Joan Collins (Dublin South Central, United Left)
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I wish to share time with Deputies Richard Boyd Barrett, Tom Fleming, Shane Ross and Catherine Murphy, with two minutes each.

Bernard Durkan (Kildare North, Fine Gael)
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Is that agreed? Agreed.

Joan Collins (Dublin South Central, United Left)
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I support the motion, another motion on the banks. It is like déjà vuor Groundhog Day. We come back here every couple of months to debate issues dealing with the banks which have been heftily bailed out by the people. They continue to implement policies that are counterproductive for the ordinary person. The motion correctly calls on them to reduce their tracker interest rates to match the ECB rates. I have a variable rate mortgage with KBC for €187,000 and am repaying at 4.5%. I paid €8,000 in interest last year, which would be standard for many people in post offices and ordinary jobs who are on an average industrial wage. An extra €6,000 in their pockets would make a huge difference to the economy. Having all those people with money to spend in the economy would be very progressive at this stage.

The motion calls for "legislation to ensure that all residential home loans in the State are subject to the protection of the Code of Conduct on Mortgage Arrears". The banks are blatantly refusing to implement the code of conduct, which is why I recently introduced legislation that was supported by the Opposition but not by the Government. The purpose of that legislation was to force the banks to adhere to the code of conduct.

The CEO of AIB has the audacity to turn around and say that because of moral hazard the bank cannot write off mortgage debt or write it down. He says that it cannot use a magic wand to do this and can only deal with cases one by one. The Minister for Finance can wave a magic wand and give AIB €21 billion of taxpayers' money. The Government waved the magic wand, got rid of the moral hazard and bailed out the banks. These banks should be told to implement a reduction in interest rates.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Once upon a time what we now call banking was known as usury and it was illegal to lend money at interest because back in those days they understood the potential for lenders to engage in profiteering and extortion, and held that to be completely immoral. We have moved from that and now not only is it not illegal to engage in extortion and profiteering when lending money to people, but these institutions rule the roost and dictate policy, and governments cower before them as they blatantly engage in extortion and profiteering. It is quite extraordinary.

I commend Fianna Fáil on raising the issue. I disagree fundamentally with its solution for dealing with it because we do not need more market and competition to deal with this. We do not need more banks lending money which always hammer out an informal cartel arrangement anyway to deal with this sort of extortion and profiteering. We need a public banking system where banking is not about profit and extortion but is about allowing the circulation of money to the benefit of all citizens, the economy and society as a whole.

Considering the extortion that is particularly being suffered by variable rate mortgage holders, why on earth are we allowing the banks that we bailed out to do this to people? It was laughable for the Taoiseach to claim that our banking policy was not to the benefit of the bankers, but was to the benefit of the consumers and mortgage holders. Are mortgage holders, who are unable to pay their mortgages because of extortionate interest rates, feeling the same as Mr. Richie Boucher when he collects his monthly pay check, which could probably pay the mortgage interest on about ten mortgages in one month?

Tom Fleming (Kerry South, Independent)
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The new mortgage rates in the country are among the highest in Europe. This means first-time buyers are paying up to €2,500 a year more for mortgages than their counterparts in France, Italy and Holland. The interest rates here are still higher than most of those imposed for property buyers in the other 18 countries in the eurozone even after recent cuts by Bank of Ireland and Permanent TSB. The cuts by those two banks were for new borrowers and those switching to them, but mostly not for existing customers. There has been a string of reductions in the main rate charged by the European Central Bank, which is now at a record low of 0.05%, but no decreases have been passed on to those in this country with tracker mortgages or on the new mortgage rates and the existing variable rates charged by the banks to established customers.

The Central Bank issues figures for the interest rates charged for new mortgage business, but these figures are distorted by the inclusion of the old tracker rates for those who have had their mortgages restructured. Publishing such official mortgage rates discourages new lenders coming on to the market and the reality is that mortgage interest rates are 2% higher than in the rest of the eurozone. On a €200,000 mortgage a new Irish borrower is paying around €2,500 more than for a mortgage elsewhere in the eurozone. Repayments on a German €200,000 mortgage work out at €819 a month, far lower than in this country.

On the regulated market lenders must act honestly, fairly and professionally in the best interests of their customers. For the integrity of the market the Government must act immediately in tandem with the Central Bank, which is not implementing its consumer protection code, in order to stop the fleecing of existing variable rate mortgage holders by the banks' actions. We are well aware that they are only further boosting their profitability.

Shane Ross (Dublin South, Independent)
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I was somewhat surprised to hear the Taoiseach say rather proudly this morning that the banks were back in what he called profitability. It is not surprising that the banks are back in profitability because the banks are allowed to do exactly what they like once again. One of the reasons they are back in profit is simply that they are allowed to pick their victims. The victims are identified in this evening's motion - the variable rate mortgage holders.

Some time ago I could think of no worse way to run a bank than to put it into public hands. I must say that now when I hear the Taoiseach say it will be re-privatised I begin to shudder. However, the worst possible combination is a bank which is in public hands but is being allowed to behave as though it was some sort of private bank, publicly quoted, with its own autonomy. At the moment the banks - I do not think there is any doubt about it - are once again allowed to do exactly what they like. In defence, the Minister of State, Deputy Harris, yesterday said the Government could not possibly interfere with what was happening in the banks. That is nonsense; it could, but it will not.

At the moment there is collusion going on. There is a cartel, as I believe Deputy Boyd Barrett identified, being run by the pillar banks with the collusion, consent and indeed the encouragement of the Government. It suits the Government's agenda to allow these unfortunate 300,000 people to be crucified by the banks and to step away in a Pontius Pilate way and say, "It's nothing to do with us; it's the banks doing it." It is the Government's duty to interfere if that is the word it wants to use. It is its duty to say, "No, we no longer will allow this sort of cartel to develop." Instead of that, it is encouraging what it calls pillar banks. It is its policy to allow a cartel to develop.

Catherine Murphy (Kildare North, Independent)
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Many of the 300,000 variable rate mortgage holders will have received mortgages for the same reason as generations of borrowers before them. Their motivation was not one of greed. They were motivated by the desire to set up a home, live independently and have security of tenure. In this country, one does not really have a choice if one wants security of tenure. This is not the case under housing policies in other European countries, where there is less dependence on homeownership. The lending institutions here could not find enough people to lend to and they were questioning whether they were borrowing enough. The same lending institutions now pick and choose and treat some of the borrowers in a way that puts them into even more difficulty. Many of those in most difficulty will have borrowed in the four or five years prior to the crash, when tens of thousands of houses were built every year. They have to listen to the rubbish that we all went mad, we all partied and we were motivated by greed, although all they wanted was a roof over their heads and to live in the same way as previous generations, namely by setting up home and paying their own way.

The Taoiseach said this morning that he was not happy. It is not enough for him not to be happy; he has to do something about it. If the banks do not do something about it, the only people that can will not be the 300,000 people subject to a higher mortgage rate but the members of the Government. Many of the 300,000 people will lose their homes. They are barely managing and may be in negative equity. Some of them feature in the ongoing court cases brought by banks seeking repossessions. Some of the borrowers' homes will be repossessed and at the same time we will see banks sold off. It is the State and taxpayer who will ultimately pick up the tab. At this point, it ought to be recognised that there is a problem. It is a problem for all of us and there needs to be a solution. It is simply immoral not to pass on the reductions to people with variable interest rates.

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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Dún Laoghaire has some of the highest house prices in the country and, by inference, some of the biggest mortgages. Some 300,000 people are on a standard variable rate mortgage. Standard variable rates in Ireland are close to double the eurozone average. They cost roughly an extra €1,500 per year for every €100,000 borrowed. In Dún Laoghaire, I estimate the cost to be an extra €7,500 per year, approximately, given the cost of properties there.

A young female constituent contacted me today about tonight's motion. She feels Irish families have benefited least from the current low-interest-rate environment in Europe. She said she has watched in absolute frustration as her mortgage rate has steadily risen while rates across Europe have generally fallen. This has cost her hundreds of euro per month. She feels this is the number one issue affecting her household budget, yet it receives little or no attention from the Government.

I am speaking this evening to support so many people who are in this very difficult position. Constituents with mortgage arrears have approached me. They are hard-working families who pay their property tax and universal social charge, and they will pay their water charges. I understand that the banks are independent commercial entities and that the Minister for Finance has no statutory role in this matter, but the fact of the matter is that the people who are coming to me in dire straits with their mortgages are the very people who helped bail out the banks. These families deserve a fair chance. We cannot allow banks to make up for their losses on tracker mortgages by loading costs onto those with standard variable rate mortgages.

Last night the Minister of State said we must sustain a competitive economy that can pay its own way, serve society and survive and thrive in a reformed eurozone. I agree. Ongoing competition in the sector is crucial. I am glad that, through the hard work of this Government, the Irish market is entering a new competitive phase. However, we need to do more. We need to continue to encourage and support new lenders in the market. We need lenders to support and work with their mortgage holders, just as we worked with lenders in their times of difficulty. The Taoiseach said today that the Economic Management Council will be meeting the banks to discuss standard variable rate mortgages. I urge the Minister of State to make it clear to the banks that as they stabilise and get lower interest rates from Europe, they must pass them on to financially strapped mortgage holders across the country.

Liam Twomey (Wexford, Fine Gael)
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The Government has moved the economy from crisis to recovery. With political stability, it has contributed greatly to the economic stability that we now see. The last tracker mortgages were issued in Ireland in 2008, and half of all mortgages today are tracker mortgages. A tracker mortgage gives the borrower a really welcome respite. The banks themselves admit, and the figures that Deputy McGrath put on the record last night show, that the cost of funding tracker mortgages is still significantly lower than that of funding in total for the banks. Therefore, half the mortgages of the banks are actually loss leaders for them, but I agree with Deputy McGrath that we must continue to put pressure on the banks to hold them to account on variable rates that really are out of sync with those in the rest of Europe.

The Government has introduced some measures to help hard-pressed people with variable rate mortgages. The Government has given relief to all those who took out mortgages between 2004 and 2008, but it is now time for the banks to make a contribution. It is also time for the Governor of the Central Bank to take a stronger role in regard to what we are going to do for individuals who are repaying mortgages with variable rates that are out of sync.

As Chairman of the finance committee, I have invited the banks to appear before it after Easter. Twice per year, representatives of the banks appear before us. The committee is a public forum where everybody can hear the contributions being made by the banks and the questions asked by members of all parties and none. That is why it surprises me that, through this Private Members' motion, the Opposition wants to give more power to the Economic Management Council. Deputy McGrath regards it more as a solution than anything else. I would have expected that in this area of greater transparency and accountability, we would want the banks to make themselves more accountable to the Parliament of the people. I ask that Deputy McGrath consider the view that we really should be asking the banks to keep appearing before us and making statements in public. With the improvement in the economy, the great strides we have made in getting people back to work and our stabilisation of the crisis of recent years, perhaps we should be having a conversation on whether we still need the Economic Management Council rather than regarding it as the solution to our problems.

I agree that not everybody is feeling the benefits of our rapidly growing economy or the dramatic increases in employment. This is why we must do everything we can to help keep people in their homes. There is still a real crisis over mortgage arrears, and it is a real concern. The banks can and must do more, and we need to put more pressure on them. Owing to the crisis that was inflicted on the Irish people, of which we are all aware and which we have discussed many times in this House, not everybody can avoid losing home ownership. There are solutions whereby one can stay in one's home, but it is not always possible to maintain ownership. We need to be pushing the solutions to remove the awful stress affecting too many people at present.

People need somewhere to live. The Government is doing a lot and has plans to do much more. Now that the economy has improved, we can invest more resources in it, which is very important, but the banks also need to show us they can do much more now that they have stabilised.

There is one thing I do not agree with. Politicians do not make good bankers. Whatever disasters that have occurred in recent years because of bankers looking after banks, the idea of politicians taking control of banks certainly will not improve the situation. We can make changes to legislation and there are other things we can do. However, we must ensure that we continue the stability that we have put in place in our economy and amplify the confidence that we have given back to people. We have given that confidence to all the people who are working, whether self-employed people who own their own businesses or the people who are employed by those small or medium-sized businesses. We are giving increasing confidence and we are getting people back to work. Now, the point has been reached when those who have benefited from what the Government has done to stabilise the situation, including the banks, should seriously give something back to help these people.

Bernard Durkan (Kildare North, Fine Gael)
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Deputy Regina Doherty is the next speaker listed but she is not here. I call Deputy Eamonn Maloney, who has five minutes.

Eamonn Maloney (Dublin South West, Labour)
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In common with others I welcome the debate and I give credit to Deputy Michael McGrath for raising the issue. It is not simply a matter of welcoming the debate. This type of debate is necessary and it should be repeated given what has happened to our economy in the past ten years or less. We need to learn the lessons whether in respect of relying on one particular industry - I am referring to the expansion of the building industry and its subsequent collapse - or otherwise. The other aspect is the entire collapse of the banking system. This is the type of debate that, rightly, highlights the wrongs of the past. Like many other people, I believe we can learn from these things. I believe we should take the banks into consideration such that mistakes are not repeated in future.

More important, as legislators we should concern ourselves with the consumers or bank customers who are mortgage holders. Given the age we live in, any householder with a mortgage or any citizen of the State has access to information. One of the great assets of living in such a technological age is that people can compare interest rates on a screen as well as every other aspect of banking not only in the domestic market but throughout any part of Europe. Such developments have led to frustration among customers.

I listened to Deputy McGrath last night. It is one of these things. Apart from unemployment within the household, the next most obvious problem that causes distress is the issue of a person who has a substantial mortgage specifically, given what this debate is about, one with a standard variable rate. Every Deputy will have experienced this in his clinics. There is a belief among those who have standard variable rate mortgages that they are being cheated in some way and that the thing is not right. As legislators, we should do something about it. I am with them in their point of view because this impacts on families very negatively. It causes dreadful distress and we have a responsibility in this area. People believe that there is an unfairness, especially given what has happened in recent times. Banks have been subject to a good deal of kicking by politicians and consumers, and rightly so, given what has happened. There is a great deal of distrust, a belief that there is an unfairness to the whole situation and a belief that banks have the upper hand all the time.

I listened to some of the debate last night and some of the views were repeated earlier. Reference was made to the independence of the commercial operators, the banking institutions.

As I said at the beginning we must learn about what got us to the point where we are having this debate tonight. We are having this debate because of what happened in recent years. We must not repeat these mistakes. I do not think we should and it would be wrong of us as legislators to do so. We have a duty to consumers and householders to ensure this does not happen.

I was listening to the Minister of State, Deputy Harris, last night. I do not disagree with him but he made a particular comment on the Central Bank. I have my own view about the Central Bank given its role in and around the period of the collapse. The Minister of State, Deputy Harris, made a particular remark last night and I am keen to refer to it because I have reservations about it. He stated: "The Central Bank has no statutory role in the setting of interest rates by financial institutions, apart from the interest rate cap imposed on the credit union sector." If the extent of our control as a parliament over the Central Bank amounts to its ability to go chasing around putting restrictions on credit unions, it does not say much for the Central Bank. Perhaps we should be looking in other directions.

Liam Twomey (Wexford, Fine Gael)
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The Deputy must conclude.

Eamonn Maloney (Dublin South West, Labour)
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I am all in favour of restrictions. There are not enough restrictions in respect of the Central Bank. I have cited some examples in this regard. If we learned one thing from the years of the Celtic tiger it is the need for more regulation.

Liam Twomey (Wexford, Fine Gael)
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The Deputy will have to conclude as he is well over time.

Eamonn Maloney (Dublin South West, Labour)
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The Central Bank stated that its principal role is one of supervision. That may be the case but we are the politicians. We are the people who have to govern. We should not govern in the interests of central banks or financial institutions. We should govern for the common good.

Jerry Buttimer (Cork South Central, Fine Gael)
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I thank Deputy McGrath for putting the motion before the House. I concur wholeheartedly with Deputy Maloney. As Members, all of us should govern and act on behalf of the people not on behalf of a chosen few.

Again today we witnessed good news in our country and economy. More people are at work. There is an increase in the number of gardaí to be recruited. More funding is to be provided for public and social housing. These are positive developments that will affect the lives of our citizens in an influential way.

We must ensure that we keep people in the family home. That is our task and duty. I encourage the Minister for Finance, Deputy Noonan, to meet the Central Bank Governor, Professor Honohan, to impress upon him the urgency of the situation and the need to give our homeowners a break.

I welcome the fact that the Economic Management Council is meeting the banks. I hope they will put in place a plan to bring about a resolution in this case.

The area of mortgages is one where we have a great deal to work on as a Government and as a country. We must ensure that the 0.25% taken off the variable rate and passed on by some banks is passed on by all the banks. I agree with Deputy Mitchell O'Connor. It is not good enough that in some cases this has not happened.

This debate is important. It is a pity that in some cases the members of the Fianna Fáil Party were not as concerned five years ago about our fellow citizens. As Deputy Maloney said, events could have changed and we would not be where we are today.

Having said that, we need to have an honest debate on the matter. I agree with the Acting Chairman, Deputy Twomey, who is Chairman of the Joint Committee on Finance, Public Expenditure and Reform. Representatives of the banks should be before the finance committee of the Houses rather than anywhere else. They should be accountable to the elected Members, who represent the people.

Clearly the banking sector has undergone significant change. Everything is not fixed and everything is not perfect. However, each of us have been contacted by people in our constituencies on the issue of mortgage arrears and the other issues being debated tonight. It is important for the banks to remember that it was the people who bailed them out and helped to salvage the banking sector.

They now have an obligation and a duty to be responsible and to work with people. I mean that as a constituency politician who engages with banks every week. It is unacceptable for banks to think it is business as it was before under Fianna Fáil. It is not, and it can never go back to that way. Those in mortgage arrears and those experiencing problems require assistance. It is not acceptable that banks can attempt to profiteer at the expense of the Irish people. What we need, as we all agree, is a fully operational banking system. However, the banks must work with the people to keep families in their homes.

Bernard Durkan (Kildare North, Fine Gael)
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I am delighted to have an opportunity to speak in this debate. I compliment Deputy Michael McGrath for bringing the matter before the House. This is a very emotive issue, one that affects an awful lot of people throughout the length and breadth of the country. Many people have felt assailed in the past number of years and have been under the cosh when it comes to meeting their financial commitments, particularly their mortgage repayments.

We know the argument about tracker versus variable rates and we know the banks have been in a bad place for the past number of years. However, we also know the taxpayer came to the rescue of the banks, rightly or wrongly, and the people made a huge effort to ensure the banks were able to trade again. I am not blaming anybody for what happened previously, but that was a huge sacrifice. Following that, it behoves the lending institutions to bear in mind that maybe not all of the borrowers were happy in the past five years either, that they may have gone through bad times and they may have had illness, lost their jobs or suffered various deprivations too numerous to mention. We have all dealt with constituents in this area.

It is now time for the lending institutions to look again a little more sympathetically at their borrowers and to try to offer them something that is within their capacity to pay, for example, they might pay the norm of one third of disposable income without any moral hazard being incurred. At the same time, the banks should look at a packaging of the balance the borrowers may not be able to resolve at this stage until it is possible to do so. In that way, everybody shares the burden: the borrower shares the burden on the basis that he or she takes longer to repay the loan; and the lender shares the burden on the basis that it takes longer to have the entire loan repaid, and it may have to be restructured in another way.

One thing is certain. The lending institutions must have due regard for the changed circumstances, which are as follows. Having made the huge sacrifices they have made, the people, the taxpayers of Ireland, need to be given recognition for these efforts. Without that recognition, the situation becomes intolerable. It goes without saying that in the time in which we live, if the banks were not to respond sympathetically to the situation, public confidence in the system would be eroded.

I again thank my colleagues across the House for bringing the matter before us. I believe there is general agreement in the way Members on all sides of the House look at this issue. It is important that the lending institutions are in profit. That is their job, as they are supposed to provide lending facilities for the community at large. At the same time, however, they need to have regard to the needs of the borrowers.

Tom Barry (Cork East, Fine Gael)
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I am delighted to speak on the motion. First and foremost, everybody wants to see the banks returning to a healthy state and lending normally. While the Minister has no statutory role in regard to the passing on of interest rates in regulated institutions, we need to be part of this discussion.

The issue for many people is not the percentage of the interest rate but the principal of the mortgage itself. Like many others, I remember borrowing at 7.7% for three years on our mortgage. I am not saying anything particular about that except that we were able to borrow a sum that was manageable. We cannot legislate against people with tracker mortgages even if the banks are losing money and they dislike losing that money. It is a situation some people find themselves in and, if they can hold on and pay, that is good for them. The point is that interfering with interest rates that the banks set, while I can see the arguments for it now, might set a dangerous precedent down the road. For example, how do we decide who gets a reduced interest rate? Do we sidetrack issues of security and track record? If we did this, we would enter into a different area.

Every week we see cases of people who have held on until now but who are in huge arrears and afraid of losing their homes. They certainly need to be dealt with. I urge the Government to consider using some of the 30 year money we are getting at just over 1% to finance solutions for these people. In fairness, they are in a very precarious position. There is an argument about someone who is not in arrears and is paying their mortgage at the moment paying a little less, but those in arrears have priority, in my view.

The Strategic Banking Corporation of Ireland, SBCI, is here to promote increased lending, in particular to SMEs and the agri-sector. While I am delighted it is here, I would be very interested to see how much of that money is taken up and how much finds its way down through the system. I will be watching it and we will see the metrics. The challenge is out there for the SBCI to be effective. At times, part of me wonders whether it should go through the pillar banks at all, although that is just my observation. We will see. Perhaps it will work.

Banks need to be profitable. All of us who are banking want to be sure our banks can re-lend to us as we move along. I believe we should be looking at the European rules introduced in the middle of the euro crisis that govern countries' deficits and spending. Ireland is in a position where, due to the situation in the worst years of the recession, we are now being tied back to those previous years of low growth despite our high current growth.

To conclude, this is a very worthwhile debate. I believe more of the recommendations of the Keane report should be implemented. People should be very cautious when banks start trying to mop up equity, as is the case at the moment, and are looking for renewed personal guarantees in regard to perfecting title. These are serious issues and we need to discuss them.

Michael McNamara (Clare, Labour)
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To pick up where Deputy Barry left off, with the Strategic Banking Corporation of Ireland, the Government counter-motion stresses the fact the Government has no statutory role in setting interest rates. I believe this was stressed by the Minister last night, and I am sorry I was not present to hear him speak. Nor does the Minister really have any role with regard to the interest rates set by banks which avail of the SBCI.

The SBCI was effectively set up to get money to develop SMEs and the wider economy after a period of considerable decline and stagnation and, of course, the SBCI set up long-term funding agreements with the European Investment Bank, with KfW, the German state promotion bank, and with the Ireland Strategic Investment Fund. The result of that has been very little. I have had communication from constituents who, through all of that period, were wondering where they could get funding, and I had told them the Government was going to set this up and that I was led to believe it would be great. Today, I was told by one of those people that they were being offered an interest rate of 6.25% by Bank of Ireland. Therefore, for all of the Government's efforts and all of the cheap money the Government is getting and giving to Bank of Ireland, that is being passed on at just 0.25% less than normal. This is not only notwithstanding all of the cheap funding but also notwithstanding all of the security that comes with lending through this scheme.

Richie Boucher came to the finance committee while I was there and made it quite clear what he thought about the elected representatives in this place. I do not know what more he could have done to express his disdain. Likewise, AIB is propped up by the State and is a failed banking institution to all intents and purposes. Another constituent runs a small business employing over 100 people in my constituency. In that case, the bank is not seeking to re-establish non-performing loans but to re-establish performing loans so it can get a better interest rate than the rate it agreed. This business, which employs over 100 people, is now being threatened with the putting in of a receiver to protect the bank's assets.

There is no threat to the business whatsoever, but if it puts in a receiver there will be an immediate threat because people who do business with the enterprise will think they should not give it money or extend it credit. To a certain extent, the Government has had successes, but they have not revolved around tackling the banking sector.

That said, I have not heard too many solutions. The solutions contained in the Government amendment are pretty much the same as those proposed by Deputy Michael McGrath, although they have been cut, pasted and rejigged because we could not possibly acknowledge that he had a point. I thank him for tabling the motion, because we all know that after every election there is a monopoly of wisdom on this side of the House, which remains there until the next election.

Bernard Durkan (Kildare North, Fine Gael)
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It was always so.

Michael McNamara (Clare, Labour)
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It was always so. We have others who suggest that we do not need a banking sector at all and that we should go back to the Old Testament times of usury, where we bury our shekels, dig them up and find they are worth exactly the same amount of money a couple of hundred years later. I thank Deputy Michael McGrath for highlighting this issue. I wonder what solutions there are.

Bernard Durkan (Kildare North, Fine Gael)
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Deputies Kitt, Calleary, Collins, Moynihan and McConalogue are sharing time.

Michael Kitt (Galway East, Fianna Fail)
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I commend Deputy Michael McGrath for tabling this motion and thank him for the great activity he has carried out on variable rate mortgages. What he said yesterday about a customer on a €200,000 20-year mortgage paying up to €1,000 a year more than the offer available to a new customer is worth repeating. Such a customer would pay €6,000 more than a family on a tracker mortgage of the same amount. Those figures show how unfair the situation is.

The excessive variable mortgage interest rates charged by banks should be investigated by the Competition and Consumer Protection Commission, because we know that the data available show that the interest on the average standard variable rate mortgage in Ireland is 4.6%, which is well above the 0.05% rate charged by the European Central Bank. Mr. Brian Hayes, MEP, has said we can say with certainty that Irish house buyers are being ripped off by banks, particularly when one considers that the eurozone average variable mortgage rate is 2.45%.

It is a great shame that high interest rates are paid by customers to keep the banks profitable, a matter raised by Deputy Donnelly today on Leaders' Questions. He stated that bank profits on individual restructured mortgages, including those where banks are seeking possession, should be capped at the expected level under normal payment of the mortgages. The issue has been raised on Leaders' Questions time and again and I hope the Central Bank will investigate and publish the true average variable rate in Ireland.

We need a thorough investigation into the argument that the current standard variable rates do no reflect market conditions. We should examine other European countries, particularly the low-interest-rate environment that exists in many eurozone countries. In Ireland, banks are still offering variable rates of over 4%. Excuses have been given in respect of Ireland's home loan rates, which are more expensive than in other European Union countries, with reference to the higher cost of funding and the effects of tracker mortgages. I do not think we can buy that.

We need a radical change in the current Irish mortgage system. I hope that will happen. There was a time when banks would pass on the ECB rate cuts to all mortgage customers, including those on variable rates as well as trackers, but that is not now happening. Instead, the banks are putting the squeeze on variable rate customers. Variable rate mortgage holders are now on interest rates that are three times those being paid by tracker mortgage borrowers. AIB and Bank of Ireland charge their customers a 4.5% interest rate compared to the 1% to 1.5% rate paid by tracker borrowers.

We also know that anyone with savings has seen banks slash interest rates on deposits. There is a 2% difference in what most banks receive in interest on all of their loans and what they pay in interest on all deposits. It is now time this was dealt with. Central Bank statistics show that almost 240,000 mortgages were restructured by the end of 2013. The Simon Community has raised this issue in regard to homelessness, given the fact that 37,000 households are in mortgage arrears of two years or more.

I refer to returning emigrants trying to get mortgages. It is always said that they are very welcome to come home, but they have told me that one needs to go through hoops to get a mortgage and save a lot more. One can expect to pay interest on a mortgage at similar rates to Irish buy-to-let investors, something which is true of Permanent TSB and AIB. One such person was featured in The Irish Times. He had worked in the UK for 15 years and returned to Dublin in order to commute to the UK. He was told by one bank that he would need a 40% deposit - that is, €50,000 - to buy a home worth €350,000. A constituent in East Galway returned after seven years, having made a bit of money. He had a €50,000 deposit for a modest house worth €140,000. He was told he would need 50% of the price of the house because he was not an Irish resident. These are the kind of obstacles that are in the way of people. There is no flexibility, and I call on the Government to show some. People, particularly those returning home, want to plan for the future, but they will not do so while the banks are inflexible and the Government is not taking action.

Dara Calleary (Mayo, Fianna Fail)
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I commend Deputy Michael McGrath for raising an issue that is important to mortgage holders and the banking system. If the Minister, Deputy Noonan, who has joined us, told 300,000 people that he would give them back between €992 and €4,000, the benches would be full of cheering backbenchers rushing to the radio talking about the great Government. Yet the benches are empty. Those on the Government side who have spoken are confused as to the policy because there is a reluctance to act on this issue.

Competition keeps coming back as one of the reasons variable rate mortgage holders are paying such rates. The Minister of State, Deputy Harris, referred to the lack of competition, as has the Central Bank. Deputies Barry and McNamara spoke about the potential options open to the Government to address issues regarding competition for variable rate mortgage holders, SMEs or bank customers generally. All of the options and the ability to do something about this issue, which is costing families thousands of euro, have been ignored.

The Strategic Banking Corporation of Ireland is in existence. Any new money being invested in the economy is good, but we reward the existing pillar banks, AIB and Bank of Ireland, which are the criminals that have been found guilty of the offence we are discussing, for their guilt. We reward them for abandoning variable rate mortgage holders and SMEs. Deputy McNamara referred to facilities being changed and extra costs and interest being charged. That is happening wholesale, but we reward the banks and give them more money from the Strategic Banking Corporation of Ireland and move away from the chance to introduce an extra element of competition.

For years, credit unions have said they want to enter the mortgage market. They are local institutions and community banking at its very best. It is the opposite of what we are rewarding, yet we will not allow competition into the mortgage market. It is no wonder our variable rate mortgages are as they are when there is a lack of competition. To proffer it as an excuse is one thing, but to ignore the chance of doing anything about it shows an ignorance of the issue.

The Government is pressing the banks to do something, as it stated in its amendment, and is the majority shareholder in AIB and a significant shareholder in Bank of Ireland, but there is a fundamental clash between that and driving that shareholding and profitability of the banks to try to sell them off at some stage. We want to increase profits, and to do that we need more bank income and the share price needs to be higher.

At the same time, the Government has an interest and responsibility to mortgage holders who are being fleeced by these same banks. Somebody must act as the independent mediator and stand up for the interests of the people, as opposed to the interests of the Government's bank balance. Somebody must argue that there is potential to introduce competition to the market through the Strategic Banking Corporation of Ireland, credit unions or any other number of methods.

We are not arguing that we should revert to something like the communist days in Russia, when the Minister responsible for finance dictated how the banks operated. We are asking why the Government has consistently over its term in office laid down in front of the banks. The Taoiseach today stated that he did not fix the banks for the bankers but we can look at the record. We changed the law to facilitate repossession of principal private residences. We facilitated and established an insolvency regime to give people a second chance that has, at its heart, a control mechanism by the main creditor, which equates to the banks. Bank representatives have not met the Economic Management Council to discuss this variable rate issue since 2012, and the credit guarantee scheme, which was introduced to assist small businesses in getting lending facilities, and which was flawed since its launch, has not been reformed despite promises from the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, going back 15 months. We are coming to the end of another Dáil session where the credit guarantee (amendment) Bill has not come before it for discussion.

Where there is an awareness of the problem at a Government level, in fairness to the Minister for Finance and the Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Nash, there is no urgency in doing something about it. On many occasions we have seen reforms put in place that have fixed the banks for the bankers, and people who are using the banks' facilities and products are being left behind to wait without money that should be in their pockets going into those pockets. Nevertheless, backbenchers are standing up to wring their hands in pain and exasperation, as was the case when Deputy Michael McGrath put forward a motion on giving protection to the principal primary residence in an insolvency regime. At 9 p.m., those backbenchers will come here to vote for the Government's amendment to the motion, which amounts to a pat on the back. They will argue that they are worried about the issue but they will want to get out of here for Easter.

I bet the Government will tackle this issue, along with the issue of protecting the principal private residence, as part of its election campaign. That is why there is such distrust and frustration about politics, as when somebody formulates a good idea, as Deputy McNamara stated, the Government will indicate that it will close down any of those efforts. When options are presented to the Government, as they have been by Deputy Michael McGrath on so many occasions, the Government will refuse to listen as it wants to act at its own time of choosing and take credit for that. The people overpaying for their mortgage do not have that luxury and cannot afford to keep paying rates way above what they would get if they were to buy the house as a new customer. The irony is if these people are forced to give up or sell their houses because they cannot afford to pay the mortgage, the people buying the house would have access to the lower variable mortgage rates now on offer. The person buying the house would have stamp duty paid by some of these pillar banks in which we are placing our trust and in which the Minister puts his constant support and empowerment. They are funding people who are buying houses from others by way of paying legal charges but meanwhile those who are paying excessive interest rates are left to whistle and suffer for the want of somebody standing up and providing a way out of this.

People have put up with much and the majority of those who pay their mortgage do so with much sufferance and sacrifice. They are absolutely put to their collar in doing it. They can see advertisements from the two pillar banks in particular about being open for business and lending; the slogan is "we are backing brave". These banks are offering to pay stamp duty for people who can buy a house. This suggests we are at the beginning of a circle all over again, and that is not somewhere we want to go. I know the Minister does not want to go there and surely there is something to be said for the Central Bank acting now on promotional offers which have people being pushed and pulled in the housing market. Bank money is our money and it is paid by variable rate mortgage holders, and it is paying for the promotions like the payment of stamp duty. That must come to a stop, as we are going down a road again which we do not want to follow.

I have lost count of the number of occasions that Deputy Michael McGrath has brought motions to this House in the past four years, starting with his first piece of business, which dealt with family home protection. As we come to the end of this Dáil, we are again highlighting issues that are relevant to the Government party Members. With those who spoke this evening, there was an absence of the usual backbencher scripts that were about having a go for the sake of it; there is a realisation among Government party Members that there is a problem. They will all do as the Government asks and support this very watery amendment to the motion. We need action and if people are to regain faith and confidence in this House, as well as in those of us serving in this House, we will need action on these kinds of issues. We need people to see that Dáil Éireann recognises their trouble and the ultimate and inherent unfairness in a position where I or anybody doing his or her best in paying a mortgage would pay more than somebody who is now in a position to buy because of lower interest rates. People who have made sacrifices to pay for those lower interest rates now have to stand back while somebody else gets the benefit in accessing those lower rates. They can also use the benefit of those sacrifices to pay for stamp duty.

Dáil Éireann needs to stand up and prove the Taoiseach right for a change when he said that we did not fix the banks for the sake of bankers. The record of this Government suggests significantly otherwise.

Niall Collins (Limerick, Fianna Fail)
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In the Minister's absence, there was a telling number of Fine Gael and Labour backbenchers who came here tonight and last night and agreed with the Fianna Fáil motion as tabled by Deputy Michael McGrath. I wonder would they do the same in the Minister's presence, as the benches are now empty. In any event, the proof of the pudding is in the eating, and we will see if they turn up later to support our motion. I do not believe they will but the Minister should take time to read exactly what those Members said.

We are in highway robbery territory with what the banks are doing with variable rate mortgage account holders. There is a man fronting the newest political quango who previously presented a television programme called "Rip-Off Republic", and unfortunately we are getting into that space again. The banks are engaged in ripping off this republic. I was astonished this morning when the Taoiseach stated proudly that the banks were profitable again and claimed this as an achievement. That sends out the wrong message. Speaker after speaker has argued that the Taoiseach and the Government cannot engage in managing banks and dictating variable interest rates. Surely he has an opinion about this, and if he does not, he has enough advisers around him who are paid well enough to form an opinion for the Taoiseach and have him articulate it. We need to see leadership on this issue. There is a critical mass of people who are stuck because of this problem.

In his comments I would like the Minister to address issues concerning the Insolvency Service of Ireland and the abject rate of take-up in that service, as well as any proposal for the bank veto in negotiations. That is the elephant in the room for people suffering distress because of mortgage payments and who are trying to negotiate with bankers. Will the Minister comment on bankruptcy? The three-year term is not working and there is a farcical position as people have the ability to travel for less than two hours and go to the UK for this purpose. We all know plenty of people who have taken bankruptcy tourism into the nearest jurisdiction. We must seriously take that on board and review the three-year term downwards.

I recently had a private conversation with a fairly senior manager in AIB who is based not in Dublin or Limerick but Cork. I will not name that person but he told me that the game with banks and his bank in particular is to restrict lending of money to house and property developers. They are trying to manage the supply of units and particularly new units on the market. They want to force up supply of existing housing stock units available to the market. In fairness, "Prime Time Investigates" had a programme about this at some stage in the past two weeks and independently examined the issue. We must seriously consider that matter as the owners of AIB. The manager told me that privately.

The evidence is out there and it was backed up by RTE's "Prime Time Investigates" programme.

Like me, the Minister is from Limerick, and he knows there was a repossession court hearing recently at which up to 219 cases were heard. I attended the court, as did Deputy O'Dea, and it was a sad spectacle. I compliment the registrar, Pat Wallace, on the way he dealt sensitively with the hardship of the people who presented before him, which was telling. He is doing a great job. Many issues flowed from it, in particular the number of people who presented at the court that day who had never heard of the Insolvency Service of Ireland, ISI. Mr. Wallace asked every one of them about it. One of the support groups, the Irish Mortgage Holders' Association, had a table in the court on the day and were handing out their information. It was very telling that person after person who presented there with cases of the hardest type to listen to was unaware that the ISI was available. It was obviously because the financial institutions that brought them there had not pointed them in that direction.

There are lessons to be learnt. If any message goes out from tonight's debate, it is that the Government must take the issue of variable interest rate reductions seriously. They must be passed on. Allowing the banks to profit on the backs of people at every hand's turn is not good for the country. We must take this on board and the Government must follow the lead of some of its backbenchers, if it will not follow the lead of Deputy Michael McGrath.

Michael Moynihan (Cork North West, Fianna Fail)
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I compliment Deputy Michael McGrath on bringing this Private Members' motion before the House. It is one of the major issues. There is not a public representative in the House who is not encountering mortgage difficulties in his or her constituency and clinic. The mortgage is one of the biggest outgoings of any family, and families are seeing the rip-off they are experiencing at the hands of the banks, particularly with variable mortgages. Nothing is being done about it. Nobody in the Government has taken the lead or got to grips with it, and it needs to be addressed. Nearly all cases of pressure from the banks and home repossessions that I have encountered have been in respect of variable rate mortgages. The banks have been grossly unfair in how they have been dealing with home owners.

I will leave aside debts for business investments and farms, and deal only with home mortgage arrears and interest accrued. A large amount of interest has been piled on. When we go to the banks in real negotiations and go through the figures, fill out the forms, take into account incomes and outgoings, and try to come to some kind of arrangement, whether by extending the loan or something else, some of the banks have been intransigent. I have been negotiating along with one family for nearly three years, and only within the past few weeks, after highlighting the case at every level I can within the bank, have we got traction. There is no serious intent on the part of the banks. The banks give the line that the last thing they want to do is to repossess houses. In my opinion, they are going bald-headed for family houses belonging to people who have only one property. These people, through no fault of their own, perhaps due to the loss of a job or an illness in the family, are finding it extremely difficult to meet their mortgage repayments. Such people must decide which bill to pay first - the mortgage or, perhaps, a medical bill. These are challenging issues that face people and it is grossly unfair of the banks. It is high time the Government hauled the banks in to discuss the variable interest rates on mortgages. Although it is fine to see the banks saying they have returned to profitability, they are doing so on the backs of homeowners.

My colleague Deputy Niall Collins mentioned insolvency. For the people I am dealing with and their difficulties, the legislation is not worth a hat full of crabs. We must be very straight with each other at Government level and around this House. The existing legislation is giving no protection to the people who have one property, a family home, which can be managed over a period of years. The Government must ensure the banks step up to the plate, because families in this country are going through hoops left, right and centre. They have cut back on every possible expenditure. I have filled in forms with them to make cases to the banks, and the same response comes back time and again. We must be very straight with ourselves in acknowledging that the existing machinery is not working and that we must challenge it in a significant way.

On the business side, families that have had to restructure loans for a whole variety of reasons, who may have had an excellent interest rate over recent years and been significant banking customers, are being disregarded by the banks. These are people who have performing loans and who have worked very hard to ensure they honour their commitments. Yet the banks disregard their track records and the goodwill that should have been built up with them. Tonight, we are dealing with the variable interest rates and the way the banks are treating home owners, particularly those in difficulty who are being threatened with repossession. The machinery of the State is not working and is failing them, and it is high time the Government and this House took initiatives to enshrine the basic principle of retaining the family home. This should be one of the most important issues for us.

Charlie McConalogue (Donegal North East, Fianna Fail)
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I join my party colleagues in commending the motion proposed by Deputy Michael McGrath to deal with this very important issue, which, unfortunately, the Government has continued to ignore. The Government has refused to engage with the issue in any way that would bring meaningful relief to the 300,000 mortgage holders across the country who are on a standard variable rate and continue to be squeezed by the banks despite the fact that over recent years the ECB has reduced its interest rate to an historic low of 0.05%. As many speakers have pointed out, and as people on the Government side of the House have acknowledged, the Government continues to stand over, and refuses to address or challenge, a situation in which the banks are charging a standard variable rate that is 2% higher than the average rate charged by banks in Europe and across the Border in Northern Ireland. Some of these banks are lending for mortgages within this State.

Since 2007, while the ECB rate has decreased drastically, Permanent TSB's margin on lending has increased from 1.44% to 4.45%. This is a massive increase by any standards. If it happened in any other part of the economy, the Government would regularly jump up and down condemning it and saying it needed to be changed and that there must be intervention. We do not hear such comments from the Government and, unfortunately, the Government was all too willing to allow the banks to recapitalise themselves by charging existing standard variable rate customers grossly unfair margins. Because house prices have dropped so much, normal market rules do not apply and existing mortgage holders cannot seek to switch lenders. The Government has made no effort, through legislation or through engagement by the Economic Management Council with the banks, to ensure the banks bring forward products that allow people to switch mortgages that are in negative equity.

Unfortunately, this has been a hallmark of the way the Government has dealt with the banks. Mortgage books were sold but the CCMA has not been legislated for, meaning mortgages sold on to vulture funds in many instances are not protected. Many people have unsustainable mortgages and are in danger of losing their homes but the Government has refused to remove the veto the banks have in respect of insolvency deals. The Minister has also presided over an insolvency service for the past there years which has clearly not worked with only 191 personal insolvency cases being finalised through that service. This is despite the Minister indicating the process would be kept under review. He refused to take on board the many concerns of people regarding how he established the service. Mortgage holders have suffered while banks have had the whip hand in dealing with them.

It is long past time for a change of approach by the Government. The EMC at a minimum should seek to meet representatives of the banks and the banking sector regarding how they are addressing this issue. It is also long past time the Government admitted that the personal insolvency service is not working and introduced a service that serves the public appropriately. Unfortunately, the Minister has been content to oversee a situation where mortgage holders continue to be squeezed with the Government refusing to take action.

Michael Noonan (Limerick City, Fine Gael)
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I have listened carefully to all that has been said on the motion last night and tonight. I appreciate the fact that this standard variable rate charge by the various financial institutions in Ireland has a huge impact on individual households and has a constraining effect on their consumption of other goods and services. This interest rate issue was discussed here earlier during Questions and I gave a commitment to speak again with the Governor of the Central Bank and request that he considers how best to influence the banks to reduce SVRs charged to borrowers. A meeting has been scheduled for tomorrow.

I also hope that the debates have shed light on the complex factors at play in the setting of interest rates by independent financial institutions. It should be clear that it would be simplistic to say that a ceiling should be set for mortgage rates and expect that there would be no consequences other than reduced rates. This seems to be accepted on all sides of the House. It is universally accepted that additional competition will have the effect of reducing prices to consumers, which in the mortgage sector means reducing the SVR. Lower rates are available for many standard variable mortgage customers if they switch lender. The banks must be convinced that they are at risk of losing customers if they persist with SVRs that are higher than the rate their customers could get elsewhere. People who are in a position to move mortgages should look into their options to do so. The CCPC website at consumerhelp.ie has useful information on the process. The website also contains comparisons of mortgage products and gives information on incentives that institutions will give to encourage switching. People can be put off by the up front and legal costs involved in switching but some institutions pay some or all of the fees involved and in some case the interest savings can be significant. I fully accept this is not an option for everyone but I would encourage people to take the time to explore it.

The Government is playing its part by putting the structures in place to increase competition and ensuring there are no obstacles to new entrants to the market. The Government continues to work to create an environment conducive to the entry of new entrants primarily through the implementation of policies to promote economic recovery and employment creation but also through various initiatives to ensure that there is an adequate pool of credit to underpin the recovery. The Government's actions in this area include the establishment of the Strategic Banking Corporation of Ireland, the credit guarantee scheme and the amendment to section 149 of the Consumer Credit Act to encourage new entrants into the financial sector.

The Government will welcome any innovative products put forward by the banks as a way to address the situation in which we find ourselves but only insofar as they are sustainable. However, if the banks begin to offer mortgage rates at unsustainable, low levels as they did in the past, we could again be dragged back into a situation where their business model does not work, with all the trauma that brings for the economy and society.

In budget 2012, mortgage interest relief was increased to 30% for all first time buyers who bought between 1 January 2004 and 31 December 2008. This is a significant saving and highlights this Government's commitment to support mortgage holders to pay their mortgage. It will continue to be available at this rate until the end of 2017 for those buyers. The Government is committed to applying downward pressure on mortgage rates by increasing and supporting competition in the market. This commitment was made in the statement of Government priorities 2014 to 2016.

I will meet the Governor of the Central Bank tomorrow and I will request that he considers how best to influence the banks to reduce SVRs charged to all borrowers. As I indicated, this is a topic on which the House agrees and I will convey this to the Governor.

Comparisons have been made, which were incorrect. For example, AIB offers a mortgage rate of 4.15% whereas its subsidiary in Northern Ireland offers a rate of 4.75%, 60 basis points higher, while Bank of Ireland offers a mortgage rate of 4.49% in Northern Ireland and 4.5% in the Republic, a difference of 0.01%. Many of the statistics produced by Opposition Members are just not correct.

Billy Kelleher (Cork North Central, Fianna Fail)
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I welcome the opportunity to contribute to the debate and I commend Deputy Michael McGrath again on raising this issue. I have also listened to the debate over the past two nights and there is a strong consensus, to which the Minister referred, that the views of the House should be conveyed to the Governor of the Central Bank. I welcome the fact that the Minister will have a meeting with him to convey that view.

In the contributions by a number of Members, there was criticism of the tabling of the motion. This was done because of where we are as a society and the difficulties families face servicing mortgage debt and we would fail in our fundamental duty as an Opposition party not to highlight the fact that 300,000 people are currently enslaved to the banks. I do not know whether the Minister has recently put his house deeds under his arms and headed off down the high street of one of our cities looking to switch his mortgage but it is not as easy as he outlined. There are many hidden costs to switching and people must also overcome the fear factor of approaching another lending institution to go through the entire process of assessment and approval prior to final sanction. They must carry hidden costs relating to legal and engineering fees and all that flows from them. It is not as easy as putting a copy of the deeds under one's arm and heading into a financial institution.

There is little competition between the major lenders on our high streets and negligible savings can be generated by moving lender. The Minister has to convey our strong views to the Governor of the Central Bank. It is reasonable for him to expect a good response because the Governor previously stated, "It is reasonable to ask whether having underpriced lending so badly in the early years of the millennium, we could end up overpricing it". He has also stated that the mortgage pricing structure for variable rates is unacceptable.

We have to realise we cannot have a situation where we are asking one borrower, who has a variable rate mortgage, to subsidise another borrower, who has a tracker mortgage. That is what is happening in effect. The banks are the ones responsible for the tracker mortgages. They went out to the markets thinking there would be free funds forever and decided to peg themselves to the ECB rate and lend accordingly. We now have an ECB rate of 0.05%, so tracker mortgages are loss leaders, as referred to by other Deputies. Asking another family to subsidise that tracker mortgage is simply unfair. It is unfair that there could be a difference of €6,000 between two mortgages in excess of €200,000 depending on whether the family is on a variable or a tracker rate mortgage.

The Minister must be strong and forceful in this. The banks cannot consistently say they are doing everything in their power to address this issue. If they were, there would be more competition and they would be more sympathetic to the variable mortgage holders, who are under huge pressure. The Minister referred to it himself. It is negating the capacity of people with variable mortgages to consume other goods and services, which would be of benefit to the Minister and to society more broadly in terms of getting spending power back into the retail sector and the wider economy. There are many good reasons we should do this. We should not always be in awe of the banks and feel that we owe them something. This Parliament and this country owe the banks nothing. It is the other way around. The idea that we can wax lyrical and boast that our banks are back in profitability is fine, but there are 300,000 families, many of whom are well below the waterline in terms of financial comfort. They need some break. It is now the turn of the banks to make a repayment for what was done to assist them in the crisis they went through.

Mattie McGrath (Tipperary South, Independent)
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Tell me about it.

Billy Kelleher (Cork North Central, Fianna Fail)
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It was a crisis of their making. One must be very strong and very forceful. If there was an unequivocal statement from the Minister for Finance on this issue, it would have an impact. The Minister should not underestimate his authority. He has it in spades and he can stand up and say in this House that the banks should pass on the savings to variable mortgage holders because it is the right thing to do. It is the fairest thing to do. The idea that we will consistently ask one family at the top of the road to subsidise the family at the bottom of the road because of bad lending policy by the banks, which thought they could access funding forever and a day from the ECB and peg it to that, is shocking. That is where we are.

The cost of funds has been referred to. This is not only in the context of mortgages. Every day of the week, small businesses are in with banks, negotiating loan extensions and looking for term loans and funds.

Mattie McGrath (Tipperary South, Independent)
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They are not getting them.

Billy Kelleher (Cork North Central, Fianna Fail)
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They cannot get them, but when they are negotiating, sitting around the oak tables of the banks of this country, they are being told that the cost of funds is 2%. We know, even from the evidence presented by the banks to the committee, that it is no longer 2%, but they consistently tell people who are trying to secure funding for small businesses that the cost of funds is 2%.

Mattie McGrath (Tipperary South, Independent)
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Porkies.

Bernard Durkan (Kildare North, Fine Gael)
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One voice.

Billy Kelleher (Cork North Central, Fianna Fail)
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Someone is misleading someone here, because all the small businesses that have contacted us about this in recent months, which are in discussion with bankers themselves, will tell us that the cost of funds is 2%. We then find officially that the blended cost of funds at Permanent TSB is 1.74%. At Bank of Ireland the cost of funds was 1.15% in June 2014. At AIB it was 1.64%. We know that it has come down substantially since 30 June 2014. The banks are high on the hog again and they are fattening themselves up nicely. We have to be strong in determining that at this stage they have an obligation to assist the many variable rate mortgage holders who are under great pressure. We should not ask families to subsidise other families because they entered into tracker mortgage contracts with banks. For all these reasons, I urge the Minister to act quickly.

There is no doubt that the Insolvency Service of Ireland is not functioning as intended, as has been referred to by Deputy Collins. This is happening day in, day out in courts throughout the country, where banks are seeking repossessions. It is not working. If it were, we would not have this level of repossessions presenting to the courts in the first place and there would be greater knowledge of the many people whose homes are being taken off them. One would have assumed they would at least have been aware of the Insolvency Service of Ireland, but we find time and again that families who are under great stress and are losing their homes are not aware of the mechanism that was set up by the Government to address this issue. This is an indication of failure of policy. The insolvency service had better pick up its game a bit and make itself more visible to hard-pressed families.

On numerous occasions, we, and Deputy McGrath, have raised the issue of the bank veto. This Government is beholden to the banks, giving the bank all the cards.

Mattie McGrath (Tipperary South, Independent)
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Shame.

Bernard Durkan (Kildare North, Fine Gael)
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One voice, without interruption.

Billy Kelleher (Cork North Central, Fianna Fail)
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We all have to be of one voice on this. We must accept that the idea that the banks have the veto on determining what is a sustainable solution flies in the face of everything we have learned over recent years about the banks. Their only abiding interest is their balance sheet, their profitability and moving their salaries back to where they were.

Mattie McGrath (Tipperary South, Independent)
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Yes.

Billy Kelleher (Cork North Central, Fianna Fail)
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I urge the Minister, in his discussions tomorrow with Patrick Honohan, the Governor of the Central Bank, tomorrow, to impress upon him that Parliament has overwhelmingly endorsed this view and expressed strongly that the variable rates charged by banks on existing mortgage holders are unacceptable. It is morally wrong that those who were thrown a lifeline are taking the lifeline from those who are now drowning under unsustainable debts. Any answer from the banks other than acceding to what I hope will be a strong request by both the Minister and the Governor of the Central Bank to the lending institutions would be shameful.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank all the Deputies who contributed to this debate. Listening to all the Deputies, including from the Government side, I am not sure anyone spoke against the motion. Perhaps it will be passed unanimously in a few moments. None the less, the important thing is that the issue be dealt with comprehensively. The bottom line is that tabling the motion and the debate on it have resulted in some progress, in that the Minister has organised a meeting for tomorrow with the Governor, Mr. Honohan. I welcome that.

Mattie McGrath (Tipperary South, Independent)
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Well done.

Michael McGrath (Cork South Central, Fianna Fail)
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It is to be hoped the Minister will deliver a very clear and strong message. Everyone in this House stands behind him in delivering that message. If he does not want to deliver it in a forthright and strong manner in public, which I understand, I expect him to do it in private. He should not be afraid to bang the table and deliver the message on behalf of the people and their representatives that standard variable rate mortgage customers are the forgotten group and it will not be tolerated any longer. The rates they are paying are exorbitant and unacceptable.

The second piece of progress we have is the statement by the Taoiseach today in the Dáil that the banks would be brought before the Economic Management Council for the first time in almost three years. I hope the opportunity will be taken to address this issue as well as a number of other issues. Over recent nights, dozens of individual stories have been conveyed to me, my colleagues and, I am sure, every Deputy in the House. The impact of very high standard variable mortgage rates on families is there to be told. I have been struck by the stories I have been told in the past 24 hours or so. Much has been made of the health of the banks. The banks are on the road to recovery and are largely healthy again. AIB and Bank of Ireland, combined, made €2 billion in pre-tax profits in 2014.

Any suggestion that the poor banks have no capacity to help people on standard variable mortgage rates simply does not stand up to scrutiny. The Government's approach to the banks seems to be to fatten the calf as much as possible, take it to the mart and flog it to the highest bidder and to hell with the consequences. There are consequences which are represented by many people who are paying outrageous, rip-off, standard variable mortgage rates at this time.

When I looked at the Government motion, I have to say I despaired. The mood has improved since as a result of some of the commitments given by the Minister and his own language. We had the scenario yesterday where the Government put forward a counter motion calling on itself to continue to apply downward pressure on standard variable rates. In my relatively short time in the House, I have never heard the likes of it. The Government felt the need to call upon itself to take action on an issue. Presumably the Government agrees wholeheartedly with the Fianna Fáil motion but, of course, it will not merely accept the motion in the manner in which it has been put forward. I thought it was the best one for a while that the Government should call on itself to take action on an issue.

The issue was well ventilated last night and tonight in terms of the cost of funds which are at an historic low. The bottom line is that people understand a variable rate moves in line with the market. It moves in line with market conditions and market conditions have never been better. The ECB rate is virtually at zero, 0.05%, and the wholesale interbank environment is extremely positive for the banks. We all know that people who are saving in the banks are getting virtually nothing in interest. The banks have never had access to as much cheap money as now and there is no justification for the manner in which they are gouging standard variable rate customers. We are witnessing discrimination against existing customers vis-à-visnew customers because a number of banks have reduced their rate for new customers but not for existing customers and that is simply unacceptable. I hope the Minister will make it clear to the Governor of the Central Bank tomorrow that the bank has a very strong role in terms of consumer protection and we want to see that role vindicated and applied.

The Minister referred to north of the Border and highlighted the standard variable rates there. I agree that the variable rates advertised are in line with the rates in the Republic but what he omitted to say is that they offer very strong discount deals for a number of years. When those deals expire, people switch their mortgage to another bank because they have a genuine switcher market open to them. AIB, which the Minister quoted, is advertising variable rates as low as 2.75% and fixed rates as low as 2.79% in Northern Ireland.

I wish the Minister well at his meeting tomorrow. The real measure of the outcome of this motion and the debate we have had is for the banks to announce a round of variable rate cuts which will benefit not just new customers, but existing customers, and that the scandalous practice of targeting this singular group of customers, involving 300,000 people who are paying firmly over the odds for their mortgages, to be brought to an end. Hopefully, our motion will have contributed to that result.