn agreement, which Governments are honoured to keep, that the bank levy would run for a period of three years and would then cease. That was the commitment made and the Government honoured it.

When?

The Minister concerned announced that he would set up a new social fund in respect of which he expected——

That is not contained in the Finance Bill.

I am trying to answer the Deputy's leader. As I said, the Minister expected the financial institutions to contribute sizeable sums of money.

For football jerseys.

I understand the main banks have already given commitments to put sizeable amounts of money into this fund.

Why is that not reflected in the Finance Bill?

A Cheann Comhairle, I am trying to answer Deputy Rabbitte's question.

I ask Deputy Burton to have the courtesy to allow the Taoiseach to continue without interruption.

The main banks have offered to put sizeable amounts of money into this fund. The money will be used in projects to help the less well-off in our society——

They will tax those people.

It will be used to fund projects that will help to generate activities in areas that are socially excluded. This is a good initiative.

It is a pity that at one level we are concerned about a company leaving the country because of the level of competition and the next question asked is about a company that is profitable and Members want to talk it down. We should make up minds and be consistent where we stand.

They have robbed their customers for years.

They have fleeced the ordinary person.

Allow Deputy Rabbitte to continue without interruption.

It is not worthy of the Taoiseach to engage in silly banter about anybody complaining about the banks being profitable. That is not the issue, and he knows well it is not. The issue is that hundreds of thousands of ordinary bank customers are being milked to contribute to excessive profits.

Hear, hear.

That is the issue. The Taoiseach did not say what he will do about the levy. He stopped the levy which was at least extracting €100 million. He did not say what the social finance fund means, apart from some general charitable reference that there will be a sizeable amount of money put into it out of the charity of the banks' hearts. This is a wider economic issue and the Taoiseach knows that very well. There is no point playing it for cheap headlines.

The Deputy has a PhD in that.

The Minister of State should be careful.

Allow Deputy Rabbitte to continue without interruption.

I am interested that the motley crew of second tier Ministers, who have so distinguished themselves, think that it is a laughing matter that Irish bank customers are being ripped off. I find it very interesting that Fianna Fáil regards it as a matter of amusement.

The Deputy's time is concluded.

The point I want to put to the Taoiseach is that the last report of the Central Bank——

Conor, they are not listening to you. You should not be looking up at them. Will you stay quiet for a moment?

The Minister of State should concentrate.

The last quarterly report of the Central Bank expressed its concern about the fact that personal credit has expanded by 25% per annum since the last quarter of 2003. Specifically the Central Bank said that a situation where debt is increasing at a rate that is more than three times that of income is unsustainable. That is the Central Bank's view. What is the Government response to the Central Bank? Is it happy to see the rate of debt increasing at three times that of income? Is it happy to see personal credit expanding at 25% per annum?

Is the Government happy to see a situation, for example, that I heard in one of my clinics on Saturday? A father came to see me about his 19 year old apprentice carpenter son who was given a loan for €8,000 from a particular bank, not a branch of Allied Irish Banks. The son went back to the bank seeking another €4,000, but the bank said it could not top up his loan by €4,000. However, it withdrew the loan and gave him a new loan for €20,000. This was given to a 19 year old and there was no concept of the responsibility of that or what it meant.

We could only have a 25% rate of expansion in personal credit by irresponsible lending on which the Central Bank has rung the alarm bells on a number of occasions. This is a serious question. What is the Government's response to the Cental Bank's warning?

I am certainly not trying to be smart about any of these issues, but I make the point that Allied Irish Banks is a very good Irish company. The threat over the past ten to 15 years was that our two main banks could be taken over internationally. That was a real fear for several years during the past ten to 15 years, namely, that they would not have the critical mass in the international financial environment to be able to maintain their positions. I get a sense of satisfaction from seeing Allied Irish Banks or any Irish company making half of its profits on the international market. I am subject to correction but traditionally that was the position. One of our companies is able to compete in that market.

Equally, I agree that the more competition, whether from An Post, the credit unions of which most people are members, the Bank of Scotland or any of the other financial services, the better it is for the customer. The Government, through legislation and in any other way it can, promotes such competition. Banks, therefore, must be fair to their customers while monitoring their profitability and securing the best deals for people.

Deputy Rabbitte asked me a question about the Central Bank's report. As domestic demand has been strong in this country, people have borrowed. In every single examination that has been done on this, it has been found that people have not borrowed excessively. The credit unions have vast amounts of money and they would be glad to facilitate borrowing. The position is equally similar in the banks for the very reason the Deputy mentioned. I am aware that if one goes to the bank to cash a cheque, one may end up being offered a car loan. I do not agree with that, but the fact is that the banks have resources and they at all times target their customers to take out loans.

The saving ratios in the country are higher than they have been at any time in the past 25 years because of initiatives of this Government. There are companies in the International Financial Services Centre making vast amounts of wealth and which would not employ a handful of the people employed by Allied Irish Banks. That said, I am also glad they make those sums because the International Financial Services Centre is a good resource for the State.

Carte blanche is being given to the speculators.

If they were not in this country they would be somewhere else. They employ people here. In the past all our young graduates had to emigrate to London, Luxembourg and America, but now they are employed here. Let us put a stop to the begrudging attitude. I agree with Deputy Rabbitte's core point, that the more competition we get to help people, the better.

I am not overly concerned that our borrowing ratio is out of line, based on the high saving ratios and the high reserves in the banks, credit unions and other financial institutions.