Tom Fleming (Kerry South, Independent)

The ongoing debate regarding arrears in mortgage repayments, personal loans and utility bills is often trivialised by some commentators who prefer to link the problem to that of over-borrowing. People who use this simple but incomplete argument are not being thorough in their examination of the scale of the problems facing families today.

A number of reports published by the European Union and the Council of Europe in recent years attribute the issue of indebtedness to unforeseen events such as unemployment, sickness or changes in family situations. In one report, the Council of Europe concluded that a high level of consumer credit use is not necessarily an indicator of debt problems.

In recent years, Ireland has experienced a severe income crisis affecting everyone. Repayment capacity is likely to deteriorate for some time to come as a recent spate of cost increases take their toll, including increases in fuel costs, mortgage repayments, insurance costs and inflation in general. It has been argued that Ireland must return itself to a state of competitiveness. I agree with this policy, provided it achieves the right result and gets the country back to work. However, in the meantime, we must accept that reducing all our wages will have a severe negative impact on some people, especially their capacity to service their debts, loans, repayments and utility bills. There is no simple solution to the income crisis and the resulting debt crisis facing families. I believe we must collaborate on what has been suggested up to now. We must tease out the inter-departmental report, the Keane report, and identify what is practical and workable within it to assist the more than 70,000 borrowers in arrears, a number which is increasing rapidly and which will probably reach 100,000 within a short period.

I welcome the Bill proposed by Deputy Michael McGrath, which is not before time. As I pointed out in this Chamber last May, the Law Reform Commission report has been left gathering dust on the shelf since last December. It should be implemented as it provides personal debt management and debt enforcement strategies and argues for the overhaul of laws that govern debt in Ireland. Its recommendations make sense and represent a breath of fresh air in an area of law that has long been forgotten. We still operate with laws that are antiquated with regard to dealing with debt in society. How can we ask people to accept lower incomes and yet not change the law to address their diminished capacity to service their debts.

I commend Deputy Michael McGrath for drafting realistic proposals, mechanisms and a formula to implement them. We must have a system that deals with people individually and on a case by case basis and must deal with the crisis in a holistic manner. We need to update the laws on personal solvency and bankruptcy. We are in the middle of an income crisis, not just a debt crisis. Families who are affected most need the laws that will protect them. We must act immediately. The Law Reform Commission recommendations and the best input from the Keane report provide the House with the means to act. We cannot delay as protecting homes is paramount.

See this speech in context