Bankruptcy term cut will be in place by end of year, says Labour

Labour has been promised that a cut to the bankruptcy term will be in place by the end of the year.

The party has campaigned for a reduction in the term from three years to one.

Senior Labour figures claimed the issue, which will be sent to the Oireachtas Committee on Finance, will be resolved by the end of July with legislation to be introduced after the summer recess.

Minister for Finance Michael Noonan said he had no difficulty with the proposal by Labour TD Willie Penrose.

"I won't be on the trenches opposing it," he told reporters in Dublin. He said the topic had already been examined when former minister for justice Alan Shatter reduced the term from 12 to three years.

“I am not adverse to bankruptcy being reduced. It is just that it is not the solution for mortgage arrears,” Mr Noonan said, adding it should be considered on its merits as a standalone proposal.

He said the finance committee should consider the matter and that the issues on both sides should be heard before it goes to Government.

Mr Noonan also said he was expecting a report within days from the Central Bank Governor Patrick Honohan on how much it would cost the banks to lower their variable interest rates.

He said he would invite the chief executives of the banks in for talks as soon as the report arrives.If the banks continued to say no to a rate reduction “we will continue to keep talking,” he added.

Minister for Environment Alan Kelly said it was time for the Government to start using "levers on the banks".

“Banks to date have not dealt with this issue in a way that’s satisfactory to me or my Government colleagues and really we need to deal with the banking sector in a way that it hasn’t been dealt with before,” he said.

The Government would be coming up with measures to “ensure that banks have to change their policy and have to look more favourably upon people (in difficulties(,” he said.

“I think it’s the biggest issue facing this Government at the moment and certainly we’re putting a lot of thought into measures that ensure that people can keep their homes, if at all possible.”

Mr Kelly announced a list of locations where social housing units will be built at a cost of €312 million. The plan is to have a total of 1,700 units in place by 2017 through a total of 100 developments.

An estimated 3,000 people will be employed during the construction period.

Some of the projects – ranging from large developments of 50 units in parts of Dublin to small numbers of houses in rural areas – still require planning approval.

Mr Kelly described the plan was the first major investment in local authority housing for many years but “much more” needed to be done.