Mr. Brendan Burgess:

I circulated a briefing note earlier but I will not go through it because we are under a little time pressure.

We began this campaign two years ago. At that stage, Irish mortgage rates were 1.9 percentage points higher than average eurozone interest rates. There was no justification for that at all. Today, two years later, Irish mortgage rates are 1.6 percentage points higher than those in other eurozone countries. While mortgage rates have come down, they have come down throughout the eurozone and not just as a result of our campaign, although I would like to believe the campaign we have been running for two years has resulted in the 1% reduction in the nominal rates in Ireland. A good part of the reduction is attributable to quantitative easing, as mentioned earlier. Rates have decreased across Europe but the gap has hardly moved at all. That is completely unjustified.

Over the two years, a person on a mortgage of €200,000 has already paid approximately €6,000 more than he or she should have. He or she will continue to pay at a rate of €3,000 per year for the next number of years while he or she has the mortgage. The payments will reduce as the capital is paid off. There is a huge charge being imposed on ordinary Irish families as a result of these interest rates.

There are two separate aspects to this Bill. They are separate but equally important. The first part concerns section 7, which prohibits discrimination against existing borrowers. If the Houses decide the rest of the Bill is unconstitutional or undesirable, it does not stop them passing section 7. I hope the whole Bill can be passed. Section 7, on its own, would be a huge step forward, however. It is the section that makes sure lenders offer the same rates and incentives to existing customers as to new customers.

What has happened in the market is that Allied Irish Banks and Ulster Bank offer existing customers the same rate as new customers. When they compete, they bring the rates down for everybody but the other banks, including KBC, Bank of Ireland, Permanent TSB and, more recently, EBS, have introduced completely new lower rates for new customers and just tell existing customers they cannot avail of them, or they keep all their rates high and compete by giving incentives, such as 2% cash back. We are talking about the new business rate having fallen to 3.5% or whatever it is, but many customers of Bank of Ireland and Permanent TSB are currently paying at a rate of 4.5%. As mentioned on numerous occasions, there are customers of Danske Bank paying at a rate of 4.95%. If section 7 were passed, it would be helping very many people.

The other aspect is equally important. We have been working on this for two years and have got almost nowhere. As Deputy Michael McGrath has said, I would much prefer if the banks had responded and if this legislation were not needed. I would be a free market capitalist. I want to see markets working but I am not an ideologue. If the markets are not working, I want to see the State intervening to make them work.

This market has not worked. People are being put in a very difficult position and the Central Bank says it is nothing to do with it, let competition resolve it. Competition will not resolve it. I have heard the Minister say that competition benefits all bank customers. It does not benefit the 46,000 people who are customers of vulture funds or the customers of Bank of Ireland who are on 4.5% who cannot switch. We are hoping Frank Mortgages will start lending. If it does, it will lend 80% loan to value mortgages to people on 3.5 times income. It will be a very small niche market lender and people who have a bad credit record, who have 90% loan to value will not get any benefit at all from that sort of competition. They are just the highlights. I will ask Stefan Goor to say a bit about his situation.