Ciarán Lynch (Cork South Central, Labour)

I welcome the proposals put forward by Fianna Fáil. It cannot go without comment that in the autumn of 2009, I, on behalf of the Labour Party, introduced a Private Members' motion that indicated the crisis coming down the tracks and the necessity for a structure to deal with stressed mortgages. Regrettably, on that evening Fianna Fáil, which was then in government, talked down the extent of the problem. The response of the Government from then on was to wait to see what happened. Action was not taken as a result of the two reports the Government had commissioned at the time. I refer to the initial and final publications of the Cooney report. The Cooney report was published on the day the Dáil went into recess last summer and it was not debated in this House. The report's final recommendations were published in November last year. Those recommendations were not debated in the House either. I welcome the Government's affording to us an opportunity this evening to debate this issue extensively and to allow Members on both sides of the House to discuss the Keane report.

There are two opinions on the Keane report. These are informed by where one stands on the issue of blanket debt forgiveness. It is very obvious from commentaries on the Keane report over the past week or so that those who are in favour of blanket debt forgiveness are those who oppose the report. The report, in its essence, is not a finished document. It is prescriptive. It lays out a very comprehensive structure for dealing with the mortgage and personal debt crises. Underpinning this are a number of key principles, the first of which is that those who are honestly trying to meet their obligations to pay their debts will not be put out of their homes. This is enshrined in the document and will be what the report will achieve. Second, the report recognises that the affordability of meeting debt repayments is at the heart of the problem rather than negative equity. This means it is not the size of one's debts but one's ability to deal with debt sustainably that is at stake.

There have been some criticisms of the Keane report in the House and outside. I will deal with them on a case-by-case basis. It has been suggested that this matter was not dealt with inclusively; it should not be in the report. We saw today individuals from outside this House offering their views at a meeting of the Committee on Finance, Public Expenditure and Reform. The sequence of the process is correct. We are now allowing other agencies to enhance the Keane report rather than having a report whose recommendations would take five to ten months to implement.

Enhanced mortgage relief has been criticised. The principle behind it was that people who took on mortgages between 2002 and 2006 would receive an enhanced mortgage relief. The Keane report is emphatic this should not happen. It is right that it should not. Members of this House who criticise the Government for not implementing the measure need to come clean. Are they saying they are for or against the measure? The measure will cost €14 billion to implement. Where is this money to be found? Do the Members believe this is the right approach? It is not because not everybody in negative equity is having difficulty meeting his debts. This must be realised.

The Keane report is very clear about where MABS stands in dealing with this difficulty. MABS is providing a service in the community but it is not comprehensive or operating at the same level across the country. The Keane report recommends that a personal debt service be structured such that it would enhance MABS and work alongside it. On occasion, the service will be based in MABS offices. Through the Keane report, we are enhancing the service of MABS. More specifically, we are bringing in professionals with expertise in this area who will rebalance the relationship between borrower and lender.

Some consideration must be given to the broader issue of mortgage interest relief. We must first ascertain why this was introduced in the first instance. It was introduced to assist people who had lost their jobs in the hope they would return to work in the short term. It was introduced in a period when houses were increasing in value. None of these conditions now obtains. The prospect of long-term unemployment faces citizens and house prices are continuing to fall.

We must acknowledge many measures that arise in conjunction with those alluded to in the Keane report. These are laid out in the report, which lists a comprehensive series of measures for those who cannot pay some of their loans and those who are in unsustainable circumstances. It deals extensively with them. It also sets out that we need to modernise bankruptcy and insolvency laws because the current ones are inadequate and antiquated. It sets out three specific proposals: a review of the judicial process, a non-judicial debt settlement approach, and the issuing of debt relief orders.

We must engage in a process of normalisation. We have seen that this week. The Central Bank issued a statement this morning on introducing more prudent lending practices such that people's mortgages would be related to their ability to afford to buy a house. We are witnessing a return to 20-year mortgage schedules and other measures that were put out the door during the bubble years created by Fianna Fáil. We will also see the creation of a house price database, the legislation for which is on Committee Stage. This is critical to normalise the housing market and for the introduction of affordability.

The principle of the approach taken by the Government is that resolving debt requires long-term affordability. The assessment of the debt is crucial and it must be dealt with on an ongoing basis. A professional service is required to do that. Ultimately, in the absence of not taking such an approach, people who are in current difficulties may move to more unsustainable positions and their problems will become worse over a period of time. I commend the Government on bringing forward the Keane report. I welcome what Deputy Michael McGrath has brought before the House. The Bill is not robust in several areas and, if I had more time, I would go into it but it does show that at last Fianna Fáil is moving in the right direction in resolving a difficulty of its making.

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