Catherine Murphy (Kildare North, Independent)

We waited in hope for the report on mortgage debt because we all know just how serious the issue is. I was greatly disappointed by two major failures in the report. One was the exclusive nature of the people who put it together and the second was the conservative nature of the report and the piecemeal solution it proposes. Some of the measures are worth doing but it is not a solution. It has prompted a debate in this Chamber and among other organisations. A recent press conference at Buswells Hotel featured a number of organisations, such as FLAC, Threshold, Focus Ireland, the Society of St Vincent de Paul, New Beginning, Northside Community Law Centre, Ballymun Community Law Centre and Respond!, outlining what they describe as nine key principles to overcome the personal debt crisis. The Law Reform Commission report was an extensive document and had some worthwhile components, some of which have found their way into Government policy. The organisations describe themselves as having "a strong track record of working and campaigning on anti-poverty issues including debt and credit, social housing, social welfare, homelessness and tenants' rights". We must recognise that they are front line organisations. Instead of highlighting the disappointments in the Keane report, I want to highlight some of the measures the document produced by these organisations identified as part of the solution.

The document defines the problem as over-indebtedness, which we know. This does not just involve mortgage arrears, we must have a much broader response. The Law Reform Commission proposal says the same. There must be a multidimensional response and it must be co-ordinated and strategic. The document describes the kind of problems that lead to people being unable to pay, including loss of employment, failed enterprises, ill-health and relationship breakdown. Some of these elements are intertwined. People who are paying the highest amount for credit are those who can least afford it. They often end up with sub-prime mortgages. The lending practices facilitated by regulatory, statutory and Government inaction and indifference are highlighted by the report. The document points out that it is not a question of people deliberately choosing not to pay but lacking the capacity to pay. That is something I recognise because I have had such people come into my office and the fact that I have a box of tissues there permanently describes the stressed state they are in. One person told me that she and her two children eat once a day. Another person told me that he had to sell his home before it was repossessed. He had put the home together brick by brick but now he has lost that and just about covered his costs by selling it. It had been worth much more but he sold it for less. Another person told me of having lost their business, lost their home and having debts following them. The one thing that person wants to do is wake up without the fear one morning. These are real people with real problems and that is why it is so disappointing that front line people dealing with these cases on a daily basis were not part of the deliberation. Consider the peace process in the North, which only worked when we got the two sides together. In this case, we need to get the two sides together.

The document refers to a war of attrition if one only looks at mortgage debt and does not consider other debt. Today's Irish Independent refers to "400,000 families in arrears as energy firms step up drive to install pay meters". That amounts to one in every four households. One cannot look at mortgage debt alone and make arrangements for people to pay if one does not consider their ability to pay, which is linked to the amount of their indebtedness. It is not only mortgage indebtedness.

The other Bill being discussed this week also considers the lack of hard evidence on the level of indebtedness. There is a lack of statistics on consumer credit arrears as well as rent and utility debt. We need to find a way of quantifying precisely the extent of the debt. The authors of the report to which I referred argue that the Central Bank should require arrears data from all lenders. That is a positive and achievable proposal.

The report also calls for an independent evaluation of current policy, with a rolling assessment, in order to ensure evidence-based, informed and responsible policy making. The report is measured in its statement that there are no quick-fix solutions, which I accept. It calls for a comprehensive policy framework rather than continuing merely to muddle along in the hope that the situation will improve. That is no longer acceptable. The report points to the consequence of continuing in this mode, including the cost for welfare budgets, the cost in terms of crime and the type of disintegration that will happen in both families and communities. We are already seeing households under great stress in the face of unsustainable debt.

Action is being taken on some of the report's recommendations, including the introduction of legislation on personal insolvency. That Bill must be brought forward as soon as possible. The report uses the term "settlement, not forgiveness" and makes reference to moral hazard and people being categorised as either "deserving" or "undeserving". The authors argue that this is a shallow characterisation of such schemes as debt forgiveness. They highlight what is available in other European countries as a norm in terms of dealing with debt problems. We are not the first to deal with this issue and we should employ best practice in other countries. There are other models from which we can learn.

The report also refers to a debt resolution agency, something we discussed last week in this House. The authors point out that the housing debt problem is worsening. While one in ten households was in mortgage arrears at the end of 2010, this had increased to one in nine by March of this year and to one in eight by the end of June. The report indicates that the average amount of arrears is €21,000. We are heading towards a situation where people will surrender their homes rather than waiting for repossession. I have seen evidence of that in my constituency.

The blame game which casts those who purchased homes during the boom as foolish ignores the fact that there was a media consensus at the time, as evidenced by the extensive property supplements, which served to stoke the boom. The Government encouraged people to purchase property and we were told the banks were well capitalised. People queued overnight to secure homes in new developments and thus avoid the inevitable price increase of €10,000 or €20,000 in the next phase. Every expert under the sun was wheeled out to urge people to get onto the property ladder. One cannot blame people for believing what they were told from every quarter. We must have a fair and proportionate response for those who find themselves in an entirely untenable position. The report produced by these groups is a useful addition to the debate.

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