Gerald Nash (Louth, Labour) | Oireachtas source

I move amendment No. 1 to amendment No. 2:

To insert the following after "at their disposal":

"— calls for mortgage holders with performing loans held by vulture funds to be provided with the option to refinance those loans through the Local Authority Home Loan scheme; and

— calls for the passage into law of the Central Bank (Variable Rate Mortgages) Bill 2022".

I am pleased to speak on this motion on behalf of the Labour Party and move one of two amendments tabled in my name. This is the third motion brought to the House on mortgage interest relief so far this year. For the first time since 2013, as reported by the OECD, living standards in Ireland fell last year. This will be of no surprise to any of us as we did not need a think tank to tell us what is before our very eyes. Inflation was at 6.3% in August and was at 5.8% in July. Food prices last month were up 7.7% over the past 12 months and energy prices soared 3.4% between July and August. All told, the past two years have created real havoc for households across the country and as we know, the impact of inflation is most felt by those who can least afford it, namely those on low and modest incomes.

We in Labour were warning ahead of the October 2021 budget that inflation was starting to rise. That budget two years ago, even before the war being waged in Ukraine escalated in February 2022, was a missed opportunity to make structural changes to our social protection system and public services that would have better insulated those who have been most exposed to the cost-of-living crisis through 2022 and 2023. Government was caught napping then and the one-for-everyone-in-the-audience approach has not worked in targeting more resources to where they are needed most during this crisis. Unfortunately, it looks like the Government's scattergun approach is set to continue with budget 2024 in three weeks in that there will be more once-off payments, with many going to those who do not need them. As Central Bank officials told me yesterday at the Committee on Budgetary Oversight, these will add anything from 0.2% to 0.7% to an already crippling inflationary environment, the greater burden of which is carried by those who are on low and fixed incomes. I am referring to those who are already poor, already struggling and those who are experiencing a permanent cost-of-living crisis.

On top of all this, we have an unprecedented series of ten interest rate increases to the main lending rate by the ECB since July 2022. The motion coherently sets out the impact these rate rises have had on holders of tracker mortgages, variable rate mortgages and those who had their mortgages sold from under them to vulture funds. Tracker mortgage holders, who had a good thing for years, are now paying thousands of euro more to their bank each month compared with this time last year. I had a message a few minutes ago from a constituent. Herself and her husband work. They live in a three-bed semi-detached house with their three children and are paying €600 to €700 per month more than they were previously. Those are quite extraordinary figures.

Our variable rates were until recently on average the second-highest in the eurozone. Homeowners on such rates hope that after every meeting in Frankfurt that their lenders might delay a little longer in adding the latest ECB hike to their monthly repayments. Most egregious of all is the treatment many of the 80,000 or so homeowners who had their mortgages flogged off to a vulture fund. They are, in some cases, paying monthly rates of between and 8% and 10%. The constituents I mentioned a moment ago are paying €600 to €700 per month more than they were. There are very few outside the top 10% of income earners who could absorb that kind of increase to their mortgage bill every month, but this is a reality now facing all too many homeowners, as the Minister well knows.

The motion calls for the reintroduction of mortgage interest relief. The motion states it is targeted and time-limited but the way it is drafted would mean several hundred thousand would gain a very significant benefit. I am not convinced this is as targeted as is being presented. The way it is designed it looks at nothing else other than mortgage costs. It is not income-related and there are no assets or means tests involved in the design. I am not saying anything new when I say I and my colleagues in the Labour Party are for good reason sceptical of the efficacy and equity of a policy like this. There are hosts of other ways in which the State can assist those who are genuinely struggling to make their mortgage repayments. According to the media, consideration is being given to a revised mortgage interest supplement payment proposition, for example. This may have some merit and I look forward to seeing how this initiative evolves, if is to evolve, in the coming weeks.

A promise made to the 78,000 people who have their loans with funds was broken. They were told they would be no worse off than they were when their loan was being serviced by PTSB, AIB or Bank of Ireland, but that is manifestly not the case. The promise was broken. These mortgage prisoners need to be released from their purgatory and allowed get on with their lives. I note the recent moves to encourage those with performing loans to go back, potentially, to the main banks, but I also note how tightly that framework is structured. We should consider a super levy on the extraordinary €5 billion of profit in our banks if they do not play ball in welcoming back those whose loans they sold from under them. Let us make the imposition of a super levy dependent on the banks' social performance. They have a responsibility in this regard and they should be made to own and manage that responsibility. I agree the bank levy should be extended and expanded and have a further proposal to make, as is reflected in our amendment. The Government should extend the levy by all means and use the revenue generated from the new levy, or the extended levy, to provide the resources to our trusted local councils to refinance performing mortgages currently being serviced by vulture funds at a fair interest rate and under fair terms. This would represent a significant State-led solution and would allow for the exorcising of ghosts that have been haunting families for 14 to 15 years, in some cases. It is these mortgage holders who are especially deserving of our full attention and who are entitled to a holistic, comprehensive solution from their Government, once and for all. We have, as I said, proposed this by way of an amendment.

In conclusion, I again call on the Minister, as our second amendment proposes, to support the passage into law of Labour's Central Bank (Variable Rate Mortgages) Bill 2022. He will be very familiar with that legislation indeed. It draws very heavily on a Bill he tabled when in opposition. It sets out objective and robust criteria where, under certain circumstances, high variable mortgage interest rates could be capped. The Minister was the mortgage holder's friend when in Opposition. If he was not championing the return of mortgage interest relief, he was deriding high interest rates at a time when rates were much lower than they are now. Labour's amendments would make a very real and sustainable difference to those who are genuinely struggling with their mortgages and we have a responsibility to act definitively, comprehensively and holistically, once and for all, in that regard.

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