Tuesday, 26th June 2012
Ladies and Gentlemen,
Thank you for being here this afternoon.
I want to say that at the outset, that I regard the issue of mortgage arrears as one of the most pressing economic, social and human problems facing our people.
Behind the statistics are tens of thousands of human stories – of people suffering in many different ways. From those who are afraid that they may lose their homes, to those who are put to their pin of their collar every month to pay the mortgage. The Government is determined to do everything we can to assist people in distress, and let them get on with their lives.
Shortly after the Government was elected, we asked Declan Keane to look at this issue and to provide us with a roadmap for tackling this issue. What we are announcing today, is that substantial progress has been made in converting that roadmap into reality. We are not there yet, but we do have important progress to report.
As you know, the Government’s approach is multi-faceted.
Firstly, we need to change the laws on personal insolvency, to strengthen the hand of those who are in genuine distress, and who need to find a solution to their problems.
We also need to put in place an administrative structure to support the bill, in the form of the Personal Insolvency Service.
Secondly, we need to ensure that the banks are engaging with the customers, and that they are offering a range of products to customers, as outlined in the Keane report, that will be matched to individual needs. By changing the law on insolvency, customers know that, if a satisfactory solution is not found, then there are legal protections open to them.
Thirdly, we need to provide people with support and advice that is independent of the bank, so that they can make important decisions with professional advice and assistance.
Fourthly, we need to look at a number of ways in which local authorities can be involved in assisting some categories of people, who find themselves in difficulties, and who, if they were to lose their homes, will end up on the housing list.
We need to move ahead on each of these elements, and to bring together the different parts of the jigsaw. What we can say to you today, is that important progress has been made. The personal insolvency bill has been approved by cabinet today. It is being printed, and will be published on Friday. It is a mammoth, and ground-breaking piece of legislation, which is bringing about fundamental change in personal insolvency law. The Bill as published will be in line with the scheme of the legislation as previously announced by our colleague Alan Shatter. It will reform the existing law on bankruptcy, and also bring in new forms of legal protection for people who are in debt, short of full bankruptcy.
Separately, the Economic Management Council will be meeting with the main banks tonight, to receive a report on the progress they are making in developing new work-out options for their customers.
During this week, Minister of State Jan O’Sullivan will also be updating you on the work that she has been doing on mortgage-to-rent and other options.
Meanwhile, the Minister for Social Protection, Joan Burton is also making progress on developing a mortgage advice service. This is being developed in tandem with the Bill, and will be fully in place before the bill is enacted. It is intended that people who find themselves in distress with their mortgages will have access both to on-line information, and to personalised professional advice at the point at which they have to make an arrangement with their bank on an option that suits them.
This is a large scale and complex problem, that requires a co-ordinated and joined-up solution. I have said before that I am frustrated at how long it is taking to find solutions. But today, we are announcing that progress is being made and that, working on a number of fronts at once, solutions are being developed.
There is no quick fix. There is no blanket debt forgiveness. We are putting in place options for people who can’t pay their mortgages, not for those who won’t pay. This is not a magic wand. But it is important progress on the path to finding solutions for this major social and economic problem