Ivana Bacik (Independent)

I welcome the Minister, Deputy Michael Noonan, to the House. I am pleased to have the opportunity to lead for the Labour Party group today in this rather broad discussion on mortgage arrears, banking and the economy. After the grand master of the Grand Orange Lodge of Ireland, Mr. Drew Nelson, addressed the House earlier today, most of the speeches from Members referred to history, tradition and the peace process. Mr. Nelson made an interesting point in his response when he spoke about the centre of economic strength moving eastward away from Europe, referring specifically to his concerns arising from the announcement yesterday of the transfer of 200 jobs from Belfast to China. While that was, undoubtedly, a worrying announcement, one of real concern for all of us and a portent of things to come, there was something positive to be taken from his address, namely, having a member of the Orange Order speaking here about the economy and jobs which was, I thought, part of a normalisation process where Northern politicians are engaged on economic and political matters which affect people's day-to-day lives. It was an interesting interlude.

While I want to focus on mortgage arrears and the Personal Insolvency Bill I want first to speak a little about banking. As stated by Senator D'Arcy, our banks are currently under the spotlight, in particular Ulster Bank in terms of the extraordinary fiasco of what was initially described as a technical glitch. Senator Higgins has already spoken about the need for an inquiry in this regard. I welcome that representatives of Ulster Bank and the Central Bank have in this regard been called to appear before the Joint Committee on Finance, Public Expenditure and Reform this week. It is extraordinary that three weeks on, this matter has still not been resolved and that there are still customers who cannot access their accounts and who are unsure whether payments on mortgages and so on have been made. It is a strange incident, although it appears this was a mere case of carelessness or negligence. What has been happening in Britain in terms of the fixing of rates at Barclays Bank is much more sinister and clearly warranted the resignation of its chairman and CEO. That is an ongoing story about which I am sure we will hear more. What happened in that instance is more than mere carelessness or a technical glitch.

With regard to the eurozone crisis, there is increased recognition that a key flaw in the design of the euro and, perhaps, some of the causal factors of the crisis we face was the absence of adequate financial regulation at a transnational level. We all recognise now that there should have been closer banking union alongside the monetary union developed with the common currency. However, when speaking about developments in the eurozone, we must acknowledge and welcome, as others have done, the seismic shift that occurred late last week in terms of a change in policy, with Chancellor Merkel apparently finally giving in, in respect of which she may pay a political price in Germany. This was a welcome announcement for Ireland and a sign of a greater commitment to a united approach to getting out of our eurozone difficulties and of decoupling banking and sovereign debt, which is of huge importance for Ireland. That day will in the future be seen as a critical day in terms of the development of a way out of the crisis. However, when we come to look back at the events that have given rise to the eurozone crisis, the role of Britain or, more significantly, the absence of Britain and the British Government in seeking to find a resolution, will be recorded as a key factor. From an Irish point of view, it is significant that our nearest trading partner has been so absent from seeking to find a resolution of the position. It is most unfortunate that Prime Minister Cameron and his euro-scepticism has damaged the prospects for recovery and has created problems for us and more generally for the eurozone.

Despite the problems we face, Department of Finance figures show that we are meeting the targets set by the troika and project positive growth for a second successive year, albeit small levels of growth. GDP growth of 0.7% is forecast for this year, to which the export sector is contributing significantly. There have also been positive foreign direct investment announcements in recent months, with hundreds of jobs being created, all of which are welcome. These positive announcements will feed into the ongoing path to recovery. The biggest problem in this area is the unemployment rate of 14%, which is disappointingly high. The Government aims to address this through its jobs strategy. The signs are that this will stabilise and fall after 2012. We all very much hope that is the case.

As everyone is aware, one of the biggest problems facing the Government is weak domestic demand, much of which is due to ongoing issues around mortgage arrears. As expressed by the Taoiseach and the Tánaiste, there has been great disappointment among everyone in regard to the slowness with which this issue has been addressed. Despite the establishment of the Cabinet sub-committee on mortgage arrears that appeared to be taking some time. Other speakers referred to the report of the Joint Committee on Justice, Defence and Equality on the heads of the Personal Insolvency Bill. It was evident to everyone when we produced our report in February just how complex dealing with personal insolvency alone was and how important it was that we got this right in the Bill.

The report of the Oireachtas Joint Committee on Justice, Defence and Equality made certain points which I hope will be addressed when we come to debate the Bill. I am delighted, as everyone is, to see the Bill being published and to hear the Minister say it is likely to go through Second Stage in the Dáil before the end of July. We look forward to receiving it in the Seanad in September or October. It is important that we tease out issues on the threshold of agreement by creditors and whether these thresholds remain too high. Some changes have been made since we debated the heads of the Bill but an issue still remains that it may still give creditors a veto.

Senator Darragh O'Brien raised another key question on an independent appeals process. This was raised with the joint committee by the Free Legal Advice Centres and many others. We need to see how we can incorporate something like this into the Bill.

The reduction of the length of the bankruptcy period from 12 years to three is very welcome. We had a very significant debate in this House on the Civil Law (Miscellaneous Provisions) Bill 2011, which has now been enacted, in which we examined the bankruptcy period. I was struck by Senator Quinn warning against over-shortening the bankruptcy period. He did not agree with the one-year period in Britain which he felt was too short and he felt three years was a better compromise. I am glad to see we will see it instituted. However, something that was raised with the joint committee was the issue of bankruptcy payment orders which may survive beyond the three-year period and amount to a longer period in practice. I ask that we examine this, as we might examine thresholds. The joint committee suggested thresholds of €50,000 rather than €20,000 for debt relief notices and that €10 million rather than €3 million for personal insolvency arrangements might be more appropriate. These are all matters I hope we will have a chance to raise during the debates on the Bill. Senator Hayden and I will speak at length on the Bill when it comes to the House.

Criticisms have been made of the announcements by the Minister of State, Deputy Jan O'Sullivan, on the mortgage to rent scheme. In response I state it is a scheme of last resort and Senator Michael D'Arcy addressed it. It will not be suitable for everyone but it is vital we have some final safety net for families who would otherwise be in social housing and who are unable to pay mortgage arrears on their principal private residence. The joint committee saw protection of the family home as a critical aspect of any Bill dealing with mortgage arrears and personal insolvency.

I welcome the breaking of the vicious circle between banks and the sovereign we saw announced at European level. I very much wish the Minister well in his attempts to ensure we can see this circle being broken.