Brian Hayes (Dublin South West, Fine Gael)

One can call it what one likes. Its role must be to examine the facts and determine what is fair in each case. The Government is still working this out. If I had the solution tonight, I would give Senator Katherine Zappone the details, but we do not yet have such a solution. I accept her point, however, that the issue is the totality of the debt and it is crucial that the unguaranteed element of the debt is not excluded.

Senator Aideen Hayden is correct that a substantial tax subsidy has been provided to enable people to buy their own homes. This includes first-time buyer's grants, mortgage interest protection, tenant purchase schemes and so forth. It is also the case that higher interest rates applied in the past, for example, in the early 1990s interest rates reached 17% or 18%, albeit for a short period. This issue forms part of the Government's assessment.

The Government is examining whether a third banking force is needed. The programme for Government includes a commitment that we will assess this question and the assessment is working its way through the Department. The Minister for Public Expenditure and Reform, Deputy Brendan Howlin, is taking a particular interest in the matter. Do we need a new force to start lending again in the Irish market? I concur with Senator Aideen Hayden's view that the housing market is highly dysfunctional. The Government will consider any proposals in this regard. I noted the Senator's comments about mortgage-to-rent schemes, under which banks would be allowed to keep a portion of homes and consider the possibility of introducing split mortgages. It appears from the Keane report that we do not have a means of forgiving the interest portion of the mortgage. This is a problem. As other Senators noted, the only pilot scheme was launched by the Minister of State with responsibility for housing, Deputy Willie Penrose, last week. Given the complexity of the issue, many of the relevant details will have to be worked out as the scheme progresses.

Senator Marc MacSharry made a passionate speech in which he proposed a radical step. While I agree with him in many respects, it may be the case that a number of small radical steps, rather than one large one, will be needed if we are to meet current requirements. I agree with Senator Deirdre Clune's comments on personal insolvency.

Senator Jillian van Turnhout asked whether, in the case of mortgage-to-rent schemes, debts would be written off by the bank or with other owners. I will revert to the Senator on that issue. She also asked a fundamental question on the risk to a housing association if it were asked, through one of these schemes, to take on, if one likes, a house and the debt pertaining to it. We cannot approach this issue in a draconian fashion. Our approach must be based on proper consultation with the housing associations, as the Senator correctly noted. Housing associations may well be in a better position than housing authorities because they are, in many respects, more imaginative in the measures they can take. I was a member of South Dublin County Council many years ago. The shared ownership scheme, under which a portion of the house is owned by the local authority with the remainder owned by the person concerned, is a classic example of an approach that works.

I concur with Senator John Kelly on reckless lending in the sub-prime market. I will raise with the Department of Finance his interesting observation that where a guarantor is in place, the guarantee remains valid. I have not heard that before. On the Money Advice and Budgeting Service, although three Departments are still trying to work this out, it is part and parcel of our implementation strategy. I took a note of Jim D'Arcy's comments on the Minister of State's pilot scheme.

Speaking in the round, the issue before us will not go away. It is the Government's firm resolve to produce an implementation strategy soon, one which will ensure people can remain in their homes, set out the options available to individuals and take a much more aggressive position on the banking system. Senators will have heard the views of the Central Bank and the Financial Regulator, Mr. Matthew Elderfield, on this issue. I agree with them. The discussions taking place between the banking unit in the Department of Finance and the banks should not be underestimated. We can get to a better place only if there is a worked-out agreement across the State and through the banking system that will get people out of the appalling situations in which they have been placed. That is the resolve of the Government. The support of this House and its Members in achieving that objective is much appreciated.