Charlie McConalogue (Donegal North East, Fianna Fail) | Oireachtas source

I join my party colleagues in commending the motion proposed by Deputy Michael McGrath to deal with this very important issue, which, unfortunately, the Government has continued to ignore. The Government has refused to engage with the issue in any way that would bring meaningful relief to the 300,000 mortgage holders across the country who are on a standard variable rate and continue to be squeezed by the banks despite the fact that over recent years the ECB has reduced its interest rate to an historic low of 0.05%. As many speakers have pointed out, and as people on the Government side of the House have acknowledged, the Government continues to stand over, and refuses to address or challenge, a situation in which the banks are charging a standard variable rate that is 2% higher than the average rate charged by banks in Europe and across the Border in Northern Ireland. Some of these banks are lending for mortgages within this State.

Since 2007, while the ECB rate has decreased drastically, Permanent TSB's margin on lending has increased from 1.44% to 4.45%. This is a massive increase by any standards. If it happened in any other part of the economy, the Government would regularly jump up and down condemning it and saying it needed to be changed and that there must be intervention. We do not hear such comments from the Government and, unfortunately, the Government was all too willing to allow the banks to recapitalise themselves by charging existing standard variable rate customers grossly unfair margins. Because house prices have dropped so much, normal market rules do not apply and existing mortgage holders cannot seek to switch lenders. The Government has made no effort, through legislation or through engagement by the Economic Management Council with the banks, to ensure the banks bring forward products that allow people to switch mortgages that are in negative equity.

Unfortunately, this has been a hallmark of the way the Government has dealt with the banks. Mortgage books were sold but the CCMA has not been legislated for, meaning mortgages sold on to vulture funds in many instances are not protected. Many people have unsustainable mortgages and are in danger of losing their homes but the Government has refused to remove the veto the banks have in respect of insolvency deals. The Minister has also presided over an insolvency service for the past there years which has clearly not worked with only 191 personal insolvency cases being finalised through that service. This is despite the Minister indicating the process would be kept under review. He refused to take on board the many concerns of people regarding how he established the service. Mortgage holders have suffered while banks have had the whip hand in dealing with them.

It is long past time for a change of approach by the Government. The EMC at a minimum should seek to meet representatives of the banks and the banking sector regarding how they are addressing this issue. It is also long past time the Government admitted that the personal insolvency service is not working and introduced a service that serves the public appropriately. Unfortunately, the Minister has been content to oversee a situation where mortgage holders continue to be squeezed with the Government refusing to take action.

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