Brian Stanley (Laois-Offaly, Sinn Fein) | Oireachtas source

I welcome the opportunity to speak on this Bill. It has been a very eventful week in the Dáil. The explanatory memorandum to this Bill refers to the 2010 report on personal debt and debt enforcement by the Law Reform Commission. This was an attempt to address the serious and long-standing problems that have been associated with the issue of personal debt. These issues were, of course, made far worse by the fact that many people were left with unmanageable personal debts, especially mortgage debt, in the wake of the collapse of the property market and house prices. This was magnified for many people. My county has one of the highest levels of mortgage distress in the State. Many of those people found themselves out of work and many households where two people had been working ended up being households where no one worked. The value of the house contracted significantly.

The explanatory memorandum to the Bill claims that the substance of that Law Reform Commission's report was implemented in the Personal Insolvency Act 2012 and claims that this legislation is being guided by the report's recommendations on debt recovery. I strongly take issue with that claim. Indeed, I suspect that as with other references to reports from NGOs and others in respect of contentious legislation, the Government is misusing the Law Reform Commission's report. The commission's report is being used as a fig leaf for the Government's failure to address adequately the issue of personal debt and to justify the draconian measures that are being proposed in this legislation.

In any event, the personal insolvency legislation does not go as far as the Law Reform Commission report recommended. The minuscule number of people applying under its terms which can be vetoed by the banks and other lenders and the even smaller number emerging at the far end would indicate that it is nowhere close to being a solution. The Government is always looking for proposals. We told it what to do in respect of this three or four years ago. We said that an independent agency was needed and that the Government could not let the banks have a veto, but this is what it did. The small numbers of people coming out the other end with solutions indicate that it is not within a hair's breadth of a solution. In particular, the Personal Insolvency Act does very little to address the most pressing issue of mortgage debt which continues to hang over thousands of people. The interests of the banks and other lending institutions which caused the financial crisis in the first instance were given priority over those of people with distressed mortgages. The same pattern can be seen in this Bill.

The manner in which the personal debt of most mortgage holders and others with problems repaying loans is treated stands in sharp contrast to the massive bailout that was extended to the banks and other lending institutions and the lenient manner in which some of the architects of and participants in the property bubble and the financial collapse are still being treated by the legal and political system in this State. We have seen how Mr. Donncha Ó Bríain fared far better than those people in mortgage distress in County Laois and other counties. A claim was made yesterday in the House by Deputy Wallace. If it is true, and he has a good record on these matters, it means that developers and speculators are still getting favourable treatment from State institutions that are supposed to be looking after the interests of the people. NAMA has refused to sell land to community and other organisations while selling off assets at knock-down prices to US vulture funds of the type who are already involved in hiking up property prices and rents.

With regard to the report’s recommendations on enforcement, while it is true the commission refers to attachment orders enforced by a debt enforcement office, it is only as a last resort and not as an early option, as is proposed here. That is a key problem with this Bill. Under the Law Reform Commission recommendations, prior to any such step being taken to secure an attachment order, creditors and debtors would have had to exhaust all other channels for settlement of claims. That would involve an independent arbitrator mediating an arrangement suitable for both parties.

Surely that would have been a more practical way to tackle the problem of personal debt. If people can come to a reasonable arrangement with their creditors, this can benefit both parties and be a sustainable solution. Creditors will get at least some, if not all, of what they are owed, although perhaps over a longer period. This would save them the expense of bringing the issue to court. I cannot fathom how or where the Minister will find the courts to deal with these attachment orders. Courts have been centralised and are now located in each county town and are already chock-a-block. If any Deputy attends and watches what goes on for an hour, he or she will see that the process is like a conveyor belt, with cases being put back, adjourned or dealt with. Judges are already working at speed to try to get through their workload and adding more would make it impossible. I fail to see how the Minister will deal with the courts having to deal with attachment orders in addition. Perhaps there is a plan to set up a lot of new courts or have a super court to deal with all of them.

Debtors, on the other hand, would at least be given some certainty if they knew exactly what they had to pay over a period. It would provide enormous relief if they were not forced by the courts but were able to put a working agreement in place without an immediate threat of prison hanging over them or the debt being taken from their wages. Set repayments over a certain timeframe would bring relief to many of those in debt. Under the Law Reform Commission's report recommendations, debtors would be able to agree to pay creditors a sum to be arranged over a period of three to five years and recognition would be given to the fact that some debts could never be paid. That is regularly done in the case of some bankruptcies but not for smaller debtors.

Account would have to be taken of the need to ensure debtors were not deprived of the means for a minimum standard of living for themselves and their dependents. Section 7 of the Bill refers to a "statement of means". This is interesting because the Minister sets out that the person must also set out his or her outgoing financial commitments. He or she must reveal all. Section 12 then deals with taking payments from his or her wages. If a person has received an increase of anything over €50, an attempt can be made to review the payment and take more.

Employers will be able to learn more about the private business of their employees. Mention was made of privacy issues. When we give power to one person, we take it away from someone else. We have seen how little power employees have, particularly the employees about whom we are talking. We have seen how little power even the unionised employees in Dunnes Stores have. Employees in shops who are not unionised are on the ropes day and night. We have gone back 100 years and are creating another weight to hang over them and another stick with which to beat them. They are already being crucified and now they will have something else to fret over.

There is an issue with regard to whether employers will have the bother of dealing with attachment orders, particularly if they have somebody who is constantly in debt and trying to muddle through as best he or she can. Will an employer want the hassle of adjusting wages up and down to accommodate the institution owed money? Reference is made in the Bill to assessing the effect of this, but the measures do not seem to provide sufficient safeguards to ensure people do not find themselves in poverty if attachment orders are made against their earnings. Attachment orders also impose huge restrictions in people planning their household budgets. Therefore, the LRC proposal for agreed repayments to be made by direct debit over five years would represent a fairer arrangement. It would also remove the indignity of people having money taken at source, especially when it would mean, as proposed, that their employer would be responsible for enforcing the attachment order. A person would face the indignity of the court and then the indignity of facing his or her employer. In a small workplace one can imagine what it would be like for the debtor if other employees knew more about his or her private affairs. People working in the office would know the business of others on the shop floor. We face that appalling situation.

The Bill appears to be a much cruder device than what is proposed in the Law Reform Commission's report. While Sinn Féin supports the provision under which people would no longer be sent to prison over debts, we cannot support the Bill in its totality, given the implications that it will have for people who are genuinely struggling to meet utility and other relatively minor costs. The Bill is a crude measure rather than offering a more balanced approach.

We are already aware of how quickly public utility companies and others threaten action over relatively small arrears. They are quick to make threats, even to long-standing customers who for whatever reason might have missed one or two bill payments. This legislation will encourage them to go to court to secure attachment orders. That facility will also be available to private companies. Therefore, people could find themselves with attachment orders on foot of arrears on a mobile phone or cable television bill. One clear objective of the Bill is to frighten people into paying their water charges, charges they have already paid via other taxes. Irish Water, with other creditors as defined under the legislation, will be able to seek an attachment order for bills owed over €500. As has been pointed out in regard to the changes being introduced in the context of charges on householders and tenants, this is a clear indication that the Government is acting out of desperation. It wants to frighten the people to get the numbers of compliant customers up in order that it can then reveal in a few months that so many hundreds of thousands have paid. We do not know how many have paid up to now. This is one of the great mysteries and nobody knows how many people have paid their bills to this public company. Neither the Minister, Deputy Alan Kelly, nor Irish Water will reveal that information. We can only assume this is because the numbers who have paid are well below what were forecast and well below what is required if Irish Water is to become financially viable under the current pricing structure. It will soon have to undergo a EUROSTAT test on its finances and it will be interesting to learn whether the measures taken this week against non-paying households are designed to bolster the argument that it will be able to cover its costs from what it takes in from commercial and domestic water charges. We know, of course, that the Government is planning to make the case for the billed amount to be the sum assessed by EUROSTAT, a sum of €271 million. We will live on the fiction for the rest of the year that €271 million will be brought in through domestic water charges. However, when we deduct the pathetic water conservation grant from what is brought in, we will see how close the Government is to the figure of €271 million.

As things stand, it will take years for enough to be collected in water charges to cover costs. This year enough will probably be collected to cover the costs of administration and collection of the money, but this takes no account of consultancy and legal costs, the cost of the corporate monster that is Irish Water and all of the other waste around it. On top of this is the huge amount of money Irish Water has been given from the Exchequer, almost €600 million. This money was taken from the Exchequer and replaced by motor taxation moneys. This was done so as to be able to say the motor tax money did not go to Irish Water because it was not done in one fell swoop. It was done in two moves in order that it did not look as if it was being done that way and that the Government would be able to state it did not hand the motor tax cheque directly to Irish Water. That is technically correct because what happened was it gave the money and left a €600 million hole which it then filled with the motor tax money. That money should have gone to pay for road repairs and to local authorities the budgets of wich have been drastically reduced in the past five years.

The argument could be made that the Bill is a cynical move on the part of the Government, as it sets the minimum debt at which an attachment order can be granted at €500. Under the current Irish Water rates charged, this is equivalent to two years of missed charges. That means there will be little sweat or flak on the doorsteps until after the general election, while at the same time the Government can tell EUROSTAT it has the mechanisms in place to enforce this double taxation. That is what this is about. The Government will be able to state this and then hope to glide through the general election and come out the other end okay. It will then raise the charges and turn up the heat in using this mechanism to enforce the attachment orders and collect the money owed.

People face no penalty under the measure, given that it cannot be enforced for two years. In the meantime, if the Bill passes, it will act as a threat to induce some people to pay their charges, alongside the measures that are being introduced to attach liability for unpaid water charges to people's homes when they are being sold and to pressure local authorities and private landlords to act as debt enforcers. If nothing else, it is a mission on the part of the Government to bully and cajole a huge portion of the population to pay what is clearly an unpopular and unjust charge, even for those who feel they have no other choice but to pay.

For a time, the Government favoured the carrot rather than the stick, and set aside the prices approved by the Commission for Energy Regulation, CER, in favour of a lower flat charge. This time last year, the CER was to set the price. However, in the autumn, the Government could not sell what was being proposed to the electorate, so it swept aside the CER with a bulldozer, lowered the charges yet again and tried to make it more palatable. Then the Government introduced the ridiculous so-called water conservation grant, which includes no encouragement to control water usage. The millionaires can fill their swimming pools, sprinkle their extensive lawns and use irrigation systems to water exotic trees in their gardens, and it will cost them not a penny more. All these concessions are due to expire in a few years, after which water charges will soar to twice and three times what households are being billed for under the current flat rate.

After the concessionary approach failed, the Government has resorted to the stick, contained in the two pieces of legislation - this Bill, and the water charge provisions which were stitched onto yesterday's Environment (Miscellaneous Provisions) Bill. Only by sleight of hand was the Government able to pass the measures directed at people's homes, including, effectively, a new water services Bill and a new waste management Bill, by including them in a small miscellaneous provisions Bill that otherwise relates to dogs, fuel and a park in Kerry. The legislation before us is the second part of the offensive. It remains to be seen whether it will be effective. The large number of people who are likely to be subject to the punitive measures proposed will not look kindly on the Government parties when the election is called. People will continue to refuse to pay and will find themselves in court, or will be forced to pay on pain of losing their rented accommodation. This is hardly the way to win hearts and minds. It will leave a legacy that will hang over the Government parties, particularly the Labour Party, for many years.

I have no objection to paying tax once and seeing where it goes. I try to pay as much as I can to the local authorities on time for the few commitments I have to them. We should do so, particularly when one can see the money being used well. We have no problem paying tax. The issue is how the Government is doing this. If passed, this legislation will mean that people who cannot pay their utility bills, and who have other small debts, will have what they owe taken out of their wages and social welfare payments. The poorest of the poor will be pilfered. These powers will extend beyond Irish Water to many other bodies and will have serious implications. While Sinn Féin supports the setting aside of prison sentences, we cannot support the Bill.

Last week and the week before, we had reports on how the mighty are doing. They are doing very well. I was flabbergasted to see how well some people are doing, particularly the likes of the gentleman I mentioned previously, as Gaeilge. However, the little person is always caught. It is the job of the Minister of State, the people in the Labour Party, whatever about Fine Gael, and us to stand up for those people in our communities. Yesterday, I mentioned a lone parent who has four children and receives €306. How has this person - most likely a woman - fared this week? Between this legislation and the Government's actions yesterday - stitching a water Bill onto another Bill and ramming it through the House using the guillotine - as well as the cuts to the lone parent allowance, it is a shameful week in the history of the Dáil and the Labour Party. I appeal to the Government, even at this late hour, to try to row back on some of it. The opportunity will arise in the Seanad, and I will carefully watch how the Labour Party Senators vote on it.

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