Last night Ulster Bank confirmed that it would close 40 more branches and lay off additional staff. In that bank alone we are looking at the loss of between 1,400 and 1,800 jobs, which is a staggering blow to those employees and their families. In a presentation to investors, the chief risk officer went further and said that the bank is anxious to break even by 2014 and to make a profit again in three years’ time. In that context, he very worryingly said that the bank would target distressed mortgage holders in arrears. In an extraordinary statement, he said that it was his view that up to 35% of those in arrears were strategic and that the bank was going after them. He blamed the Dunne judgment in the context of the Land and Conveyancing Law Reform Act.

It is interesting that the Government’s response to the mindset and mood revealed in the presentation to investors yesterday was essentially to capitulate to the bank’s agenda. It is clear that the banks are targeting those in arrears and the Government has facilitated this, first, by simply changing the legislation, bringing it through this House, to make it easier for banks to repossess family homes and, second, by unravelling the existing protections and code of conduct that existed for mortgage holders and those in arrears. The new code of conduct represents a significant rebalancing of powers towards the lender as against the borrower. What we saw yesterday was a revealing insight into the thinking within the bank boardrooms and the bank management across the board. It is their belief that it is legitimate to use legal action to go after people in arrears on the basis that they are all strategic defaulters anyway. It seems to me that what we are witnessing, which explains why the Government has created a situation that coincides with the agenda of the banks, is a dilution of protections that existed for people in mortgage arrears and a change in legislation without any conditionality to protect those in arrears.

Does the Minister share the view of Ulster Bank that up to 35% of mortgage defaulters are strategic? Is that the Government’s view as well? Given the mindset, as revealed by the bank, will the Government reconsider intervening on behalf of those in arrears and put in place independent oversight to arbitrate between the banks and those in arrears to ensure that those in mortgage arrears in this country get a fair hearing and genuinely sustainable resolutions to the predicament in which they find themselves?

It is difficult to take lectures from the Deputy opposite about capitulation to banks given the history of what we have been through.

Hear, hear.

The Minister wanted to guarantee Ulster Bank.

Would an answer be out of the question?

Deputy Cowen to the rescue.

All of us in this House will express sympathy with those who have lost their jobs in Ulster Bank, which is the initial question raised by the Deputy. I am very much aware that this is an economy in transition.

In recession.

While we feel for the people who are losing their jobs, we also recognise that we are making real progress. We are seeing parts of the economy that grew too big, which unfortunately included banking and property, adjust to a new reality. We are creating employment in other sectors that are long term and sustainable. That is part of an ongoing transition that is taking place.

The Deputy also raised the issue of people who are in mortgage distress. The Government has taken enormous pains to provide a framework within which such people can be protected.

Hear, hear.

There is a mortgage arrears relief programme which sets out the code that must be followed. In addition, we have made it very clear that the money we the taxpayer have put into the banks to recapitalise and make provision for the losses in their loan books must be used systematically to deal with people who are genuinely unable to meet their mortgages. Targets have been set for the banks to have workable restructuring programmes developed for each mortgage holder, with a 50% target by the year end. We are moving to deal with what has dogged many other countries that have had banking crises of this nature, namely, a failure of banks to face up to the situation and to allow people to get on with their lives. That is what we are putting in place.

In addition to the programme I outlined we have also put in place personal insolvency legislation. That provides people who have failed to reach an agreement at the end of negotiation with the banks to go to the personal insolvency service and have their case dealt with independently.

Exactly.

We are putting in place a number of protection mechanisms to allow people to work through problems in a systematic way. Our objective is to move the economy on to allow people who genuinely cannot pay to reach a resolution so that they can restart their lives and to insist that banks use the money that has been put in at enormous cost to taxpayers to resolve the issues for individuals and businesses.

The Minister referred to expressing sympathy. People need more than that at this stage. I asked him a basic question, whether he shared the Ulster Bank’s view that up to 35% of those in arrears were due to strategic considerations. I do not share the view. That is an extraordinary figure. Anybody who has called to people’s houses or talked to those in arrears knows how much they have tried to engage with banks.

The Deputy made a big mess of the economy.

Since the Keane report, out of 144,000 people in mortgage arrears, we have only had 144 split mortgages. That is an indication of the lack of engagement to date by the banks with people on the basis of meaningful, sustainable ideas that were proposed two and a half years ago.

Yet the Minister refers to adjusting to new realities. New Beginning asserts that there are up to 50 new repossession cases before the courts every month. This is the new reality to which many of those in mortgage arrears are now adjusting.

Bank activity has focused increasingly on such people in the past eight weeks. This is what we are hearing on the ground and from the groups at the coalface. There is an absence of independent oversight of the banks.

Does the Deputy have a question?

Inexplicably, the Government changed the code of conduct a short while ago and reduced the protections. It stood by and allowed this to happen.

And your question is what?

The change gives more power to the banks to do what they want, namely-----

No question.

-----return to profitability and target those in arrears. There are no safeguards against abuse in terms of increased contact. All the restrictions about contacts with customers are gone.

One would think the Deputy had just landed. His Government caused the problems.

Deputy, please.

The banks can harass people for as long as they want.

How about a question?

A question please, Deputy Martin.

For the first time ever, tracker mortgages are now on the table. People are getting no-----

This is a Second Stage speech.

Order, please.

Deputy Martin's Government caused the problems.

The truth hurts, Deputy Stagg. There is no independent oversight in terms of those-----

Could we have order, please? A question from the Deputy, please.

His question is what?

There is no independent oversight of tracker mortgages or the offers that banks may make to people on those mortgages-----

The Deputy is over time.

-----to ensure the wool is not pulled over their eyes.

Sit down. The Deputy is over time. He has no question.

There is no entitlement to a minimum level of income, for example.

A Leas-Cheann Comhairle, do something about this.

The same old hypocrisy every morning.

Deputies, please.

Fundamentally, the Government has changed the legislation to give all of the power and control in this scenario to the banks.

A Leas-Cheann Comhairle-----

It stays in the Central Bank.

I am sorry, Deputy, but you have gone over time. You must resume your seat.

I accept that.

He is well over time.

I must call the Minister.

I just want to ask him, if I may-----

Ask him, please, and conclude.

Many people on the Government benches are aspiring to the Leas-Cheann Comhairle's position and are giving him instructions.

Given what was revealed yesterday-----

Deputy Martin was not very good at giving instructions either.

-----will the Government change tack and ensure independent oversight of the relationship between banks and mortgage holders?

The Government cannot even keep basic promises.

Do the others agree with that?

I am unsure as to whether there was a question. One comment I must make is that-----

There was a lot of hot air.

Does the Minister agree with Ulster Bank?

-----the Deputy opposite does not seem to realise that hundreds of thousands of people-----

Hear, hear.

-----were led into buying property in the midst of a property bubble that was supported by flawed policies pursued by the Government. That is the reality.

Egged on by the current Government.

We are trying to deal with the consequences of policies that failed.

Cheerleaders. I remember it well.

Order, please.

Answer the question.

I will answer the question on whether we agree with Ulster Bank's claims. Clearly, we do not know the data in respect of Ulster Bank and its claims, but we have put in place a requirement to have sustainable solutions by the end of the year for 50% of people who are in difficulty. This is overseen independently by the Central Bank. Furthermore, the process-----

It is not. The Central Bank has made it clear that it has no prescriptive powers.

Please, the Minister has the floor.

The Deputy is shouting people down.

Does he not want the answer?

The Minister should not mislead the House on this point.

Allow the Minister.

Furthermore, if banks fail to engage in a mortgage arrears resolution process, MARP, the situation can be appealed to the Financial Services Ombudsman.

Would someone in arrears go to the ombudsman?

The banks' commitment to dealing with the regulations as set out is overseen.

Deputy Martin should watch behind himself.

Look at what happened to Deputy Rabbitte.

Individuals who have been unable to find agreements with their banks have the option of going to an independent personal insolvency service where the issues can be independently assessed and a procedure can be put in place to deal with their problems. Right along the trail, there is independent oversight of the different steps in this process-----

There is not.

Deputy, please.

-----to ensure those who cannot pay are offered sustainable solutions. This is the route we have sought to pursue. If we fail to face up to these problems in our banks, we will have the sort of zombie problem within banking that traps families, banks and our economy in a situation in which they cannot move forward.

There are a few zombies over there.

The actions we are taking are designed to allow for a recovery-----

And allow more repossessions.

-----after the crisis created by policies about which Deputy Martin knows more than we do.