Sir, – The current mortgage crisis in nothing new. Eighty thousand families face ruin, and urgent creative solutions are needed. Sometimes these can be found in the past. In 1874 Ireland went into a sudden dramatic and prolonged recession. Many tenants could not pay the previously agreed rent, and many landlords refused to agree a rent reduction. Incredibly, the British government intervened by setting up a Fair Rent Tribunal, and a Land Commission. If there was no agreement between landlord and tenant then these state bodies set the judicial rent with the full force of the state behind it. The commissioners toured the country, landlord and tenant made their case and a decision was handed down on the day based on the tenant’s ability to pay. It worked.
Is this not an excellent template for working through the current mortgage difficulties? We know the model works, and as the structure was only abolished in 1999 the Irish State knows how it works. It is a model that we have been groping towards in the past number of weeks, and it deals with the issue of moral hazard by examining each case in detail.
At least the Government is going to make a decision on this by the end of September, and this proven method should be included in the resolution.
Sir, – The late Jim Mitchell was widely ridiculed during the 2002 general election campaign for proposing that loss-suffering Eircom shareholders should be compensated. Under the guise of debt forgiveness, are his successors in Fine Gael now planning to compensate those who have gambled and lost on the property market? – Yours, etc,
Sir, – I have just trawled the internet, looking up newspaper articles on loans written off for previous taoisigh (Haughey and FitzGerald). These involved very large amounts of money, and at a time when the country was in very poor shape financially. I could not find the term “moral hazard” anywhere. Is this term just reserved for dealings with “ordinary” citizens and not the great and the good? – Yours, etc,