Tom Fleming (Kerry South, Independent)

The ongoing debate regarding arrears in mortgage repayments, personal loans and utility bills is often trivialised by some commentators who prefer to link the problem to that of over-borrowing. People who use this very simple yet incomplete argument are not being thorough in their examination of the scale of the problem facing families today. A number of reports published by both the EU and Council of Europe in recent years attribute the issue of indebtedness to unforeseen events such as unemployment, sickness or changes in family situations. In fact, in one report, the Council of Europe concluded: "A high level of consumer credit use is not necessarily an indicator of debt problems."

In recent years Ireland has experienced a severe income crisis affecting everyone. Additionally, in recent months, as highlighted in today's Irish Examiner, the issue of repayment capacity is likely to deteriorate for some time to come as a recent spate of cost increases take their toll, including increases in fuel costs, mortgage repayments, insurance costs and inflation in general. As a society, we have all been asked on successive occasions to reduce our income expectations. It has been argued that Ireland must again return itself to a state of competitiveness. I agree with this policy provided it achieves the right result and gets the country back to work. However, in the meantime, we must accept that reducing all of our wages will have a severe negative impact on some people, especially their capacity to service their debts loans repayments and utility bills. There is no simple solution to the income crisis and resulting debt crisis facing families, including those in my own constituency of Kerry South. However, I am confident that we have the right mechanism to alleviate the extreme financial hardship of those most affected.

At its annual conference on 16 December 2010, the Law Reform Commission presented its report, Personal Debt Management and Debt Enforcement, in which it argues for the overhaul of the laws that govern debt in Ireland. The recommendations make sense and represent a breath of fresh air in an area of law that has long been forgotten. It is shocking that we still operate under laws that were better suited to the Dickensian or Elizabethan era when it comes to dealing with debt in our society. How can we ask people to accept lower wages and yet not change the law to address their diminished capacity to service their debts? We need to act on the Law Reform Commission proposals immediately. This House has a duty to act on those recommendations. Our families will thank us for doing so and society will benefit enormously.

Instead of toiling with the more limited matter of mortgages, I urge the House to address the real issues facing our society today. We do not need ad hoc solutions to deal with negative equity. We need a radical reform of our debt laws and the Law Reform Commission recommendations largely give us the means and the mechanism for doing this. Instead of leaving the matter to the courts and the media, it is the responsibility of this House to legislate and deal with this important issue once and for all.

I also wish to highlight the work of the expert group on mortgage arrears, which came about through consensus between a number of Departments and representatives of interested outside parties. Apart from changes to the code of conduct on mortgage arrears, not a single recommendation has yet been implemented including relatively straightforward procedures such as reform of the mortgage interest supplement scheme.

I call on the Government to finally act on the Law Reform Commission proposals and to enact them into law. Almost six months ago, the Law Reform Commission published its recommendations and yet it continues to sit and wait for action. Instead of providing the means for hope, it gathers dust as our society bends under the burden of rising costs and falling incomes. I welcome what Deputy Ciarán Lynch said on the Government initiatives on the two-year moratorium on repossessions and the proposed personal debt management agency. I also welcome what the Government is trying to do on the income supplement.

Today's Irish Examiner reports that 115,000 gas customers are now in arrears on their utility bills. Inflation is again taking hold with petrol and insurance costs rising rapidly. Increased taxation, levies and fees are placing a growing strain on family incomes. We are in the midst of an income crisis and not just a debt crisis. Families who are most affected need the laws to protect them. We must act immediately. The Law Reform Commission recommendations give us in this House the means to act and we cannot delay.

A revised code of conduct on mortgage arrears, which came into effect on 1 January, enhances the protection afforded to those in arrears or pre-arrears. It is most important that borrowers engage early with their lenders to benefit from the protection afforded under this revised code. The Government and the Central Bank should give extensive media coverage to this code and we should act immediately.

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