Enda Kenny (Mayo, Fine Gael) | Oireachtas source

The Deputy has raised a number of issues. First, every Minister is as a matter of course consulted about issues which affect his or her Department or Estimates. As the Deputy is aware, the Economic Management Council comprises myself, the Tánaiste, the Minister for Finance and the Minister for Public Expenditure and Reform. In many ways, it is an opportunity for cohesive conversation on major issues arising prior to their going to Cabinet for full discussion by members of the Cabinet. In other words, it does away with the necessity for full Cabinet meetings on every issue. In that sense, it allows for a streamlining of issues that are reflected upon by the EMC and later brought to Cabinet as part of the process of Government decision making on issues.

The role of the Economic Management Council is to manage the Government's programme in respect of economic, planning and budgetary matters; the economic recovery programme, including the representation of Ireland internationally in negotiations with the EU, IMF and ECB; the integration of the work of Departments and agencies in these matters; and the co-ordination of banking policy. The EMC has the status of a Cabinet committee, comprises only four members and has the broad remit I have just outlined. It provides a forum for discussion by those who may have a differing view on strategic issues prior to their presentation to Government for decision. This means there is a more streamlined and cohesive approach to issues. It does not replace the whole of Government, whereby all Ministers have an opportunity to contribute to decision making and where all Ministers, whose Departments are involved, are consulted individually. It is good practice in terms of our needing to learn from experiences of the past and provide a forum where relevant Ministers and, where necessary, officials and advisors can consider the economic strategy based on the best available advice. For instance, in terms of preparation of the budget for 15 October, the forum allows for strategic discussion on issues prior to their being presented to Government. Obviously, the budget must be discussed and agreed by the Cabinet in due course. The Economic Management Council has met 43 times so far this year.

On the Deputy's other question, the Minister of State, Deputy White, will shortly bring his proposals in respect of general practitioner care to Government. On mortgage arrears and credit availability, the committee was established in March to oversee the effective implementation on a cross-departmental basis of the Government's response to the issue of mortgage arrears. We have previously discussed this issue in the House. As such, the Deputy will be aware of the progress on implementation of the specific reports in this area, including the setting of targets by the Central Bank in regard to engagement by lenders with distressed mortgage holders, which targets will increase into the future not only for engagement purposes but in regard to the putting in place of sustainable solutions for people who are caught in this bind.

The review of the code of conduct on mortgage arrears, CCMA, is part of the Central Bank's wider response to the growing problem of mortgage arrears and is intended to provide protection to borrowers from unfair lending practises and to ensure that there is a strong process in place for the delivery of solutions for borrowers. The three main objectives are to strengthen existing protections where necessary, to ensure transparency and fairness for borrowers and facilitation of resolution of arrears. A number of changes were made in this regard, including the replacement of the current restrictions in terms of the number of unsolicited contacts allowed with contact policies set out by lenders and approved by the boards of those lenders; amendment of the definition of a non-co-operative borrower such that key protections are extended only to borrowers who engage constructively with lenders within a specific period and in a manner that is consistent with addressing their arrears; and consideration of amendments to permitting modifications of the interest rate setting mechanism where the lender has offered an alternative arrangement which is advantageous to the borrower in the longer term - in other words, a debt write-off. As with other offers, the borrower may accept or reject this offer. A further change for co-operating borrowers is replacement of the current 12 month moratorium with a three month notice period, subject to an overriding minimum period of eight months from the commencement of arrears. All of these are significant changes.

While concern was expressed that implementation of the Dunne judgment would lead to a rash of repossessions, the Deputy will be aware that the judgment had the unintended consequence in certain cases of restricting lending institutions from exercising certain of their repossession options via the courts. This lacuna in the law is addressed by the Land and Conveyancing Law Reform Bill 2013, the primary purpose of which is to confirm that the law in force prior to the commencement of the 2009 Act should continue to apply to mortgages created prior to that date. The Government's strategy is to, where appropriate and possible, keep people in their homes. Accordingly, the Bill provides the court with an option as it may consider appropriate to adjourn repossession proceedings to allow the parties involved to explore whether a personal insolvency arrangement under the Personal Insolvency Act might be more appropriate and provide a more acceptable alternative to repossession. As I have previously stated on many occasions, homes are exceptionally important to people in this country and repossession should be seen as the absolute last resort.

Deputy Martin asked about the position in so far as mortgage arrears are concerned. The most recent Central Bank arrears statistics published on 21 June 2013 show that while there has been a decline in the formation of PDH arrears in recent months, the number of borrowers in long term arrears continues to rise. For this reason, the Government welcomes the publication by the Central Bank of specific time-bound targets for the main banks, which will ensure they take resolute and sustainable action in regard to those in long term arrears. In addition, people can avail of the debt restructuring arrangements offered by the Insolvency Service of Ireland. This is a pilot project operated by the Central Bank and supported by Government. The Money Advice and Budgeting Service, MABS, has a different view of what its involvement might be in this regard, which is short of the formal legal position under the insolvency process.

The Deputy also asked about the availability of credit to SMEs.

The results from the recent Department of Finance and RED C credit demand survey show that SME credit demand, while remaining low, continues on a gradual upward trend. This is to be welcomed as a sign of what could be described as creeping confidence in the right direction. It has been helped by a backdrop of continued stabilisation in the marketplace, which has been driven by improved trading conditions for larger SMEs. From speaking to business people, I get the sense that they believe things have improved and there are opportunities ahead.

The overall rate of decline remains unchanged at the levels that were recorded in December 2012. On the positive side, more loan applications are being approved in full, rather than partially. We also extended the remit of the Cabinet committee on mortgage arrears to include credit availability. Deputies will be aware of the investment by the National Pensions Reserve Fund of €500 million in three new funds for small and medium enterprises. This will result in up to €850 million being made available for SMEs through equity, credit and restructuring investment from the NPRF. A ten point tax reform plan has been introduced with the aim of improving the cash position of small and medium enterprises.

Last Monday week, I visited Waterford with the Tánaiste and Ministers for Jobs, Enterprise and Innovation and Social Protection to announce the JobsPlus programme, which will deliver a cash injection and improvement in cashflow for employers who take on persons who have been on the live register for 12 months or more. When the TalkTalk facility closed in Waterford with the loss of many hundreds of jobs a new company, Eishtec, emerged from its ashes. Run by three experienced operators, the new company has taken 60% of its employment force from the live register and currently employs 400 people. The sense of optimism and determination to make this work was palpable during our visit.

All these initiatives, from the micro-finance scheme to the improvement in availability of finance from the European Investment Bank, European Investment Fund and Silicon Valley Bank and National Pensions Reserve Fund partnership, are targeted at the innovation sector. Combined, they provide opportunities for new credit which will bring about innovation and jobs. We are always open to ideas on that front.

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