Billy Kelleher (Cork North Central, Fianna Fail) | Oireachtas source

I welcome the opportunity to contribute to the debate and I commend Deputy Michael McGrath again on raising this issue. I have also listened to the debate over the past two nights and there is a strong consensus, to which the Minister referred, that the views of the House should be conveyed to the Governor of the Central Bank. I welcome the fact that the Minister will have a meeting with him to convey that view.

In the contributions by a number of Members, there was criticism of the tabling of the motion. This was done because of where we are as a society and the difficulties families face servicing mortgage debt and we would fail in our fundamental duty as an Opposition party not to highlight the fact that 300,000 people are currently enslaved to the banks. I do not know whether the Minister has recently put his house deeds under his arms and headed off down the high street of one of our cities looking to switch his mortgage but it is not as easy as he outlined. There are many hidden costs to switching and people must also overcome the fear factor of approaching another lending institution to go through the entire process of assessment and approval prior to final sanction. They must carry hidden costs relating to legal and engineering fees and all that flows from them. It is not as easy as putting a copy of the deeds under one's arm and heading into a financial institution.

There is little competition between the major lenders on our high streets and negligible savings can be generated by moving lender. The Minister has to convey our strong views to the Governor of the Central Bank. It is reasonable for him to expect a good response because the Governor previously stated, "It is reasonable to ask whether having underpriced lending so badly in the early years of the millennium, we could end up overpricing it". He has also stated that the mortgage pricing structure for variable rates is unacceptable.

We have to realise we cannot have a situation where we are asking one borrower, who has a variable rate mortgage, to subsidise another borrower, who has a tracker mortgage. That is what is happening in effect. The banks are the ones responsible for the tracker mortgages. They went out to the markets thinking there would be free funds forever and decided to peg themselves to the ECB rate and lend accordingly. We now have an ECB rate of 0.05%, so tracker mortgages are loss leaders, as referred to by other Deputies. Asking another family to subsidise that tracker mortgage is simply unfair. It is unfair that there could be a difference of €6,000 between two mortgages in excess of €200,000 depending on whether the family is on a variable or a tracker rate mortgage.

The Minister must be strong and forceful in this. The banks cannot consistently say they are doing everything in their power to address this issue. If they were, there would be more competition and they would be more sympathetic to the variable mortgage holders, who are under huge pressure. The Minister referred to it himself. It is negating the capacity of people with variable mortgages to consume other goods and services, which would be of benefit to the Minister and to society more broadly in terms of getting spending power back into the retail sector and the wider economy. There are many good reasons we should do this. We should not always be in awe of the banks and feel that we owe them something. This Parliament and this country owe the banks nothing. It is the other way around. The idea that we can wax lyrical and boast that our banks are back in profitability is fine, but there are 300,000 families, many of whom are well below the waterline in terms of financial comfort. They need some break. It is now the turn of the banks to make a repayment for what was done to assist them in the crisis they went through.

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