Alex White (Dublin South, Labour)

I am pleased to have the opportunity to contribute to this debate on the Personal Insolvency Bill 2012. As Deputy Hannigan noted, it is complex legislation and is a vital element of the response of the Government and the Oireachtas to the broader issue of debt and debt resolution faced by so many people and which is faced at a macro level by the economy. As Deputy Hannigan suggested, it deserves close scrutiny. However, I wish to begin by reflecting on the process associated with this legislation. As I stated, it is a highly complex Bill that is a response to a real need. In addition, part of the context of the Bill is that historically, Ireland's bankruptcy laws have required reform for many years or decades. It was only when we entered into the crisis that in many ways we had no choice but to address the shortcomings and flaws in our insolvency regime.

It is important to reflect on the point that this legislation has had the benefit of a considerable amount of debate and discussion, which is only right and absolutely proper. However, one often hears about the process in the Houses of the Oireachtas and the Dáil and the relationship between the Government and the Parliament. The point is made, albeit perhaps more often in television and radio studios than anywhere else, that the Government determines what is the legislation and what is the law and there is little or no participation by Parliament or anyone else. Whereas that criticism sometimes is well made and well taken, this Bill constitutes an example in which there has been genuine participation and input by Members of the Dáil and the Seanad. Moreover, there has been an increasing number of such examples over the short lifetime of the present Administration thus far. Members should not forget the heads of the scheme of this Bill were published in January 2012 and the Bill has had the benefit of pre-legislative scrutiny in the Joint Committee on Justice, Defence and Equality. This is an initiative I am happy to state the Government has been developing in respect of legislation across the board. As Chairman of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, I am pleased to have been involved in a similar type of process in respect of the protected disclosures legislation, which is another element of the Government's reform programme. It allowed for that kind of input; not just of committee members, but also of the various stakeholders, NGOs and interested persons who had an interest in how the legislation should look. This delivered on an undertaking by the new Government to ensure that there was scrutiny prior to the publication of legislation. That is one of the shortcomings that we have had in the past as parliamentarians. Legislation is published and to a great extent, much of the work has been completed at that stage and it has been relatively difficult in the past to persuade the Minister to persuade the Government to look at possible changes. However, I commend the Minister for allowing this Bill to breathe in the committee. The Minister has had the benefit of the responses of the various members of that committee and the representatives of the bodies invited in during the course of that hearing. It is especially important for a Bill such as this.

There are many citizens who are interested in this Bill and who are affected by our current insolvency regime. There are also non-governmental organisations that have had a very useful input into the Bill already. They may not have been entirely ad idem with the Minister on all aspects of what is proposed, but at least they had an opportunity to have an input prior to the publication of the Bill. I know that their voices will be listened to in the next few months when the Bill is on Committee Stage.

The banks and the credit institutions have also been consulted. When people reflect on that fact, they are critical of the idea that the banks would have an input into this Bill. There is no point in believing that we can exclude the banks and the lending institutions from an assessment of the proper balance between the needs of debtors and the position of the creditors and the lending institutions. We in the Parliament and the Government in particular have to establish what that correct balance should be. I notice that in the Bills digest prepared by the very helpful Library and Research Service, the objectives of the Bill from an economic viewpoint are set out. There are four such objectives and it is written in very helpful but perhaps rather stark, cold economic language, although it makes sense. The first objective is to allow sufficient repayment to creditors that lenders are willing to lend, if not to the insolvent debtor, at least to others in the economy. The second objective is to reduce the disincentive to work for insolvent debtors. The third objective is to prevent creditors from harming debtors by racing to be the first to collect. The final objective is to provide debtors with partial consumption insurance, which means if a person reduces outstanding debt, it frees up cash to be spent on consumption in the economy.

On Second Stage we often talk about the philosophy of legislation, rather than its detail. Part of what we need to do is to have regard to the viability of the lending institutions. We should say that clearly. We are parliamentarians and representatives and we have seen in the community many pressurised situations faced by citizens. Our principal focus is on the citizen, the debtor and the person who is in financial difficulty. Nobody should apologise for that being our principal focus, but we must answer other questions. What do we say about the lending institutions? What do we say about the viability of the lending institutions? There is always the temptation to say that we use every opportunity to punish the lending institutions and God knows they deserve punishment for many reasons outlined in the House. However, do we want to continue to have viable lending institutions? That is to say nothing of the fact that the particular institutions we are talking about are owned by the taxpayer; therefore, there is an additional reason to ensure they are viable. I do not make that point to take away from the necessary focus on the dilemma and the situation faced by debtors. We should be looking to ensure we have the best possible protection for them. The three stage process outlined in the Bill seems appropriate to me, but there is no point ignoring what we think the banks should be able to do in the future.

There has been much talk about the veto and there is some disagreement as to whether the voting powers, percentages and so on outlined in the Bill can be described as a veto. There is the possibility for lending institutions to block agreements in certain circumstances. For that reason, the attitude taken by the banks in the future will be absolutely crucial to the success of this legislation. It is very clear that the banks will be required to take the most flexible and sensitive approach to these debtors and the agreements and settlements proposed.

The chief executive of Permanent TSB was before the finance committee this afternoon. We look to what people do with greater interest than listen to what they say, but if he is to be believed on what he said, I thought there was quite a flexible, sensitive attitude being displayed by PTSB on this Bill. However, it will be actions that will speak rather than words. All eyes will be on the banks and the lending institutions. There will be a very high expectation that they will come across for the working out of this legislation for individual debtors and proposals. I know that all Members will want to see that addressed properly.

I welcome the Bill. Although we have had this pre-legislative scrutiny, much work has been done. Considerably more work needs to be done to go through the Bill line by line. It is enormously complex. It is a very important reforming Bill introduced by this Government, and is one of a raft of laws brought forward to address the crisis and the impact of the crisis on ordinary citizens. I congratulate the Minister once again and wish the legislation well in the course of its passage through the House.

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