Thomas Pringle (Donegal South West, Independent)

When the report of the interdepartmental working group on mortgage arrears was published, people across the board greeted it with a sense of huge disappointment. The report clearly finds in favour of the banks and puts forwards solutions which benefit the lending authorities. This is hardly surprising, particularly when one considers the membership of the working group, namely, 16 civil servants, five bankers and one accountant. These individuals came together and supposedly studied the problem. The solutions at which they arrived only favour the banks and are designed to ensure the latter will recover the vast bulk of the debts they accrued as a result of reckless lending.

I was amazed to hear the Minister refer to dragging the banks to the table, kicking and screaming, and obliging them to negotiate with people who are in debt. We own the banks and we can tell them that they must deal with people. It is not a question of dragging them anywhere. We have invested €74 billion in them in the past couple of years but the Minister stated that we are going to try to drag them to the table and oblige them to talk to people. We should not drag them; we should inform them what they have to do.

Various Members on the Government benches stated that they are seeking proposals in respect of this matter. The Technical Group tabled a Private Members' motion on this issue in March and signalled that the problem of mortgage arrears would be the single biggest crisis the country would be obliged to face. I put proposals to the Minister for Finance following the debate on that motion but I still do not know whether he gave them his full consideration. The proposals to which I refer would not have cost the taxpayer any money but they would have dealt with the level of negative equity that exists. Following a number of months, I received a letter from the Department of Finance which did not address any of the proposals I had put to the Minister.

Groups such as New Beginning and others also put forward proposals. These groups were not even consulted when the interdepartmental working group was drafting its report. How could it be possible to produce a proper report which seeks to deal with the issues and provide solutions that can of benefit to everyone when those responsible for its compilation did not even consult widely with the groups which are already working on behalf of people who are in distress and who have mortgage arrears? It would have been quite easy for the working group to have considered and evaluated the many proposals that have been put forward by various interested individuals and groups and to have accommodated them within the report. If what I am suggesting had been done, the report would have been much more satisfying in nature and would have been a great deal more relevant to people whose mortgages are in arrears and who were conned during the Celtic tiger years into taking on massive mortgages they could ill afford. The banks certainly knew that the people to whom I refer could not have afforded to have repaid the mortgages they took out. As everyone is aware, the banks facilitated people by boosting the figures relating to their incomes and showing various transactions passing through their accounts in order that they might qualify for larger mortgages. They then provided them with mortgages which they could not afford to repay.

The report refers to the reform of the bankruptcy laws. Since the first day on which I entered the Dáil those on the Government side have been referring to the reform of those laws. We are now informed that it will be spring of next year before legislation in this regard will be forthcoming. This probably means it will be this time next year before the legislation is enacted and put into operation. That will be way too late for most of the people who are being pursued by the banks in respect of massive arrears they have run up and who are seeking a way out.

The report also refers to mortgage-to-rent or mortgage leasing arrangements. Again, these favour the banks and give rise to State involvement. In addition, they will only be available to those who qualify for the housing list. A number of months ago, the Government changed the rules in respect of qualification for social housing and stipulated that the incomes of those who qualify cannot exceed €28,000 per year. How many people who are earning decent wages but who are struggling to meet their mortgage repayments and building up arrears as a result will qualify for placement on the social housing list and avail of the leasing arrangements to which I refer? I imagine it will probably be very few. Although it will probably not be fully acceptable to most members of the Technical Group, the report does offer a potential solution. This involves people applying to their local councils in order for placement on the social housing list. What will happen when they are informed that they do not qualify and that there are no other options open to them? They will be left to wait for the bankruptcy legislation to be enacted.

There is a need to consider the possibility of writing down debt. We know there is a cost involved. That cost is estimated in the Keane report as being less than one sixth of what the banks have cost us to date. There is no moral hazard involved. The greater moral hazard lies in doing nothing. This matter requires urgent attention and the sense of urgency attaching to it is only going to become greater. Unfortunately, the solutions offered in the report will not bring about relief quickly enough.

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