Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

The reality is that the Government has had concerns. Whereas it is fair to acknowledge that banks engaged in substantial debt forbearance for many individuals, particularly in the home loans area, in recent years - the statistics show that there are more than 80,000 individuals who, in the past four years, have been in areas of debt forbearance for periods of time if not continuously, in that they may only have been making interest repayments on mortgages or paying a portion of capital as well as interest, but not the full sum - banks have been very slow to engage in debt forgiveness. The reality is that those who can afford to discharge their debts should discharge them, whether they are secured or unsecured. However, there is a concern to the effect that there are individuals who, in terms of home loans, for example, are in serious negative equity, do not have the income to discharge capital and interest on their monthly mortgage repayments to avoid arrears, are in substantial arrears and in financial circumstances in which it is clear that, for the foreseeable future, they will not be in a position to pay the full sum of capital and interest and where their negative equity is such that, in truth, the banks or financial institutions do not have security for the money lent. For example, if a bank lent ¤500,000 for a residential home in 2005, if that was the cost of the residential home, namely, if a 100% loan was provided, if that home is today worth ¤250,000, if what was a two-income family has become a one-income family, if there is barely a capacity to make the interest repayments, never mind the capital, and if there are no other major resources, individuals in such circumstances may find themselves either in a position in which they have to seek bankruptcy, in which case they would lose their home, or a personal insolvency arrangement, under which they would have the opportunity to retain their home. If their creditors engage with them, their creditors will have an opportunity to look at what full arrangements might be put in place to facilitate their addressing their debt issues.

There will be families in circumstances like this where debt forgiveness will be appropriate. Members can be assured that, in any representation or discussion that has taken place, that has been explained and made clear. It is one of the options under the personal insolvency arrangement. On the other hand, if someone is in negative equity but can afford to make mortgage repayments, or if someone is in negative equity with one property but has other resources and assets, he or she has an obligation to meet his or her financial commitments if he or she is in a financial position to do so. The alternative is that the banking system will realise even greater losses, which may ultimately impact on taxpayers.

Senator Daly seemed to be getting excited yesterday evening as we concluded. If he is trying to make the case that this legislation has been written by the banks to score some crass political point, I assure him that it is not. If I was the Senator and bearing in mind the contribution his party made in government to destroying the economy of this state and putting us in major debt, in encouraging the property boom - it encouraged people to buy properties at exorbitant prices and looked the other way when the regulatory system completely collapsed - and in being substantially responsible for the mire that the country has found itself in, I would not be foolish and make silly allegations about a Bill that is the most reformist legislation on insolvency in the history of the State and an area of work in respect of which absolutely no work of any description was undertaken during the course of the last Administration's period in government. What I do not want to do today is waste time on trying to score political points against one another.