Olivia Mitchell (Dublin South, Fine Gael)

I welcome this report and its guiding principles, including primarily the acceptance that those who can pay must pay. This report is not about those people, rather it is about those who absolutely cannot pay. The report also recognises that there is no automatic entitlement to a solution and that all solutions have consequences both for those seeking a solution and those who are required to fund it.

There were high expectations about this report and there has been disappointment that there is no blanket debt forgiveness scheme. Those who expected one are not really facing up to reality. It is undoubtedly heartbreaking to see what has happened to so many young people who bought houses in the Celtic tiger boom and are now unable to meet the repayments. I understand people's instinctive desire to make banks or building societies who loaned recklessly to young people take a hit. The reality is that every time the banks take a hit, the taxpayer funds the bill. To be honest, the taxpayer can no longer afford it. That is the reality and there is nowhere to borrow.

We hope banks are sufficiently capitalised to deal with the bad debts that will inevitably arise. That said, recognising that there will be bad debts and actually setting up a scheme of blanket debt forgiveness are two very different things. Taxpayers cannot afford it. They have already covered the banks' borrowings as well as the banks' major lending through NAMA. There just is no more money. I realise that is not fair but it is how things are, however unfair that may be.

On a related issue, I realise the need for more realistic personal insolvency rules, which are recommended in this report. I completely agree with that recommendation. I have highlighted the abuse by some company directors of the company insolvency procedures, whereby they can walk away from debt and restart the next day with the same staff in the same premises and with the same customers. I do not want to see a system of personal insolvency legislation which facilitates similar abuse. The easy option route should never be taken because it is easier than paying one's debts. I am conscious that an easy option insolvency regime would be great for some people who bought property towards the end of the boom, may have had 100% mortgages or more, and probably never made any repayments or very few. They could just walk away and lose nothing, but someone has to pay the bill for them. I do not think that is what this report intends to happen. We must be very careful that we do not introduce a system like that in any new legislation.

I wish to make a substantial case for mortgage holders in negative equity. One hears every day about distressed mortgages and that case has been well made in the course of this debate. The sort of cases I hear about in my constituency concern people in negative equity who can continue to pay their mortgages but simply need to move house. In many cases they are couples who bought one or two-bedroom apartments as starter homes and now require a bigger home as they have started their families. Others may need to move because of their work. The economy needs a mobile workforce and, in addition, it needs mortgage holders to remain in employment and keep paying their bills. Broadly speaking, banks will not allow negative equity mortgage holders to sell up, buy a new house and take the negative equity with them.

During the boom years in Dublin almost all home building was in apartments. As the Acting Chairman knows, thousands of young people in our constituency had no choice but to buy a home which they never intended to be a long-term residence but simply a starter home. As the babies arrive and because they cannot sell, many of them are now forced to move out and rent bigger houses. To put the tin hat on their woes, they then become liable for the non-principal private residence tax.

The Keane report recommends negative equity mortgages in a trading-down situation. I ask the Minister to ensure there is flexibility for those wishing to trade sideways or upwards. No one wants a reckless overlending regime. Where it is clear to lenders, however, that customers - usually their existing customers - have the ability to pay, are genuine cases and have a real need to relocate, then I can see no reason such cases should not be facilitated. I understand the Financial Regulator would have to approve any such new product and he, of course, must be mindful of the danger of fuelling a new property boom. To be honest, we are a million miles from such a boom. It would not be a bad thing for the housing market to facilitate those who can pay and wish to move. I ask the Minister to encourage the regulator in this regard.

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