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

I also know the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach has engaged with the Central Bank in the past week or so on these issues. I am in continuous engagement with the Central Bank. I know from that engagement that the Central Bank is actively on the case. It is on the case of ensuring the full implementation of all the statutory codes and the consumer protection rules that are in place through the consumer protection code and the code of conduct on mortgage arrears. It is important that work continues.

We also have to acknowledge the context of the decisions being made by the European Central Bank, despite the consequences for people in their day-to-day lives, which I acknowledge present genuine difficulties for people. However, we need to get inflation down. It is in everyone’s interest that we do so as quickly as possible. We are seeing some progress in this regard. It now stands at 7.7% in Ireland, which is still far too high and well in excess of the ECB target of 2%. Of particular concern is the level of core inflation when we exclude energy and certain food items. We have to work to get inflation down. We must all be conscious in the decisions we make in this regard. When we look in the round at what the Government has done on a phased basis, we see the bullet payments made from October right through to the Christmas period, the changes in welfare and taxation, the reductions in childcare costs that kicked in in January, the electricity credit applied just last month, the further electricity credit that will be applied in the month of March and the other decisions we made to reduce VAT and excise, all of which have continued and now fall due for a decision. Any reasonable person will accept the Government has made a genuine effort to address the very serious cost-of-living pressures that exist.

It should be acknowledged that mortgage rates in Ireland in the round are in a very different place relative to our European peers compared with where they were just a short time ago. In December 2022, the average interest rate on new mortgages from credit institutions in Ireland, which currently hold about 84% of primary dwelling mortgages, was 2.69%, the same as at the end of 2021. This contrasts with the position in many other euro area countries. Over the same period, the average interest rate for new mortgages in the eurozone increased from 1.29% to 2.95%. The average new mortgage rate in Ireland, which was among the highest in the eurozone at the end of 2021 and had been for a very long period, is now among the lowest. I am not making a prediction that this will continue but this is the current position, as evidenced again in the retail interest rate statistics published today by the Central Bank.

I acknowledge and share the concerns many have expressed about the plight of those paying far higher interest rates. I am very much aware of individual mortgage holders who have received those consecutive multiple letters, to which colleagues across the House referred, and who are now paying interest rates of the order of 7%. This will inevitably place them under genuine pressure. That is why the Central Bank is working proactively with the lenders to make sure these customers are treated fairly, that problems are prevented and that solutions are put in place for them as quickly as possible to ensure they can get through what is a difficult period in the interest rate cycle. We do not know how long this will continue. It is also worth making the point that it is not in the interests of any lender to allow mortgage holders to get back into arrears again. We have invested a lot in switching. We have more work to do. I acknowledge that is not an option for every mortgage customer at this time.

I welcome the motion and the proposal but I will not accept it. The Government has to make decisions in the round. This involves looking at all of the fiscal levers we have at our disposal. We have immediate issues on VAT, excise and business supports that need to be decided in the coming weeks. This is where my focus will immediately lie.

See this speech in context