The Taoiseach has been accused of trying to absolve himself of rules on mortgage restructuring after he suggested banks should not use the very powers that his Government granted them.
By Mary Regan and Juno McEnroe
Enda Kenny said it would be “quite incredible” if banks asked people to give up jobs as part of insolvency settlements in cases where childcare costs exceeded the second family income.
“People have the right to work,” he said on the campaign trail in Meath East, where a by-election is held tomorrow. “People have the right to earn money to raise their families in the best way possible.”
Mr Kenny was responding to reports on the new Personal Insolvency Service guidelines concerning how banks can impose income limits and living standards on people seeking to re-negotiate mortgages.
The guidelines state that “where a person is working and paying for childcare as a consequence of his or her employment, the cost of child care should not exceed the income from the employment”.
This could force many people, particularly the second income earner, out of work in a move described as “short-sighted” and “draconian” by the opposition.
Mr Kenny said: “This is a country where the Government is unashamedly focused on making arrangements for an atmosphere and an environment where jobs can be created.”
He said each case would be dealt with on an individual basis but added: “I would find it quite incredible that somebody would say that you are required to give up work in order to meet these changes.”
However, the Irish Mortgage Holders’ Organisation said Mr Kenny was speaking out of both sides of his mouth on the issue because his Government sanctioned the powers for the banks.
“The Taoiseach has it within his gift to shape the entire system to ensure a level of fairness exists between borrower and lender,” said spokesman David Hall.
“Why give the banks guidelines if you do not want them to interpret the guidelines as they wish?”
The guidelines, to be published next week by Justice Minister Alan Shatter, will allow for “reasonable living expenses” for those who enter debt restructuring arrangements.
Health insurance, holidays, and subscription TV will be considered a luxury, meaning people can be forced to give them up. Car usage will not be considered reasonable where there is adequate public transport.
Joan Burton, the social protection minister, said nobody wanted to see banks “grinding people down” and “the notion that banks would seek to micro-manage everything — I think that is much exaggerated”.
Mr Hall said there was no debtor representation in the drawing up of the guidelines, and he would have “far more confidence” if ministers and the Taoiseach “stood over them and said they are fair and equitable”.
Fianna Fáil yesterday published a bill which proposed to remove the veto given to banks in personal insolvency arrangements.
However, Mr Kenny slammed it as “hypocritical and blatantly populist”.
“For a party that deliberately inflated the market to look after their developer friends, they have a cheek,” he said.
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