Ciarán Lynch (Cork South Central, Labour)

I very much welcome the opportunity to speak on this issue. Members might recall that in November 2009 the Labour Party tabled a Private Members' motion on increasing mortgage arrears. We did so because the crisis was developing and every examination of the problem was showing it would get worse. We warned of an impending crisis and argued for the creation of a mediation service based on a legislative framework. Having read the debate on the motion in recent days, I note a wait and see approach was adopted which has featured ever since. The recommendations from the Cooney report, many of which are commendable, were not debated here. The preliminary findings of the Cooney report were published in July last year on the same day the Dáil went into recess. It was targeted deliberately so that the report could not be published and debated here. The finalised reports were published in November last year. Once again the Fianna Fáil Government refused to let the report be debated in the House. It is ironic, if not disingenuous, to listen to Fianna Fáil Members who, in recent weeks, have spoken to the urgency of this issue and the need for it to be debated in the Dáil when, on two specific occasions, that party refused to facilitate the House upon the publication of the two stages of the Cooney report. Since then mortgage arrears have doubled. The number of people who are 180 days in arrears has doubled since the Labour Party brought this motion before the House.

I have listened to the debates and discussions on the Keane report in recent days. While there may be some fair criticisms of the Keane report, the main driver of criticism is the issue of blanket debt forgiveness and those who argue in favour of it. Without a doubt this group is in conflict with the Keane report because the Keane report is clear where it stands on the matter of blanket debt forgiveness: it will not happen and difficulties faced by people in arrears will be dealt with on a case-by-case basis. Clearly, there is an agenda which proposes and promotes blanket debt forgiveness. It is in the interest of those promoting it to undermine the key recommendations and the robustness of the Keane report.

The Keane report is not a finalised response, nor is it an overly prescriptive document and this is as it should be. The Keane report lays out the structures by which solutions can be arrived at. In terms of the way the processes are laid out, it allows other parties into the debate to add to and compliment what the Keane report has recommended. People who have argued that MABS, New Beginning or others were not included in the process have the cart before the horse. The position is now clearer. Yesterday, several groups appeared before the Joint Committee on Finance, Public Expenditure and Reform. Perhaps it is simply the old-style of binary politics but there seems to be acceptance that people are prepared to take as untested or unchallenged reports or documents presented before the committee without question.

Those in New Beginning have some interesting things to say. However, when asked to lay out specifically and in tabled detail the content of their report yesterday, they said they had no wish to get bogged down in detail, despite that they were before the finance committee. Some estimates of the New Beginning proposal suggest it could cost the Exchequer €75,000 per mortgage because it involves off-loading the debt to the bank and, since the State ultimately owns the banks, the €75,000 will be picked up by the Exchequer if the New Beginning proposal, as some have interpreted it, were to be implemented. I understand they will bring the tables before the committee and we can test it later on.

The Keane report should be considered in the context of the key principles which underpin it. The first principle of the Keane report is that people who are making an honest endeavour to meet their financial obligations in stretched situations will not be put out of their home; they will continue to remain in their home. That was a key principle of the Labour Party leading up to the general election, it is a key principle of the programme for Government and it is a key recommendation and outcome of the publication of the Keane report.

The Keane report makes it clear that the problem is affordability, not negative equity. This means it is not the size of the debt which matters put one's ability to pay it back. The Keane report sets this out clearly. Criticisms of the Keane report from Members and others outside the House must be challenged. Sometimes these criticisms are rather disingenuous because they relate to a blanket debt forgiveness agenda or it is simply a case of old-style binary politics, that is to say, no matter what the Government proposes, Opposition Members will oppose it.

We have been criticised for certain issues and I am keen to know where of the Opposition stands on these issues. The Keane report has ruled out the concept of enhanced mortgage interest relief, which would cost at least €120 million per year to implement. It is not targeted in any strategic way. The relief would go in a blanket fashion towards those who have taken out mortgages between 2006 and 2008. Those who can afford to pay their mortgages would receive this relief and those in distressed situations would also get it. The Opposition may criticise us for not including it as part of the Keane report. However, where does the Opposition stand on this? Is the Opposition for enhanced relief or against it? Those in the Opposition should not criticise the Keane report for not containing such proposals unless they have a position on the matter themselves.

Another issue relates to the creation of an independent mortgage service. The report clearly describes why such a service is required. It is in the report because the examination of MABS revealed the lack of continuity and uniformity of approach throughout the country and that skill levels vary from area to area. The Keane report proposes to enhance the work MABS is doing and it is proposed that specialised people would work hand-in-hand with MABS agencies throughout the country. In some situations these people would be located in MABS offices. This would yield an enhanced MABS service where the relationship between borrower and lender is re-balanced. It is a clear and honest proposal.

I wish to explore another aspect of mortgage interest relief and I believe the Keane report should examine mortgage interest relief in greater detail. The relief was set up at the outset to deal with short-term problems. It was established in an economy in which house prices were increasing and in which people were unemployed on a temporary basis. This has changed completely. House prices will continue to drop for at least another 18 months or two years and long-term unemployment is with us. We must redefine mortgage interest supplement in this context.

Other matters must be considered in the context of the Keane report. This is not the only action the Government is taking. There is a series of actions under way around the Keane report. They include the decision tree which provides five options for people who are being assessed by the personal debt management agency. There are other issues such as the three-tiered approach whereby there will be a review of the judicial processes, non-judicial debt settlements will be taken into account and debt relief orders will also be required. Why is this? It is because existing legislation in this area is antiquated and it was never designed for the dilemmas we face at present.

We must create normalisation measures, not only crisis measures. One of two measures rolled out this week which will lead to normalisation in the sector is the creation of a house price database, which is on Committee Stage in the Dáil at the moment. This is critical to putting in place clear information with regard to the housing market. Second, the new lending practices published by the Central Bank this week will change borrowing levels to an appropriate ratio of people's incomes rather than the madness which was facilitated by the previous Administration. This must be done because Irish society will continue to be a home purchasing society. We must ensure the measures which were absent for many years are now put in place.

The key principle of managing the resolution of debt is the issue of long-term affordability to service that debt. In addition, it is critical that people are assessed on an ongoing basis with regard to their debt difficulties. This is why the agency is required. Otherwise, we could create a situation whereby people under stress at the moment may arrive at an unsustainable situation and, because we cannot extract them from these situations, their situation will become worse.

It is critical that a number of comprehensive measures are rolled out, which is what the Government is doing. I ask Deputies, especially those on the Opposition benches, to add their ideas to the template set out in the Keane report and, in so doing, assist the Government in implementing what is a very robust and long overdue proposal. The report should have come before the House a long time ago but the Government deserves credit for reaching this point within six months of coming to power.

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