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Are Labour ministers split over mortgage debt relief for homeowners?

The party denies it but that appears to be at odds with the differing lines ministers gave on the much talked about issue yesterday.

Eamon Gilmore and Joan Burton (File photo)
Eamon Gilmore and Joan Burton (File photo)
Image: Julien Behal/PA Wire/Press Association Images

THE LABOUR PARTY has denied that is split over the issue of mortgage debt relief for homeowners struggling to pay their loans despite differing views expressed by ministers in interviews yesterday.

Yesterday the Tánaiste Eamon Gilmore said that the government was not considering ”some kind of a blanket writing-off of mortgage debt” which appeared to be at odds with what the Minister for Social Protection Joan Burton said yesterday morning in a radio interview.

The idea of debt forgiveness has been much discussed by ministers and economic commentators in the past week following a call from the UCD economist Morgan Kelly for the government to back a write off scheme to the tune of around €5 billion to €6 billion.

Yesterday, Burton told Newstalk’s Breakfast programme that there needed to be a form of debt forgiveness that would be fair to both the debtor and the lender and pointed to the example of Iceland were the amount repaid is linked to the current value of the property.

Her comments appeared to echo those of housing minister Willie Penrose who said at the weekend that the idea should be discussed by the government.

A government-commissioned review headed by KPMG accountant Declan Keane is  already examining measures to help distressed mortgage holders as was promised in the programme for government but it does not appear likely to recommend a blanket writing-off of mortgage debt.

And Gilmore told RTÉ News yesterday: ”What we are developing are proposals that will be fair to those who are in difficulty paying their mortgage, fair to those who are paying their mortgages and, of course, fairest to the taxpayer who is going to have to fund it.”

The Irish Times reports that a Labour party spokesman denied there was a split saying the Tánaiste was referring to a blanket forgiveness while ministers were referring to individual cases.

Gilmore’s position appears more in line with that of the rest of the government with Department of Finance minister Brian Hayes, a Fine Gael TD, saying earlier this week that introducing debt forgiveness totalling €6 billion “would be very difficult to justify”.

According to the group New Beginnings, which works with heavily indebted homeowners in Ireland, there are more than 50,000 mortgages in arrears of three months or more.

The economist Stephen Kinsella, who has previously joined calls for mortgage relief for homeowners, told RTÉ’s Morning Ireland there were some homeowners in Ireland who will never be able to repay their mortgages in their current state.

Read: Morgan Kelly calls for debt forgiveness for struggling mortgage holders>

Read: Government seeks to play down possibility of mortgage relief scheme>

About the author:

Hugh O'Connell

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