National Housing Co-operative Bill 2017: Second Stage

I welcome the Minister of State, Deputy Michael D'Arcy, and again congratulate him on his appointment.

I move: "That the Bill be now read a Second Time."

I welcome the Minister of State to the House.

This is an extremely important Bill and I am relieved that it has been allowed in the Seanad because there were questions about whether it would create a charge on the Exchequer. I asked the Master of the High Court, Mr. Ed Honohan, who is largely responsible for preparing the Bill, if this was the case and he stated definitively, "No". The other aspect that might have created problems is the question of property rights. In light of the fact that the public good in the Constitution trumps every other right, I have never understood why Governments have not had the guts to appeal to the public good in passing legislation.

I pay particular tribute to two persons: Ed Honohan, who produced the Bill, and Deputy John McGuinness, who is in the process of introducing it in Dáil Éireann. They both have done a very great deal of work on it.

Yesterday, we held a press conference in Buswells Hotel and the only people to appear there were from The Irish Times and RTE radio. I saw nothing whatever reported about this, which is extraordinary. Those present were Mr. Mike Allen from Focus Ireland, Fr. Peter McVerry from the McVerry trust, Mr. Austin Byrne from Right 2 Homes, Mr. David Hall from the Irish Mortgage Holders' Organisation, Mr. Jerry Beades, Mr. Brian Reilly and Ms Caroline Lennon-Nally.

I look at the Press Gallery and I see nobody there. That is most disappointing. If there are any reporters listening to or watching this on their units in their offices, I appeal to them to take note of this debate and to report it in some detail.

Neither I nor Right 2 Homes and the others involved claim that this Bill is perfect. It is the start of a debate. We would like the Government to take note of it. We would like the Government and my other colleagues here today to put down amendments to make it a good Bill. We will not try to rush it through.

The debate has been allocated one hour and 45 minutes and the Bill will be left in suspended animation on the Order Paper in order that it can be continued because we believe in co-operation. This issue is a disaster facing this country. If members of the public realised what was coming down the line, they would be in a panic. The authorities cannot deal with 7,000 people being homeless. They are incapable of dealing with that. What happens when that number increases to 10,000, 20,000, 30,000, 40,000 or 50,000 people, as will surely happen when Allied Irish Banks, under the instructions of the European Central Bank, unloads the distressed mortgages? I would like to put in the figures but I cannot give any definite figures because there is quite a range of figures available to people. In terms of people's right to a home, the number of accounts is 60,000, the number of people directly affected is about 250,000, and the total debt outstanding is €14 billion. I cannot confirm that because there is a dearth of demographic and statistical information. One of the first things we need to do is to scope the complete dimension of the problem. However, we have some figures from the Central Bank. On 31 March this year, there was a total of €8.8 billion in outstanding balances on mortgages in arrears for more than an year on private homes, covering 41,000 accounts in total. The total in arrears on private homes came to €2.6 billion. In March of this year, private home accounts in arrears for more than a year made up 5.6% of all residential mortgage accounts. Clearly, we have a very serious problem facing this country.

Have people forgotten that eviction is a dirty word in this country? Charles Stewart Parnell and Michael Davitt throughout the 19th century fought against eviction. I find it astonishing that an Irish Republic should stand over eviction, and not only that but that it should invite the vulture funds into this country to buy up the slack and make a profit out of it. There is no other motive in vulture funds, other than vulgar profiteering. What has happened here, just as at the time of the Famine, is that a rigid economic theory is being implemented as if we were some kind of a laboratory experiment but we are dealing with real people. We are dealing with human misery. We are dealing with people who for years have been tortured by financial worries. When I look at the European Central Bank it makes me grimace. These were the people who illegally forced this country into redeeming the bonds of bondholders and taking on board the gambling debts of the Irish banks, and then they turned around and did precisely the opposite in Cyprus, so there was no principle involved. We paid out €65 billion. The bondholders were laughing all the way to the banks. Some of them bought up the bonds at 5% of their face value and the Irish taxpayer was forced to redeem them at 100% of their face value. When the vulture funds move into this country, take over the distressed mortgages and evict people, guess what the cherry on the pie is. The Irish taxpayer will be presented with the bill for the evictions. They can be very costly, involving the cost of helicopters, the police, the sheriff's office, dogs - the whole works. It is like forcing the Jews to pay for their own execution during the Second World War. It is an absolute disgrace. To think that the Government gave them charitable status, what in the name of Christ is charitable about the vulture funds? They were given that status so they do not have to pay tax. They got away with €77 million in profits and they did not pay a single red cent to the Irish taxpayer under their deeds.

I find this quite an extraordinary situation for any Government in which to find itself. I am very glad the Green Party, People before Profit and all the small parties have supported this Bill. I have spoken to my friends and my colleagues about this Bill. Senator Colm Burke said on the Order of Business this morning that this was a very important Bill, that there were things wrong with it, which I accept, but that it should be debated in this House and left on the Order Paper. All the smaller parties support it. I have spoken to my friends in the major parties and they have all agreed in principle with this Bill. How could they do anything else? That wonderful man, the Jesuit, Fr. Peter McVerry, said he did not know how anybody in Ireland could not support this Bill. It is inarguable; there is no case against it. The Bill is not perfect. It is intended to start a discussion on this issue.

What has happened here can be seen right across the Continent of Europe and in United States of America, and it is the reason Donald Trump got elected and it is the reason for Brexit. At the time of the financial crisis when this was just beginning I asked the Government to institute a Minister for home protection, not homeland protection, not a neurotic reaction to a perceived terrorist threat, but a reaction to the threat of people being evicted from their homes, a Minister for home protection to ensure Irish citizens would have a roof over their heads. Ireland is unusual in Europe in that we have a very large amount of home ownership. There is a something in Ireland about land and about people having their own home, not renting but owning their home and having that to which to go home.

With regard to the banks, they have learned nothing. They are precisely the same as they were before the financial crisis. The banks have taken it upon themselves to close down campaigns. I will not specify all of them but the Ireland Palestine Solidarity Campaign is one. It was a good, decent, peaceful campaigning organisation but the banks decided unilaterally to close down its accounts. They have also closed down the accounts of some embassies in Ireland. That was bloody high-handed of them, in particular given the Government has such a large stake in these banks. They also started charging outrageous and illegal interest rates, which forced some people into losing their homes and some people into losing their lives. I remember at the beginning of this crisis somebody saying fatuously: " Well, nobody lost their life." Quite a few people, put under this enormous financial terror, have taken the ultimate step to take their own lives.

This Bill proposes to create a new agency, a national housing co-operative, which will move in when groups like Allied Irish Banks unload this enormous number of shares, creating a possible avalanche of homelessness. The housing co-operative will take over the distressed mortgages at the current level of value. It will then rent them back or remortgage them to the original owners in order that they can stay in their houses. That is a really good response.

I do not understand how the bloody vulture funds got into this country in the first place and how they were given this privileged status. I like the former Minister, Deputy Michael Noonan. He has been an admirable, honourable politician, but I do not know how anybody could say that vultures were a good idea because they cleaned up corpses. I cannot understand how any Minister in an Irish Government could make such a gaffe. What we are talking about here is not a bird, snake or animal corpse but the corpse of the well-being of Irish citizens.

I am happy to move this Bill, particularly in a period when somebody like Mike Allen, director of advocacy at Focus Ireland, says that no strategy to tackle our housing crisis can succeed unless it stems the flow of families losing their homes on a daily basis. In Dublin this year, over 70 families a month lost their homes. Let us just think about that. That means 70 ordinary families losing their homes.

I will finish on this as I understand that I have a few minutes left. The capital required would be secured by a 20-year bond secured against the properties and we believe that we would have the backing of major international financial institutions to do so. This is because long-term 20-year loans are at a uniquely low level and the financial institutions are looking for something good that is guaranteed to take up. It is for that reason that this Bill creates no charge on the Exchequer.

We should ashamed of ourselves as an Oireachtas if we do not take on this issue. I would like to quote Edmund Honohan, Master of the High Court, when he addressed us in both Houses of the Oireachtas. He said:

Gentlemen [he should of course have said Gentlewomen as well but we will forgive him, he is, after all, the Master and not the Mistress of the High Court] you are the gatekeepers of legislation. Do not pass the buck.

I thank the Leas-Chathaoirleach.

I welcome Deputy John McGuinness and his colleagues to the Gallery.

I formally second the Bill. I welcome the Minister of State back to the Seanad and I would also like to acknowledge the presence of Deputy McGuinness from Kilkenny and the enormous amount of work that he has done in the Upper House, and indeed outside of Parliament. He has been a constant advocate on this matter.

The Lower House, I should think. The other House.

In the Dáil. The other House, let us say.

The lesser House.

It is important to acknowledge the enormous work that my friend and colleague, Senator Norris, has put into forwarding this Bill. I am delighted to second it and to have been asked to do so. Let us add some context here. What are we talking about? The purpose of this Bill is to provide for the establishment of an industrial and provident society we call the national housing co-operative society. This society would have the mandate and powers to acquire, manage, rent or sell distressed mortgages so that the occupants of houses can move from the status of distressed mortgagor by means of a mortgage to possibly a rent and mortgage. It is important that we get that context right.

Senator Norris mentioned facts and details on this matter. I got an email this morning from a contact who had been in touch with the Central Bank. These are the latest figures, which I will now share with the House. A total of 278 homes were repossessed in the first quarter of this year. We also know that 1,645 legal proceedings have been issued for the repossession of family homes in that first quarter. It is important to quantify some figures around this debate so as to get some sense of its urgency and importance.

I was struck by two simple words used by Senator Norris, namely, "financial terror". I think that brings the message home clearly. We all know friends, members of our family and colleagues who have lived in terror every day as they try to honourably meet their financial commitments to hold and secure a roof over their heads and those of their family and loved ones. That is a noble cause and one which should be supported by everybody in the Houses of the Oireachtas. Everyone has a right to a home. The consequence of doing nothing is that thousands of people will end up on our social housing list when we already have a national housing crisis. It is imperative that the Government steps in through a mechanism like this Bill and tries to give some support to people who genuinely need it.

It is also very important that this not be seen by anybody outside this House as some form of charter for those who can pay but will not do so. It is important that we get this message out. There are people who can pay but choose not to, who do not want to discharge their honourable debt to honourable financial institutions. This is a really important line. We are trying to deal here with vulnerable people in their own family homes. Senator Norris's Bill sets that out very clearly. Since the financial crisis in 2007, the level of home mortgage arrears has reached alarming levels with serious social and economic consequences. An urgent intervention is required to stem these expensive and exceptional circumstances, as well as the expensive litigation involved in taking actions through the courts to effectively evict people from their homes. If people are driven from their homes for inability to pay the mortgage, both the social and economic implications for this country are devastating.

The National Housing Co-operative Bill 2017 seeks to resolve the difficulties facing home owners with mortgage arrears and to find and broker resolutions and solutions to prevent people from being turfed out of their homes by the banks and vulture funds. It is envisaged that the national housing co-operative, when established, will purchase the properties and related debt from the various lending bodies. This will be subject, of course, to a degree of nuance and change and this is where the legislation is perhaps somewhat weak. As Senator Norris has said, however, this Bill is to kick-start the issue and get the debate going. He has indicated that the Bill is open for amendments to make this better legislation. It is incumbent on us as parliamentarians to bring proposals forward and to draw on the expertise and knowledge across all parties and none in order to make this better legislation. That is our job and we should settle for nothing less.

Significant benefits would flow from this Bill. Most people would be able to remain in their homes and would have greater security of tenure. Repossessions would be limited to very exceptional circumstances. I reiterate that those who can but will not pay should get no comfort from this legislation. That is really important.

I will conclude by sharing some more facts. We need to deal with facts and figures if we want to get to the bottom of this issue and put in place meaningful and proper measures such as this Bill attempts to do. I quote from figures released by the Central Bank in June 2017. These figures indicate that the number of mortgage accounts in arrears for principal dwelling houses further fell in the first quarter of 2017. This has to be welcomed. This marks the 15th consecutive quarter of decline. A total of 76,422 accounts were in arrears at the end of March, still a significant number, amounting to a decline of 1.4%. There is a decline then, and we know why that is happening, but the number is still very significant. The number of mortgage accounts classified as restructured by the end of March came to a total of 120,894. That is very telling.

Let us make this personal. We all know neighbours, friends and colleagues who are only paying interest-only mortgages. This is unsustainable and cannot go on. There is a crisis and we need to understand that. The Central Bank figures also mention the number of buy-to-let mortgage accounts in arrears. As of March these amount to 24,500, which is a phenomenal figure.

I point out to the Minister of State that financial terror has reigned over so many people. So many people's lives have been destroyed. So many people were unable to go on living because of this terrible crisis over mortgages and homes. So many people bought their first family home with great expectation and pride for that was to be their family homestead. That has fallen away for so many people. We owe it to them to do something here.

I will conclude by thanking Senator Norris for setting out this Bill and for inviting people to add and detract from it and make it better legislation. For far too long politicians from both of these Houses have belly-ached on the radio and in the media about distressed mortgages and the financial ruin that people have suffered as a result. It is time to speak up and be accountable, to put their words into action and come to this House to support this legislation.

Senator Murnane O'Connor has eight minutes.

Fianna Fáil supports the Bill in principle, however, we believe it is incomplete.

Fianna Fáil's position on mortgage arrears is that every effort should be made to keep families in their home. It has been ten years since the onset of the financial crisis but no sustainable long-term solution has come from the Fine Gael-led Governments to tackle the issue and assist families in genuine mortgage arrears. That is a fact. Fianna Fáil published a mortgage resolution office Bill in 2013, which would have allowed an independent office to assist families. The previous Fine Gael Government rejected it, as its preference was to allow the banks to retain a veto. This discouraged families from engaging with the banks to resolve their mortgage difficulties, as they believed the banks did not have their best interest at heart. Even though there has been a very slight decrease in those in mortgage arrears for more than two years, there are still 33,000 homes in mortgage distress and in the past two years there has been a worrying increase in the number of mortgages that are in arrears for more than 90 days. This remains a major challenge.

Fianna Fáil is bringing forward a Bill on mortgage arrears resolution, called the Mortgage Arrears Resolution (Family Home) Bill 2017. Deputy Michael McGrath is moving the First Stage of the Bill in the Dáil today. I know a group has been working on the Bill for the past few months. This campaign led by Fianna Fáil to remove the veto power from the banks and other lenders has been ongoing for a number of years but Fine Gael has refused to budge. It is still said by MABS and personal insolvency practitioners that the biggest hurdle is dealing with mortgage lenders. This new Bill would use the current insolvency mechanism, but it would remove the banks' veto. It would force the lender to come up with a sustainable long-term solution. If the lenders do not come up with a solution, then the mortgage resolution office, which is under the personal insolvency service, will create a mortgage resolution order. This would involve the office coming up with a sustainable long-term solution and allow families to stay in their homes.

Fianna Fail supports the principle of keeping people in the family home and while it supports the intention of the National Housing Co-operative Bill 2017, there are some very serious questions and concerns that need to be addressed. While well intentioned, the Bill lacks clarity and at a minimum requires the availability of €5 billion and the recruitment of at least 300 staff. In debating this legislation we have been absolutely honest and clear about what is possible in the context of the Bill. As it stands the Bill will be stopped before it enters Dáil Éireann as it will not receive a money message. Opposition parties or groupings are prevented under Article 17.2 of the Constitution from passing legislation that involves significant cost. From reading the Bill, it is clear that it is a money Bill and only the Government can proceed with a money Bill.

It is estimated that the co-operative will have to raise at least €5 billion. If this money is to be raised through bonds, as was the case with NAMA, this will ultimately have to be guaranteed by the State. The Bill, as drafted, it is not clear on the function of the co-operative. It is unclear from the Bill whether the homeowner is activating the process or not, and how much control the home owner has in this process. That is a significant issue. There is such a lack of clarity that many issues have to be resolved. Under the mortgage-to-rent scheme, for all its flaws, the home owner must initiate the process.

This Bill is also unclear about whether the house or the debt is sold. In NAMA's case, the loans were purchased at a discount and the bonds used to fund NAMA were guaranteed by the State. It is unclear whether the co-operative will become a landlord or a landowner. For example, the Long Title refers to the possibility of the co-operative renting distressed mortgages. This again highlights the incompleteness of the Bill. In some cases the Bill suggests that home owners will have to give up their house but remain in debt. This certainly would not serve the home owner. It is unclear what the co-operative will actually own, whether the house, the loan or both. It is unclear what the homeowner is giving up. Given that the co-operative will need State support in terms of guarantees, the lack of clarity over the function of the Bill is likely to cost the State and the home owner. Evidence suggests that repossession is currently not the primary issue, it is typically the steps before that point that are causing stress among home owners.

Fianna Fáil is today bringing forward the Mortgage Arrears Resolution (Family Home) Bill 2017. We believe the Bill offers genuine, practical and constructive solutions to assist families to stay in their homes. It is far less complex and has a far more practical cost base and will not require a money message.

We support this Bill, in principle, and it is about everybody working together, getting information and making sure that people stay in their homes. We have a housing crisis. We have people losing their homes. However, I believe that Fianna Fáil, Fine Gael, the Independents, Sinn Féin and the Labour Party need to work to make sure that people will have the chance to remain in their homes. I congratulate Senator Norris and Deputy John McGuinness because I know they have worked hard on the Bill. It will take all groups working together to ensure that people and families do not lose their homes.

Senator Kieran O'Donnell has eight minutes.

I welcome the Minister of State, Deputy Michael D'Arcy. I may not agree with everything in the Bill but I agree with Senator Norris's sentiment and applaud his intent. This Bill was before the Oireachtas Joint Committee Finance, Public Expenditure and Reform, and Taoiseach a short time ago and I see the committee Chairman, Deputy John McGuinness, in the Gallery.

I have had time to reflect on the Bill. I asked myself the following questions. Do we have a problem with people with mortgages? The answer is "Yes". Why have we a problem? It is a legacy issue. In the years 2005 to 2007 many people bought houses at an astronomical cost because the property market was allowed to run on unchecked. We are talking about responsibility. Fianna Fáil has to take a share of the responsibility for that.

The issue is how to address this problem now. The Bill before us is about effectively addressing the issue in terms of the vulture funds, a view which I share. We need to take a serious look at how the banks dispose of their loans. From the discussions I would have had with people who are involved in property and in property rental, there are concerns in the Dublin market about the level of control some of the vulture funds have in the property market. We need to look at this issue. Perhaps we need to introduce controls in the market. We cannot have a situation where a large group has some sort of control over property rentals.

I have a number of questions on what is proposed in this Bill. It has been stated that the State will have to underwrite the funding. It may be regarded as another mini-NAMA. The structure is not that different. Second, on the question of the European Investment Fund, it is proposed that the rules would have to be changed, but could the rules be changed? Is that a practical measure?

The French Prime Minister proposed it.

I am posing the question.

It is a very good question.

Does the Bill do anything to increase the supply? The most significant issue in the housing market at present is the level of supply. The Bill does nothing to address the issue of supply, but basically deals with a group who have distressed loans with the banks. The other issue the Bill does not address, is the issue of sustainable mortgages. The problem is that people bought three bedroom, semi-detached houses up and down the country, and took out mortgages for close to €300,000. This was crazy. It was not sustainable to service such a mortgage. If the loan is moved to a national housing co-operative, the entire debt on the house is moved. The banks must come to a resolution. If the debt is written down to what is regarded as a recoverable amount, the banks have already taken the hit on their balance sheet. Why should they be selling the debt on to somebody else? Why should we not come up with a mechanism where the bank can deal with the individual mortgage holder?

There is much doublespeak going on here in that, ultimately, it suits the banks to sell loans in large numbers and not have to deal with the issue. I would put it a different way. We have bailed out the banks at considerable cost. Even with €14 billion of face-value book loans purchased at €5 billion of a write-down value, it is €9 billion that the taxpayer has already bailed out. When I speak about the taxpayer I am talking about the citizen, the person on social welfare who is paying VAT on goods purchased. These people pay excise duty on drinks and cigarettes. It is the holistic meaning of the term "citizen". They have already paid for it. The question is whether the solution lies within banks.

This has brought about at a critical time a discussion around how we deal with what we know colloquially as vulture funds but what are large investors in multiple loans sold by banks. The discussion is about how we deal with them selling home and residential loans, not to mention small business loans. We must consider whether banks must step up to the plate and accept their share of responsibility in giving mortgages to people. They were being doled out like confetti. I was elected as a councillor in 2004 and met people who got mortgages they should not have got. Everything was set up to give mortgages to those people. We have a very fundamental idea instilled in us, referenced by Senator Norris, in that we value the ownership of our home and we see it as an aspiration of everybody to enable somebody else to own a home. Even if this goes to a co-operative, it does not change the basis for a home owner, who still has a full loan and may end up as a tenant. These people may never own their home. We need to find a structure to enable people to own their home. The banks are doing write-offs so they can be sustainable. They have already done the write-off on their balance sheet as it is.

I have a few points on the structure of the Bill. I referred to this in the finance committee and I am trying to be constructive. I am working from the view that we are now at a juncture where we must look at maintaining people in their homes and, additionally, getting them back to being in control of the purchase of their homes over time. The co-operative can either buy the loan or the property. If the co-operative buys the property, the individual would remain as a tenant. Such people would not own the house, despite living in it before. They would probably be entitled to a form of rent supplement or housing assistance payment, and the State would effectively be paying for it. The worry would be that the national housing co-operative would create another residential mini-NAMA. We need to move beyond that and put the responsibility back on the banks to sort out the mess they created so people can remain in homes.

The mortgage-to-rent and other schemes must be examined again to see if they are fit for purpose. The worry is there are many questions about funding and this does not bring about any increase in supply or lead to sustainable mortgages.

The houses are on the market.

It is something we must address and the banks must deal with it. If they have written down loans to €5 billion, they have been written down by approximately 80%. My maths should be better.

The Senator is into injury time.

Why should vulture funds or even the national housing co-operative, even with its merits, be able to pick that up at a reduced rate? Why does the home owner not get it when the write-off is already there?

I welcome the Minister of State and say "fair play" to the activists, Senators Norris and Boyhan, Deputy John McGuinness and all the other people who have made it possible for us to discuss this Bill. I acknowledge its attempts to stop the tide of citizens and families being turfed out on the streets. It was apt earlier when Senator Norris spoke about evictions, because that is what they were. As legislators, we are facing the question of whether the Government will continue to condone evictions. My party and I certainly cannot stand over that.

This is not a perfect Bill but we do not deal with perfect Bills. We get Bills and we do our best to make them perfect through various stages of scrutiny and debate. I am glad Senators Norris and Boyhan have said they would welcome amendments. Today, it is all about the principles and spirit of the Bill, and it is a spirit I am very happy to support. My party has brought legislative proposals before aimed at giving borrowers a chance, at least. For example, our land and conveyancing reform Bill in 2013 could have made a huge difference but, sadly, it was rejected. The same old Government line has triumphed since in that the banks must come first and the borrower and rights of consumers are bottom of the list. We have seen this in delays dealing with the tracker mortgage debacle, which I see as a crime. The closure of rural facilities and the flotation of AIB reflect the attitudes of banks and them never being reined in to be held accountable. When we invite representatives of banks before the finance committee, we have seen even in the past number of weeks that they have refused. The excuse of the partial flotation of AIB has been used, with all the other banks trotting out the same lines that they will not come in for a number of months. That is not acceptable.

That is the mentality that has us in this position and it must change. The former Minister for Finance, Deputy Noonan, rolled out the red carpet to vulture funds. This time last year, I put to him at the economic dialogue gathering as to whether he had quantified exactly the amount of money lost through the sweetheart deals he was giving to vulture funds. He never addressed the matter and he saw those funds as a solution. I certainly never agreed with him in that respect and they are part of the problem. Vultures do not kill but they prey on the carrion. These funds actively kill off small businesses and attack owners. They are predators rather than simply vultures.

As has been noted, there is an idea in Ireland about land and home ownership that we should cherish. There is also a history in Ireland of corruption, cronyism and protection of the golden circle. We can consider the €67 billion given to the banks we are here to speak about and we forget that we are paying €7 billion or more every year just to service that debt. It is €7 billion that could be used on physiotherapy and health or other services that people are in desperate need of around this country. We should all be clear that the banks got away with it and continue to do so. That is why what we are discussing today is so important.

Some people tell us there is a low rate of repossession in this country but that ignores the so-called voluntary surrenders and, more importantly, the context. The same banks wrecked the country, destroyed the economy and made tens of thousands of people unemployed, as well as forcing people towards emigration. We are now speaking as if everything is okay and we have full employment. Nevertheless, I come from an area with unemployment rates of more than 30%. How can that be explained? The banks have gotten away with the major part they played in bringing that about.

As people have try to recover, the banks have come knocking on the door, saying that we owe them. We have it backwards. In a normal context this Bill would be unnecessary.

There will always be a small number in society, as alluded to, who through bad luck will fail to repay their mortgage. There will also be a number of people who can pay but will not do so, in respect of whom there must be the possibility of a threat. When we have a societal and economic issue of this scale, a different approach is needed, but the conservative powers in the State simply cannot contemplate that type of action. That is the crux of the problem. They promised limited actions, but even are not being taken. A review of thresholds and the processes for the personal insolvency arrangements, including SMEs, to raise them, where appropriate, was promised. The establishment of a dedicated new court was also promised, but, again, that has not happened. The Government promised to work with the Central Bank to amend the code of conduct for mortgage arrears, but that, too, has not happened. All of these things have not happened because of the policy that the banks must come first, but they have never been held to account. It is excruciating to witness their arrogance and the benign attitude the Government has shown towards their behaviour, but they could not care less about citizens because they know that there are no sanctions and that the close knit elite will not bring their friends to account. They also know that there are no sanctions against those who engage in white collar crime and they have had all of the evidence they need even in recent weeks.

There are questions about initial financing and the way a co-op would operate. We will, therefore, need information as the Bill progresses. A lot of work will need to be done to iron out the concept until it resembles what is a living entity. My party is prepared to put in the hard work with others as these are societal and economic issues that need to be addressed. It is not just a banking issue, even though we have concentrated on the banks today, but we have a duty to act. However, we must also act responsibility and consider the full consequences of our actions. The Bill should progress and Sinn Féin will support it on this Stage.

I express a huge "thank you" to Senator David Norris for spearheading the Bill. It shows once again his humanitarian and caring nature and activist role. I also recognise the work done by Deputy John McGuinness who is in the Visitors Gallery. I thank all of the housing and citizens' groups which have supported Senator David Norris in his wish to bring forward the Bill.

This is a housing issue. Everyone present probably has experience of family members being harassed by the banks in the past few years; therefore, they know how people's confidence can be destroyed. People have received telephone calls from banks on a daily basis. Pressure has been put on individuals, families and their children. The distress caused has been shocking, atrocious and totally unacceptable. The Bill will go some way towards addressing the problem.

In the past year the Civil Engagement group, of which I am part, has focused heavily on the housing crisis. Last year I introduced the Vacant and Derelict Sites Bill as a means of tackling the ever-expanding housing waiting lists. The aim of the Bill before the House is to prevent homelessness from occurring in the first place. It should, therefore, be well supported and commended. As a member of the Oireachtas Joint Committee on Housing, Planning, Community and Local Government, I have advocated for much stronger action by the Government to end homelessness and tackle the catastrophic rise in rents, particularly in the Dublin region. Since the beginning the Civil Engagement group has focused on adopting a social approach to housing. We view it not as an investment but as a right. We want to see strong action being taken by the State and locally to deal with the issue. An important part of our approach is the principle contained in the Bill to protect those who are already in homes. The new Minister for Housing, Planning, Community and Local Government, Deputy Eoghan Murphy, has admitted that the Government will not meet its target to house Ireland's homeless and get them out of hotels and other emergency care settings. The former Minister had ambitious targets and it is sad that they have not been met. I hope the Bill will go some way to protecting those who are slipping into homelessness. Prevention is better than cure. Society would be much better served if we were to find a way to help people to stay in their homes rather than try to assist them after they have lost them.

On the insolvency laws and vulture funds, the Bill aims to give a fresh start to borrowers, to allow mortgagees or borrowers to buy their mortgage debt from the banks and create a new co-operative society that will rely on the European Investment Bank in providing the funding required to buy secured loans from lenders. The Green Party supports the principles behind the Bill. Certain points need to be teased out and I hope that will happen in the coming weeks. I agree, in particular, with the aim of the Bill to deal with the issue of insolvency and tackle the parasitic vulture funds in Ireland. The housing crisis is being seen purely as a financial issue, but that mindset must be turned around. The Bill should be about providing support which I believe is the approach proposed by Senator David Norris. My party wholeheartedly supports the Bill on this Stage. I look forward to making further inputs as it passes through the different Stages.

I welcome the new Minister of State at the Department of Finance. This is the first opportunity I have had to be in his presence since his appointment and I congratulate him on his promotion.

I acknowledge the Bill before us and Senator David Norris's input into it. It deals with an important matter that affects so many members of society. There are issues in the housing market that need to be addressed. How they are addressed will be key in how we address societal issues. For me, the key issue is the lack of supply and house building. The former Minister for Housing, Planning, Community and Local Government, Deputy Simon Coveney, and the new Minister, Deputy Eoghan Murphy, have made moves to address the key issues involved. Lack of supply is one of the key issues we must tackle in order that we will again have an active housing market. Some infrastructure has been built to open up sites, but lack of State investment in infrastructure and the need for a direct input into social housing schemes are key issues that need to be addressed in order that we can increase housing supply.

The Bill tries to deal with legacy issues. Perhaps we might put a small version of NAMA in place or ask the banking industry to deal with them. How we address them and get everyone on board will be key in solving the housing problem. Some people have struggled badly in the past few years and we need to ensure a process will be put in place to help them. There have always been people who struggled but yet managed to pay their way. We need to ensure we will bring such persons with us also. It is, therefore, a balancing act.

Trying to access credit and a credit rating are key issues in the housing market. There is an issue for people on the so-called working wage in taking out mortgages to enable them to access the market. From my point of view, the key issue is the lack of supply. We need to build more houses and open up the market. If we do so, I hope we will share the ambition of ensuring everyone will be able to own his or her home. We must ensure people will have an opportunity to invest. That is what most people want. They want to own their own home. That is an idea we should promote.

There are measures that need to be looked at through the Department of Finance so that these issues can be addressed. I am sure the Minister of State, Deputy D'Arcy, will use his influence in the Department of Finance to ensure that these issues can be addressed. If we do not address them, the cycle will begin again, and the cycle - in many ways, the boom and bust - is a key issue we have now. We cannot have another boom-and-bust scenario. We have seen inflated prices in the past six to eight months, or even longer - probably the past 18 months - that we need to address. It is all about trying to get these sites open and get supply in the market. The Minister of State will have a very tough remit with these issues, but I am confident he can deal with them.

The Minister of State is very welcome to the House, and I congratulate him on his promotion. It is a great honour to serve the Irish people as a Minister, and I know he will do his best. I compliment Senator Norris and Deputy McGuinness and the others who worked to bring the Bill forward. I listened very closely to Senator Norris's contribution. He openly and honestly said this is not a perfect Bill. As a former Minister of State, I do not think I ever brought a perfect Bill to the Seanad. However, if we listen to the debate and discussion, we can improve on every Bill, and the Senator has openly accepted this.

A few remarks have been made in this debate to the effect that the Bill does not deal with supply. I think Senator Norris will accept this is the case.

I actually-----

The Bill deals with demand. If one stops people losing their homes, one stops demand increasing-----

-----so we must look at this in a logical way. If the Minister of State wants to deal with supply, I can give him many suggestions on how to do so. One very simple suggestion would be to introduce legislation on short-term lets. This could provide 2,000 units overnight just within the Dublin area, not to mention Cork, Leitrim, Galway or wherever else this could be done. If the Minister of State wants to deal with supply, there are mechanisms that can be used. We are trying to reduce demand. I have listened to comments to the effect that the Bill needs to be a money Bill. I am not convinced it does, but we can discuss and flesh that out.

I remember when Deputy Willie Penrose introduced bankruptcy legislation that it was constantly said that as a result of the changes in that legislation, the sky would fall in if we let people off with bankruptcy of less than 12 years. It was said everyone would be going bankrupt, etc. The sky has not fallen in. People have been able to get on with their lives, start up new businesses and buy homes due to that Bill, so Members should not be too quick to say the Bill before the House is a bad idea. It has a lot of merit.

The Sinn Féin Seanad leader in her contribution said the Bill needs amendment. Everyone who supports the Bill openly said that it does and that it can be amended and improved. It is on Second Stage in the House so that we can start that discussion and conversation. I would very much like to see the Bill progress to Committee Stage, when we could have a robust interrogation of the Bill and how we can improve it not in a party-political sense, but in a way that will help people facing huge arrears.

Is there an opportunity for families to purchase their loans at the price they are being sold on for? We see loans of €200,000 being sold on for €90,000. We all know families in Ireland would come together and chip in and would make an effort to buy that home if it were offered to them at €90,000. Can we start looking at such mechanisms?

That is my proposal.

This is the debate the Bill is allowing to take place. However, this will not solve everything, which is why the co-operative and how it can be purchased is an innovative idea. There are pension funds, the ECB and investment institutions that are looking for what I call moral ways to invest money. They are looking for returns but they want to make a contribution to society.

I very much appeal to the two major parties in the House to allow the Bill to progress. Let us work on it together and see how it can be improved. Let us see what we can learn from the debate and the discussion. The proposals in the Bill do not claim to represent the font of all wisdom; they beg a discussion and a proper debate that we can have on Committee Stage, when we can take further evidence. The Bill could be improved, but let us get on with the work.

I have always said that I do not want to see anyone left behind, but thousands of families are being left behind, and we must examine how we can assist them to make sure they have roofs over their heads. We must ensure that as few people as possible lose their homes. I thought there was adequate legislation and that the Central Bank rules would reduce somewhat the inflated housing prices, but that is not happening. Senator Kieran O'Donnell said we do not want it to happen again, but all the signs are there that it is happening again. Young people are becoming more and more pressurised. They are not even that young; they are in their early 30s. They are in their family formation years and are desperate to buy a house, have a home and start a family and they are getting pushed more and more into these inflated house prices. I very much worry that we are at the beginning of a cycle in which this will all happen again. This is why it is so important to make sure we do everything we can to assist the people who were burned and crucified through the last recession. I believe this Bill starts that conversation.

As I said, I commend the people who assisted in introducing the Bill, namely, Deputy McGuinness and Senator Norris, but let us not leave it lying around. Let us progress it and see how we can improve it. I would like to make some amendments to it and I will further engage with Senator Norris later in that regard, but let us move on and get about the business we were elected to do, that is, to pass legislation that protects the citizen. I again thank Senator Norris for proposing the Bill.

I start by congratulating Senator Norris on bringing this Bill before the Seanad. I also commend my colleague, Deputy John McGuinness of Fianna Fáil, who has been promoting this cause since before 2011. I do not think a month or a week goes by that he does not bring this cause to the fore. I also echo the sentiments of many of my colleagues that the spirit of the Bill cannot be questioned. However, some small amendments regarding funding and the minutiae would probably be suitable. It is said the devil is in the detail.

There is a section of society that has been left behind. My friends, perhaps in 2003 to 2007, were given €500,000 to buy apartments with very little light in not-so-great parts of the city which would now cost, if they tried to sell them, €150,000 or €200,000. People are left saddled with debt. We also have families that might have lost their jobs, that have small amounts left on their mortgages and whose houses are worth quite a substantial amount, and banks are forcing them through the courts system even though the amount left on the mortgage is minimal compared to the value of the house. This is absolutely unfair. It does not matter how much one's house cost; if one has been there for 20 years, reared a family and invested a lot in one's area and community, one should not be forced through the courts system and the strain of being evicted, as has been referred to, from one's family home. It is an absolute disgrace.

I agree with Senator Humphreys. I am a solicitor and I can see that a frenzy is starting again. It is a bubble. Everyone is saying they must have a home. People are talking more about investment property. There is talk of going back to relaxing the mortgage credit lending rules, which I do not agree with. We saw from 2003 to 2007 that 100% mortgages were being given to people who had absolutely no income and perhaps no possibility of any income in the future. We must, therefore, be very mindful of not relaxing the credit rules, instead introducing measures that will increase supply. Fianna Fáil has looked at measures relating to VAT, planning and certification rules.

There are ways of reducing the cost of building houses and ways of increasing supply. We also discussed the "use or it lose it" tax on land. There are many plots of land around the city which are left vacant, with owners sitting on them and not building because they are waiting for even more inflated prices, although they do not know when they are going to come. I think it is very unfair to have these vacant sites around the city, where people want to live.

Fianna Fáil is this week bringing in a mortgage arrears resolution Bill. One of the plans brought in by this Government was the PIP, or professional insolvency practitioner. The main reason this measure failed was because banks were given a veto on whether to implement the PIP plans. From the outset, there was an outcry that this was not going to work and, lo and behold, it did not work. I do not believe the PIP plan was the solution. The Fianna Fáil Bill will get rid of the banks' veto and will bring in a more streamlined courts system. I welcome this Bill and hope it will go some way towards helping people stay in their homes.

I am glad to support Senator Norris's Bill in some shape or form and I commend him on bringing it to the House. As he said, the real elephant in the room is supply. I do not think the number of people affected by arrears will be increasing from now on and the number seems to be slowly decreasing. At the same time, they are there and it will be very hard for them to get out of that trap. In the short and medium term, their situation will not get better unless Bills like this give them a chance to move on. We are a First World country. We should not have people who are almost imprisoned by their mortgage as this affects not only their family life but also their mental health. It is wrong that this would happen in this day and age. I again commend Senator Norris and I commend my colleague, Deputy McGuinness, and the others in the Visitors Gallery who have been spearheading this Bill.

Déanaim comhghairdeachas leis an Aire Stáit nua, an Teachta D'Arcy. Go mórmhór, gabhaim buíochas leis an Seanadóir Norris agus an Teachta Dála McGuinness as ucht an Bhille an-thábhachtaigh seo. In welcoming the Minister of State, Deputy D'Arcy, to the House, it is my first chance to congratulate my friend and colleague and to wish him well in his new Department and new brief. It is a very important Bill that we are discussing this afternoon. I congratulate Senator Norris and Deputy McGuinness, who is in the in Visitors Gallery, for their work, as well as all those who have worked with them on the Bill.

The important point from today's debate is that we should not allow this Bill to vanish into the ether, as I said on the Order of Business. Notwithstanding that there are different viewpoints on the Bill, there is a need to have not just a conversation but a national conversation. The national economic framework forum met today in Dublin Castle and the Oireachtas all-party committee met on the housing issue prior to the formation of this Seanad. It is important that the overarching aim and spirit of the Bill are what we should all work to achieve, and that means we must abandon the high tax and spend of Sinn Féin, the fiscal prudence of Fine Gael or the catch-all of Fianna Fáil in order to arrive in the middle. This is about citizens of our country being able to be kept in their own homes, being able to buy or being able to work together to ensure we have supply of housing.

In saying that, we must consider the backdrop. I understand the sincerity of Members of the House but sometimes, when I hear Senator Ardagh talk about Fianna Fáil bringing forward this or doing that, I have to wonder whether I am in a dream, because it was the party in government that nearly bankrupted the country. I am sure if T.R. Dallas wrote a few more songs, they would be bestsellers. We are now where we are, however, and what we must do is ensure that we achieve what Senator Norris is trying to achieve at the end of this.

I do not necessarily buy the argument that we should always be looking at our debt burden, although I might not be popular in Fine Gael for saying that. It is about people. It is about ensuring that people can stay in their own homes and that, as Senator Norris said on the Order of Business yesterday, they are not evicted or removed. We should not be going to the courts in this regard. I have a viewpoint which is something similar to that of Senator Norris. Senator O'Donnell touched on the vulture funds in his remarks. Why can we not have some type of co-operative, as Senator Norris said, where people can go to get money and make payments? If we look at what we are paying in rent allowance, housing assistance, hotel accommodation and the whole nine yards, I often wonder what would happen if we had some kind of vehicle whereby citizens could go and take out money and have a type of a mortgage. We are spending a fortune on our budget for all the housing supports, which are needed and which we all support. I am simply posing the question of whether there is a better way of doing that.

Supply is the big issue. We need to look at how we can incentivise the construction sector to provide supply in order to ensure we are doing everything possible-----

The Government is supposed to be building thousands of houses but we still have not seen them.

Senator Murnane O'Connor------

The Minister, Deputy Coveney, promised thousands and we have only 200.

The Leader, without interruption.

I am reminded of the line in the song "I've looked at clouds from both sides now". Sometimes the clouds the Senator are on-----

They were supposed to build thousands of houses.

This debate is going to be a futile mess if Members insist on introducing partisan politics into it. I think that would be a disgrace.

We will move on. I ask the Leader not to be provocative.

I am not talking about him, particularly.

I was making the point that what we need is a sustainable model whereby people can access credit. We bailed out the banks, whether we like it or not, and they have a moral duty to work with citizens. That might be populist but it is the reality. All of us in this Chamber and in the other House are dealing with customers of banks, whether private or commercial. I repeat that the banks have an obligation and a moral duty to work with all of us. I worry that we are heading down the road of the old-type bank, where they were seen as being vastly superior to all the rest of us. That cannot be allowed to happen.

This is about ensuring we have a new way of doing business. That is why I commend Senator Norris and Deputy McGuinness on challenging the status quo and challenging the Department of Finance thinking. Without being personal, some of the people in the Department are the people who were there in the old days. We need to challenge that mindset because if we do not challenge each other, then we cannot find the pathway forward, irrespective of our political ideology. I understand the Government has a different viewpoint on parts of the Bill. That is why it is important that we do not defeat the Bill today. We must have a national conversation. We have a White Paper on different policy documents, whether in regard to defence or education. While I am not being partisan, to be fair to the Minister, Deputy Coveney, and the Minister of State, Deputy English, Rebuilding Ireland was the first serious attempt in a generation to build housing. The Senator's party did nothing except run away.

No provocative language, please.

None of us accepts the situation where there are people in hotel rooms, people being evicted and people having uncertainty regarding their place of residence or their home. None of us wants that to continue. That is why housing policy must ensure we get a balance between the provision of social housing and private housing, and that we incentivise the market so we can have more people involved.

If schemes need to be changed, let us do that. To be fair to the Minister, Deputy Eoghan Murphy, he said in his opening remarks as Minister, and the Taoiseach said in his first day in the Dáil, that there will be a review. Senator Ardagh has made reference in the past to the buy-to-let scheme and the whole issue of supply for first-time buyers. If we have to tear up the whole playbook, let us not be afraid to do that. This is about our fellow citizens. Some of us are lucky enough to have the money to buy a house or have a mortgage, and we cannot just wash our hands and absolve ourselves of responsibility. We are legislators. We have a task to do this and we are doing part of it today in this House. That is why it is important.

The other point concerns the model of financial services.

I am worried about our banks. I am concerned about the way in which the credit union movement is being treated as well and I make no apology for saying that. We must always ensure we have a viable credit union movement, which is accessible to people who require finance, and we must equally ensure we work with the people who build houses as well. They are not pariahs in some cases. We know who were the pariahs in the past but we need a healthy and vibrant construction sector, which can build houses.

I commend Senator Norris, in particular, and Deputy McGuinness. This is not the most perfect Bill but this is a conversation we need to have.

Four Senators are offering but I will call the Minister at 2.20 p.m. If everybody, therefore, keeps their contributions reasonably short, I will get everybody in.

I welcome the new Minister of State to the House. I congratulate him on his appointment and I wish him well. This is vitally important legislation. It is much more important than the discussion that has taken place over the past week about judicial appointments because this matters to people in their daily lives. This is about keeping them in their family homes and protecting their physical and mental well-being.

This is one of the most important Bills to come before this Seanad because it is about protecting real people who have been disenfranchised by the financial world within the State supported by the Government of the day, whether it was the current and previous Governments or the Fianna Fáil-led Government which was in office prior to them. The banks were bailed out and supported, but they have offered no support in return to those who wish to remain in their homes. That is a disgrace on the part of our financial and political institutions.

The legislation may have its flaws. I do not recognise them but others have commented on them. The legislation deserves respect and support. I congratulate Senator Norris and, in particular, the chairman of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, Deputy McGuinness, for bringing it forward. It is radical, creative and reflects outside-the-box thinking that very often does not happen within the Civil Service. The financial sector is not only running the political show in Ireland; it is running the political show across the world. I did not understand this until I paid to do a masters degree in finance a few years ago. I soon became educated in the fact that big finance is running governments across the world. Policy decisions that are taken, whether it is in this House or the other House, or in parliaments throughout the world, are infiltrated by vested interests from the financial sector disguised as lobbyists and, therefore, those interests are always protected against the best interests of the consumer, or the home owner in this case. The Master of the High Court and other eminent researchers have said that the repossession statistics will increase at least fivefold over the next two years. Last year, there were approximately 5,000 repossessions and this will increase to 25,000 over the next two years if nothing is done.

There has to be an alternative solution because currently banks are frustrating people to the point of breaking them and, in some cases, they are using receivers. They are paid to do this. Vulnerable home owners are scared out of their wits. They are seeking medical interventions and they are forced to give up. Eventually, their homes are repossessed through the courts and they end up on the social housing waiting list. It will cost the State much more in the long term than the Bill would ever cost. The legislation provides a solution that can be tweaked if needs be but it is the path to sustainable homes for many people.

Receivers in the buy-to-let sector are operating on behalf of banks and vulture funds. The banks will say the receiver is acting on behalf of the borrower but that is not the case. I have a case where a receiver was appointed and sold two properties for a total of €127,000 but only €62,000 was allowed against the loans. The receiver, therefore, took more than half the money raised. The State is permitting banks and receivers regulated by the Central Bank to operate in this fashion while the borrower has no protection. That is unacceptable in a democratic society.

We have to stand up to big finance because it is laughing at us at the moment. The Bill is a step in the direction of taking them on properly and standing up on behalf of the ordinary man and woman who has taken out a mortgage and hit hard times, and who through no fault of his or her own, has lost a job and is unable to repay an unsustainable mortgage. The mortgage is a joint agreement between the lender and the borrower and that does not apply when the bank calls in the loan because the banks are taking no share of the loss. They say they may be doing underhand deals but there is not much evidence of that.

With regard to the fund that is to be established, the EU has an obligation to assist the State to deal with this residual issue because the ECB put such pressure on Ireland in 2008 and 2009. This makes economic sense and there are many ways to justify it economically but I do not have time to go into that. In the long term, this would be cost effective for the people affected and for the State. It would provide value for money and keep people in their homes. Reference was made to the need to provide additional housing. If the Bill is not accepted, there will be a need to do so for those who are in houses with unsustainable mortgages.

There are many ways of looking at this. If these issues are not dealt with, our mental health budget will have to be increased because people are at breaking point. I have visited families who were so distraught that they were unable to explain their circumstances. How can they take on the might of these financial institutions? When they seek legal advice, that is costly and they may not have the money to pursue it. There are many caveats. The Bill is sensible and I wish it well. I am happy to support it and I commend Senator Norris, Deputy McGuinness and the representative groups on the work they have put in. They are bringing forward a creative solution using outside-the-box thinking, which is urgently required. Approximately 10% of the 760,000 mortgages in the State are in arrears of 90 days or more. When one drills down into that number, €8 billion worth is in arrears of 360 days or more. This serious issue is coming down the tracks and if it is not dealt with now, there will be an avalanche of destruction over the next 24 months.

I call the Minister of State. I congratulate him on his promotion and I welcome him back to the House.

I thank the Acting Chairman. It is a pleasure to be back in the House. Senator Ó Clochartaigh seems to be present every time I am in the House.

I am the Minister of State's greatest fan.

The Senator is very kind.

I would like to respond to the Minister of State.

It is good to see that Senator Norris has moved to the centre.

I am the floating voter.

There are major issues. Affordability is the biggest issue and the Bill does nothing for people who want to purchase property. The problem with the rental sector is that not only is there a lack of housing, too many people are renting.

Until we have houses that people on average salaries can purchase, they will be renting. There is huge pressure on rent.

I am pleased that the Senator accepts this is the start of a debate and I am happy to start it. In our opinion, and that of the Department of Finance, there are enormous deficiencies in the Bill.

We need a Minister who stands up, faces down the Department of Finance and does not get bullied by it.

We are having the debate. That is why we are here.

I agree with the Senator. As a result of our history, in this country the word "eviction" is a dirty word. We also have to understand and accept that there are very few evictions. Senator Daly said there were about 5,000 to date. To put that into context, there are 170 evictions a day in the UK, and there were 45,000 evictions in 2016.

(Interruptions).

No one from the Gallery is entitled to speak. Only elected Members will speak here.

The position in which we find ourselves is of great difficulty for some people. I want to put the figures on the record now. There are 121,000 private dwelling homes in the State that are now in arrears, and 87% of those loans have been restructured. Some 15,700 homes are under pressure. I do not know whether Senator Conway-Walsh made her statement with or without the required knowledge, but her statement was incorrect. She said €7 billion was paid to service the national debt for the banks. That is completely incorrect.

It is being paid to service the debt that is being privatised.

That is incorrect.

What are we paying-----

The national debt is €200 billion. In 2007, it was €40 billion. The banks will cost the State €30 billion. The extra €140 billion is a result of the deficits we ran between 2007 and 2017. We ran, on average, a €14 billion deficit per year for ten years. They are the figures. The €7 billion figure refers to servicing the entire debt. They are the exact figures.

The Minister of State is saying that €30 billion-----

The figure of €30 billion of €200 billion is a result of the banks. The figure of €7 billion refers to it all. Our deficit is €140 billion. They are the figures. It is important to put them on the record.

Senators O'Donnell and Humphreys spoke about the prospect that, at some stage, somebody would be allowed to purchase his or her loan at a reduced rate. We had the same conversation when we spoke about the IBRC loan book that was traded – Senator Norris was in the House for that debate. I do not know if that can be done. My personal opinion is that the matter should be considered. Under those circumstances, there is a benefit for the individual.

My criticism of the Bill is that if it is passed, the debt still stays with the individual.

A reduced debt.

We do not know that.

The Bill does not deal with that.

The debt stays with the person. While the property might transfer, the amount may or may not be reduced. The full debt is still liable to the person who signed on the dotted line; that is the responsibility of a person who signs for a mortgage.

People have huge debts.

They are the points I want to address. I also accept the bona fides and the spirit in which the Bill is proposed. Everybody would like to do something for people facing the appalling vista that is the pressure of being in debt.

I thank Senators for introducing the Bill. I know it is motivated by a genuine desire to assist those suffering with long-term mortgage arrears and the fear of losing their homes.

I do not want to be rude to the Minister of State. Will a copy of his script be supplied?

There is no requirement for the Minister of State to do so, but perhaps he may be able to do so.

I will get a copy for Senators. The Government cannot support the Bill because, if brought into law, the Bill as drafted raises very serious concerns from a number of perspectives, including housing policy. The Bill could lead to the State housing budget being reallocated from social and affordable housing to the blanket purchase of mortgages in arrears for the benefit of individual mortgage holders.

In terms of fiscal implications, the Bill could lead to reductions in spending and other Government priorities in order to fund the proposal. It could also lead to a breach in the State's fiscal targets., the meeting of which have allowed the State to return to economic and employment growth. In terms of fiscal stability, the Bill, as drafted, would incentivise an increase in mortgage arrears, given the ability to transfer costs from individual borrowers to a State-backed scheme, with no impact for the individual borrower. This would follow an impressive 15 consecutive quarters of decreases in the levels of mortgage arrears and would also be likely to undermine wider payment discipline, with consequent costs in terms of higher interest rates for the majority of holders who are paying their mortgages. In addition, there are no substantive details provided for this proposal and no worked-up business case. Based on the information provided, it is virtually impossible to see how a large mortgage book of non-performing loans can be turned into a performing security eligible for low-cost funding without a massive capital injection.

There is no evidence that the proposed national housing co-operative society could issue bonds. The establishment of a co-operative would require significant levels of capital and there is no information contained within the proposal about where this capital would be found. The level of capital required to acquire €13.9 billion of outstanding non-performing loans would be significant and it is not possible to see how the State could provide this capital without breaching fiscal rules. There is also no evidence that the co-operative could be kept off balance sheet. Furthermore, the Bill raises state aid and competition issues, and could prompt the European Commission to open an excessive deficit procedure against Ireland at a time when we have repaired the damage to Ireland's reputation at EU level and globally.

The Bill states; "The availability of EIB funding at historically low interest rates for bodies providing housing and the potential to refinance housing debt from this source" as justification for the Bill. There are serious difficulties with this approach, including the fact that European Investment Bank, EIB, will only lend to viable business proposals and there is no basis for how this proposal is viable. It is difficult to see how the viability of this proposal could be established when a business case is reliant on borrowers with poor credit records making regular payments. Even if viability could be established, any funder, be it the EIB or a third party, would likely require a significant risk premium to fund this project. Therefore, no cost funding cannot be assumed. The EIB will only provide half of the funding for any project, so the private sector would have to provide at least the other half of the required funding. For the reasons outlined already, any third-party fund will charge a significant risk premium for this proposal. Furthermore, the explanatory memorandum displays no understanding of how the ECB operates as it suggests that the co-op would, through a secured property bond, raise the total needed from the ECB and EIB with a combination of 15 and 20-year fixed interest rates.

The ECB cannot directly fund this proposal. It could only purchase such a bond in the secondary market if it was properly marketable, rated and met all of the required conditions. However, it is highly unlikely to be able to do so as the co-op would have to be off balance sheet. The bond would have to be bought by the private sector and would have to be performing, none of which would appear possible.

I will touch on the Government's response on mortgage arrears. Members will be aware that the Government has already introduced the mortgage-to-rent scheme which enables borrowers unable to restructure their mortgage to remain living in their home as a social housing tenant. My colleague, the Minister for Housing, Planning, Community an Local Government, recently adjusted this scheme to make it more flexible and accessible to a greater number of borrowers. It is also the case that the Department of Housing, Planning, Community and Local Government and the Housing Agency are initiating pilot projects to explore potential mechanisms that would facilitate investment into the residential market by private equity firms using the mortgage-to-rent model. Should these pilot projects prove successful the refined MTR model would eliminate the need for a national co-operative society proposed in this Bill.

The Government has also introduced personal insolvency legislation to provide a framework to allow indebted borrowers to restructure their debt in a sustainable way by means of a personal insolvency arrangement with priority being given to the objective of facilitating the borrower to remain in the principal dwelling where possible. This legislation was further amended to introduce a court review of PIAs which included the family home which had been rejected by the lender. The court now has the power to impose the PIA on the lender if it forms a view that the proposal is the most reasonable and best alternative to bankruptcy. The insolvency service reports that the level of applications for PIAs has increased since the introduction of this court review.

Part 3 of the personal insolvency legislation is currently the subject of a review for which the public consultation phase will close on 30 June. The outcome of this review will be laid before the Houses of the Oireachtas in due course. The term for this charge of bankruptcy has been reduced from 12 years originally to three years, and last year was reduced to one year for applicants who fully co-operate with the process, allowing people to start again in a reasonable timeframe.

Last October the Tánaiste and then Minister for Justice and Equality, and the Minister for Social Protection launched a new Abhaile home mortgage arrears resolution service.

The Minister of State has two minutes left.

Abhaile facilitates State-funded access to legal advice and-or consultation with a personal insolvency practitioner for indebted borrowers to ensure that they are fully informed about all available options to address their mortgage debt. The Consumer Protection Act 2015 has been enacted to fill the consumer protection gap where loans were sold by the original lender to an unregulated firm. The Act introduces a regulatory regime for a new type of entity called the credit servicing firm. These firms are now subject to the provisions of Irish financial services law which is applied to regulated finance service providers. Importantly, this remit ensures relevant provided borrowers whose loans are sold to third parties maintain the same regulatory protections as prior to the sale. These protections include protections under the various statutory codes and regulations issued by the Central Bank of Ireland. It should also be emphasised that the sale of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the original contract.

The Minister of State has one minute left.

I will not finish this in a minute, if the Chairman could indulge me, please.

Members will also be aware of the code of conduct on mortgage arrears, CCMA, which set out how mortgage lenders must treat borrowers in or facing mortgage arrears, with due regard to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits, with the objective of at all times assisting the borrower to meet his or her mortgage obligations. Members will see from the range of initiatives to address mortgage arrears already implemented, that the Government is already committed to providing support for borrowers in mortgage arrears and will continue to address outstanding commitments contained in the programme for partnership and the Action Plan for Housing and Homelessness.

On 8 June, the Central Bank stated that there were 735,000 primary dwelling home mortgages outstanding at the end of the first quarter of 2017. Some 90% of these accounts are not in arrears. The majority of mature categories of arrears, including those in long term arrears, are now declining. There has been a reduction of 46% in the number of primary dwelling homes accounts over 90 days in arrears since the peak of the third quarter 2013. This cohort stands at 53,100 accounts. The equivalent reduction in buy-to-let properties in arrears over 90 days is almost 36%. Accounts in arrears over 730 days now number almost 33,000, with outstanding balances over €7.4 billion.

These figures indicate that where borrowers actively engage with their lender under the CCMA, it is more likely that an equitable arrangement will be found and the borrowers will be able to remain in their family home which is everybody's objective. I believe the introduction of the National Housing Co-operative Bill could undermine that good work to date by encouraging indebted mortgage holders eligible for a mortgage restructuring arrangement to wait and see how this legislation pans out. This would be a negative outcome and mortgage arrears would continue to increase, leaving them with a larger debt to resolve in the future.

Could the Minister of State conclude please?

This Bill would have an adverse impact on the ability to undertake secured lending in Ireland which is ultimately dependent on the financial institutions' right to realise the security if needed, and priced accordingly. This is the cornerstone of secured lending and an effectively functioning mortgage market.

It is the cornerstone that drove this country bankrupt.

There will be no interruptions and the Minister of State will conclude now.

I reiterate the Government's strong opposition to this Bill for the reasons outlined and urge Senators not to pass the motion for this Bill. It is important that any proposal for such far-reaching legislation would have been thoroughly researched in terms of the current situation, the expected impact and outcomes, and be subjected to rigorous regulatory impact analysis so that the resulting draft legislation is based on clearly established facts and all the potential consequences, both positive and negative, are foreseen and properly considered in advance.

I thank the Minister of State. Clearly, we will not finish this today. The next speaker is Senator Ó Clochartaigh.

Tá mé ag seasamh inniu agus mé ag tacú leis an mBille atá tugtha chun cinn ag an Seanadóir Norris agus lena bhfuair sé cuidiú ón Teachta McGuinness agus daoine eile lena réiteach.

I am disappointed with the Minister of State's response. We have heard many different contributions today. Generally people have said that they agree in principle that there is a major crisis and people have to be helped and so on. It becomes a little tiresome, especially from the Minister of State and the Government Senators, when they give us those types of sentiments and then the Minister turns around and gives us a litany of excuses as to why these people cannot be helped rather than coming in here in a constructive way to say that he agrees with the Bill and while there are issues with it, let us work together and see how they can be improved, and giving his own suggestions.

There were very few suggestions from the Minister of State on how to improve this Bill which is very disappointing at a time when we realise there is such a crisis. If we have the wherewithal in the Department of Finance to devise the animal that is NAMA, which can organise a fire sale of bargain basement proportions for vulture funds to come in and buy up properties in the State, surely we have the wherewithal and expertise to improve Senator Norris's Bill to create what would be a more humane type of institution that would help people in mortgage distress and would really follow the spirit of this Bill. I do not believe that the Minister of State cannot come with more positive proposals at this stage.

When people come to write the history books in years to come, Rebuilding Ireland, which the Leader mentioned earlier, will probably go down as one of the greatest works of fiction of the 21st century. We can look at the situation in Galway at the moment. In 2016, the previous Minister, Deputy Coveney, who has been lauded as having done great work in this area, told us that there was a target of 1,126 social housing units which were supposed to be built in Galway city and county in 2017. How many have we got? Fourteen. How many will we get next year? Fifty five, according to the targets. That is in Galway city and county where we have over 4,000 people on social housing lists.

Senators tell us that it is a supply issue which of course it is. However, the problem with a supply issue is that the Fine Gael-Labour Party Government, and previous Fianna Fáil Governments, have all left the supply to the private sector. We need State intervention. We need a State building programme that will build social and affordable houses for people who need them and take the pressure off the private rented market which will see the exorbitant rents being charged for private rented accommodation brought down.

If we build social and affordable houses for people who need them, it will take the pressure off the private rented market, the exorbitant rents that are being charged to people in private rented accommodation will decrease and it will stop the practice of people being housed in hotels and paid for by the local authorities. There is a supply issue and the Government is not taking any real action to address it.

I agree with the Leader's comment earlier that a considerable amount of money is being spent on HAP, rent supplement and so on. Approximately €870,000 is being spent over a six month timeframe by Galway City Council to house 24 families in emergency accommodation. What level of mortgage would that support? Why can that money not be spent on construction of social and affordable housing rather than be squandered in that way? That cannot be done because of Government policy, not only of this Government but of previous Governments. Sinn Féin has brought forward legislation in this area. For example, we have called for the 15 derelict sites in Galway to be bought by the local authorities for the purpose of social and affordable housing provision. That would take some of the pressure off the supply side.

It is important consideration is given to the intervention suggested by Senator Norris to address of the mortgage crisis. I have been in the repossessions court in Galway and have seen the stress people are under and the David and Goliath struggles that are going on in the courts. In fairness, some of the county registrars are standing up to the banks. Many people are severely stressed as a result of having to attend repossession hearings in the courts for months on end. The banks have no problem bringing in solicitors and barristers and paying them huge amounts of money but most of the people in mortgage arrears do not have two pennies to rub together. They cannot afford that type of support. In Galway, the repossessions court is no bigger than a shoe box such that most of the people against whom repossession cases have been taken cannot get into the room to listen to their cases being dealt with. It is a disgrace.

That Fianna Fáil is rubbing its hands about this crisis is appalling.

It would be more in line for Sinn Féin to focus on fixing the problems in the North.

Senator Ó Clochartaigh to continue without interruption.

Fianna Fáil has no credibility on this issue.

Sinn Féin has enough on its plate up North.

Sinn Féin is the most noteworthy party in this country. I never thought I would say that. It is the only left-wing party in the country too.

I have given Senator Ó Clochartaigh some leeway and I hope it will be appreciated and he will conclude soon.

Fianna Fáil fuelled the property bubble and it introduced the regulation that was in place at that time. It allowed the 100% and 110% mortgages to be given by the banks. For Fianna Fáil to be crying crocodile tears at this point is not good enough. We know Fianna Fáil cannot be trusted on these issues.

This model, which is a NAMA for the small people, is an important one. Sinn Féin supports the model in principle but we will be bringing forward amendments on Committee Stage. It is about time the Government put its money where its mouth is. It needs to use money more wisely and stop depending on the private market to resolve the crisis it created, to put real money and effort into the build of social and affordable housing and to take account of the measures we have brought forward on rent certainty.

Unfortunately there are two speakers remaining but as we have gone over time they will have to wait until the resumption of this debate to contribute.

Before we conclude, because I do not believe we will come back to this Bill, the fingerprints of the Department of Finance were all over the Minister of State's speech. It must be stood up to.

The Senator will have an opportunity to respond another day.

We need political direction. What was said was absolute rubbish. In regard to the Minister of State's point that there were only 5,000 evictions, how would he feel if he had to look every one of those 5,000 Irish citizens in the eye and tell them that?

The Senator will have an opportunity another day to raise those issues.

May I respond to Deputy Norris?

I want to respond to Senator Norris.

I cannot allow the Minister of State to do that.

It is not ideal for people to have their houses repossessed. The Senator does not have the monopoly on this, not for one second.

I was reiterating the Minister of State's own words.

I ask for some decorum, please.

Debate adjourned.
Sitting suspended at 2.35 p.m. and resumed at 3 p.m.