Pádraig Mac Lochlainn (Donegal North East, Sinn Fein) | Oireachtas source

It is good the debate on the Personal Insolvency Act has been reopened. In 2012 when this legislation was first debated, mistakes were made by an arrogant Government which decided it was better off trusting the banks rather than listening to those who work at the coalface with people in debt. We cannot let another opportunity slip past us. This time the Government must listen to those in debt and those who work with them.

On the face of it, the Government is simply tidying up a range of issues that require clarity. We will listen closely to the Minister and examine in detail these proposals to ensure they do the job as intended. There is a much wider issue at play and the cat is now out of the bag. The comments from the Taoiseach and senior Ministers last week that the system was not working showed what this Bill should really be about. It should be about correcting mistakes made, the same mistakes about which the Opposition parties warned the Government.

In 2012, we were promised a review of this legislation. Where is that review now? Can we just skip to the part where we do what should have been done in the first place?

The reality of debt is with us as much as ever. The reality of debt for many is that it is the last thing on their minds before they sleep - if they can sleep - and the first thing on their minds when they wake up. It has led to suicide and addiction. That is why we have to get this right. The economic realities of debt are stark too. Thousands of households see every cent soaked up by interest and repayments. Paying a mortgage has meant not spending a cent in the real economy above and beyond the bare essentials. Like our national debt, personal debt is a huge burden preventing economic growth.

My party is prepared once again to engage constructively to tidy up the Government's mess and build a personal insolvency service that actually works for people and families who are over-indebted. When this Bill was first proposed by the then Minister, Deputy Alan Shatter, he told my colleague, Deputy Pearse Doherty, that he expected 15,000 people to avail of the various new arrangements in the first year of the service. Less than 10% of that number have actually availed of it. As a systemic solution to personal debt, it has failed. The reason it has failed is that the game was rigged from the beginning. The banks had a veto and they have used it. What the experts who work with people in debt said would happen has happened. The Act has not delivered. The proof lies in the numbers who still choose bankruptcy. Years later to hear the Taoiseach and Tánaiste suddenly realise there is a problem just shows once again how out of touch they are.

While we will examine the Bill in detail on Committee Stage I am stating clearly here that my party's primary objective is to remove the veto. If the penny has finally dropped on the Government side then we will work with it to achieve that goal. It is apt that we are discussing this Bill in the same week as my party and the Technical Group have tabled a motion in Private Members' motion calling for an EU-wide debt conference. We must never forget that the personal debt crisis in this State did not come out of the blue. While some people clearly made poor decisions, most were simply hit by a tide beyond their control. The Banking Inquiry has begun to look at the ties between politics, property and finance in the State, which lie behind much of the crash. For my party, this debate is not about forgiveness or doing people favours, it is about repairing society after it was attacked.

Personal debt, like business debt and our sovereign debt, must be made affordable and sustainable. This Government saying no to a debt conference is like a highly-indebted family refusing to meet with an insolvency practitioner out of pride. It makes no sense and can only hurt the country. From 2011 it was the mantra of this Government when asked about the mortgage arrears crisis that the Personal Insolvency Act was on the way and thousands of struggling homeowners would be liberated from unsustainable debt and would be free to remain in their homes. That was bluster and deceit which has now been exposed. What the Government actually did for struggling homeowners was remove the legal protection given by the Dunne judgement. When Sinn Féin proposed a Bill replacing Dunne with a more sustainable model, Labour and Fine Gael marched the troops in to vote it down. Anybody looking at that debate would have found no coherent reason for voting it down other than that the Troika told them to do it. In connivance with the Central Bank, they then allowed the banks to meet their targets for mortgage arrangements through legal actions. The Government sat back and let the banks off the leash. Now that fruit is ripening as we see hundreds of repossession cases taking place across the State. Labour and Fine Gael might be happy to consider repossessing a family home as a "sustainable solution" but Sinn Féin is not.

The number in long-term arrears is continuing to rise over three years after this Government came to power. The personal debt crisis is still with us and nothing substantial has been done to tackle it. The mortgage to rent scheme, for example, has failed utterly. My party has consistently called for an independent resolution system to be put in place to force banks into arrangements where the family home is concerned.

The core issue remains that we have a Government that trusts the banks and supports the banks over the people, a Government that owns two-and-a-bit banks but will not use that leverage to benefit the people in whose name they own those banks. We have seen this time and again. The Minister for Finance, Deputy Noonan paid top dollar to Mercer to publish a report on bankers' pay but then let the banks ignore it, force the cuts on the lower paid workers or just get rid of those workers altogether while protecting the bankers at the top. The Government owns 99% of AIB but will not lift a finger as it outsources its core staff. Banks were hiking up interest rates on variable mortgages at a time when the ECB was lending to them at record lows without a peep from the Government who owned those banks.

There is a pattern of capitulation to the banks time after time. It is that fear of the banks that means the Personal Insolvency Act has failed in its intended aim. It is not the fault of the insolvency service staff who are doing the best they can. People in debt are not going to play a game they know is rigged to their disadvantage.

We have before us an opportunity not just to tidy up but properly to sort out once and for all a functioning insolvency system which will make a difference. I will be tabling amendments to remove the veto and to empower people in debt to break free and start rebuilding their lives without the bank having to agree. I am calling on all sides to bang our heads together and to work together to rectify the mistakes made in 2012 and to put in place an avenue of hope for the tens of thousands of struggling households worried about losing their homes, and for all others burdened everyday by fears of debt taking over completely.

See this speech in context