Martin Heydon (Kildare South, Fine Gael)

This is historic legislation, although I do not say so lightly. We can sometimes be a bit flippant, but the Bill is historic because of the country's historic level of debt. We are introducing new legislation that the country has never previously needed, but has been necessitated by unprecedented levels of personal debt that were built up in short periods by a large number of people.

Some constituents have asked me why they should bail people out when the former did not go mad and spend big during the boom. It is a difficult argument to make, but people must understand that, for the good of the economy and the country, it is in no one's interest to allow so many to be burdened by so high a level of personal debt. When people tell me that they did not take chances and did not lose out and ask why their taxes should be used in this way, I make a point about their children being unable to get jobs and their relations and friends losing jobs in shops, pubs, restaurants and elsewhere in the services industry. They need to understand that many people do not have disposable income and, as such, are not spending, which is choking our economy.

The perception that this is a bailout needs to be challenged. Some have suggested that the Bill is a gravy train, a way out or a handy number for people with personal debts who took many chances. That is not the case. Nobody, if faced with the choice of having debt and going through personal insolvency or being without debt, would choose the former. The Bill is very well structured in that regard, which is very important.

The Bill will allow those currently stifled by unsustainable debt to start living a normal life again. There are families currently struggling to feed themselves and their children, and they are unable to afford the basics in life that most of us take for granted. The difficulty may be in recognising these people. When canvassing, on occasion we might knock on doors of houses that might have a nice car in the driveway. It might be in an affluent area and the house may have been very expensive during the boom. We might think such people are comfortable but in many respects some of these people are struggling the most. The people who did not have much means during the boom probably did not have the potential to get into big debt.

That may be a generalisation but we must change our perception of who is in this type of difficulty. Families may not look like they are struggling to the extent that they are, and the burden of debt and stress placed on the family unit is colossal. This Bill looks to help those people get back to some sort of normality in their lives. The legislation will provide a release from the mental torture and stress that can be brought on families. Whether the father or mother is the main provider, the burden of debt weighs heavily on a person's mind, often with tragic consequences. I am very mindful that yesterday's Central Statistics Office figures indicated a 7% increase in suicides, and everybody in the House should be mindful of this. It is an indication of the level of stress and strain that debt can bring about.

This Bill provides a process that will allow people see light at the end of the tunnel, especially those who can only see themselves in a black hole. The level of debt and stress is relative for people; there are some who owe millions of euro but do not lose much sleep because they have the mentality to the deal with the pressure. If another type of person owes a couple of hundred thousand euro and the family home is on the line, it is a different reality. A certain person may owe €4,000 or €5,000 to a debt collector who aggressively knocks on the door every week. The unregulated money lending area is a big issue in my constituency and although €4,000, €5,000 or €6,000 might seem a relatively small amount of money, if the collectors impose penal interest rates and are aggressive when seeking the money, the consequent stress can weigh heavily on people.

This is the reason there are different methods for different levels of debt, all with very strict conditions. The debt relief notice is for unsecured debts up to €20,000, the debt settlement arrangement is for figures above €20,000 and there is also a personal insolvency arrangement for the settlement of secured debts up to €3 million, along with unsecured debt. The Minister should be commended for the level of work and detail that has gone into this very complex legislation. He has ensured that all sides are being looked after, including the debtor and creditor. We must be as fair as possible and there should also be an acknowledgement that the current period is like nothing we have seen before. I hope we never see anything like it again.

There is a suggestion that the banks will retain much power and control under this legislation. It is important to remember that this Bill will introduce agreements, which cannot come about unless both sides are involved. If the agreement does not kick in, we would consider other options. The banks and lending institutions have an element of power but the debtor also has an option of whether to take or leave this. That should be borne in mind.

It is important to note this is not jut about mortgages but takes in all types of debt, including the smaller debts which can be equally stressful relative to a person's circumstances. Many members of the public may think the introduction of this Bill will in some ways force banks to deal with customer debt levels, and in some ways it will do so. The easier access to settlement options should act as an incentive for banks to reach settlement arrangements. It should also encourage banks to come up with their own initiatives to address customer difficulties, which is already happening to some degree. The irony is that the introduction of this legislation may mean that more settlements are reached outside the legislation due to the incentive the new law will provide. If that happens, it would be a mark of a good Bill.

I have been contacted by plenty of constituents who are with banking institutions that have not yet passed on the recent interest rate reduction from the European Central Bank. The issue has been raised with me and people are very frustrated about it. They have seen the State pumping billions of euro into the banks but when the ECB cuts interest rates, they note that banks do not pass it on. There are two sides to the argument, the issue is quite difficult and I understand where people are coming from. The State cannot micro-manage the banks and they must be allowed to make commercial decisions. Nevertheless, the banks are not commercially funded at present, which knocks holes in any argument to be made in that regard. The banks must return to being commercially funded but that will not happen if the State micro-manages operations. The banks must react and take responsibility for their part in the crisis. They must be as creative in formulating debt settlement and restructuring solutions as they were with sales products during the boom. If the banks can show the same ingenuity now in solving some of the problems they helped create, it should happen.

I welcome a much anticipated and badly needed Bill. I am sorry we are in a position where it is needed but to restore our economy, we must allow people to move on and get back some semblance of normality in their lives. I hope the provisions will provide light at the end of the tunnel for those people currently struggling. I commend the Minister as at the heart of this legislation is a real desire to keep people in their family homes, which is crucial. No matter how many problems any of us have in life, we should always be able to return home in the evening to the family. There is comfort and solace in that. If the family home is under threat, more than anything else that would lead to a level of insecurity. I commend the Minister and his staff for their work and I ask the Minister to keep the pressure on in getting this legislation enacted as quickly as possible.

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