Personal Insolvency Bill 2012:
Deputy Mattie McGrath: I am also glad to get the chance to speak on this Bill. I compliment the Minister, something I do not often do, on bringing it forward, however belatedly.
It is incumbent on all elected public representatives in this House and the Seanad to tease this out and pass it as soon as possible. We are being watched and people are waiting with bated breath to see what we do. They are anxious for this to happen.
They want to know how it will improve their lives. There is no doubt that personal indebtedness and mortgage arrears are having a devastating impact on people's lives, family relationships, children and extended families. In some cases parents and grandparents, for reasons of good intent and in an effort to help their children or grandchildren, put their shoulder to the wheel and were ready, willing and able to share the equity they had. All they were doing was helping their family to better themselves. In many cases in rural areas they bought sites, sought planning permission, paid the fees, paid the architects and got the best advice available to build a home for themselves. What more noble objective for any person than to house themselves? We have a proud record in that area in this country. One must bear in mind the Famine and the people who were bullied out of their homes and whose homes were raided. Evictions are an emotive issue given what went on in those penal times. Little did we know since we got independence that we would be back in that situation again. Tragically for many people, we are.
While the Bill has shortcomings, it is, however belatedly, an effort to resolve matters. Many people are affected by stress and trauma. Family life is under extreme pressure. People are being harassed by banks, lending agencies and moneylenders - the scum of the earth, as far as I am concerned, who take advantage of people in trouble and offer them quick money for family events and other needs. Little do people know what to expect when they are driven into the hands of those vultures. That is all one could call them.
I have come from a briefing about the impact of the Coroner's Court on families and the devastating circumstances following death by suicide. The consequences thereafter are tragic. People have to relive the event in the Coroner's Court, and the media are present there also. Sensitivity is required to deal with the issue because of the trauma involved and the danger of copycat deaths.
The debts of the average family are phenomenal. They are overpowering. As a result, people are worn down. I met the troika as a member of the Technical Group, and we tried to get the message across to the people we met. The Government’s projected growth rates will not be met. They cannot be met while people are in a state of insolvency, have huge mortgage debts and many other types of debt. People do not have jobs or spending power. Self-employed people do not have proper supports. Many self-employed people had good businesses and built homes for themselves. I do not refer to the people who built mansions. I speak about decent, reasonable homes. Those people had reasonable expectations but their businesses failed. They have a two-pronged problem because they also have business debt which they incurred in good faith.
We had a briefing this morning from FLAC. I was alarmed to discover that people in hire purchase agreements have no recourse to any justice. I have entered into many such agreements myself in the past and I was not aware of that. However, it is a bad day that one does not learn something. We again see the vultures - the banks that we bailed out - advertising on a daily basis hire purchase agreements for cars and other items. It is the one area in which they can do so under the radar, put people under huge pressure and still have all the cards on their side of the table. One of my criticisms of the Bill is that the banks are not being addressed. I question whatever power they had over the previous Government, of which I was a member, and have over this Government, official Ireland and the troika. The banks are playing funny money games with everyone. They are not stepping up to the plate and lending the money they were supposed to lend.
In the context of today’s debate, from which I do not wish to stray, banks are not being sensitive in their dealings with ordinary people. Many staff members in banks do a tremendous job - I refer to people who work on the front line or are local managers - but, unfortunately, they have no say anymore. They are not being listened to and they were not listened to either when the money was being fired out. Many of them were conscientious and had an understanding of families and what money could be repaid but nobody listened to them. It was all about shovelling money out as fast as they could to make commission for the whizz kids who were going up the ladder fast. In many cases, reasonable managers who are still in place were thrown to one side because they were out of fashion. They were considered to be old fogeys who did not know what they were talking about and they were told to move aside. It was said that time moves on and that we were in modern-day Ireland. People were offered car loans or holiday loans with the mortgage. Many of those working in the banks have now moved on to debt collection - a horrible practice, with repossessions and intimidation. It is as if they did not get enough of it the first time around. They are getting huge remuneration in that area as well. People are being pressurised and intimidated. They are subjected to late-night telephone calls, dawn raids and calls to the house. In many cases, the same people who made money by lending money on a commission basis have become nothing short of terrorists. They are terrorising the lifeblood out of ordinary people. In many cases the result is that, tragically, people take their own lives and leave their families and loved ones to deal with the trauma.
The debt of the average family is unbelievable. I invited the troika yesterday to come to this country or send an independent agent to walk through any rural town or any city, including this one. They will see there is footfall but people are not spending money because they do not have it. One cannot spend what one does not have and credit has dried up. Shopkeepers and small businesses cannot get credit so they cannot give credit. We are in an awful situation.
I lived through the previous economic crisis in this country and, in the main, the only people who had huge borrowings with excessive interest were the farmers. They suffered but they are resilient and they came through it. They had an asset which has varied in value since then. Currently, almost everyone has large borrowings. In fairness to young people, those under 30 saw no other example than to spend, spend, spend. Money came out of the hole in the wall as if it was a type of factory. People did not understand the value of a pound or a shilling. Then there was all the pressure, with advisers and advertisements setting out what one could have. There were no limits to what one could have. One could ask where those advisers are now. Organisations such as FLAC and other support groups are trying to help people. They are standing by those unfortunate people who did their damnedest in a noble effort to house themselves and who are being punished for it. They are being thrown to the wolves. It is time that stopped. That is why the Bill must deal with the issue.
The parents - and, in some cases, grandparents - who secured the mortgages have lost everything as well. Having worked their way up since the inception of the State, housed themselves, reared and educated their families with dignity and pride, and given them a hand-out to provide them with security, they cannot sleep in their beds because they are faced with threats from the sheriff and the bailiff. I appeal to the Minister to reform the legislation on sheriffs. It is an outdated bastion of the British Empire. We must get rid of the office because sheriffs are insensitive. The tactics they employ involve bullying. We thought we had got rid of all of those people when we got our freedom and independence but we had not. They call to the homes of people who do not have enough food on the table demanding money for cars or other things. In some cases they call to small business people who have equipment, most of which they have paid for, with only small bills involved.
Every time a sheriff calls or writes a letter, there is a fee. One can deal with Revenue - I have dealt with it as an elected Deputy and I compliment it, as it has realised that people do not have money and is doing deals with them - but one cannot deal with the sheriffs. They will not even talk to a person. If one rings, the sheriff will accuse one of making threats or upsetting staff. Sheriffs are like paper shredders. The minute they get a beck from Revenue, they are off. Every time a sheriff makes a call, writes a letter or sends an agent, it is more money.
Intimidating tactics are being used against households in which children do not have enough to eat. Sheriffs have a job to do, but even if they are not coming to a person's door relentlessly, the threat of them doing so makes people wait for them day in, day out. Someone will be killed. It will be another tragedy. People are distraught. They have told me that, if a sheriff comes again, they will not be able to control themselves. I have tried to talk them out of it. The dignity of the home and family must be respected. One's home is one's castle, but these vultures are knocking on doors, threatening people, waiting for them to bring their kids home from school and taking their cars away. Unfortunately, sheriffs have the power to enter a house to remove personal belongings.
This system needs to be reformed because it is outdated. I will not support anyone who does not pay or try to pay his or her way, but some people are in serious situations. If a person still has a television or has paid the licence fee, he or she can watch the night's news about bankers, advisers and former politicians and public servants on pensions of €140,000 or €150,000. I found out from an answer to a question submitted by Deputy Tom Fleming that some of those people have been re-hired. It is not as widespread a practice as I had expected, but it is still disheartening. That they took early retirements, are in receipt of pensions and have been re-hired is despicable. It beggars belief that we as politicians allow the institutions of the State to do this.
People are being arrested. On Sunday evening, a man showed me the mark on his finger left by his wedding ring, which he had pawned the day before to pay for his child to go on a school trip. The sheriff is following him around. Bankers have gone to football matches in Poland and so on and are being called to present at Bray Garda station by appointment. In the case of a former Deputy, a misappropriation of funds amounting to €1,400 or €1,800 has been alleged. His house was visited by three car-loads of detectives, who raided and plundered before taking him away like a common criminal. He is innocent until proven guilty, which is a matter for the courts, but the media was tipped off first. That is the most despicable part of it. Will the Minister check on who told the media? Doing that to anyone, a politician or otherwise, is disgraceful. What of the bankers, the gangsters and the chancers? Senior advisers bought the voting machines. The former Minister made the decision, but what of the smart people who knew all about them, went on junkets to see them, claimed they were fit for purpose and bought a pig in a poke? I would not know the inside of a computer from the outside, but these experts and so-called advisers were well paid. Now we have a mess. The Minister received €70,000 for the whole lot. People in mortgage arrears are living in fear and cannot endure any more of this. It is past time that we made an effort to deal with it.
According to the Minister's documentation, the Bill's principles are an insolvency service, insolvency professionals, voluntary debt settlement and bankruptcy. It is a strange description, but we all know that there has been bankruptcy tourism in recent years, with people going abroad to be declared bankrupt. This morning, we received a presentation from road hauliers. Unfortunately, people are being forced to buy laundered diesel to try to keep their businesses alive. Where will Ireland be without a road haulage service? Where will it be without the people who are ready, willing and able to work towards rebuilding it if they are downtrodden and kept on social welfare and have their dignity taken away?
I welcome the proposed reduction in the bankruptcy period from 12 years to three years, but I am concerned about some aspects of the change. For example, one could be bankrupt for eight years. Personal debt is a major problem for the economy. A recent IMF study found that household debt restructuring programmes help economic recovery. I told the troika as much yesterday. If people have money, they will spend it. We must make cuts, but many of them have been made in the wrong places. We need to allow people enough money to live. We cannot have a situation in which they are hungry, desperate and driven to moneylenders. If they do not have money, the cutbacks and austerity will not work. It is time that our so-called friends understood this and examined what is happening. They should not believe everything they are told by Ministers or special advisers. Many of the latter group advised the previous Government and were present on the night of the bank guarantee. When it was put to us, we had no option but to vote for it, yet they are still in their jobs. A minority has retired and been re-hired. Many of the advisers do not seem to know, understand or, even worse, care. This situation cannot continue. We need to deal with the issues and root out the permanent government. Regardless of what happens, the people involved cannot be reprimanded, let alone dismissed. With the Government of the day, they got us into this mess, but they are not taking any flak for it. I do not want recriminations, but changes and new ideas. We should involve people with business brains who can understand how to deal with bank debts and what can and cannot be repaid. I compliment my local authority in North and South Tipperary, which will be combined, and its housing officials, for example, Mr. Aidan Fennessey, Sean Lonergan and Ms Catherine Meade. Day in, day out, they must listen to the tragic stories, occasionally in my company, of people in shared ownership arrangements or who are renting local authority housing. I took a female applicant who I did not know to the housing officer. Little did I know that she had gone into business. When the housing officer asked her about her debt, she said €10 million. The officer and I nearly fell off our chairs, but we needed to deal with her. She got involved in a situation and borrowed money she should never have been loaned. I am not laughing at the idea. The extent of it was funny, although it was no laughing matter. The ordinary people who I like to represent only borrow enough to house and work for themselves.
The rent allowance has been cut back. I have been a critic of the system. For years, I have called for local councils to deal with it, as they understand the matter. When a budget froze rent allowance, rents went up on the same night, which should not have been allowed. The onus is being put on people to negotiate with their landlords. In many cases they cannot, as their landlords are not compassionate, are only interested in money and will not reduce rents despite the Department telling them to do so.
We must examine how other countries dealt with questions of insolvency and bank debts. The system must be independent. The banks and lending agencies cannot have a veto. As we know from business and elsewhere, banks and the like have no interest other than recovering money for their books. It would be fine if they admitted that they did not have money to lend. The so-called pillar banks in which the public owns a large stake submitted a lending plan to the late Brian Lenihan in which each would lend €3 billion. He sent it back to them.
The plan was cobbled together and the banks sent back a more detailed one. They did not measure up to the task and they are not doing it for this Government, in spite of what is being said. I am tired of saying how people in business are being called in to have their overdrafts withdrawn. These business people go to banks and come out with a term loan instead of an overdraft. they cannot run a business without an overdraft. That is forced lending and it is being included as bank lending, which is a big con job. This is happening on a significant scale.
We must have an independent arbitrator and the Bill will not be worth the paper it is written on if there is not to be an independent and well-resourced body to take on these mobsters, gangsters and chancers. We cannot let them out from the wing again, court them or be nice to them. I do not know why there is an obsession to save these bankers. We got rid of the kings and queens in this country but the bankers have replaced them.
Deputy Michael Creed: The Deputy was in Cashel to welcome the British queen.
Deputy Kieran O'Donnell: They have a high king.
Deputy Mattie McGrath: Of course I was. We have moved on. She would be welcome again. She visited Coolmore to see our bloodstock industry. I heard the Deputy visited recently as well. I hope he had a good trip to the sunny south east and the Golden Vale.
This House should not be beholden to these desperadoes in the banks, the vast majority of whom are only interested in filling their boots. The whizz kids are only interested in getting their jobs back but are currently happy to be employed as terrorists in making repossessions and making a commission on that basis. It is blood money. Although this Bill does not go far enough, I will support it.ENDS