Paschal Mooney (Fianna Fail)

Along with all my colleagues I welcome the Minister of State, Deputy Brian Hayes, to the House. Contributions on all sides of the House have made plentiful reference to the expert group on mortgage arrears and personal debt. I add my voice to those and suggest that the recommendations be implemented immediately.

As has been established already on this side of the House, while we support the motion we believe it does not go far enough. My friend and colleague, Senator Marc MacSharry, who has been at the forefront of this issue since the economic collapse in recent years, primarily in Sligo where he launched a number of initiatives in association with community and civil groups, for which he is to be commended, will bring forward legislation in this area which I hope the Government will consider and the House debate.

I want to touch on one or two issues that arose in the expert group on mortgage arrears and personal debt. In calling for its recommendations to be implemented immediately the appropriate provisions should be put in place to ensure that mortgage interest supplement, MIS, is accessible to people clearly in need of the payment to protect their primary residence.

As the Minister of State is aware, the Social Welfare and Pensions Bill will come before the House tomorrow and while I appreciate that the Minister is focusing on anti-fraud measures and other related issues in the Bill, which we will have an opportunity of discussing then, I would like to record that it would have been an opportunity for the Minister to introduce some reference to the recommendations of the expert group on mortgage arrears and personal debt. In that context, the Department should introduce an alternative and more equitable approach to achieving the MIS objectives and maintaining its sustainability in light of the changes in the economic climate and the mortgage market.

In that regard there are one or two issues that should be highlighted. For example, no legal action should be taken by the lender while MIS is being paid and the borrower is co-operating with a lender. The debt forgiveness area is complex and there is a great deal of emotion surrounding it because the most important decision an individual or a couple will make in their lives, apart from perhaps getting married, is buying a house. The ban on paying MIS to a couple where one person is in full-time employment should be removed and a revised means test developed. The main reason for that is because mortgages were usually taken out when two incomes were coming into the house. The significant number of people in mortgage arrears is as a result of the loss of a job by one or other of the couple due to current economic circumstances. They should not be penalised when there is only one income coming in that would help to pay the mortgage during its lifetime.

I agree with the recommendation that the rule which excludes the payment of MIS when a house is for sale should be suspended. That rule was implemented in the height of the Celtic tiger years or even before that when there was not a crisis in the housing market and houses put on sale were sold within a matter of weeks or at most within a month. If we reflect on the housing market over the past 20 years it would have been seldom that a house would be left on the market for a considerable length of time, particularly in the areas where the crisis is now impacting, namely, large urban areas or areas of high population density. That rule was introduced in different economic circumstances but as we are all now aware, the housing market is still in free-fall. This morning's newspapers report that it is estimated that there are only 11,000 mortgages for the entire year. That is based on the first quarter mortgages which are only of the order of approximately 3,000. That figure was last seen in 1971. It is clear, therefore, that the housing market remains in deep crisis.

It is surmised that one of the reasons mortgage applications are at such a low ebb is because people believe what they read in the newspapers, namely, that the housing market has yet to find the floor, and they are waiting for it to drop even further. Whether that is sensible is a moot point because the old cliché, "doctors differ and patients die", could be applied to economists. They regularly get it wrong and they regularly disagree with each other. In terms of those economists who are suggesting that the market has a significant way to go, and not just a marginal drop in the next 12 months, I am not sure that is the case but as the Minister and his colleagues in Government have stated, this is about confidence building. The Government is about that and we applaud it for attempting to do so because we must have confidence in our economy. As the Minister stated in a previous debate and which perhaps should be propagated more widely, the significant amount of money in savings here is way above what would be normal seven or eight years ago. In that context the rule excluding the payment of MIS when a house is for sale should be suspended in the current climate. It would be helpful because it takes longer now to sell a house, if at all.

Other issues of which the Minister is aware arose out of the recommendations of the expert group. I do not wish to score a political point here, but I would like to remind the coalition partners of their commitments made prior to the election. In the Fine Gael manifesto published earlier this year, the party committed to using mortgage interest supplement to "adequately cover families in need" while the Labour Party manifesto promised to "support families who cannot make their mortgage repayments". The Labour Party manifesto stated that the 30 hour rule for MIS would be amended. I am not calling the Government to account for the sake of it, but the people who are most in need, namely, those in deep mortgage crisis, are expecting and hoping that they will get a positive response from this Government.