Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

Ba mhaith liom buíochas a ghlacadh leis an Teachta McGrath as ucht deis a thabhairt dom labhairt ar an ábhar fíor-thábhachtach seo. We talk about human suffering, but probably the greatest human suffering is fear. Many people in society are fearful at the moment because they cannot face up to the financial challenges facing them. The only mistake of many of these people was that they paid inflated prices for houses for their families.

It is very hard to get into the mindset of fear that sets in when people feel they face overwhelming financial problems. Having in an earlier life experienced severe financial pressure and having spent many a night counting up cheques to try to meet bank commitments the following day, I can guess at the fear faced by most of these people.

When one meets people who have debts, often the first thing that strikes one is their inability to face the simple task of getting a bit of paper, listing all their debts and telling somebody about them. Even though they know that hundreds of thousands of people have similar debts, they feel that nobody else is in the same mess. It is clear when one meets them they are dealing with an issue of embarrassment and shame. It should not be there, but it is there as these people try to struggle on from day to day.

Deputy Michael McGrath set out the sheer numbers in this regard. Some 94,000 people are in mortgage arrears. Many people are in arrears for all sorts of other debts. I have no doubt that the Minister, Deputy Shatter, is familiar with the scale of this problem, which is a cancer stalking our land. I have a feeling that the Government thinks it is caught in a catch-22 situation. Funnily enough, I think it shares the fears of those who are unable to face up to the realities of this problem. Sooner or later, we will have to recognise, as we did in the case of commercial borrowing, that much of this borrowing is unsustainable in the short to medium term. Many households that were receiving two good incomes are now surviving on the subsidiary income alone. Other households might also have a small second income. In most cases, the level of borrowing is unsustainable. The Government is aware of the reality that the sticking plaster approach, which involves hoping the banks will pretend to write off debts while not actually doing so, will come back to haunt it in the long term.

I have asked myself why there is such inaction in this regard. I do not believe it can be attributed to constitutional problems. The Constitution makes it clear that all property rights are subject to "the exigencies of the common good". Surely it is in the interests of the common good that we deal with this problem. The last time we were in government, the Attorney General made it clear when we were introducing Bills which interfered with people's property rights that approximately 25% of a person's pension or salary, as a rough figure, could be taken away on the basis that the common good outweighed the property right in its absolute form. The Minister might remember the forewords to some of the legislation we introduced. If there is a constitutional problem, it can be dealt with quite simply. This Government is great at proposing constitutional amendments, so it could propose one in this instance.

The Government will have to face up to the much deeper problem in this regard sooner or later. It is afraid that it will have to put further moneys into the banks if they crystallise this loss on their mortgage books and write it down to a real and sustainable level on those books. It is paralysed by this fear. That is why it is unable to face up to the reality of this situation. It would rather that huge numbers of people suffer than to admit that not enough money has been provided to resolve this problem. It has not accepted that more Government money, or some other money, will be needed to provide for an upfront resolution of this issue.

Deputy Michael McGrath has articulated some of the many reasons a system whereby every individual goes in and makes an individual case, with the banks having a veto, will not work. First and most obviously, if the bank is in control, those who are more capable, have better advice, have better life experience or work in this kind of business will come out better. Such people would be at a huge advantage compared to those with no experience of dealing with their own financial affairs. The second reason should also be obvious to the members of the Government. They can imagine how long it will take to process individual cases if the banks have a veto, but individuals do not have to sign up to what is dictated by the banks if they find it unsatisfactory. Each case would go over and back many times before it would finally be resolved. At the moment, it takes a year to process a social welfare appeal, which is a fairly simple operation. One either gets an invalidity pension or one does not. In normal cases, one has to have enough stamps, which is a black-and-white, two-minute issue. The only other thing involved is a medical test. Even so, appeals can take up to a year. In that context, one can only hazard a guess at how long it would take to get through the guts of 100,000 individual cases to find some way of resolving people's problems. Therefore, we need radical policies and radical change. If a binding ruling were issued by an independent office like that proposed by Deputy McGrath, the process would be hastened as there would be no need for endless negotiations. There would be no eyeballing between the banks, which would use their veto to ask people for things they cannot commit to, and applicants who know their borrowings are unsustainable.

Another weakness in all of this is that most people who are in financial trouble will make promises way beyond what is possible if they think that is a way of getting out of the problem in the short term. Therefore, if the banks seek unsustainable payments as part of an attempt to protect their own interests, most ordinary people will believe the best thing to do is to commit to making such payments even though they know in their hearts and souls that the figures do not stack up. If that happens, we will have to take another trip on the merry-go-round a year or 18 months from now. It is time for us to face up to this problem in an upfront manner by recognising the reluctance of the banks to crystallise their losses. They are pressurising the Government not to force them to crystallise their losses. The kind of shadow-boxing that is taking place, as the Government asks the banks to set out the numbers of cases they have dealt with, will allow the banks to deal with all the easy and marginal cases while pushing the greater problem down the road.

Our proposal would make a big difference. Having worked on this issue for a long time, I know the current approach is not going to work. I am not engaging in political point-scoring as this matter is way too serious for that. As I said at the outset, relationships and marriages are breaking up and people's physical, emotional and mental health is failing because of the threat of repossession. If the Government says there will be no repossessions, it will create a new moral hazard. If people think there will be no repossessions regardless of their circumstances, they will stop paying. The unwillingness to face this problem means that both sides are losing out. Ultimately, the ordinary people of this country are left with a burden on each shoulder. I will conclude by reminding the House that inaction in this regard will ultimately hurt the young children who are growing up in this country. They will remember that the formative growing years of their youth were blighted by the fact that their parents were living in fear.

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