Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I thank Sinn Féin for bringing forward this motion on the very important subject of how mortgage holders are being absolutely creased with the mortgage interest increases they have experienced as a result of not only the rising ECB rates but also, and this is critical, as far as we are concerned, the profiteering of the banks. It is for that reason we think the Sinn Féin proposal is far superior to the do-nothing approach of the Government that essentially says these are decisions of the ECB, commercial banks and investment funds, and there is nothing we can do about it. Ordinary working people are seeing massive increases in what they have to pay to service their mortgages. For reasonably average mortgages people might have, they can have seen increases of up to €5,000 or €6,000 in the costs they have experienced over the past year or so. That is a huge hit for people on top of all the other cost-of-living increases they have suffered: rising energy costs, rising food prices and rising costs on just about every front. While we welcome, therefore, any attempt to give relief to mortgage holders, we do not favour the approach in this motion as the way to do it because it does not deal with the fundamental problem, which is the profiteering of the banks and the questionable policy of the European Central Bank to hike interest rates over recent times to deal with the inflation crisis.

I will not spend too much time on the bigger picture of why we have rising costs on a whole range of levels. Suffice it to say that, mostly, in broad terms, it comes down to the decisions of big companies and corporations trying to maintain their profit levels and therefore increasing prices in the same way they decide production levels and the supply of key resources based on their private commercial interests. They make decisions to reduce supply, to increase supply, to increase prices and so on to ensure their profits stay up. That is what we need to deal with. Of course, on every single front this Government and, by and large, the European Union, or governments generally, are not willing to do what is necessary, which is to deal with the root problem of profiteering. In other words, if landlords are charging extortionate rents, limit their ability to charge those rents and introduce caps on rents. If house prices are extortionate and totally unaffordable, which they are, intervene and control the price of housing to ensure it is affordable. If energy companies are bringing in extortionate increases in electricity or gas prices, do not let them. Introduce controls and caps on what they are charging. This can be done, it has been done and it should be done, but the Government does not want to do it because, ideologically, it believes in the market. It does not want to or is unwilling to intervene in the market. The same goes for the banks and their profiteering and the profiteering increases in mortgage interest rates.

What is needed, therefore, are caps. It is as simple as that. What we propose is that the Government impose a cap of 3%, that is, that banks cannot charge interest rates higher than 3%. That will deal not only with the people who are being absolutely creased, who are on trackers and who are now paying 6% and 7%, but also even with the people on the fixed and variable rates who are paying in excess of 3%. It will give them all relief. That can be done and should be done. Of course, if that is done, it will also have another positive spinoff effect, which is that the vulture funds will probably be driven out. That would be a very good thing. Some of the vulture funds are not even borrowing from the ECB but are using the ECB increases as their excuse to hike up rates. Let us drive the vulture funds out and use the banks in which we still have a majority shareholding to establish a public banking system whereby the priorities of the banking and financial system are directed towards the needs of our society and ensuring money is available at a price that can actually deliver affordable housing for people buying homes.

It may be of interest to the Minister as a reminder that even the US Federal Reserve has a broader mandate in ensuring the affordability of housing than the ECB, whose only mandate is to control inflation. That is a mistake on the part of the ECB. The ECB should have a broader mandate to be concerned with the cost of housing, and we should certainly ensure that.

In our view we should cap mortgage interest rates at 3%. Given that ECB rates have increased, the banks are making huge additional profits on the back of people's deposits at the moment. They are giving far less interest for ordinary customers' deposits than they are getting from those deposits sitting with the ECB, where they are getting the ECB rates. There is a massive surge in profits for these banks. There is plenty of scope to cap mortgage interest rates so that people are not suffering these large increases, and for that to be absorbed by the excessive profits the banks are making. I am not necessarily saying that would cover all the costs of capping rates but it would cover a significant amount.

This should also be linked to developing a new not-for-profit public banking model in this country. It is absolutely clear the existing banking model is failing, either in terms of profiteering banks charging these excessive mortgage interest rates, significantly higher than the average in the rest of Europe, or, in the case of other banks, just leaving because they are not profitable, like Ulster Bank. They decided they could not make enough money here and that they would just dump a million customers who might have been banking with them for generations. They decided to just dump them because they do not really care about them, because the banks do not care. They do not care about their customers. They will leave them, they will screw them, it does not really matter to them. We need a different type of banking model. All the more folly the Government decision to start selling off further shares in the Allied Irish Banks as it has done with Bank of Ireland and other banks that we had effectively nationalised. After bailing them out and nursing them back to profitability, as soon as they start to make profits we hand those profits back to private shareholders. We should be retaining those institutions, controlling their behaviour and ensuring their interest rates and general objectives are about meeting the needs of our society for affordable housing and fair and reasonable access to credit. No doubt the Minister would deem our proposal radical but it is the only one that is going to deal with the systemic problem we are facing, of rampant profiteering by financial institutions, vulture funds and generally by corporations that benefited and are benefiting from the cost-of-living crisis imposing so much suffering on ordinary people.

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