Catherine Murphy (Kildare North, Independent)

There is a collaborative and co-operative approach from the Technical Group. I thank Deputy Donnelly for tabling the Bill. When he set out his stall on its provisions he accepted it was not the final product. No Bill presented to the House is the final product which is why there are five different Stages. Committee and Report Stages are very useful in crafting a Bill and finalising it to ensure it can take on board the range of different issues appropriate to it. It is a success if the ideas are taken on board. If today's sitting delivers on that it will have been a success.

Would lending behaviour have been influenced if there was this kind of sanction? Had this been in place, lenders may well have had to be much more thoughtful about the kind of loans that were offered and the kind of pressure that was put on people. There was abuse of the system, whereby things were factored in in terms of people's incomes that should never have been. Multiples of people's incomes should not have been factored in. If we had had different lending practices would we be in our current position? We have to learn from the past.

Deputy Donnelly proposed this Bill, like any other piece of legislation. We have been told by the Government side on numerous occasions that one does not read one piece of legislation in isolation, rather several different pieces are read together. That was the intention in this case.

We debated the statutory instrument on Internet copyright intermediaries earlier this week. We were told the courts have to be proportionate. I accept the courts will not do things that are not proportionate or in the public interest. One cannot make that argument on the other side of the House and not transmit it to this side when there is a proposal on how the courts will interpret law.

I, too, welcome the personal insolvency Bill, on which there will be a robust debate. It has many excellent aspects and others that need to be changed. It is urgent that it be enacted and got right.

Let me deal with moral hazard. It seems to apply only to the little people. When the inter-departmental working group on mortgage arrears was making its proposals, a group was established comprising bodies that felt they were not included in the process. The group included FLAC, Focus Ireland, the Society of St. Vincent de Paul, New Beginning, Respond and other such organisations with an interest in law, housing and debt issues. It stated the word "settlement" should be used rather than "forgiveness". Many cheap headlines are pitting people against one another in regard to mortgage debt. The group stated:

'Moral hazard', or the fear that potential personal insolvency schemes will be hijacked by the undeserving, has also appeared to be a substantial impediment to remedial action. The debate has not been helped by the shallow characterisation of such schemes as 'debt forgiveness'. We strongly object to this term as it implies that 'blame' lies predominantly with the borrower, when the cause of indebtedness is most often factors beyond people's control and the reckless lending of credit institutions.

It is very important that we use the correct language in dealing with this issue. We should be proportionate in how we deal with it.

The Minister, Deputy Shatter, stated he had no crystal ball to predict the cost of house prices in five years. The values will be influenced by a number of factors. There are many unfinished housing estates that will have an impact. When I was a local authority member throughout the 1990s, we were picking up the pieces from the 1980s. Deputy Durkan will remember this. There was no moral hazard for many of the people who left destruction after them because they reappeared as builders or developers in other guises. Many of us will remember this. The borrower seems to carry all the cost. Moreover, the borrower seems to carry the cost in respect of pyrite and shoddy workmanship, as in the case of Priory Hall. I question the use of the term "moral hazard" because very many considerations need to be made when considering economic morality.

Regarding some of the points that have been made on negative equity, the repossession of houses and the borrower carrying the residual cost over and above the value of a house when sold, we are talking about ruining people economically. One must either leave the country or depend on the public purse for housing. In Kildare, for example, 7,000 families are on the housing waiting list. This translates into approximately 20,000 people, which is the population of a large town in one county. This is before we begin to see the mortgage issue washed through the system completely. When this occurs, the problem will be exacerbated significantly. The people affected will not be in a position to buy a property because they will not get a mortgage again. Therefore, we must give people a second chance and take on board points that should be taken on board in the courts when repossession is being considered.

The lack of a public housing programme is a very serious issue. People renting houses who go to work do not receive rent assistance. People are being put into a poverty trap and into circumstances in which they have no hope. We then wonder why families break up and why there are children in difficulty in schools, as Deputy O'Sullivan pointed out. People do not buy houses with the intention of having them repossessed. They buy them with great hope and aspirations. People traditionally wanted to buy a house because they wanted certainty as to where they would live. This relates to our history in which people were shunted off the land. We must understand that the Irish aspire to house ownership. It is the tenure of choice for the majority.

All the Bills that have been taken thus far on Fridays have been Opposition Bills. I welcome the very good attendance today to address a problem that Members on all sides are genuinely interested in resolving. Unless Bills proceed to Committee Stage, however, individuals will ask genuinely, both inside and outside the Houses, whether we are engaging in an optics exercise. This applies to Government backbenchers as much as Opposition Members who propose legislation.

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