Derek Nolan (Galway West, Labour)

I congratulate the Minister and commend him, the departmental officials and all those who worked on the preparation of the Bill. I understand it was extremely difficult and required much legal checking and careful drafting, and it is a credit to those who drafted it and worked on it.

Many Members of the House have welcomed the Bill, including those involved in the previous Administration who were 14 years in government. If anything is a legislative monument to the failures of their policies over the years, it is the Bill, because it has been created to deal with the disastrous consequences laden on families and individuals throughout the country who were caught up in an unsustainable economic model based on nothing more than revaluing land and property and constantly refinancing them so people were burdened with more and more debt.

We had an economy in which it was considered socially acceptable and morally right for young couples with limited means to borrow ten times their income to live in a semi-detached house in the suburbs. This was the type of value held by the society we had. These couples are now struggling because one of them may have lost a job due to the collapse of a construction sector based on shoddy foundations and the consequent spreading of this collapse into the domestic economy, and they are stuck with a huge debt on a modest home which is crippling them. To help these people primarily we must bring forward this Bill to allow them have some hope they can resolve their financial difficulties. To hear some of the pontificating and self-righteous remarks from the Fianna Fáil Members during the debate on the Bill is quite simply galling, and they ought to reflect when they come to speak here and have a little more of a humble tone in their voices.

There are two ways to deal with debt settlement. One either writes it off or gives people the means and ability to pay it back. I do not see the Bill as the be all and end all of dealing with the debt problems in the country. The main thing we should do is try to get people back to work, increase their incomes and get the economy functioning again so people can afford their debt and pay it back. This is the most logical way to deal with it and it is the way which will have the best impact on people's lives. Unfortunately, even if we do so, the problem is still so immense the Bill will be very important.

Every day in their advice centres public representatives deal with the consequences of the disastrous economic policies and the disastrous lending by banks. Families and individuals come to speak to me and one would be surprised at some of the people who are in trouble. These include people with good jobs who have mortgages of more than €1 million and cannot afford them any more and people on very limited incomes and social welfare. The debt crisis is not confined to any demographic or sector of society; it is widespread and invidious and is causing untold concern. If a study were to be done on the impact of debt on health, stress levels and family life it would show a disastrous and very dangerous tendency.

I welcome the three main provisions of the Bill, namely, the debt relief notice, the debt settlement agreement and the personal insolvency arrangement. They are very helpful and will have many benefits. The practitioners involved must take cognisance of the very fragile state of those coming to see them with difficulties and problems, and a very compassionate approach must be taken. The drafting of the provisions in the Bill on the delivery of the service is technical, but when these services come to be delivered, care and attention must given to those in a situation they never thought they would be. They may have a sense of shame, which they should not have, or a sense of powerlessness and futility that they cannot control their own financial arrangements which is hurting them and in some cases making them feel they are lesser people because of it. This needs to be taken into account in any delivery of service. Adequate training must be provided for those who will be involved with personal insolvency practitioners, and MABS will also be involved, to ensure people are treated with respect and dignity, and that their situations and any possible mental stress are understood.

The problem is immense. Figures show that at the end of March 77,630 mortgages representing more than 10% of all mortgages were in arrears for more than 90 days. Those figures are telling but what they do not tell one is that mortgages are what people pay first. People will sacrifice food, car, light and heating bills to ensure the mortgage is paid first because of the attitude in this country that one's house is the most important thing. Those figures, while dramatic, mask another level of debt which is below the surface and with which people are struggling.

I like the idea of the independent insolvency service. That is very helpful. This legislation cannot be seen in isolation. The announcement, almost at the same time, of the mortgage-to-rent scheme to help people, who will never be in a position to pay back the debt, to remain in their homes with their families entrenched in the same community, with their children going to the same schools, availing of the same services and with the same neighbours. Merely changing the structure from ownership to renting is a revolutionary idea. I know the targets are quite limited but a couple of thousand people are expected to avail of it. It is socially compassionate and socially right and I very much support it as another element of the manner in which the Government is dealing with insolvency legislation and people's debts.

There are few issues which I am sure can be teased out on Committee Stage. I am sure the Minister will commit to engaging fully on Committee Stage even though I know he has a very ambitious timeframe, and rightly so, to get the legislation implemented by the end of the year. One is the debt relief notice. I note the figure of €20,000 has been set as the ceiling for that. Having talked to people in MABS in Galway and in the citizens advice bureau who deal with these issues, a higher limit - although not a significantly higher one - of perhaps €30,000 would be a much more appropriate level and may have a greater and an immediate impact and keep people out of the next layer. It would keep people in the lower layer, which can be dealt with quickly. The issue of the attachment order that can apply after the three years of bankruptcy has been raised. That may defeat some of the purpose and attractiveness of the bankruptcy period of three years if it is not amended. I am sure the detail and the logic of that can be teased out on Committee Stage.

I support this legislation. What I really like about it is that it takes people away from lawyers. People are terrified of, and are intimidated by, the courts, solicitors and lawyers. The idea of this being non-judicial is more cost effective and allows for more human, trusting and relaxed interaction with people who are already in a very fragile state. Again, I welcome the Bill, although there is some work to be done on Committee Stage to clarify some issues and to see if there are other possibilities. Overall, I commend the Minister, the Government and the officials on drafting the Bill.

See this speech in context