Wednesday 16 October 2019

Labour launches new bid to convince FG to cut bankruptcy term

Joan Burton. Photo: Damien Eagers
Joan Burton. Photo: Damien Eagers

Daniel McConnell Political Correspondent

Tanaiste Joan Burton and Public Expenditure Minister Brendan Howlin are to again press the idea of reducing the bankruptcy term from three years to one at a key Government meeting, it can be revealed.

The pair will raise it at a meeting of the Economic Management Council (EMC) at which they sit with Taoiseach Enda Kenny and Finance Minister Michael Noonan, who are known to be far less enthusiastic on the plan.

There is a strong desire within Labour to address the failure of the Government's Insolvency Service to adequately address the mortgage arrears crisis.

Former junior minister Willie Penrose has tabled a bill which would reduce the term of bankruptcy from three years to one.

The push to have the term of bankruptcy reduced as part of Coalition efforts to tackle the mortgage arrears crisis is likely to meet resistance from the Department of Finance.

Fine Gael sources have said that Mr Noonan's department is "very cool" on the idea, saying it will not have a substantial effect on the numbers in mortgage arrears.

"There is a strong feeling within Finance that reducing bankruptcy wouldn't address the problem as many people would lose their home," said one source.

However, Ms Burton and Mr Howlin are adamant that something be done, with Mr Howlin promising his party colleagues at a private meeting to raise the matter with the Taoiseach and Mr Noonan.

"Brendan told the party he would raise it with Noonan and Kenny, and this will all be thrashed out at the EMC," said a senior Labour figure.

Before the St Patrick's Day break, Mr Kenny and Ms Burton discussed the issue, which is becoming a growing political problem, at their weekly one-on-one meeting before Cabinet.

Crisis

Mr Kenny has said the Government would unveil a new set of measures to tackle the mortgage arrears crisis next month, in advance of the spring statement, and held out the possibility of introducing new legislation.

Ms Burton again emphasised a Labour Party proposal to reduce the term of bankruptcy, which Mr Kenny also said would be considered in the coming weeks.

"It is something we can consider," the Taoiseach said. "I know Deputy Penrose has tabled a bill on this.

"Obviously it might spur the banks on to a more expeditious decision. The banks don't get anything, or very little, in the case of bankruptcy," he said.

A review of the current insolvency system and the implementation of the Central Bank's mortgage arrears targets is nearing completion and a new set of measures will be announced in April.

It has also been suggested that the Government's spring statement will take place in the last week of April.

While the final details have not been confirmed, it is expected that it will be similar to a Budget day with speeches from Mr Noonan and Mr Howlin in the Dáil.

Irish Independent

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