Mick Wallace (Wexford, Independent)

Going around from house to house during the general election, I was struck by the level of difficulties being experienced by people, whether in social or private housing. Most of those in social housing had no work. Those in private housing had jobs but were experiencing terrible difficulty paying their mortgages. It was difficult to credit, as I had not been around the entire county of Wexford previously. Going from house to house, I was amazed at how many people were in trouble. No doubt the moratorium on repossessions has certainly been a help, but there is an element of kicking the can down the road. Matters are a great deal worse than we realise.

We are fairly used to the fact that the banks do not tell us everything first-off. We were drip-fed the truth over recent years. I have experience in the construction sector of building and selling apartments and I can assure the Minister that close to 50% of the apartments I sold between 2003 and 2008 are in difficulty. Given that 270,000 units were built between 2004 and 2008, it is hard to credit that only 44,000 are in the difficult position of being 90 days behind in their payments. If this is the case, I will be very surprised if the number does not increase dramatically in the coming 12 to 18 months because I am very much aware of people who bought properties from me who are in severe difficulties. This is having a huge impact on the entire economy. It is very difficult to see how the economy will recover if people are afraid to spend money. They are saving the little bit they have to try to deal with their mortgages and to keep a roof over their heads. It is very challenging. Their take-home pay is less than it was because of tax and they have less disposable income. Any opportunity we have of creating more jobs has been diminished by this. It will be difficult for unemployment figures to go in the right direction if people are spending less money, and God knows this is creating a social misery which is devastating for many people.

The notion of debt forgiveness seems unthinkable to many people. However, we know from history that it has been applied before and it worked. Roosevelt used it in the United States in the 1930s after the great depression and it worked to great effect. In this country, in 1932 de Valera introduced a form of it with regard to land tenants who had been repaying money to the British Government for years. At that stage, the payment was £5 million per annum and GDP was approximately £150 million, so it was a huge amount of money. De Valera put a stop to it and did a deal with the British; the British sought £100 million and he gave them £10 million. He took over the debts with the farmers, who were having trouble with the repayments. He halved the repayments and gave them double the time to make payment. At the time, the main argument was that debt forgiveness was good for the economy. It worked, and it was a sensible thing to do. Today, we are at a place where it is definitely something that needs to be considered.

I know there are difficulties with it. I know the dangers with regard to moral hazard, whereby one will behave differently if one knows one will be bailed out if one fails. The banks are in good contact with their customers and are aware of who genuinely cannot pay and who can. If work was put into this, we could deal with those in the most trouble and help them out of their situation which would help the economy in general. If I bought a house in 1995 I would like to see someone who bought one between 2003 and 2008 receive help because I would be better off. From a selfish point of view, I would be better off even though I bought my house in 1995 if those who bought between 2003 and 2008 received help because not only would it help us see a bottom in the market, it would also help the economy in general and we would all be better off. If the benefit exceeds the cost it is something the Government should consider.

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