Paul Connaughton Snr (Galway East, Fine Gael)

Of course they do not. This process was put in place in the full knowledge that such consequences would come about. What is going on is nothing short of pure skullduggery and it is only a matter of time before the majority of the 1.5 million people affected realise what is happening. It will then be too late. The Minister for Defence is present but they all sit around the same Cabinet table. Whatever the Government argues in terms of cost and cutbacks, there is nothing from a cost perspective involved in this. It is bureaucracy gone daft.

In answer to a question I raised with him, Professor Drumm of the HSE stated that his problem was whether they would be able to get necessary IT equipment up and running to make the process efficient. If the Department does so, it will be the first time it has. We can imagine the flood of 1.5 million applications into one office. We might have thought the debacle with the voting machines was bad but it will be nothing beside what will happen in Finglas in the next year or two.

The Minister referred to the back to work enterprise scheme and I hope she will act as she said she would. We should enact any law or make any provision, if that is possible, to allow people an opportunity to work, irrespective of how low paid it is at the outset. I understand there were two schemes, the back to work allowance scheme and the back to work enterprise scheme, and these will be amalgamated. One of the schemes had an eligibility rule where the applicant had to be unemployed for two years before he or she could apply for it. Surely in this recessionary period any two-year period should be cut. People may have an idea to create a job for themselves so why would the Government commit them to two years on the dole unnecessarily?

Officials from the Department of Social and Family Affairs indicated to me this morning that they expect to be informed on 1 May of the new rules governing the back to work enterprise scheme. I sincerely hope the scheme will be workable, practical and, above all else, sensible. By sensible I mean that after six months persons who believe they can create employment for themselves, either individually or as part of a collective, should be allowed to enter the system. Under the old scheme, applicants who were successful would receive the full amount of the jobseeker's allowance for the first year, 75% of it in the second, 50% in third and then the payment would finally be phased out. This provided people with a great guarantee and peace of mind because they knew that while they were testing their new projects, some form of payment that would allow them to survive would still be coming in. There is nothing new in that because similar schemes operated 20 years ago. In the good times, however, there was no great need for such schemes.

By the time the Bill is enacted - irrespective of what might be said during the various debates on it - I hope people will be encouraged to take up the scheme because they will know they will be guaranteed to receive a certain proportion of their social welfare payments while trying to get projects off the ground. Nothing could be more sensible than that and I do not know how the Government could argue against it, particularly when so many people are out of work. However, in light of my past experience with regard to matters which should have been put right in this House but which were not, I will bet someone will throw a spanner into the works. The eligibility rules will probably be framed in such a way that many people will be excluded from the scheme. It will be nothing short of a disaster if that proves to be the case.

There is another aspect of the Bill on which I wish to comment. As stated earlier, I hope we will do the best we can for the recipients of social welfare and that we will do everything possible to keep people out of the social welfare net by working with the Departments of Finance and Enterprise, Trade and Employment to put in place initiatives to ensure these individuals will not be obliged to draw the dole. As I am sure other Members did, in recent weeks I met a number of young married couples who have young children and who also have extremely large mortgages. Some of them informed me that they had the opportunity a couple of months ago to transfer to fixed rate mortgages. Regardless of whether what they did was right or wrong, the advice they received was that it would be better to switch to fixed rate mortgages - 5.9% in a couple of cases - because interest rates might rise. In the interim, interest rates have continued to fall.

The people to whom I refer went back to their banks and building societies and stated that they were finding it more difficult to meet their mortgage payments each month because they had lost their jobs and due to the fact that they are now paying rates that are 2% or 3% higher than those which apply in respect of tracker or variable mortgages and asked if they could switch. I do not know who is running the banks but if what I have been told is true, then what is happening is nothing short of scandalous. In three or four cases, the people involved were informed that because they had signed up to fixed rate mortgages only three to four weeks ago they could not switch. In one instance, a person with a mortgage of €200,000 was informed that it would be fine to switch to another bank or building society but in order to do so a penalty of €12,500 would have to be paid.

At a time when taxpayers are on their knees trying to ensure the banks remain in business, would it not be in everyone's interests if the banks and the building societies applied the lowest possible interest rate to these families' mortgages to give them the opportunity to pay their way out of their difficulties? The family with the €200,000 loan informed me that the difference between the repayments that apply in respect of the fixed and variable rates is approximately €200 to €300 per month. Why would the building societies, the banks and the Government not want what I have outlined to happen in order that people might pay their way out of the depression in which we find ourselves?

The Government should take this matter seriously. In view of everything that has happened with the banks - the bringing in of outside directors, etc. - is it not time we took an imaginative approach to this matter? If, five months ago, a bank could grant a loan to a young man and his wife or partner on the basis that it believed they could meet the repayments, why would it not be possible for it to reduce the rate of interest that applies without imposing huge penalties? Who do the banks and building societies think they are kidding?

The banks are saying that individuals may pay only the interest on their mortgages for the next six months. However, that is merely a case of passing the buck because people's financial problems will remain at the end of that period. The people to whom I refer require assistance and it should be provided.

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