During the past week there was much discussion of the mortgage arrears crisis, preparing the scene for yesterday's announcement by the Government. The question of repossessions loomed large in that discussion, worryingly so for many families. The Taoiseach, the Tánaiste and the Minister for Finance, Deputy Michael Noonan, have been at pains to play down any prospect of repossessions. However, the civil servants tell a different story and paint a different picture. Last week the Secretary General, Mr. John Moran, announced that there would be and would have to be more repossessions and was attacked in a rather cowardly manner by Labour Party Ministers and senior figures in the Labour Party.

In response to yesterday's announcement Mr. Matthew Elderfield, Deputy Governor of the Central Bank, was even more clear when he said repossessions had to be expected to rise significantly. He went further by saying that even those families who were engaging with their lenders might end up losing their homes. The reason he is saying this is that the Government's proposals announced yesterday essentially put the banks in the driving seat, about which there is no question. Banks are being given additional powers to set aside the code of conduct. Legislation will be passed to facilitate repossessions of family homes and, overall, the momentum is unquestionably towards repossessions. In addition, there are other issues, including people losing their tracker mortgages if deals are done with the banks. The Government essentially believes that if the banks are put in the driving seat and given the wherewithal, this crisis encompassing more than 182,000 people in arrears will be resolved. There is an essential flaw in that analysis because who will independently oversee the deals that are going to be done on behalf of mortgage holders? There is a huge disconnect between the official language and the reality for people on the doorstep, people who are in mortgage arrears and experiencing the banks coming at them in different ways.

I knocked on a door in Steeplechase in Ratoath yesterday and a gentlemen told me that three of his neighbours had received letters from the banks telling them that they had to sell their homes. This was on the day that the Taoiseach had told me in the House that essentially repossessions were not going to happen, except very extreme circumstances.

The Deputy is over time.

On LMFM yesterday the Tánaiste was similarly lauding this plan. The bottom line is that there are 23,500 people with mortgages in arrears for more than two years. That is very similar to the targets the banks have been given. These 20,000 people are clearly in the firing line for repossessions because the banks have to make offers and proposals. There is no definition of what a deal or a resolution is and no definition of sustainability. Sustainability has to be about-----

A question, please, Deputy.

-----the capacity of borrowers to survive after such a deal is made in their daily lives and keeping them and their families together.

When Deputy Michael McGrath and our finance team put together a debt settlement office Bill, which suggested the establishment of an independent office, the Minister accepted-----

Any chance of a question?

I am putting it.

I have asked the Deputy to do so.

We are five minutes into the business of the House.

Order, please.

The Minister accepted that legislation, in principle. Will he indicate, first, what Matthew Elderfield means by a significant number of repossessions and, second, will he provide, independent of the banking system in its entirety, for independent oversight on behalf of the borrower and mortgage holder because, without question, the imbalance in the relationship between the banks and borrowers------

I call the Minister for Finance.

-----is confirmed and exacerbated by the announcements made yesterday?

First, I congratulate Pope Francis on his elevation and wish him a very long and successful reign in that very high office. I am sure the people of Ireland wish him very well, as I know this House does.

We will have the embassy reopened shortly.

To turn to the business in hand, there will be independent oversight of all these arrangements. As the Deputy knows, the Central Bank is independent in the performance of its functions and has taken on the task of helping to design these arrangements and monitoring them as they are rolled out. As well as this, it is the licensing authority for the banks and, therefore, is in best position to insist on its policies being carried out, and it will do so.

On the various reflections in the Deputy's introductory comments on the repossessions issue, the position is, as he is well aware, that since the Elizabeth Dunne judgment in 2009, there has been a lacuna in the law and there have been no compulsory repossessions. The statistics are for people handing back the keys or agreeing, by arrangement, to surrender homes, but what we are talking about is compulsory repossession. There has not been any because the law does not enable one to do this. If the level of repossession is zero and there is only one repossession in the course of next year, that will be a big increase. The Government has made it absolutely clear that there is a sequence of interventions, cascading down from interest only arrangements to repossession, but that repossession will be used only in extremis. It is not considered there will be a significant increase or a significant amount of repossessions of family homes. However, I envisage repossessions in the buy-to-let sector.

That is a different category. They are commercial investments, people are collecting rents and if they are not servicing their mortgages the best thing for the economy is that these investments are sold to people who can service them.

I call Deputy Micheál Martin. He has one minute left for a supplementary question.

First of all-----

The Deputy has one minute and I am timing him now.

Is Deputy Byrne the new Ceann Comhairle?

I am timing the Deputy.

We need someone to do the job.

Are the Labour Deputies afraid to go to County Meath? They are all here this morning.

His minute is up.

There are more of us than there are of Fianna Fáil.

Could Members respect the person in possession please?

There have been approximately 950 repossessions according to Mathew Elderfield's comments yesterday, and 38 forced repossessions in the last quarter. I do not accept the point that the Central Bank in the context of its functions and remit, and the imperatives and orthodoxy by which it abides will tip the scales in favour of the mortgage holder-----

The Deputy is glorifying it.

Who is the Deputy suggesting would do it?

-----or that there will be a genuine independent approach to resolving the issue which allows sustainability for the mortgage holder.

Is he suggesting a former Fianna Fáil Minister could do it?

The Tánaiste, Deputy Gilmore, was very clear about what should be done before the general election because his view was that for the duration of the recession there should be no repossessions whatsoever.

The Deputy's time is up.

Deputy Stagg should listen to what he said.

He said it would be crazy for the banks to repossess and he wanted a guarantee that there would be no repossessions of family homes for the duration of this recession. He said it in this House and he put it very eloquently-----

Deputy Martin is making this up.

-----and articulately that it should be the case.

The Labour Deputies should calm down. We cannot hear them now.

My point is that when the deputy Governor of the Central Bank says there has to be a significant number of repossessions that does not tally with the language of only in extremis.

The Deputy is on double time now.

It does not tally with the Taoiseach's claim that it would be only in very extreme cases. There is something missing in the equation. The Secretary General of the Department of Finance, John Moran, is saying very clearly that there must be a significant number of repossessions. The Deputy Governor of the Central Bank is saying there must be a significant number of repossessions but the politicians on the Government side are telling us not to listen to any of that. They say the Secretary General spoke out of turn. According to the Labour Ministers he should never have said that.

This is a commentary. It is a history lesson. There must be some former Fianna Fáil Minister who can be independent.

There is a big gap or lacuna between the reality of what the Central Bank officials are saying and what the Minister and politicians are saying.

The Deputy should ask John Moran about that.

The people on the ground are telling us the reality of what is happening.

The Deputy has to conclude his comment and ask a question.

I have been interrupted non-stop. The people on the ground are telling us what is happening in their engagement with the banks.

It is a pity they did not tell the Deputy sooner.

The Government Deputies all know this. We have all heard about small business owners whose overdrafts were cut and so on. The same is now happening to mortgage holders.

A Leas-Cheann Comhairle, this is not the chamber of a town council.

The Deputy has been speaking for about five minutes.

I invite people to go out and knock on doors and listen to what people are saying.

Dealing with the banks on a daily basis is very different from what officialdom says is happening. People are worried with very good reason because of the behaviour of the banks towards them.

They are better off not doing business with them.

I call on the Minister to reply.

What was the question?

Deputy Michael McGrath is the Fianna Fáil Minister for Finance.

When all the grandstanding is taken out of it we all know that people's inability to pay their mortgages is one of the big problems in Irish society. Yesterday, arrangements were announced which will ensure that systematically people will be offered solutions so that their mortgages will be sustainable. The Central Bank will monitor this and provide the targets. The targets announced yesterday were that by the end of June 20% of people with impaired mortgages will be offered solutions. By the end of September that will go to 30%, by Christmas it will have gone to 50% and the residue will be dealt with next year. These are offers to mortgage holders of ways to resolve their positions. Early in the summer the Central Bank will set targets of agreements that the banks must reach. We are at the stage where the number of people coming into arrears has lessened a great deal so we can quantify the problem and we are dealing with it systematically. The Department of Finance is involved but the driver is the Central Bank. People want solutions to their indebtedness. This is what we are doing.

Most of us here have had or have mortgages. One gets the money from the bank or building society and gives it the deeds of the house. The deeds are worth nothing unless there is a legal possibility of the collateral being realised by the banks. It does not work otherwise. If there is no provision in law for repossession there is no mortgage market. Then Deputy Martin would be back in here asking me why the mortgage market collapsed and why young people cannot get loans. Providing for it in law is different from saying this must be a primary option. It will be a residual option in extremis for the family home. That is what I have said.

That is at variance with what the officials are saying.

That is not what John Moran is saying.

Many people here were at the meeting of the Committee of Public Accounts and they know exactly what Mr. Moran said.

The Labour Ministers attacked him.

It is not what the Deputy said. I ask the Deputy to read the Official Report and he will see there what he said.

I have read it. He said our repossessions are much lower than anywhere else.

Inné, d'fhógair an Rialtas an plean úr ó thaobh dul i ngleic le cruachás na morgáistí. I ndiaidh dhá bhliain gan aon rud a dhéanamh, nuair atá dúblú tagtha ar méid na ndaoine atá in ríaráistí morgáiste 90 lá nó níos mó, feictear dúinn go bhfuil an plean sin lochtach san dóigh céanna a bhí na pleananna roimhe sin, mar go bhfuil an Rialtas ag fágáil na sonraí suas ag na bainc arís.

Yesterday the Government announced its latest plan in response to the mortgage crisis. After two years of doing nothing and seeing the numbers in arrears double during its term the Government's announcement has repeated the mistakes of the past. Has the Government not learned the lesson that the banks will do at best the bare minimum and at worst exacerbate the mortgage crisis? All the evidence tells us that the banks cannot be trusted to address the mortgage crisis with which tens of thousands of families across the State are grappling. We have only to look at what the banks have been doing, hiking up interest rates and failing to provide debt write-downs. Over half of those in restructured mortgages have slipped into arrears.

Point of order.

There is no point of order.

This is not the first time that the Government, and indeed the previous Government, have brought forward a plan to deal with the mortgage crisis. When Deputy Martin's party was kicked out of office there were 120,000 families in mortgage distress. Every plan that the previous Administration and this one have brought forward has failed because it has left the decision up to the banks. The Minister knows that 185,000 families are in mortgage distress and that excludes the buy-to-let sector. His plan has left these families at the mercy of the banks once again. If he looks at the figures, which deal only with those in arrears of 90 days or more by the end of this year the majority of those 185,000 families will not even be offered a sustainable compromise or solution.

Why has the Minister not learned the lessons of the past? Why has he not taken the veto away from the bank? Does he not realise that the bank will not do what is required? The threat in respect of capital sanctions is not enough. The Minister knows that the stress test tested those banks and provided the capital to allow for the write-down to the current market value of the property. That is the stick the Minister is using against the banks. The 185,000 families were waiting for an immediate solution not some long-fingering that left it up to the banks to decide how best to resolve their mortgages.

What they need is some transparency, not a veil of secrecy leaving it up to the banks to pick one person off the other depending on what is there. Yesterday, the Minister was not-----

The Deputy is over time.

-----prescriptive about the solutions that were offered. He spoke about debt write-downs but he has not firmly placed it as an option for the banks. Why has the Minister not considered taking the veto off the banks and establishing an independent agency that could compel the banks to accept solutions which they have so far not being willing to accept?

Does the Deputy want us to buy a bank?

What about Northern Bank?

We could blow it up.

Ar an gcéad dul síos ba mhaith liom mo bhuíochas a ghabháil leis an Teachta as ucht seo a lua arís. Maidir leis na freagraí a thugamar inné, níl an plean lochtach ar chor ar bith. Beidh réiteach ar fáil do a lán clann timpeall na tíre nuair a bhéas an plean curtha i bhfeidhm.

There is no flaw in what was put out yesterday. Solutions will be offered to families. It was slow and I have expressed impatience previously about the tardiness of the banks in implementing solutions. Of course, they had ready-made solutions because we entered a situation where the law was inadequate. The Minister for Justice and Equality had to bring in an enormous and complex Bill on personal insolvency. That has been passed and the director of the personal insolvency agency has been appointed. He is scheduled to make a statement at the end of this month. He will be employing personal insolvency practitioners, affectionately known as PIPs, who will intervene between lenders and borrowers to protect the interests of the borrower when arrangements are made.

Then there is a range of solutions cascading down from interest-only arrangements right through to write-downs. We all know from clinic work that some people are just tricking around with repayment schedules, extending maturities or even splitting mortgages. There is a group of people for whom write-down is the only solution. However, it will have to be done on a case-by-case basis.

There are people who would like if we announced some kind of discount. That is not going to happen. There will not be any kind of across-the-board write-down for people who can pay but who are not paying. It will be on a case-by-case basis and this is the way it will be adjudicated.

Hear, hear.

Hear, hear.

Only developers and speculators get discounts.

Some of them even got 50% write-downs.

On the issue of the independent agency, first, there will be a director of the personal insolvency agency who will implement the provisions of the personal insolvency Act with the personal insolvency practitioners. He is independent under the law passed by this House. The driver of this will be the Central Bank which is independent under Statute and the Constitution. It has co-operated with us in setting out the targets. It will take ownership of setting the targets for completed arrangements which are sustainable. It will make those announcements in the summer time.

We accepted some of the ideas the Deputy brought forward in debates. It is important there would be an independent approach. We have it through the director of the personal insolvency agency and the Central Bank exercising its independent function to deal with this. I hope with this we can arrive at a solution.

However, I am not underplaying the difficulties of which we all aware. It is a quantifiable difficulty. I met the boards of all the banks the week before last. In the course of my conservation with the board of AIB, one of the directors asked me if I realised the average arrears in AIB across 35,000 mortgages comes to €13,000. That means half of them are below that and half of them are above that. If the arrears are of that order, then there should be readily available solutions for quite a lot of people to resolve their problems. Others will have more difficulty but we will work systematically through it. The Central Bank will drive it.

The Government has taken a hands-off approach to this. The targets will be set by the Central Bank, which is independent, and will be supervised by it. However, the Central Bank cannot compel a bank to prescribe a set of options. The only action the Central Bank can take in the plan announced by the Minister yesterday is to force the banks to make provisions against the losses of the impaired mortgages.

On non-Irish banks.

The banks have already been recapitalised to do that, so it is not a significant threat.

Will the Minister accept that at the core of the mortgage crisis is the issue that people's incomes have dropped substantially? Some of this has happened because of unemployment. For others, it is because the Government's budgetary polices have picked their pockets of disposable income. Will the Minister accept that each year his budgetary polices are making the mortgage crisis worse? Taking people's disposable income means a reduction in the money they would spend in the domestic economy and how much they can pay on their mortgages.

One only has to look at some of the measures the Minister introduced. There have been increases in motor tax and the duty on alcohol and cigarettes. The new family home tax will crucify people. There will be water charges coming down the line. All of these are adding fuel to the fire.

Diesel.

We know the Government has targeted children and families through cutting child benefit, taxing maternity benefit and increasing college fees.

Where is the question?

Thank you, Deputy.

All these budgetary measures have reduced people's ability to pay their mortgages. This needs to be dealt with in a holistic fashion. The banks need to be forced to do the right thing. I have documents, which I released last week, which show what the banks are doing to the buy-to-let sector. The banks are telling borrowers that if they speak about arrangements or even state that they are in discussions with the banks, they will be liable for any losses the banks will incur.

The Deputy must conclude.

There is no transparency in the Minister's approach to mortgage resolutions. Will he accept that his budgetary position of picking the pockets of people struggling to pay their mortgages is making the crisis worse?

The main thrust of Deputy Pearse Doherty's first intervention was that there should be an independent agency to look after these matters and that this was part of Sinn Féin's policy proposed earlier in the year. Now he is accusing me of having a hands-off approach. If there is to be an independent agency, then it must be independent. The independent agency in this case is the Central Bank, which is very involved in this process.

Yet, it cannot do anything.

The Deputy cannot have it both ways on this.

It is not independent agency, it is just supervisory. What we called for was an independent credit agency. The Minister should not misquote me.

The Minister has the floor.

The Deputy advocated the establishment of an independent agency. When I told him that was what would happen, he said we were hands-off in the Department of Finance and that was no good.

The Central Bank is a supervisory agency.

The Deputy cannot have it both ways. There has to be some logic to his policy positions.

There is not.

He is correct in linking the issue of impaired mortgages to unemployment. Many people have linked it to negative equity and all sorts of other things. If one looks at it properly, the people with impaired mortgages are by and large unemployed. It is because of unemployment that we have this crisis. If we do not introduce the measures we have in the budget and if we do not get the deficit down, we will not repair this economy and, subsequently, we will have more unemployed people. The Deputy might not like the solutions but they are solutions. We are systematically working to get the economy growing again. It is growing faster than anywhere else in Europe, bar Estonia, and we will continue doing that.

The jobs strategy is to get people back to work. Much of this is intractable. It is difficult to find a job elsewhere for someone who worked on a building site for 20 years, no matter what retraining schemes one introduces. The Deputy's solution, however, is to pile deficit on deficit and debt on debt.

It is not about taxing the unemployed.

Order.

That approach would result in more people being unemployed and more impaired mortgages.

Just to pick up on the Minister's reference to the election of the Pope-----

Is Deputy Boyd Barrett wearing red shoes?

The Deputy is infallible too.

Deputy Boyd Barrett without interruption.

What does the Minister think of the significance of the Pope's choice of the name Francis?

The Minister will be aware that St. Francis was the son of a wealthy merchant who made the decision to repudiate his wealth.

A little like Deputy Boyd Barrett.

Order, please. Deputy Richard Boyd Barrett, without interruption.

The bully boys are at it again.

Deputy Timmy Dooley is at it.

The Bertie boys are at it.

He was someone who chose to repudiate his wealth and walk among the poor. The Government might consider taking a leaf from his book. My main question relates in a way to something we might consider at the weekend when we commemorate another saint, St. Patrick. The occasion is a celebration of our national identity. As Minister in charge of Coillte and the State forestry, will the Minister for Finance take the opportunity of this weekend to reconsider the plan of the Government to sell off the harvesting rights to our State forestry, which is a symbol of our national heritage, history and culture? We will consider these things this weekend and many of us will probably walk in the State forests over the weekend. Does the Minister not believe it would represent the ultimate betrayal of our national heritage and culture to sell off the harvesting rights to our State forests, especially when it is likely that the people who would purchase them will be the same bankers and bondholders who bankrupted the country? Since this Government and the previous Government have agreed to pay off those gambling debts we could have the ultimate irony whereby we are forced to sell off our State forests to pay the debts of banks, and those self-same banks would end up owning the forests. Would it not be the ultimate betrayal of our national heritage, history and culture to sell this precious asset to Helvetia Wealth and its subsidiary, headed up by Bertie Ahern, the Irish Forestry Unit Trust, a consortium involving Bank of Ireland, Allied Irish Banks and Irish Life, or the China State Bank, which has expressed an interest? Is it not unacceptable to sell this precious resource to pay off the debts of bankers when those bankers would end up owning our State forests? Will the Minister for Finance use this weekend to reconsider the plan of the Government and give a commitment that it will retain the State forestry in public hands and use it in the interests of the people?

Further to the Government's decision that the harvesting rights to Coillte's forests be considered for sale, at the Government's request the National Treasury Management Agency, through its NewERA unit, has been actively engaged with Coillte, the Department of Public Expenditure and Reform and the Department of Agriculture, Food and the Marine in recent months to examine the financial and other implications of a potential transaction. Evidence gathered from similar transactions completed in other jurisdictions indicates that a transaction could be structured in such a manner as to ensure the maintenance of the open forest policy, reflecting public access to recreational land, the preservation of existing replanting obligations and the incorporation of biodiversity requirements. This process has also included engagement with potential acquirers of harvesting rights when requested by them in accordance with the published Government protocol. The two Departments and NewERA have also met interested stakeholders to discuss their positions on the sale of harvesting rights.

That is not much of an answer from the Minister. He could indicate who those stakeholders are and who the Government is talking to about the sale of the forests. I asked the Minister whether he would reconsider and review the commitment of the Government to sell off the harvesting rights to our State forests. If we do this - if we sell off our forests - we will be the only country in Europe to have disposed of the harvesting rights to state forestry. In one country where this was partially done, Sweden, after several years there was a national outcry and then Sweden took the state forestry back into public ownership. In another country which has partially privatised state forests, New Zealand, one of the richest people in that country now owns a significant part of the state forestry and, as a result, there has been a significant loss of jobs and public access, a significant outflow of profits from the country and damage done to the country's sawmill industry.

Banks are not interested in protecting public access, national heritage or the long-term stewardship of forests. They are interested in turning a quick buck. I put it to the Minister that this is not the way to protect our forests. What we should do and what I call on the Minister to do is to retain our State forestry fully in public ownership and manage and develop it to create jobs and desperately needed revenue for the State, which could be done if it was managed properly and sustainably, something banks will never do.

This issue arises in the context of a requirement under the programme. As the Deputy is aware, the troika has been involved in this. The context is that some State assets are to be sold. For example, the National Lottery will be issued with a new licence and the non-network part of Bord Gáis Éireann and some of the ESB power generation assets are under consideration. It is also proposed that the harvesting rights of some of the forests will be sold. The issue is being examined. The arrangement with the troika is that half the proceeds will be used for investment in essential infrastructure in the country and the other half will be used to reduce the debt. No final decision has yet been made by Government. This is being led by the Minister for Public Expenditure and Reform, Deputy Brendan Howlin. When he has a proposal he will bring it to Government and then final decisions will be made. However, at present it is certainly under consideration. Several announcements have been made previously and several questions have been answered.

Will the Minister for Finance review it?

Several questions have been answered in the House on the matter.