Paul Murphy (Dublin South West, Socialist Party) | Oireachtas source

The Anti-Austerity Alliance is happy to support this Bill as an attempt to curb the gross profiteering of the banks. The rip-off of the bank bailout has been laid bare for all to see in recent weeks in particular as has the inequity of that bailout, where we see how the banks have treated the victims of austerity, those in mortgage difficulty due to unemployment and pay cuts, who are being asked and told to pay back every cent. Those who do not are pursued viciously and are led into extremely stressful situations, leading to them eventually loosing their homes. There are no write-offs, no special deals and no bailouts for them. We have even seen an increase of 500% in court proceedings against mortgage holders. On the other side, particularly highlighted in recent weeks, has been the treatment afforded to the benefactors of austerity, the super wealthy, the capitalists, the Denis O'Briens of this world. They have been given sweetheart deals, write-downs and massive reductions in interest rates by IBRC and the banks at a cost of hundreds of millions of euro to the taxpayer. Following the bailouts and the crisis in this country we have been left with a largely publicly owned banking system. One may have thought that with a nationalised banking system we would have banks that would pursue policies that would take into account the overall good of society and of the economy as a whole rather than the narrow interests of maximising profits. In fact, the opposite has taken place. The bailouts and the nationalisations took place in order to let them reprivatise, of which a central part is driving profitability in the banks.

There has been a continuation and a deepening of the robbery of working class people. The holders of standard variable rate mortgages are particularly exploited and ripped off. They pay approximately 2% over the European average which represents a massive extra €330 a month for a €200,000 mortgage. This is a massive extra burden and hardship for low and middle income households, with a deflationary effect on the economy as a whole. The banks are consciously increasing their profit margin on variable mortgages to cover the losses on other loan books such as tracker loans and buy-to-let. When asked about it the Government's fundamental reply has been that it does not intervene in the day-to-day decisions of the banks and that it is a question for the management of the banks in question. The Government attempts to apply some sort of pressure but fundamentally it is a question for the banks. It is a pathetic attempt to wash its hands of any responsibility for this rip-off. The Government is responsible. It is a Government that stands over the banks having a mandate to maximise profit. The Government is pursuing the logic of profit maximisation. How else would the banks operate in a situation where they are making losses on one side of the business other than to pursue maximising profits where they can with those who have relatively little power, namely those with variable rate mortgages?

I was therefore disappointed to see that the Bill obliges the Central Bank to consider the profitability of the banks when deciding on its direction on rates. That accepts the logic that the banks must be run for profit which is the central issue here that we have to challenge. If the Government was serious it would introduce legislation, amend regulations and instruct the banks not to operate solely to maximise profits at the cost of ordinary mortgage holders. It would use the fact that we own the banks to run the banking system in the interests of the majority. The problem we have had over the past whole number of years is that we have had societies run in the interests of banks. Now we own the banks and we should run the banks in the interests of society. That would mean ending evictions and court proceedings against mortgage holders; writing down mortgage debt that is unpayable; and having interest rates that are payable by people.

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