Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I acknowledge the impact the changing interest rate environment has had on so many households and in particular those who have enjoyed historic low tracker rates for a long period have had a very sharp shock with the increases that have happened since last summer. Some variable rate customers have also seen increases and as some fixed rate customers come off their fixed rate period, they will also be repricing in a very different environment. I think people understand, although they may not agree, with what is being done by the ECB or the banks. I think people understand the reason why it is being done, which is to try to bring down inflation. It is in all our interests that we get inflation under control and down to a much lower level than it is today.

The Deputy has pointed to how, if you take the full body of interest rates charged on the mortgage book in Ireland, it is higher than the EU average. It should also be acknowledged that a lot of progress has been made on new interest rates. For new mortgages being issued, Ireland has gone from being probably the second most expensive for a very long time, to now being among the cheapest. I think it is now the third lowest in the eurozone and it is certainly below the eurozone average. It should also be acknowledged that a lot of progress has been made in respect of mortgage arrears. We now have the lowest level of mortgage arrears since 2010. That is a function of a number of things, including the strong economic performance in recent years, the fact that there have been forbearance measures and undoubtedly, it is also linked to the fact that interest rates have been low for a prolonged period. That has now come to an end, of course. I would make the general point that this is a modest finance bill that is principally necessary because of the measures that were due to end at the end of February and which we extending in the form of the VAT on gas and electricity, the changes to VAT in tourism and hospitality and the extension of the TBESS scheme as well and there is the extension and phased restoration of the excise. That is the primary purpose of this Finance Bill. It is not a budget. It does not provide for an overall budget. I understand the point the Deputy is raising. I am also receiving the emails. I have seen many individual cases and I acknowledge that for some, the increase in the interest rate has presented real difficulties for many people. I do not doubt that for a moment. But it is also the case that the introduction of mortgage interest relief right now would involve significant costs which would need to be considered not on an ad hoc basis but in the context of the range of other cost-of-living measures the Government is providing over a period.

The Deputy will be aware of what the OECD has said about mortgage interest relief. It has raised concerns about equity. He will also be aware that the commission on tax and welfare did not recommend the reinstatement of mortgage interest relief. As he has done before, the Deputy has referred to my previous comments in opposition but I think he knows full well what the context at that time was. Mortgage interest relief was due to end at the end of 2017 and in the course of our negotiation on the confidence and supply agreement, we did secure the extension of mortgage interest relief to the end of 2020 when it was ended. That was the context of the call that I made at the time. I think he knows that well. I do not propose to accept Deputy Doherty's amendment at this time because of the reasons I have outlined.