Ruth Coppinger (Dublin West, Socialist Party) | Oireachtas source

The situation facing people in mortgage arrears and the housing crisis are the two burning issues that should have been addressed by this Government. Instead of this, however, the EU, the troika and the code of conduct on mortgage arrears put pressure on the banks to resolve mortgage arrears, which effectively means repossessing homes. I am seeing the effects of that policy in my own area in terms of people being made homeless and homes being repossessed.

We need more radical reform than what is called for in the motion, which does not include the vital option of a write-down on all mortgages in negative equity. We should not be outlining only three options for the banks because it is essential for society that we write-down all mortgages in negative equity. There is no other solution to the current crisis and it is something for which the Anti-Austerity Alliance is campaigning. The idea of a mortgage write-down has been dismissed by the Government based on the question of moral hazard and undeserving recipients. However, it is necessary in order to take the albatross of debt from people's necks and to free up millions of euro to spend in the real economy. Many of the people carrying the heaviest burdens also face huge child care costs and other expenses which add to the depression in the economy.

A mortgage write-down would solve the problem of negative equity for those who bought at the height of speculative boom caused by the banks and some of the parties in this Chamber and stoked by the media. How are these people to blame for buying overpriced houses when they had no other means of getting a roof over their heads? They are not to blame, they are the victims of speculation and profiteering in the housing market over a period of 15 years. This motion would split their mortgages without tackling the root cause of the crisis. The people who bought houses at hugely inflated prices were coerced into this situation and it is not their fault. The banks and developers have been bailed out at enormous cost by this Government and the previous regime while ordinary people have been left struggling.

How much would a mortgage write-down cost? Various estimates have been produced by economists and the Department of Finance. One estimate is that it would cost €14 billion but that includes both owner occupied and buy-to-let properties. Given that an argument can be made not to include buy-to-let properties in a write-down, the final cost would be €7 billion over a period of 25 or 30 years. That is not a huge cost. More recently, it was estimated that the cost would be €18 billion, or €9 billion for mortgages on principle homes. That is not a huge cost for the banks but it is a cost that the banks rather than the taxpayer should pay. Apart from helping home owners to reduce their mortgages and repayments, a write-down would create considerable domestic demand.

I obtained figures from the Central Bank on warehousing and restructuring. The banks are restructuring mortgages in many cases but 20% of split or restructured mortgages are continuing to fail.

That represents a significant number of people. We are saying we will leave the banks in control, make people continue to pay and make their children pay in future. What will happen when interest rates go back up and people cannot keep to the commitments that have been teased out with the banks? It is a large figure because while the number of people in arrears is declining, the number of people with long-term arrears is increasing. The Central Bank stated in September 2014 that the decline in arrears over 90 days masked a continuing increase in very long-term arrears. It added that accounts in arrears over 720 days had increased by 5% during the second quarter and now accounted for almost 5% of all mortgage accounts. It is a very significant proportion and indicates that the restructuring deals are simply not working.

The only way a write-down can be implemented is to nationalise the banks and take them into public ownership to run them in the interests of ordinary people - of working class people - and not in the interests of the establishment. It is the only way to plan for society's needs and to take this yoke from people's necks. A write-down is the most basic measure to call for by anyone on the left, not split mortgages and deals which are, in essence, liberal capitalist demands.

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