Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

It is to be hoped the Minister will deliver a very clear and strong message. Everyone in this House stands behind him in delivering that message. If he does not want to deliver it in a forthright and strong manner in public, which I understand, I expect him to do it in private. He should not be afraid to bang the table and deliver the message on behalf of the people and their representatives that standard variable rate mortgage customers are the forgotten group and it will not be tolerated any longer. The rates they are paying are exorbitant and unacceptable.

The second piece of progress we have is the statement by the Taoiseach today in the Dáil that the banks would be brought before the Economic Management Council for the first time in almost three years. I hope the opportunity will be taken to address this issue as well as a number of other issues. Over recent nights, dozens of individual stories have been conveyed to me, my colleagues and, I am sure, every Deputy in the House. The impact of very high standard variable mortgage rates on families is there to be told. I have been struck by the stories I have been told in the past 24 hours or so. Much has been made of the health of the banks. The banks are on the road to recovery and are largely healthy again. AIB and Bank of Ireland, combined, made €2 billion in pre-tax profits in 2014.

Any suggestion that the poor banks have no capacity to help people on standard variable mortgage rates simply does not stand up to scrutiny. The Government's approach to the banks seems to be to fatten the calf as much as possible, take it to the mart and flog it to the highest bidder and to hell with the consequences. There are consequences which are represented by many people who are paying outrageous, rip-off, standard variable mortgage rates at this time.

When I looked at the Government motion, I have to say I despaired. The mood has improved since as a result of some of the commitments given by the Minister and his own language. We had the scenario yesterday where the Government put forward a counter motion calling on itself to continue to apply downward pressure on standard variable rates. In my relatively short time in the House, I have never heard the likes of it. The Government felt the need to call upon itself to take action on an issue. Presumably the Government agrees wholeheartedly with the Fianna Fáil motion but, of course, it will not merely accept the motion in the manner in which it has been put forward. I thought it was the best one for a while that the Government should call on itself to take action on an issue.

The issue was well ventilated last night and tonight in terms of the cost of funds which are at an historic low. The bottom line is that people understand a variable rate moves in line with the market. It moves in line with market conditions and market conditions have never been better. The ECB rate is virtually at zero, 0.05%, and the wholesale interbank environment is extremely positive for the banks. We all know that people who are saving in the banks are getting virtually nothing in interest. The banks have never had access to as much cheap money as now and there is no justification for the manner in which they are gouging standard variable rate customers. We are witnessing discrimination against existing customers vis-à-visnew customers because a number of banks have reduced their rate for new customers but not for existing customers and that is simply unacceptable. I hope the Minister will make it clear to the Governor of the Central Bank tomorrow that the bank has a very strong role in terms of consumer protection and we want to see that role vindicated and applied.

The Minister referred to north of the Border and highlighted the standard variable rates there. I agree that the variable rates advertised are in line with the rates in the Republic but what he omitted to say is that they offer very strong discount deals for a number of years. When those deals expire, people switch their mortgage to another bank because they have a genuine switcher market open to them. AIB, which the Minister quoted, is advertising variable rates as low as 2.75% and fixed rates as low as 2.79% in Northern Ireland.

I wish the Minister well at his meeting tomorrow. The real measure of the outcome of this motion and the debate we have had is for the banks to announce a round of variable rate cuts which will benefit not just new customers, but existing customers, and that the scandalous practice of targeting this singular group of customers, involving 300,000 people who are paying firmly over the odds for their mortgages, to be brought to an end. Hopefully, our motion will have contributed to that result.

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