Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank every Deputy who contributed to the useful and constructive debate in the House over the past two nights. I acknowledge again the presence in the Gallery of members of the fair mortgage rates campaign group which has been lobbying and campaigning on this issue for some time.

Deputy Jim O'Callaghan raised a number of the issues arising from the Minister' speech last night, which I had intended to address. The Minister and other Government Deputies referred to an alleged constitutional question surrounding the Bill. It is most bizarre, given that we had a full Second Stage debate on an identical Bill last July, that not a single reference was made to a possibility of it being unconstitutional. It is instructive that the words "Attorney General" have not even been uttered in the context of references to the constitutionality of the Bill. I take that as meaning something and that this issue was raised for whatever purposes at this stage.

I have a great deal of respect for the Minister. However, his statement last night that the "day Deputy Michael McGrath republished his Bill, Irish bank shares went down by 10% across the line" drew a clear inference that there was a direct correlation between my party promoting this Bill and Irish bank share prices. When Niall O'Connor, a journalist with the Irish Independent, asked the Department to provide evidence to back up this statement, he was provided with a spreadsheet showing the movement of bank shares, not over one day but over 11 days. Two banks in particular were cited, namely, Bank of Ireland, where the share price movement of 2% took place over 11 days, and Permanent TSB which experienced an 11% fall in its share price, albeit not on the day the Bill was published but on the day it issued a trading statement providing an update setting out the serious challenges the bank is facing, none of which relates to the publication of the Bill before us. While I respect the Minister, his statement was below the belt, uncalled for and inaccurate.

The Minister for Social Protection, Deputy Leo Varadkar, made some generous comments but also stated that the Opposition should not publish Bills to gain publicity or highlight an issue. That is not what we are doing. We wish to legislate in a responsible manner and we will not be in any way irresponsible in this Dáil. If the Bill passes Second Stage tonight, which I sincerely hope will be the case, it will receive detailed and line by line scrutiny on Committee Stage. All Deputies should work together to make this legislation as good as it possibly can be.

I will engage with the Central Bank and having spoken to Central Bank officials, I am aware of its views. I have agreed to meet and engage further with officials and I will also engage with the banks. However, I will also continue to engage with ordinary mortgage holders, as I do every day, who are stuck paying unsustainable and unjustifiable standard variable interest rates.

While the Bill is not perfect, it has been constructed with the genuine intention of seeking to apply downward pressure on standard variable mortgage rates.

It is a matter for the House to take a view on the Government amendment which would defer the passage of this Bill on Second Stage for a further six-month period. That would be six further months that mortgage holders in this country would have to pay mortgage rates that are simply indefensible. I genuinely wish this Bill was not necessary, but the banks have brought this on themselves through their actions. If they do not want this House to legislate on interest rates or to provide extra powers to the Central Bank, they know what needs to be done. That is the bottom line in regard to this debate.

There has been some progress and the Minister has contributed to that through his meetings with the banks. He has also issued what could be regarded as veiled or direct threats to banks around the actions he is prepared to take in the event of there being insufficient progress. However, we cannot ignore the reality. We cannot ignore the discrimination that continues against existing customers vis-à-visthe offers being offered to new customers. That is not a sustainable position.

From my perspective, the Minister should embrace this Bill. He should use it as leverage to bring about further downward pressure on interest rates, because they are unjustifiable. Even today, despite the progress through the announcement by some banks of rate reductions, a bank in this State 14% of which we own, is charging a standard variable rate that provides for a margin of 460% above its cost of funds. That is economically unjustifiable and indefensible. There may well come a time again when standard variable rates of 4% or 5% are justifiable. If the ECB increases its rates or market conditions change, the reality will change. However, my point has always been that standard variable rates should move in line with market conditions. Market conditions for banks have never been better in terms of an ECB base rate of zero, paying little or nothing to depositors and savers and availing of historically low interest rates on the interbank and wholesale markets.

This is not about a political victory. I take no pleasure in the possibility of the Government losing a vote. If there is a vote tonight, it is not about that. We need strong banks, healthy competition, new entrants and credit unions to be given more resources and greater capacity to extend mortgages. This Bill is about acting for the common good and securing a fair deal for mortgage holders. I commend the Bill to the House and hope it passes on to Committee Stage where it can receive the detailed scrutiny it deserves. I hope also that over the course of the next few months, we will see much more progress on interest rates.

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