Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

Yes. I welcome the opportunity to participate in this debate. I wish to put on record my full support for any sustainable measure that, if introduced, would result in a reduction in monthly mortgage repayments for any person on a variable rate mortgage. While there are some elements in the Bill that I support, overall it will not achieve what we all want, that is, variable mortgage interest rates that are on a par with our European counterparts.

As highlighted by the Minister, there are possible constitutional issues with the Bill, including the interference in vested property rights, the absence of an appeal process and the retrospective application of the proposal. As everyone knows, the agreed programme for Government committed to pre-legislative scrutiny all new Bills. With this is mind, I cannot understand what issues the Opposition has with the Bill undergoing that scrutiny.

Another important aspect that must be addressed is that the independence of the Central Bank must be respected at all times. The Governor of the Central Bank has publicly stated that he is not seeking the powers proposed in the Bill. Under the Bill, the Central Bank may only issue directions and therefore cannot be forced to take action. As such, the Central Bank does not want the powers proposed in the Bill and is not going to be forced to use them. Surely everyone can see that this can only lead to difficulties and will be of no benefit to the people whom we are trying to help. What are needed are real and practical solutions that will work now and in the future. We need more competition in the mortgage sector. By its nature, competition will reduce interest rates, since new providers entering the market will want their share of it.

In my constituency of Louth, I have often dealt with banks on behalf of constituents who found themselves in difficulty with their mortgage repayments. To be fair, I have managed to reach a satisfactory outcome for the customers in their dealings with the various banks almost every time.

Getting back to the Bill, a much better proposal would be to introduce a simplified way of switching mortgage providers. If the Bill is introduced, I fear that new providers will be discouraged from entering the Irish market.

In the long term, this will not be good for those people on variable rate mortgages. We must not, however, fall into the trap of introducing weak legislation that in the short term might save money but in the long term will cost even more. We have seen what happened in the past with the boom-and-bust policies. The people of Ireland have paid and are still paying a very high price for the boom-and-bust policies of the last Fianna Fáil Government.

I agree fully with the amendments proposed by the Minister, Deputy Noonan, and urge the Opposition to reconsider their Bill to take into account these amendments. The best solution is to introduce a more simplified and cost-effective switching procedure which will allow people to switch mortgage providers more efficiently. This will result in more innovative mortgage solutions by the providers, better competition between the providers, and ultimately a better long-term outcome for mortgage holders.

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