Brendan Smith (Cavan-Monaghan, Fianna Fail)

I am very glad to have an opportunity to make a short contribution in this very important Dáil debate. This Private Members' Bill makes a positive and important contribution to the current discussions on the very serious mortgage debt problems. Although the Bill is not, and does not claim to be, a silver bullet for all the problems facing many thousands of people throughout the country, if it is acted upon in time it will substantially ease the difficulties facing many of those people.

With the publication of this important Bill we in Fianna Fáil demonstrate again that we are a positive and constructive Opposition that puts forward solutions and valid and positive proposals. This legislation, prepared and put before the Oireachtas by my colleague, Deputy Michael McGrath, proposes to establish an independent non-judicial debt settlement system which can deal with both personal debt and mortgage debt.

I compliment Deputy McGrath and other members of the parliamentary party on the enormous amount of work they have done in preparing these proposals. As Deputy Dooley remarked, they consulted widely. Organisations which have been helping people who struggle with personal debt and mortgage difficulties, the Free Legal Advice Centre, the Financial Regulator, Mr. Matthew Elderfield, the recent Keane report and the Cooney report of late 2010 have all outlined the need for such a system. Some days ago, the Governor of the Central Bank, Professor Patrick Honohan, spoke out clearly on the inaction of the banks and lending institutions, noting they had restructured relatively few mortgages. He stated, "Insufficient capital cannot be a reason for inaction".

This Government came into office with a strong line in rhetoric but a weak line in terms of policies that could be implemented. It promised it would put the interests of mortgage holders above those of the banks but where is the evidence of that? Contrary to what people were told before last February the banks have not been instructed to absorb the European Central Bank interest rate increases. In regard to mortgage interest relief the programme for Government contains a commitment to increase the relief to 30% for those who bought their homes in the period 2004-08. We were told the commitment was to be effective from last June but it is yet another broken commitment.

The programme for Government rightly devotes a page and a half to the crucial issues of distressed mortgages and housing. It contains some noble aspirations but is woefully short on specifics. One of its proposals was to expand MABS to become a debt management agency with quasi-judicial powers but this has hardly been mentioned in the eight months since the Government took office. This Bill deals with that issue but does a great deal more. It ensures that those who are in debt or have mortgage arrears will not be helpless or abandoned when they face the banks. The system we advocate in this Bill will assist people in a fair and consistent manner to get to a situation where they can realistically move to paying their debts and mortgages in a restructured manner.

I welcome the announcement by the Minister for Justice and Equality, Deputy Shatter, during the debate on the Keane report. He stated the Government would not oppose the Private Members' Bill introduced by my colleague, Deputy McGrath, but I am concerned that he linked this to the publication of the Government's personal solvency Bill as this Bill is not due to be published until March 2012. That timeline will not work. In spite of what Ministers say, this problem is getting worse. According to the Central Bank, the share of Irish private home loans in arrears or restructured rose to 12% in the three months to the end of June. As FLAC pointed out, one in ten mortgages was in trouble at the end of 2010. By March the figure was up to one in nine. Now we see that almost one in every eight mortgages is struggling.

This problem must be tackled now. This Bill, drafted by Deputy McGrath and based on the Law Reform Commission report and proposed legislation, is an important and necessary step in tackling the issue. Deputy McGrath stated yesterday:

The Bill can form the basis of a radical overhaul of Ireland's personal insolvency regime and can allow thousands of distressed borrowers to see some light at the end of the tunnel. That is what lies at the heart of this legislation.

In implementing legislation we need to achieve the best possible system to deal with indebtedness which is such a problem for so many households. The time to move on is now.

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