Sir, – While John McManus (Business Opinion, September 5th) makes many valid points, I disagree with his comment that the problem of private debt is finally being faced up to by policymakers. We are seeing the usual political fudge, as policymakers will not take the correct decisions if those carry the risks of alienating the electorate and further weakening the banking sector.
The fairest way to handle the debt burden of those people in serious financial difficulties is through a reform of our bankruptcy laws. Last year in the UK more than 135,000 people declared insolvency through bankruptcy or its watered down form of the “Individual Voluntary Arrangement”. The average figure of about 20 Irish bankruptcies annually is totally unrepresentative of what is happening in our economy.
The 600 homes repossessed in Ireland last year amount to about one repossession per 3,000 homes. In the UK the rate is seven times greater, with one per 440 homes (40,000 repossessions annually.) It is obvious that household incomes in Ireland, even for those with jobs, will continue to drop as a result of additional levies, charges, taxes and rate increases. The Irish banks have neither the framework, skill nor the stomach to address mass debt renegotiation. Our politicians should stop blathering about “forgiveness” and draw up a modern bankruptcy framework. – Yours, etc,