Monday 26 September 2016

Kenny goes to war with Labour on bankruptcy changes

Published 22/04/2015 | 02:30

Taoiseach Enda Kenny has kicked to touch proposals to slash the maximum bankruptcy term - a move that will infuriate Labour Party backbenchers
Taoiseach Enda Kenny has kicked to touch proposals to slash the maximum bankruptcy term - a move that will infuriate Labour Party backbenchers

Taoiseach Enda Kenny has kicked to touch proposals to slash the maximum bankruptcy term - a move that will infuriate Labour Party backbenchers.

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In his strongest remarks on the issue yet, Mr Kenny said reducing the term from three years to one could have a deeply negative impact on small businesses which are owed money.

For the second time in recent days, the Taoiseach citied recent statistics that show that 70pc of bankruptcies result in repossessions.

He told the Dáil that reducing the term to one year - a proposal that has unanimous support within Labour - would not solve the many issues facing distressed homeowners and businesses. "It's not as simple as it seems, to say a reduction from three to one (years) are a panacea for all of these issues," he said. Mr Kenny said the issue should be examined by an Oireachtas committee, adding that he doesn't want to see situations whereby people become bankrupt and "say tally-ho to you".

The comments by the Taoiseach come after days of tensions between the Coalition partners over the proposal, which was put forward by Labour's Willie Penrose. As revealed on Monday, Mr Penrose's proposal has been met with major resistance in recent days from both the Department of Finance and Fine Gael ministers, who fear such a move will spark an acceleration in repossessions.

Finance Minister Michael Noonan has been warned by his own officials that slashing the term from three years to one could backfire and increase the prospect of moral hazard.

Priority

And Mr Kenny's decision to kick the proposal to touch came just a day after Public Expenditure Minister Brendan Howlin said it remained a priority.

Labour sources are adamant that the Irish bankruptcy system must be brought in line with systems in Britain and the North, which adopt a one-year maximum term.

Mr Penrose said yesterday that the cut from three years to one remains a "red-line issue".

"This is about fairness. It's about giving something back to the hard-working people of this country. Fine Gael don't own this government," he told the Irish Independent.

His party colleague and Clare TD Michael McNamara said he was fully behind the proposal and that the Government must also ensure the bank's veto on insolvency deals was tackled.

Meanwhile, the Government's mortgage-relief measures have been delayed by as negotiations between Fine Gael and Labour ministers continue.

Agriculture Minister Simon Coveney said the plans will be announced in full by the Coalition next month.

Irish Independent

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