Séamus Kirk (Louth, Fianna Fail)

I am glad of the opportunity to support my party spokesman, Deputy Michael McGrath, in moving the motion to support a mortgage interest rate cut by Permanent TSB. In my constituency - I am sure the Minister of State, Deputy O'Dowd, will be familiar with it -- many people are directly affected by this issue. I am speaking on behalf of the estimated 80,000 people nationally who are seriously and adversely affected by the issue.

This House affords backbenchers, Ministers of State and Ministers the opportunity to debate in a practical and logical way the issues of the day. There is no issue more pressing than that of distressed mortgages, negative equity and people simply losing faith in their ability to hold onto the properties they bought and worked hard for. There are many who will find themselves in serious financial trouble for many years to come.

In a recent paper entitled Variable Mortgage Rate Pricing in Ireland, it is stated some lenders are charging higher variable rates to compensate for the losses they are making on their tracker loans. It states, "One bank's [...] variable rates are significantly lower and another bank's [...] variable rates are significantly higher than its peers, controlling for funding costs, arrears rates and other factors." The reality is that this needs to be examined urgently. A plan needs to be put in place to find a solution. I call on the Minister to consider this very serious problem. We need action and we need it now. We need a commitment from the Minister that he will engage in discussion with Permanent TSB so it will reduce its standard variable rate. The standard variable rate charged by Permanent TSB is out of line with the market rate and the rates of other State-owned banks.

Deputy Michael McGrath asked last night why Permanent TSB can offer new customers a standard variable rate of 3.7% while existing customers are being charged 5.19%. That highlights very clearly that the cost of funds is not the issue.

One other area I would like to mention is a possible tax relief for those who help out family members with a distressed mortgage, be it in Ireland or the United Kingdom. I know of a case from the boundary of my constituency and that of the Minister of State, Deputy McEntee, that concerns an individual working in the Untied Kingdom who is helping a family member in Ireland with a distressed mortgage. There is no tax relief available to the family member. A strong argument can be advanced that we should have a bilateral taxation agreement to cover this specific issue. Distressed mortgages can arise in the United Kingdom and Ireland. In the parish of Crossmaglen, people living 100 yd from one another on the Dundalk-Crossmaglen road may be living in two different jurisdictions. They could be related or members of the same family. There is no tax relief if one helps the other with a distressed mortgage.

This needs to be examined. It is but another element of the problem we are discussing tonight.

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