Paul Murphy (Dublin South West, Anti-Austerity Alliance) | Oireachtas source

The starting point here is the accepted fact that the holders of standard variable rate mortgages are being exploited and ripped off and are paying approximately 2% over the European average rate for their mortgages. That represents an extra €330 per month for a person on a €200,000 mortgage. That is a huge burden and hardship for low and middle income households and is having a significant deflationary effect on the economy. For this reason, the Anti-Austerity Alliance will vote in favour of the Bill because we support any attempt to curb the profiteering of the banks and to relieve the massive burden on the shoulders of low and middle income workers.

The response of the Government, in particular the Minister, Deputy Noonan, must be noted. Are we getting a glimpse of new politics here? The numbers are such that the Opposition can get Bills passed but will that be subjected to a mini operation fear every time that we are about to do so? The clear implication of a relationship of causation between the publication of the Bill and the drop of 10% in bank shares is, to quote Deputy Michael McGrath, clearly ridiculous. It was a ridiculous contribution on the part of Deputy Noonan and it is not the way politics should work. There is no basis in fact to link the events in that way.

I repeat the point which Deputy Boyd Barrett made that the fundamental problem economically and ideologically with the Fianna Fáil approach, as represented in its Bill, is that it does not represent a change from the political approach that has led us to where we are, to the banking crisis, and which has informed the approach of this Government and previous Governments. This is summed up in the approach of the Bill when it states that the problem is market failure and that we only need to sort out the market and get a perfectly functioning market. The market is the failure. That is the problem. The problem is that we have a privately owned banking system operating to maximise profit and a so-called independent central bank, in this case a European Central Bank, which is completely unaccountable to any democratic body and which functions in the interest of the market, that is, in the interests of the profiteering of the banks. Unless we deal fundamentally with that problem, we will not deal with the fundamental problems of people dealing with the banks and getting ripped off, for example, on variable mortgages. The banks are increasing their profit margins on variable mortgages to cover the losses on other loan books, such as tracker loans and buy-to-lets. That is what profit-maximising companies will do.

The Government has consistently stated it does not intervene in the day-to-day decisions of the banks and that it is a matter for the management of the banks in question. That is a pathetic attempt to wash its hands of any responsibility for this rip-off. The Government and all those who support this private capitalist market system are responsible. They have set up the banks with the mandate to maximise profit which is exactly what they are doing. That is the problem with Fianna Fáil's Bill: it accepts the logic that the banks must be run for profit, as opposed to the idea of a public banking system set up as a public utility under democratic control.

If the Government were serious, it would introduce legislation and amend regulations to instruct the banks not to act solely to maximise profits at the cost of ordinary mortgage holders. It would act to have the banking system run democratically as a public utility in the interests of the majority and act to implement write-downs and rate reductions for ordinary mortgage holders. It would also instruct the banks to cease implementing evictions and court proceedings against mortgage holders in financial difficulty. Instead of moving in that direction, the Government is intent on the full privatisation of our banks, which will be yet another historic robbery. The rip-off on variable rates is one example of how the Government is deliberately fattening up the banks for privatisation. Another is changes to the tax rules, which mean that AIB will get a tax write-off of €3.24 billion, Bank of Ireland of more than €1.5 billion and PTSB of approximately €500 million in terms of their being able to write off the losses that were the State's and the public's losses and then getting the benefit of that on their balance sheets.

To really tackle the mortgage rip-off, we need a completely different model of banking. We also need an end to the provision of housing on the basis of the market. The AAA will vote in favour of this Bill. However, we need to see more substantial change. We need measures such as the write-down of mortgage debt to reflect the true value of the home, rent controls and a massive plan of public investment which would see the construction of social and affordable homes. It is only through breaking with the capitalist market that we can provide for the housing needs of all and prevent these sorts of rip-offs.

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