Joe Higgins (Dublin West, Socialist Party) | Oireachtas source

The Land and Conveyancing Law Reform Bill 2013 is a mean bit of proposed legislation to give back to the banks the terrifying power over homeowners who purchased prior to 1 December 2009 and who might have been in a position to benefit from the repeal of section 62(7) of the Registration of Title Act 1964 in that their homes could not be repossessed by virtue of this repeal.

What is extraordinary is that the Government, instead of devising bold and imaginative new ways of dealing with and resolving the huge issue of mortgage distress in the State on the part of homeowners, can only think of one recourse which is to give the financial institutions draconian powers over homeowners even when this can mean people in mortgage distress being evicted from their homes as a result of the disaster which was allowed to develop in the period from approximately 1997 to 2007, what we now know as the property bubble.

What is shown here is that the Government of Fine Gael and the Labour Party is utterly beholden to the banks and, in a wider sense, beholden to the dictatorship of the financial markets which really rule the European Union in terms of financial and economic policy. The Government, like Governments throughout Europe, will tolerate nothing except that the sharks which dominate the markets have all the power they demand over the small fish in the pool.

In this sense the attitude of the Fine Gael-Labour Party Government here towards the massively powerful financial markets on the one hand and the small people on the other reminds me very much of the moral underpinning of the plays of William Shakespeare. In Shakespearean drama anything which threatened the established feudal order and the divine right of kings of the day is seen to bring chaos and disorder, and equilibrium can only be re-established when the small people know their place, which is being subject to the monarchical dictatorship of the day, which has the divine right to rule and does so with a vengeance. This is the underlying policy of all the right-wing governments of Europe at present.

The Labour Party and Fine Gael from their first day in office have ruled on exactly the same basis as their Fianna Fáil predecessors. They prostrate themselves at the altar of the financial markets, the banks and the financial speculators, known popularly as the rulers of the universe, and anything which would challenge this system and anything which would provide a practical solution to the huge problems of debt, and mortgage debt in particular, of ordinary people will not be entertained because there is a veto by the bankers, bondholders and speculators who dominate the financial markets of Europe.

Alternative approaches to this situation are possible. It is possible to implement radical solutions to the crisis of mortgage debt. It would mean writing down to today's prices the value of homes for which ordinary people were forced to pay massively inflated prices during the bubble. Monthly mortgage repayments could then be calibrated accordingly. That would provide a basis for a solution to the horrific crisis of mortgage distress faced by up to 180,000 householders. Naturally, the establishment, right-wing media and right-wing commentators would snort in derision at any such proposal. However, let us examine both the morality and the economics of this situation.

I was a Member of Dáil Éireann from 1997 to 2007, which coincided fairly closely with the beginning of the property bubble, which became the craziness in the Irish property market, up to its penultimate year. Mine was perhaps the only voice in the Dáil that, at many stages over those ten years, raised the issue of the rapid and dizzying escalation of house prices and their effect on working class people.

The government of the day - Fianna Fáil and the Progressive Democrats - was legislating for this and facilitating it in every way. The dominant ruling party, Fianna Fáil, regularly entertained the instigators, and those who benefited from this situation to the tune of billions, in, for example, in the party's tent at the Galway races. In opposition, however, Fine Gael did not once raise a principled objection to the type of profiteering that was having a devastating effect on young working people who needed to put a roof over their heads if they wanted to begin a family or for whatever reason. They were forced into paying these massive house prices, with mortgage terms going from 20 years up to 30 or 40 years. At the time, I cited the example of a young post office worker who related his experience to me. An average new home in the Swords area cost him €375,000 and he was forced to take out a 39-year mortgage. I got a bank worker to estimate that, at an interest rate of 4%, the total repayments of that worker and his partner would be €750,000 over the 39 year period. If interest rates went to 6% the total repayments would be €1 million.

About 50% or €200,000 of the €375,000 sum that young couple were forced to pay for their home would have been sheer profit for the developers, depending on the prices they had paid for the land. To describe it as profiteering would be mild - it was racketeering to an incredible degree, with young working people as the victims. That situation was validated in the media of the day. Those responsible for the situation, including builders and developers, were lionised and glorified in the media, while the politicians courted them. The whole system supported that massively immoral situation.

That generation, who are now in negative equity, has been left with unsustainable mortgage levels as their wages have been cut or they have lost their jobs. Even from a moral perspective they are entitled to expect the State and the Government to make amends for their situation. Therefore, rather than caving in again to the banks in this Bill, which will give banks the right to evict these young victims of the building bubble and the profiteering of that time, it would be better to say that those crazy prices should be written down to today's values and the monthly mortgage repayments should also be written down. At a stroke, that would not only relieve huge distress and pressure on so many people, but it would also free up the literally billions of euro to go into the domestic economy that now go straight into the banks in mortgage payments. It would give a much needed shot in the arm to the retail sector, thus underpinning the jobs of shop and service workers who are suffering so much because of the austerity policy.

A few months ago, when the banks' representatives attended the Committee on Finance, Public Expenditure and Reform, Allied Irish Banks provided some very interesting information. At the time, its total residential mortgages amounted to €41 billion. Some 34,000 mortgage accounts had been subject to forbearance, with 66% of those being interest-only. Therefore, instead of a radical solution we now have a whole cohort of people shackled and imprisoned in an interest-only situation. It will go way beyond the 39 or 40-year limit if this system prevails.

AIB said the quantum of negative equity was €6.8 billion. In other words, to write down the mortgages' total value to today's real value would cost €6.8 billion. Is that so much against the €64 billion that was put into the banks generally? That is the type of radical thinking we need for a solution. It is not possible, however, on the basis of the crazed logic of the system today. It would be possible in a situation where banks and financial institutions were in public ownership, under democratic control and run for the benefit of the majority in society, rather than for shareholders and the elite who dictate policy.

Molaim athló an díospóireacht, a Cheann Comhairle.

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