Derek Keating (Dublin Mid West, Fine Gael) | Oireachtas source

Several factors militate against the untimely and opportunistic proposal by Deputy Pearse Doherty and his party. Since the recession and the sea change in the Irish mortgage lending market, there has been a decrease in the number of institutions offering mortgage products. This is not a healthy situation for the market, for the country or for borrowers. The Minister for Finance and the Department of Finance, and indeed the Central Bank, recognise and highlight the lack of competition and the apprehension that would be off-putting for any potential entrant into the Irish market. It is essential that we have a strong regulatory framework for policing banks, but they must be able to arrange their activities in developing products that will generate a profit.

Bank profitability is at the front and centre of any potential entrant's mind in deciding whether to operate in Ireland, as the Irish market is not a profitable one. However, when rates being charged are excessive they act as a brake on the economic growth of the nation, and the banks need to recognise that glossy advertising to attract people will be counterproductive if they fail to deal with their customers in a fair and transparent manner.

The issues that give rise to the current situation remain largely within the legacy of the Fianna Fáil Administration. The absence of Fianna Fáil Members this evening is noticeable. In 2006, when dark clouds loomed and interest rates began to rise, a former Minister representing a now defunct party said that Ireland did not need the revenue raised from stamp duty. In June of that year, by way of a written response to a question tabled by the current Tánaiste, Deputy Burton, the then Minister for Finance, later Taoiseach, Brian Cowen, of Fianna Fáil, said:

A high proportion of household indebtedness in Ireland ... relates to borrowing for house-purchase which, in turn, involves the acquisition of an asset for the households. ... It therefore reflects the strong performance of the economy and confidence in Ireland’s economic prospects. Demand for housing has risen strongly in recent years and has been underpinned by demographic factors, the innate strength of the economy and the impact of an accommodating monetary stance, including historically low interest rates. House prices have risen rapidly in recent years driven by these fundamental factors. It is reasonable to assume that, over time such factors as the large increase in new housing supply will restore equilibrium to the market. This should allow output to move gradually closer to sustainable demand and result in more moderate price increases.

Unpicking this answer exposes and explains the web of betrayal that was wrought on the Irish people. The former Minister went on to say that we would be in for a soft landing. This phrase will be remembered by all of us, as it was bandied about in Dáil debate after Dáil debate; the Official Report is peppered with the phrase. It leaves a bad taste even now.

Over a year later, Mr. Cowen's boss, the former Taoiseach, in his now infamous speech to the Irish Congress of Trade Unions, said of the people who urged caution:

Sitting on the sidelines, cribbing and moaning is a lost opportunity. I don't know how people who engage in that don't commit suicide because frankly the only thing that motivates me is being able to actively change something.

Of course he recanted this and apologised, but I wonder just how many lives have been lost to suicide since the financial crash that the Fianna Fáil Administration lumbered into as they believed their own bluster. How would those members of the Opposition who were part of that Administration explain themselves to the Irish people?

The borrowing-fuelled property market that ran amok with the boom, followed swiftly by the bust, dragged large numbers of young people into, and saddled them with, mortgages of up to 110% that would be ultimately unsustainable, resulting in negative equity as the much-touted soft landing became a catastrophic crash.

A total of 52% of Irish mortgages are low-yield tracker mortgages. It is against this backdrop that the current mortgage market is structured. The Minister for Finance has met with banks recently. We are waiting for the lenders to come up with options that will be available at the beginning of July. In the circumstances it is wholly inappropriate and most untimely that this Bill has been brought before the Dáil. I do not support the Bill.

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