Paschal Mooney (Fianna Fail) | Oireachtas source

We already dealt with this matter in some detail on Second Stage and I know the Minister made some responses that were very specific and which I am sure she will repeat again on Committee State. Nonetheless as Senators Cullinane and Byrne have done, it is important that we record our opposition to this proposal.

The submission on the Social Welfare and Pensions Bill by FLAC and the Northside Community Law Centre stated: "What is particularly disappointing is that this is being done when there is no evidence, let alone any guarantee that banks are positively encouraging solutions that will keep people in their own homes." On Second Stage I said I was concerned that the banks ultimately have a veto. In the Personal Insolvency Act and every other piece of legislation the Government effectively caved in to the banks. The Government can put whatever spin it likes on it, but the banks rule, okay. They will rule even more now that a number of other banks have pulled out of the Irish market.

The FLAC and the Northside Community Law Centre submission stated: "The initial justification for reducing MIS was that it was only going to banks." This is something the Minister has repeatedly said and one has great sympathy with that situation. I would be completely ad idem with her on that; why should the banks be gaining at the expense of the taxpayer in the current economic climate? The submission continued:

However, that was not its purpose. It was and remains an important housing support. If MIS is lost, then people may not be able to support their mortgage, leading to unsustainable mortgages and ultimate repossession with the risk of further costs to the state in rent supplement and social housing costs.

Let us consider the change in the law during the past 12 months. It will now allow more repossessions. When we tie that in with this proposal, one might question whether there is an unstated Government policy to allow a rush of repossessions. I genuinely hope that will not be the result of this proposal.

I echo a point made by the Free Legal Advice Centres organisation and I endorse what FLAC and the Northside Community Law Centre have stated. The FLAC recommendation is that "Mortgage Interest Supplement be retained at least until the Central Bank can produce satisfactory evidence that lenders have sustainable strategies to maintain people in their homes without the need for the supplement." Whether the banks will do that is a moot question. Thus far, the evidence suggests they are more concerned about going after repossessions especially in a rising housing market in the Dublin and Leinster area. I am rather concerned about this and I hope the Minister will address that and the other issues that have been outlined by my colleagues.