Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I am thankful for the opportunity to speak on this very important issue, which is of great importance to the Government. It is also of great importance to my constituents, many of whom have mortgages at a standard variable interest rate. On a rough calculation, if there are 300,000 people with standard variable interest rates, there are probably between 9,000 and 10,000 in the constituency of Dublin West.

I congratulate the newly appointed members of the Fianna Fáil Front Bench, some of whom are present, including Deputies Barry Cowen, Jim O'Callaghan and Thomas Byrne.

This considerable issue affects my peer group in particular, but by no means exclusively. I refer to people in their 30s and early 40s who bought property at a time when it was very expensive. Deputy Darragh O’Brien spoke of being in this position himself. I am very conscious of being one of the lucky ones with a tracker mortgage, whose interest rate is now approximately 1.1%. Others in my peer group, including friends and family who bought at the same time at a standard variable rate, pay at a much higher interest rate. Research shows that interest rates in Ireland are pretty much at the European median, but the difficulty is caused by the fact that some are on tracker mortgages and are therefore benefiting, while others are on standard variable rates and are therefore losing out. There is an injustice and unfairness in this that we can all recognise and identify.

I acknowledge the bona fides and interest of Fianna Fáil in this issue, and Deputy Michael McGrath in particular. He has focused on it for a number of months, or even years. Even just focusing on it has helped to exert downward pressure on rates. It is important to acknowledge that.

There have been many actions by the Government, and by the Minister for Finance, Deputy Michael Noonan, in particular. They include meetings with the lenders in May 2015 and again in September 2015. Figures from the Central Bank of Ireland, issued on 13 May this year, indicate that variable rates went down quite significantly in the period gone by. Just last week, AIB reduced its rates by 0.25%. Of course, privately owned and foreign-owned banks have been less forthcoming in reducing rates.

There is a problem, and we all agree on that. It has an impact on my Department. We still have roughly 3,000 people in the closed mortgage interest relief scheme. People on rent supplement are obviously affected by rent costs, and there is also a significant impact on household budgets.

The question we have to ask, as politicians seeking solutions, is whether the solution is more regulation, more competition or some combination of the two. My view is that the best solution is more competition. This entails new lenders in the market, or new banks willing to come to Ireland to lend and facilitate people in transferring mortgages. The question we must ask ourselves is whether this Bill would help or hinder in encouraging greater competition and bringing more banks and lenders into the market. There is a risk that it could be a hindrance.

Any time we debate a new law in this Chamber, we must always be aware of the fact that we are actually debating two laws, the law before us and the law of unintended consequences. In this case, there are potential unintended consequences. As others have mentioned, there are questions about the constitutionality of the legislation and how it might affect property rights. There is a potential impact on existing contracts and the very bad precedent that could be set by passing legislation that interferes with existing contracts.

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