Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

I compliment my colleague, Deputy Michael McGrath, on bringing this motion forward because high standard variable mortgage interest rates are an important issue that face hundreds of thousands throughout the country. Those with such mortgages feel very aggrieved at the hands-off approach the Government has taken on this issue. We bring forward this motion on foot of our previous Private Members’ motion which highlighted the lack of action on the Government’s part in dealing with mortgage arrears. High standard variable interest rates feed into the issue of mortgage arrears. When one has families here paying a 2% higher interest rate than their European counterparts, this equates to an additional €6,000 per annum or €500 per month in mortgage repayments. This is a serious amount of money for those having difficulties making mortgage repayments.

I recently dealt with a constituency case of a professional lady with a standard variable rate mortgage who received a stay of four months from the courts to tackle her mortgage arrears. Her marriage had broken down and she is trying to hold on to her house. The largest issue for her was the reduction in her monthly take-home pay of €500 over recent years. Her repayments would be made much easier if the banks lived up to their responsibilities and were more reasonable by passing on the benefits of the 3.95% reduction in interest rates that have occurred since June 2007. For example, Permanent TSB, a State-owned bank, has only reduced its standard variable rate by 0.94% in the same period. That bank’s margin over the ECB rate has gone from 1.44% in June 2007 to 4.45% now. It is not good enough that the Government and the Central Bank take a hands-off approach to this. It has a role in the State-owned banks to ensure that reduction is passed on to hard-pressed families. Those families trying their best to meet their monthly mortgage repayments are being screwed. A mortgage of €200,000 is not really large when one considers house prices in the past decade. As the Minister of State knows from his constituency, €200,000 would not have bought a house at all in Greystones or parts of Bray. People on such a mortgage are paying €6,000 more than what they should be paying because of the standard variable rate policy here, however.

We need the Government to bring the banks’ senior executives before its four-man economic committee to ask them why they believe it is okay to compensate for their loss-making tracker mortgages by screwing people on a variable rate. This needs to be addressed. It was very disappointing when the Governor of the Central Bank stated last year: "It is reasonable to ask whether, having under-priced lending so badly in the early years of the millennium, they could end up over-pricing it now." It is not good enough for him to be an observer on the sideline, passing commentary.

He is the Governor of the Central Bank. He should be instructing the financial institutions of this State to pass the interest rate reduction on to the hard-pressed families who need a lifeline. They have endured unbelievable cuts and reductions in their living standards over the past number of years. Here is an opportunity to give those families a lifeline and an extra €500 per month that will not cost the State anything. We talk about our local economies and our retailers and businesses on the main streets of Mullingar, Longford or Athlone. Imagine the difference to the local economy - the local shops and restaurants - if people in these areas got this cut and had hundreds of euro to spend on whatever they chose.

I plead with the Government to use its offices. It is the Government of the land and it is the one with the say. It has the influence. It should haul the banks before the Economic Management Council and ensure that they live up to their obligations. They benefited from this State, which stepped in and looked after them when they were in their hour of need. They should not now be screwing ordinary, decent, hard-working people. I plead with the Government to ensure the interest rate for variable rate mortgages is reduced without delay.

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