Thursday, 18 February 2021
Covid-19 (Enterprise, Trade and Employment): Statements
Peter Fitzpatrick (Louth, Independent)
Earlier, I raised the issue of the banks that were refusing to honour approvals in principle for house mortgages to employees whose employers had availed of the Government's temporary wage scheme. I am dealing with many constituents in the Dundalk area who are affected by this approach. As the Tánaiste knows, the taxpayers paid and continue to pay a heavy price for the help the banks received during the financial crisis. For banks to behave in this manner now is disgraceful. I am working with many young people, including those with young families, who have done everything that has been asked of them to get a mortgage. They have made and continue to make great sacrifices in order to get approved for a mortgage. They have saved to ensure that they have the correct amount for a deposit, sourced a home and, in many cases, paid a holding deposit. They have given notice to their landlords and just when they are ready to complete their home purchases, the banks renege on their loan approval. This is a serious situation and one that the Government needs to address. To renege on a loan offer because a worker's employer has availed of a Government scheme is not only morally wrong, but surely the banks are breaching some code of practice by doing this. I am pleading with the Government to intervene in this matter.
Since the onset of this terrible pandemic, it has become clear that many workers must plan on working from their homes on a more permanent basis. Having spoken to many people who used to travel to Dublin and other areas for their jobs but who now work from home, it is clear that there are many challenges. One of the main challenges they face is that of a suitable workspace in their homes. In the initial periods of the lockdown, many of those who worked from home did so from their kitchen tables or living rooms. While this was okay for a short time, it now poses many issues. In order to create a productive work environment, they need a proper workspace in their homes. I know from speaking to many of these workers that they would embrace the option of converting a small space in their homes for work purposes. The challenge they face is the financial cost. In order to create these workspaces, they will need proper facilities, including desks and chairs, fit-for-purpose network systems and adequate lighting.
The new reality we are facing is that workers will more and more continue to work from home and we must support them. The best way to support them is to encourage employers to make a financial contribution to their workers in order to convert a section of their homes into workspaces. The employer could be encouraged and supported in doing this through a Government scheme. The benefits of this support are much greater than the financial costs. We would see less traffic on our roads, meaning less pollution. People would be more productive because they would no longer have to endure a daily commute that in some cases can amount to four hours. This is an important opportunity for the Government to make a real difference to people's working conditions.
I wish to raise the issue of banks charging negative interest rates on deposits. This is a problem that will emerge over the coming months. It is not only a problem for those who are fortunate enough to have large sums on deposit, but also for the many small savers around the country. I am talking specifically about the thousands of savers in the credit unions. Although it has not been confirmed, I am led to believe that credit unions, which mainly have their customers' deposits with mainstream banks, will be hit badly. This will undoubtedly lead to charges being imposed on their savers. That is wrong. In the traditional banking system, a bank used its deposits to loan to other customers, thereby making a profit on the difference between the interest charged on the loan and the interest paid on the deposit. Now, it appears that these banks are saying that they have too much money on deposit and, therefore, are not in a position to pay interest.
How is this the case when I have spoken to so many small and medium enterprises which tell me daily the difficulties they have obtaining credit facilities from local banks? There is something not right about this.
Another area that will affect people is the operation of solicitors' clients accounts. As the Tánaiste knows, these accounts are, in effect, only transaction accounts. The solicitors use these accounts to hold clients' sales and purchase funds, mainly from buying and selling property. The president of the County Louth Solicitors Bar Association has written to me in this regard and outlined the difficulties solicitors will face with these new charges. It is clear the approach taken by the banks in this regard is a very blatant profit-making exercise. I would like the Tánaiste to address these issues. Should he not have enough time I would appreciate it if he could ask his officials to respond in writing.