Many thousands of families and households have been eagerly awaiting the Bill before the House. I welcome the fact that we have at least been presented with legislation in order that we might engage in a debate on the most important issue facing the 70,000 or so people who are in mortgage arrears, those whose homes are in negative equity and individuals who are experiencing severe distress as a result of personal indebtedness. As already stated, those to whom I refer have been awaiting legislation to deal with the problems they are experiencing. Many of them are in impossible, even unsustainable, situations.

The stakes are very high for the people in question, namely, those who are at the sharp end of the crises relating to mortgage arrears and personal indebtedness. However, the stakes are also high for our entire society. The scale of the mortgage arrears, mortgage distress and personal indebtedness to which I refer is probably one of the key reasons that recovery, growth and demand in the wider economy are being smothered. People who are at their wits' end trying to pay off mortgage or other debts - they really cannot afford to do so - are obviously not going to be in a position to spend much money in shops, retail outlets, etc., which are crying out for customers and which are going out of business at a rate of knots. Everybody in the country has a stake in resolving this problem in a fair, just and sustainable way, to provide some hope and relief to those who are in trouble and to lift the massive burden of debt that is smothering the economy.

In so far as it at least proposes to establish some sort of system to deal with indebtedness, insolvency and mortgage distress, the Bill is welcome. As a result of its introduction, we will now have an opportunity to examine and debate all of the issues relating to this gravest of problems with which we are faced. Having said that, however, my difficulties with the legislation begin almost immediately. The Oireachtas Library and Research Service does all Members of the Houses a great service by producing Bills digests. It is both interesting and telling that the digest of the Bill before the House begins by referring to the context of its introduction. The context set out by the Oireachtas Library and Research Service is the need to update the legislation relating to personal insolvency due to the fact that the current system is wholly inadequate and, in fact, virtually non-existent. The digest also states that laws which stipulate that people must remain bankrupt for 12 years are extremely punitive in nature and just do not fit the current situation. In so far as the digest puts this forward as the legislative context in which the Bill is being introduced, this is true. However, the digest misses out on the fact that we are faced with a bigger and more immediate emergency which does not really have anything to do with a failure to update legislation and which came about as a result of the extraordinary behaviour of the banks, mortgage lenders and developers and of the political class which facilitated them in pumping up a property bubble. Those to whom I refer were driven by greed and when the bubble they created burst, it literally crashed our economy, ensuring that tens of thousands of people were left in the kind of desperate circumstances to which I refer.

The Bill, in both its provisions and its general thrust, does not acknowledge the extraordinary circumstances that led to the creation of the crisis in which we find ourselves. What we are doing here is not just updating legislation for the modern era; we are required to take emergency measures to deal with an absolutely remarkable situation that developed in this country between 2002 and 2008. In my opinion and, I suspect, that of many others, the victims of the crisis were not at all responsible for its creation. The normal rules and provisions of insolvency legislation, regardless of whether they are updated, are not actually the issue here. This is not a case in which people who borrowed too much and should have known better find themselves in trouble, obliging us to enact legislation to give them a second chance. Insolvency legislation is normally supposed to deal with such eventualities. However, we are not dealing with those eventualities.

I accept that we need legislation to deal with insolvency, and this Bill at least moves us one step in the direction of dealing with the types of situation that can arise at any time. However, we are not dealing with such situations; rather, we are dealing with a specific crisis involving exceptional circumstances that were created by a golden circle of bankers, developers and politicians. The Bill before the House fails to deal with that crisis because it does not acknowledge the crucial and informing context I have outlined. Even though it is not directly relevant to the Bill, it is important to note that the crisis to which I refer has been massively exacerbated by huge increases in unemployment - brought about, of course, by the financial crisis created by the golden circle of bankers, developers and politicians. One could add the ECB to that golden circle, particularly in the context of its policies on interest rates, etc. Increases in unemployment have compounded the effects of the financial crisis and made them even more disastrous in nature.

If the Bill were to acknowledge the existence of the crisis to which I refer, it would stipulate that we need to take emergency or exceptional measures in order to write down the debts that were incurred by those who took out loans in order to put roofs over their heads or deal with the circumstances that prevailed in the period 2002 to 2008. The people to whom I refer are the victims of a crisis that was created by others, and they took out mortgages that have proven to be utterly unsustainable. All these individuals were trying to do was to put roofs over their heads, but they were doing this in a market that was rigged. If we were acknowledging that, we would allow mortgage debt that was incurred during that period to be written down to current market values, or at least to pre-bubble levels. Then we could start to consider what was reasonable borrowing and what insolvency mechanisms should be put in place. There is a bigger context, however. The crisis resulted from what went on between 2002 and 2008. The situation people found themselves in at that time was not of their own making. It has landed us in a catastrophe, just as it landed them in a catastrophe. In my opinion, the portion of such debt that was artificially created by the greed of a few should be subject across the board to a system of debt write-down or forgiveness. I would not include in such a scheme those who were involved in obvious speculation for greed in the commercial property area, or who bought large numbers of properties to rent out in the hope of making a killing in the market, or who speculated on continuously rising property values during that period. I do not believe such people deserve any forgiveness. Some people were doing nothing more than trying to put roofs over their heads, which is a perfectly legitimate thing to want to do at any time. They took out loans that subsequently turned out to be unsustainable because they believed that if they did not get on the ladder at that time, they would never be able to do so. Such people deserve our forgiveness, if that is the right word because it is not as if they did anything wrong. The portion of their debt that relates to the bubble period should be written down.

I will give the House an example of a better legislative model that we should adopt. The legislation that was introduced in Norway after a similar property crisis in that country in the mid-1990s puts the Bill before the House to shame. The Norwegian insolvency legislation had three main elements, all of which are lacking in this Bill. First, a guarantee of the right of the home owner to his or her home - to be housed in his or her own locality - was written into the Norwegian legislation. It was not left up to the banks, made subject to negotiation or suggested that it might or might not happen. It was written into the legislation that the chief imperative of the laws of the state was that people should stay in their own homes. It provided that people were entitled to decent quality housing in their own localities. Second, the Norwegian personal insolvency arrangements defined what "a reasonable standard of living" was, something this Bill does not do. The various arrangements proposed in this legislation will allow the lender or mortgage holder a reasonable standard of living, when such an arrangement is established, but they do not define what that entails. What do we think the banks, which will have a veto, will consider to be a reasonable standard of living? We can be pretty sure they will push for the standard to be very low, perhaps along the lines of our level of social welfare.

The chief imperative for the banks will be to get their money back. That was confirmed to me by the heads of Permanent TSB in the last hour or so at a meeting of the Joint Committee on Finance, Public Expenditure and Reform. We asked them about the priorities of the bank when it deals with people who have distressed mortgages. We heard lots of noble words of concern about the plight of people, etc. When they were pushed, they said their mandate is to protect the capital base of the bank. That is what we heard explicitly in finance committee just now. That is what the banks we have recapitalised are interested in. They see the protection of their capital base as their chief priority. They do not want to protect the right of the home owner to his or her home, or to a reasonable standard of living. They want to protect their capital base. That means the pressure-----

That is good news.

No, it is not.

They did not do that in the last decade. We need them to get the money they are owed.

They have always been interested in protecting their profits. There is no change in that regard. This legislation will give the banks a veto. The pressure will always be on them to get as much as they can, even if it does not leave the borrower with a reasonable standard of living, or with his or her home. Any proposal that is made by the borrower or the personal insolvency practitioner can be vetoed by the bank. The bank has the whip hand. This Bill will not enshrine in law the supreme right of the householder or borrower to a roof over his or her head in his or her own locality, and to a reasonable standard of living that is properly defined. In Norway, the independent assessment agency, which is called the "personal insolvency practitioner" in our legislation, has the whip hand. That body can impose a resolution on the bank. The bank does not have a veto in Norway. An independent body decides what is a reasonable arrangement for the repayment of a loan and what is reasonable standard of living. It has as an imperative the requirement to try to keep a roof over the person's head. It can impose a settlement on the bank. That is the critical difference.

Under our proposed legislation, if borrowers or householders are not happy with what banks are proposing to impose on them, the only choice they will have will be bankruptcy, which will involve losing their homes. They will be able to walk away after three years, but they will have lost their homes. We should not say that losing one's home and enduring three years of bankruptcy is a cakewalk. It is better than 12 years, but it is not a cakewalk. It is not an option that people will take up easily. In light of the chief culpability of the banks in creating this crisis in the first place, why does this Bill give the banks the whip hand? It is even more extraordinary given that we are recapitalising the banks. We really need to tease this out. I hope it happens during this debate.

When representatives of Permanent TSB were at the Joint Committee on Finance, Public Expenditure and Reform just now, I asked them about their relationship with the Government. We have recapitalised Permanent TSB. We are the main shareholder - the only shareholder - in Permanent TSB and the main shareholder in AIB, etc. When we debate what the banks are doing, having been recapitalised, we are told the Government is not very happy with the way they are doing things - how they are treating customers and what they are doing with standard variable mortgages, etc. There is an implication that there is nothing we can really do about these matters because the banks decide the policies. Perhaps we can say things to them, but we cannot determine their policies. That is how things are presented to the public. We are told about the terrible and nasty banks. I asked the chief executive of Permanent TSB about his relationship with the owner of the bank, which is the Government. He said he meets the chief stakeholder - the Minister for Finance - every month. Who is telling who what to do in this relationship? If the Minister for Finance is meeting the heads of Permanent TSB on a monthly basis or very regularly - I presume the same thing is happening in the cases of AIB and Bank of Ireland - why are we as the major shareholders not telling the banks what to do? Are we telling the banks what to do? If we are not happy with how the banks are dealing with distressed mortgage holders - we should not be happy - why are we not telling them to change their policies? If we are not happy with how they are dealing with standard variable mortgages, why are we not telling them to do it differently? The Government should answer these questions. This legislation essentially puts responsibility for dealing with this - the biggest problem - at one remove from the Government, on personal insolvency practitioners, PIPs, and insolvency agencies with no teeth. Ultimately, it gives the banks the whip hand and says they can veto anything.

I am not at all happy with the details of this legislation. People only qualify for debt relief if they have a disposable monthly income of more or less €60. That is very restrictive and is essentially saying that, unless one is absolutely poverty stricken, we will not provide relief on personal indebtedness.

In conclusion, major and radical amendment of the Bill is necessary. The only good thing is the recognition by the Government that we need a system to deal with insolvency but we need to radically amend the Bill to take the whip from the hand of the banks and to put, as the central imperative of the legislation, the need to keep a roof over the heads of ordinary householders who borrowed under extraordinary circumstances created by the greed of banks and to ensure people who enter those arrangements are left with a reasonable standard of living that will allow them to re-engage with, and contribute to, society and not be smothered in debt for years or decades.