Seán Fleming (Laois-Offaly, Fianna Fail)

I have a difficulty with the approach being taken by the Minister in this regard. The lender and the borrower are involved in a transaction and the taxpayers are also involved. The Minister must protect the taxpayers' money in this scheme. However, I note that people are getting into more financial difficulties because they may be unemployed. I note from the briefing note on this amendment that the Department supports the curtailment of the mortgage interest supplement scheme. I agree this scheme helps the banks but it is designed to help the individual who is in difficulties with mortgage repayments. The Department is supporting the curtailment of this scheme by way of this specific legislative provision.

The Government has made legal provision to suspend the mortgage interest tax relief at source for people in mortgage arrears. We are dealing with an 18-month period so the two sets of figures are not co-ordinated. The Minister may argue this is a matter for the Department of Finance. As soon as a person's mortgage interest relief is suspended or the mortgage interest supplement is stopped, the tax relief will also be suspended and this has to be taken into account in the overall mix.

As regards the code of conduct on mortgage arrears, both elements of the State support are designed to help the individual and legal provisions are in place to penalise the borrower in distress. The Minister has referred to codes of conduct regarding mortgage arrears and these are voluntary, non-legal and non-binding arrangements. The only reference the Minister made to the banks was with regard to the constitutional rights of the lenders. This House could have passed legislation any time since last November to ensure the banks would implement the Keane report recommendations rather than by means of voluntary codes of conduct. I do not accept the situation where the penalties imposed on the borrower are decided by legislation, for instance, the reduction of mortgage interest supplement and the abolition of mortgage interest relief but on the other side with regard to the banks, there is a voluntary code of conduct in place. It is as if the Government would not wish to upset the banks by imposing a legally binding code of conduct.

The legal force of law is being applied to mortgage interest supplement and it should also be equally applied to the lender so there is no more of these voluntary arrangements and codes of conduct which the banks like to operate. They will threaten the Minister by saying that a legally binding code would upset their balance sheets and that it might not find favour with the international bond markets. I want to see the Minister apply the same legal rules to the banks to make them come to the table rather than allowing them have a voluntary code of conduct.

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