Clare Daly (Dublin North, Socialist Party) | Oireachtas source

It is somewhat ironic that there are so many problems in the State and so many issues on which the Government could legislate to fix them, yet it has frantically decided to address one of the areas that is probably not that bad in an international context due to the very low level of repossessions in this country. It is doing so at the behest of the troika.

It is also ironic that the action is taking place simultaneously with the demands from the troika on the introduction of a home tax, a tax on what is in many instances a liability for many people who are struggling, and for the hundreds of thousands of citizens who are in mortgage arrears and great personal and emotional distress, not to mind economic hardship. One would have to ask where the Government is going with the Bill. Talk about great timing. The Government is introducing the Bill at the same time as we had reports last night that what we can face in the future is continuing austerity, the prospect of further tax hikes and public sector cuts of €3 billion next year, followed by another €2 billion the following year. However, at the same time, the stability programme update revealed that in fact the Government will have a primary surplus of approximately €1 billion in 2014. In other words, we are collecting approximately €1 billion more in tax revenue than we are spending on public services. The reason we cannot enjoy the surplus and use it to develop public services is because of the enormous national debt, one that was in the main undertaken to bail out banks and bondholders. That is the nub of the issue, yet those very same people whose actions are crucifying ordinary workers and citizens in terms of their pay packets are the very ones who are also putting the squeeze on people in their own homes.

It is a little sad the speed at which the Government can move to address what is being called in a derogatory way a loophole but which I would call a safeguard and a good thing. The Government is moving faster to make it easy to repossess properties through the courts. The points have been well articulated by other Deputies about why that needs to be absolutely balanced in terms of protecting lenders and why a number of amendments will have to be made on various Stages of the Bill. I will not repeat the points made. I pose the question as to how it could be a good thing that people’s homes are to be repossessed. One could ask how that will benefit anybody, not least the overall economy. While the Government can say that the family home is being protected and will only be seized as a last resort, the reality is that we all know that it is not the experience currently. If the law is changed further, the process will accelerate further.

This afternoon, my colleague, Deputy Joan Collins, had a telephone call to her office from a very distressed woman who is having terrible dealings with Bank of Ireland. Her mortgage is unsustainable as a result of a separation. Her husband has left the country and stopped paying the mortgage long ago. She lost her job two or three years ago and the bank is putting her under enormous pressure to sell the property. The reason the bank is pursuing her particularly aggressively is that the property is not in negative equity and it knows it can get its money back. If that happens, the woman in question, who is without a job and without a roof over her head in the latter years of her life, would be thrown at the mercy of the local authority social housing list or society in general at a time when an arrangement whereby she could stay in her family home is being ignored by the same bank.

Another young couple who have two children with severe disabilities were advised to get a bungalow which could not be supplied by the local authorities and were encouraged to buy one. They spent a lot of money adapting the premises to meet their children’s needs. The husband lost his job and they are being squeezed and threatened by the sub-prime lenders with repossession of their home. They made a reasonable offer that would result in a more sustainable mortgage and the lender getting more money than it would if the house was sold, but their wishes were ignored. One could ask where they will end up – back on the social housing list that could not accommodate them in the first place. It makes no sense whatsoever.

As Deputy Wallace said, the only solution is that the banks would engage in some form of a write-down of mortgages where the value of the properties is written down to their more reasonable current value. Sub-prime lenders in particular are not operating. They have shut down and they just want to get out of the Irish market and realise as much cash as they can before they go. Making appeals to them to be reasonable, fair and nice to people who are struggling will not work. The only measure that will protect the family home is legislation to enforce it. It is somewhat sad that the people whose homes are not in negative equity but who have lost their jobs are the ones who are most at the mercy of the banks. All of the points that have been made about the lack of protection for borrowers have been ignored. We have seen very aggressive actions taken by the banks in the courts, and that will only get worse. Not only that, we have also seen many scams where some lenders are engaging in fire sales of properties for which people have handed back the keys and left the country. There are many examples of people making a higher offer for a property and the lender not accepting it, presumably because someone they know or a friend of theirs is in the running to buy the property at a knock-down price from which they can benefit and make a killing later.

We have to put this firmly in the context of the overall economic situation. This measure and home repossessions will do nothing to protect the economy. If anything, it will drive down property prices and lead to an increase in suicide. I do not say that lightly but based very much on the experience in Spain. In that country, the credit crunch and rising unemployment has resulted in a situation where home repossessions are at a record level. Almost 30,000 repossession procedures were initiated in the first quarter of this year alone in Spain, which is an increase of 126% on the figure in 2008 and 59% on the 2009 figure. In actual fact, the numbers are probably even higher because a number of repossession procedures often involve more than one property. The result is that the banks have in excess of €20 billion worth of repossessed properties on their books, which in and of itself is causing a problem in the commercial courts and so forth. Nobody is benefiting from that situation. Overall, almost 400,000 evictions have taken place and studies show that this situation is demonstrably linked to the frightening rise in suicide in Spain. It is a bit ironic that we have heard so much here about suicide vis-à-vispregnant women who may need an abortion, with everybody in a big flap about that, but nobody is taking into account the very real pressure on people because of the economic situation and the housing difficulties they face.

I will not repeat the points made by others but we have heard organisations like New Beginning, FLAC and others explaining how they meet thousands of people who are literally at their wits' end. People are at an incredibly low ebb and there are hundreds of new cases every week of people struggling, trying to engage with the banks to get fairer settlements but being ignored. This Bill is designed to make that situation not better for them, but worse. It will add to the pressure they are under. The lives and well-being of our citizens are being sacrificed on the altar of the banks. The banks have been bailed out and they, in turn, are putting the squeeze on us.

It was quite correct of Deputy Wallace to highlight the bailout granted to Independent News and Media, which is one of the organs which champions Government policies and stands idly by, allowing this situation to go unchallenged. It does not challenge the fact that the taxpayers and ordinary citizens are bailing out developers through NAMA. Billions of euro in taxpayers' money has been spent on developers, many of whom continue to trade, while the ordinary taxpayer picks up the bill. Where is the objection to this from Independent News and Media? There is none because it has been bailed out too. It is the very same organisation that warns that we cannot have a similar write-down for hard-pressed home owners because that will taint everything and will represent moral hazard, with negative repercussions for everybody. That is not the case, however. Keeping people in their homes, with sustainable and real solutions, is of benefit to the individuals concerned and to society, but it will not be facilitated by this Bill.

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