Marc MacSharry (Fianna Fail)

I move amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

"—notes that legal repossessions of home owners reported by the institutions covered by the Guarantee amount to 20 in the first nine months of this year;

notes that the Mortgage Interest Subsidy scheme provides an important safety net for mortgage borrowers who get into difficulties and that more than 14,000 families are now benefiting from this support;

notes that the Renewed Programme for Government envisages an examination of ways of expanding mortgage support measures and new measures to protect families having difficulties;

notes that the number of home owners in arrears (90 days) with institutions covered by the State Guarantee is currently of the order 15,000–16,000 and that the rate of increase in arrears has moderated notably since the early months of this year;

notes that activity in the property market has remained low, making it very difficult to assess realistic price levels, so that any estimate of how many are in negative equity, or how long the position is likely to last is largely speculative;

notes that the introduction of a statutory Code of Conduct on Mortgage Arrears earlier this year reinforces existing practices at mainstream mortgage lenders and extends legally obligatory protection to all mortgage borrowers;

notes that the Renewed Programme for Government envisages an examination of ways of expanding mortgage support measures and new measures to protect families having difficulties including the introduction of new measures to protect families having difficulties with their home mortgage payments;

notes that the Renewed Programme for Government also provides for the existing statutory Code of Conduct on Mortgage Arrears and the recently agreed protocol between the Irish Bankers Federation (IBF) and the Money Advice and Budgeting Service (MABS) on debt default to be further reviewed with a view to expanding the options available for dealing with debt situations, including for example, the use by banks and lenders of more flexible mechanisms to avoid foreclosure in appropriate circumstances and that these could include:

reduced rates;

longer maturity dates;

rolling-up of outstanding interest;

bank taking equity in the house;

bank taking ownership and leasing back the property to the resident with rent payments coming off the loan;

notes that the Renewed Programme for Government envisages that ways of expanding mortgage-support measures will be examined with reference to the measures adopted in other jurisdictions;

notes that the Renewed Programme for Government envisages reform of debt enforcement in light of the deliberation of the Law Reform Commission, which has recently published a consultation paper on the matter, the regulation of debt collection agencies, a new system of personal insolvency regulations allowing for a statutory non-court-based debt settlement system, and the establishment of a central Debt Enforcement Office to remove as many debt enforcement proceeds from the courts as possible;

notes that NAMA is not a bailout for developers and that extending it to homeowners would not provide them with relief;

notes that the proposal for a Home Owner Support Scheme would involve the State in buying further problem loans from the banks at a discount, would be complex to administer, would cut across the existing Mortgage Subsidy Scheme and could turn the State into both a mortgage lender and a landlord on a large scale;

notes that despite what certain media and other commentators might claim, a person cannot be imprisoned on the grounds of inability to pay a debt. Committal orders are granted where someone fails to comply with a court order, and can only be made where the debtor shows that the failure to pay was due to wilful refusal or culpable neglect;

notes that the Law Reform Commission is giving priority to its work on a Final Report on Personal Debt Management and Debt Enforcement, having already published a Consultation Paper in September 2009;

notes that Section 11 of the Non-Fatal Offences Against the Person Act 1997 provides an adequate system to protect debtors from unacceptable debt collection measures. Under this Section it is an offence to demand payment of a debt in a way designed to alarm, distress or humiliate;

notes that the Money Advice and Budgeting Service (MABS) provides a free confidential and independent debt advice and budgeting service for people in particular those on low incomes who are over-indebted or at risk of getting into debt and need help and advice in coping with debt problems;

welcomes the introduction of the Enforcement of Court Orders (Amendment) Act 2009 as a means of safeguarding the position of debtors who face proceedings in court and to clarify the position of inability to pay, ability to pay or refusal to pay a debt;

welcomes the fact that the operation of the Enforcement of Court Orders (Amendment) Act 2009 will ensure that it will only be in very exceptional cases that a person may be imprisoned for failure to pay a debt;

commends the Government for its actions to stabilise the financial system and to restore the public finances thereby protecting jobs and home ownership;

commends the Government for its increased support for the Mortgage Interest Subsidy scheme;

commends the introduction of the statutory Code of Conduct on Mortgage Arrears; and

commends the provision of additional resources to MABS for 2009 and the appointment of additional money advisors to 19 MABS offices in August 2009, bringing to 271 the number of money advice staff working in 65 locations around the country.".

I welcome the Minister of State and thank Senator McFadden and the Fine Gael Party for using Private Members' time to address this issue. Since March, I and many other Members have been working hard to try to devise innovative ways to deal with the human cost of the international economic downturn and its effects on the national economy. In that regard, I and a number of other people prepared a report which made a number of recommendations to the Minister for Finance. We presented the report to the Minister last August and I am pleased to note the amendment acknowledges much of its content.

There is no question that our economic difficulties are unprecedented. The economy is sum of the people in it and the problems people face must be addressed. In recent weeks, the Taoiseach and Minister for Finance have noted that the number of repossessions remains relatively low, notwithstanding the figures cited by Senator Buttimer on the number of cases before the courts. At approximately 14,000, the number of mortgage holders in arrears is not especially significant relative to other years. On the basis of available evidence, the type of actions sought by the Fine Gael Party and the group with which I was involved and which presented a report to the Minister do not appear to be necessary.

I acknowledge the good work done by the Financial Regulator in preparing a code of conduct on mortgage arrears.

The Minster of State was very involved in the establishment and work of MABS. It does excellent work. I acknowledge the protocol it has signed up to. It states it will not commence legal action and will suspend or adjourn legal action which may have already commenced, subject to ongoing compliance with a mutually acceptable, affordable and sustainable repayment.

I would not describe the kinds of complaints and worries families are having in terms of mortgage arrears as a ripple in the context of what is coming. Inevitably, as we constitute less than 1% of the eurozone economy and given the focus of Trichet in the European Central Bank on inflation, as the European economy begins to recover there will be difficulties for Ireland.

Anybody who was up late last night would have seen that many of the international headlines focused on the outlook that the EU is on its way out of recession. It is great news in theory. In the short to medium term it is not particularly good news for us. The eurozone economy, 99% of which does not include us, will inevitably demand interest rate rises. This week Norway, which is not part of the eurozone, increased its interest rates. Interest rates will inevitably begin to creep up here.

People who had a double income and no children were put to the pin of their collar to borrow €250,000 or €350,000 to buy their dream home or first home to get on the ladder and start the ball rolling. Such people are now in a different scenario. Perhaps one of the jobs is gone, one or both people could be on short time or there may be two children to be cared for. The complete outlook for such people has changed and there is no question that as interest rates rise the pressures on them will significantly increase. When that time comes the demands on such people will be greatly increased and far from a ripple, it will be like a tsunami. I am not trying to scaremonger, frighten people or create a mountain out a molehill. It is basic maths. It would be foolish in the extreme if we did not prepare for such an event.

There has been some acknowledgement that we need to do this in the form of protocols from the Irish Bankers Federation. We require a legislative basis for it. Senator McFadden referred to the good development which emerged over the summer whereby a woman could not be put in prison for non-payment of a debt. It is to be hoped a woman or a man could not be put in prison——