Finian McGrath (Dublin North Central, Independent)

I thank the Acting Chairman, Deputy Catherine Byrne, for the opportunity to speak to this new legislation, the Family Home Protection (Miscellaneous Provisions) Bill. I commend and thank my Independent colleague, Deputy Stephen Donnelly, for introducing this new and radical Bill. It shows once again that Independent Deputies are putting forward solutions to some of the major problems facing people at the moment, in this case householders in particular. The new Bill is sensitive and compassionate but above all it is the right thing to do for people who are currently in dire need. It also protects the family home. That should be the ethos and emphasis of today's discussion. There should be a strong social justice dimension to the debate, as there is to the legislation. This is the type of practical leadership the country needs at the moment. We need people to help us come up with solutions.

On the broader issue of what is happening currently to householders, the general income of people and the trends in wider society, surveys have shown that 70% of adults in this country feel that the amount they have left each month after paying essentials has fallen during 2011. Other findings highlight the fear that approximately 83% of people believe 2012 will be a more difficult year. A total of 55% of people are now struggling to pay their household bills on time. That is something we must deal with as well. Mortgage and rent continue to be the most expensive bills for 75% of adults in this country. That is the real world and that is the reaction of people at the moment. Yesterday's increase in VHI payments by an average of 9% will impact on families, especially those who have someone who is ill and is required to attend hospital. We must focus on such issues in discussing the legislation. There is a broader issue and agenda at stake. I will return to the details of the legislation in a moment.

In addition to an increase in utility bill costs, there have been increases in the cost of groceries and other shopping for householders. The increasing cost of private health care has led to 9% of people saying they will give it up in 2012. A further 31% may be forced to give it up if there are any further price increases. People are facing another hit at the moment. Many people are fearful for the year that lies ahead and how they will cope with the increasing financial pressure. I will focus on them today. A total of 24% of those surveyed said they are worried about how they are going to manage in 2012, with 6% stating that they will not be able to cope. That is something we can link to the mental capacity Bill as well. Within that 6%, one will have people getting so upset, depressed and stressed that it will lead to serious mental health issues. A total of 84% worry about how they will cope with unforeseen expenses. I provided those statistics to show what is going on in the background to the legislation.

I wish to turn to the details of the Family Home Protection (Miscellaneous Provisions) Bill 2011. First, the Bill will give judges discretion when hearing cases where a mortgage lender seeks to repossess a family home. It will give them jurisdiction to take into account certain matters such as whether the borrower has proposed a credible offer for paying off the mortgage when deciding whether to grant possession of a family home to a lender. That is what is in the Bill. Currently, many mortgage holders are feeling stressed. The purpose of the legislation is to address the situation. At present if a borrower has defaulted on a mortgage payment and the lender seeks to repossess the house, the judge must grant possession. The judge is not entitled to take into account anything other than the terms of the agreement made between the bank and the borrower. The judge has no authority to consider whether the loan was given responsibly in the first place, whether the lender has followed the code of conduct on mortgage arrears, whether the lender has engaged with any credible offers made by the borrower, the amount of arrears or what prospect the borrower has of paying them off. We all saw during the mad years of the boom how money was pumped out to people while they were egged on to borrow more. Based on cases of recent actions taken by some banks, it must be noted that the judge is not allowed to take into account circumstances such as a mortgage holders with variable rates being pushed into arrears due to repeated interest rate increases.

A common sense approach must be taken with economic legislation which this Bill does. Is it not better for the lender to be getting at least €20 a month rather than nothing? Is it not better to get some repayment rather than kicking a family out of their home and ending up on the local authority housing list, costing the State more in the long term?

We all have to face the reality that debt is a major problem in this country, be it family mortgages or the great international banking debt. The ECB and the EU must be told that both in the interests of Ireland and other EU countries, Ireland's bailout will have to be renegotiated. This is the elephant in the room that must be dealt with before we even tackle the mortgage debt issue.

Deputy Donnelly's Bill has ideas on how to tackle mortgage debt. I appeal to the Minister not to throw the baby out with the bathwater and incorporate some aspects of this Private Members' Bill with his own proposed legislation on personal insolvency. I accept there are technical issues with this Private Members' Bill. However, they can be tightened up while the core principles of the legislation are respected. The Minister is concerned about the financial implications of section 2(d) and the code of conduct in section 2(e). However, these can easily be tweaked.

Earlier I recalled how the banks carried on during the boom with crazy lending. Some people got too greedy during that time but there were innocent victims too such as the residents of Priory Hall who got hammered. It is not acceptable that young families who bought an apartment in the development are treated so badly and the required works not carried out. Members of the Technical Group have visited the site and spoken with the residents. I have already spoken to the Minister for the Environment, Community and Local Government about the plight of the Priory Hall residents. I urge him again to see if anything can be done to help them.

Against the size of arrears, the number of repossessions by court order is relatively low. In the 12 months up to September 2011, 180 court orders were granted for repossession against non-payment of arrears. Reports from the courts suggest certain lenders, particularly sub-prime lenders, have been aggressive in seeking repossessions. The pillar banks — although considering some of their carry on I am concerned about describing them as that — have been slow to seek repossessions which means that this Bill will be likely to have little impact on their balance sheets. I have been involved in some cases of lobbying individual local bank managers who have subsequently reorganised loans in a sensitive and sympathetic manner. Again, it is about being sensible. As I said earlier, it is better to be getting €50 out of someone rather than nothing.

Following the BlackRock stress tests of the banks, Bank of Ireland, AIB and EBS were given a further recapitalisation of €24 billion. Of this, €7.6 billion was to deal with residential mortgages. As of last October, AIB which had received €2.3 billion for this purpose had written off a total of just €600,000 in mortgage debt while Bank of Ireland, which received €1.8 billion, had written off none. Even were the situation to change dramatically and this legislation's provisions refused a large number of repossession, it would still have a negative impact on the banks' recapitalisation levels.

Article 45.2.ii of the Constitution states: "That in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole." Although the Constitution also gives strong protection to private property, Article 43 states, it must be regulated by the principles of social justice and balanced for the exigencies of the common good.

Will this legislation cost the taxpayer money? It may cost a small amount in the short term if it applied to cases of repossession being taken by State-owned banks. However, they have not been leading the way in repossessions. A judge has to consider that the total public good, for example the total costs of rehousing a family, may significantly outweigh the benefit to the bank of repossessing a house.

I urge the Minister to examine the sensible ideas put forward by Deputy Donnelly whom I commend on bringing this important Bill to the House. I welcome the call by some Government Deputies for the legislation's core ideas to be examined.

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