Paul Connaughton (Galway East, Fine Gael) | Oireachtas source

I welcome the opportunity to discuss this extremely serious situation. When one considers the last four years and where we have come from, one can see that a great deal has happened in the banking sector, but there is a long way to go. As the Minister acknowledged, it is far from fixed and certainly far from where it must be to treat everybody fairly.

Probably every Member of the House has been contacted by people at some stage about mortgage arrears and certainly about issues regarding the variable interest rate. I am no different. Outside of the technical response the Minister gave, the sense of unfairness is what grips people most when they discuss this. More than likely they know their neighbour has a tracker mortgage while they have a variable rate mortgage. It is very easy to calculate the difference between what they are expected to pay back on their mortgage and what their neighbour is expected to pay. It is very hard for people to stomach that, given that they are going through the same trials as their neighbour. It might be unemployment or a reduction in income since the recession began. However, as the country starts to pick up they appear to be two steps behind their neighbour all the time. This is not about bitterness or wishing worse for their neighbour, but about them wanting to be given the same opportunity everybody else is given.

I understand everything the Minister said about opening the market to more competition to allow more people in. That will probably make matters better for those who are joining now, but more stern action is required to help those who are already experiencing this problem. That there is an issue with mortgage arrears is acknowledged and recognised, and work is being undertaken to deal with that. However, many of these people are not yet in mortgage arrears, but they might fall into that trap. For that reason more immediate action is required to help them.

There is always a counterbalance. We want an effective banking system and there is nothing wrong with that. The banks are beginning to return to profitability. However, that must not be on the backs of people who made a decision to go with a variable rate over a tracker mortgage.

I wish to highlight the sense of unfairness they feel in that regard. Let us be honest. The easiest thing to do in politics in the past four or five years was to give the banks a good kicking. The economy needs an active banking sector. When they needed help we were there for them. I am not 100% certain how many people were caught in the trap but they deserve to get some help as well for several reasons. As someone said here, if they can get a fair chance, they will pay down their mortgage. We are also concerned about increasing spending in the domestic economy. They simply do not have that domestic spending power at the moment because of what they are paying on variable rates.

We need to focus on this matter. Bringing the banks in front of the Economic Management Council would be a step forward. However, they have to follow through. It was well acknowledged even before this Government came into office that the banks were not always giving us the true picture of what was going on. They got away with a great deal. Whether that was down to lack of regulation or oversight does not matter; we are not going back to that issue. The banking inquiry under way at the moment is doing all of that. However, the concern is that they are doing it again. It is possible to fob off a decision for a couple of months but a person cannot fob off paying back his mortgage for a few months. He runs into trouble straight away. We need to see action quickly, something that will make these mortgages more sustainable and something with a hint of fairness. As the banks return to profitability, they should be rewarding the people who bailed them out. Let us be blunt and honest about this that it does not seem to the people on variable mortgage rates as if this is happening at the moment.

Multiple measures have been taken. The Minister of State has announced what will happen in future and all of that is welcome. However, we really need to get across the idea that these people are in trouble now. Something that is due six months down the line or three months down the line or a meeting that will happen at some stage is cold comfort for someone who is paying a high variable rate at the moment and who simply cannot afford to keep doing so. We need to take whatever actions we can take now.

We have to be realistic as well. Many people are throwing out options. Sometimes it is a little hard to understand Deputy Ó Cuív. He sounds like one of the new Fianna Fáil Deputies elected at the last election, someone who never spent time in government, because he seems to have all the answers. He spent time in Cabinet when the banks were causing trouble for the last Government.

We are now reaching a situation where the banking sector is moving in a way that we want. We need the sector to lend much more to small and medium-sized enterprises to produce growth in the domestic economy. However, they must also help the people who are on variable rates. That is why the motion is welcome. We also have to think of those in extensive mortgage arrears and those who could potentially fall into the trap of mortgage arrears.

Whatever action the Government takes, it should take it quickly. I understand the banks are independent institutions, but pressure should be brought to bear on them as to why they are still around. Whatever we need to do to bring in more lending institutions should be done. I am unsure whether that would allow the credit union movement to get into the mortgage market. I am not suggesting I have all the answers but let us open up the market and protect those who are coming into it now.

Above all, let us not forget that group of people who are hurting seriously at the moment. We get this thrown at us every day. The banking crisis happened but who went to prison? Who was jailed for the banking crash? It all leads to this argument. This is all we get in clinics day in, day out. We hear that no one paid the price except these people and they are being fleeced again. Many people take the view that this lack of fairness needs to be solved quickly. While I welcome the announcements of what is to come, much more needs to be done now. We need help to get these people out of the mess they are in. When we do that, they will certainly help us in future when they increase spending.

Another point mentioned previously is the issue of bankruptcy. Although somewhat off topic, we need to give serious consideration to reducing the bankruptcy term to one year. That is my personal belief. Some people who have contacted me got into trouble and want to get out of it as quickly as they can. They may have a great idea but they are being held up by the three year limit. It may be a stick to beat the banks with. The Minister of State said that he is no apologist for the banking sector and neither am I. We can be partisan about this but we all want to move in the one direction. This involves the banks stepping up to the mark and doing something. However, they cannot say they are going to do something; they actually have to do something and move on this issue. If they were able to do something about variable rates, we would see a greater increase in domestic spending and public trust in the bank. I am unsure who is lower in the popularity stakes at the moment, politicians or bankers, but they could do themselves a favour if they worked on this. They would probably help people for much longer. We could do ourselves a major favour if we put enough pressure on them to do something. I welcome what has happened in the past four years to move this economy on but we cannot forget the people who are in this situation.

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