In late February of this year, shortly before Fianna Fáil moved our motion on the same issue that is dealt with in the legislation before us this evening, I met with a constituent in my office. For the purpose of this debate, I will call him Shane. The Minister seems to find that amusing, but it is he who is letting the banks gouge ordinary families. If he thinks it a laughing matter that I should raise the circumstances of a constituent, it is merely indicative of the bubble in which he lives when it comes to the distress being experienced by families as a result of the mortgage interest rate crisis. The Minister has turned his back on all those families.
Shane is on a variable rate mortgage. He and his wife struggled through recent years without complaint and were paying their bills, including the new ones levied on them by this Government, notwithstanding the promises given prior to 2011. Unlike many others, Shane and his wife were fortunate enough to stay on top of their mortgage payments. However, the financial strain of paying this and other bills leaves them with nothing at the end of every working week. As a consequence of the ball and chain that is the interest rate on their mortgage, they are unable to save or enjoy a night out and have not had a weekend away with their children in the past six years. They are, like many other families, simply surviving in order to pay the bank. In effect, the bank owns their life. In addition, as I said, they must bear the costs that have been imposed by this Government, such as water charges and local property charges. There is nothing left over for their family at the end of the week.
Their neighbours in the same estate have enjoyed falling rates over the past few years as their trackers fell in line with the ECB base rates. New neighbours in the estate who bought at the bottom of the market are also enjoying the lower rates being offered to new home buyers. These families have been afforded, through interest rate cuts and lower rates, some small financial relief that has allowed them to enjoy a quality of life. However, that simply is not the case for the person to whom I referred.
Shane is a law abiding and productive citizen, who wants nothing extraordinary. He wants a small bit of wriggle room to get his financial affairs in order and to spend some money on his children. He is horrified at the idea that he will approach this September facing costs of up to €400 for uniforms alone for each child. We are asking the Government to intervene, as we did earlier this year in a motion tabled by Deputy Michael McGrath.
Shane’s fury is also a result of the knowledge that the banks here are levying interest rates significantly greater than the European norm. His anger was directed not only at the banks, but at the political system he believes has abandoned him. The Government has hidden behind the words of the Commission. It asked the Government to burn bondholders and it would not, but if it asked it not to interfere with interest rates it would not. Shane is incredibly cross and I do not agree that he has any right not to be so. The front page of today’s Irish Examiner contained, in large letters, the news that the Cabinet had backed down on interest rates. Using a European Commission report as a convenient cover, the Cabinet declared that there was nothing more it could do apart from tolerate a second attempt by this party to do something for struggling families.
The Government has been as sensitive as the European Commission to the dictates of the market, above the interests of society or having a just approach. Financial institutions have been gouging families. The Minister, Deputy Noonan, I regret to say, informed the newspaper that the needs of the market meant the banks must be permitted to do whatever they wish and that social concerns could not override those concerns. That is the attitude of this Government, Fine Gael, the Labour Party and the European Commission. It is essentially the same as any 19th century Victorian commitment to approaching the economy.
The advice of the Minister, Deputy Noonan, to variable mortgage rate holders, offered on the front page of the Irish Examiner, is as helpful as the Labour Party’s advice to lone parents who are unable to afford child care, that is, that they should simply bring their children to work or work and live to provide for a bank. The Minister, Deputy Noonan, and Deputy Tuffy, who offered that advice on behalf of the Labour Party, are evidently detached from the realities faced by families who are struggling to get from one week to another and to survive until Friday to be broke on Saturday. People are living and working for banks, and are being gouged by them.
The Minister, Deputy Noonan, advised those on variable mortgage rates to move to fixed rates, and observed that be believes we are at the bottom of the interest rate cycle. Considering that we are as close to the zero bond as makes no difference, this observation is about as profound as noticing that water is wet. The Minister must know from the reports he receives on the banking sector that his offered advice is worthless. He advises mortgage holders to switch providers in order to secure better rates, but the switcher market is largely a mirage. The main lending banks have informed the Oireachtas Committee on Finance and the Public Service that very few such transactions are completed. His advice that people move to fixed rates ignores the fact that existing customers are simply not being offered the fixed rates that are being offered to new customers.
There is a gross inequality in the market, with existing customers being held captive by their banks on higher rates while new customers benefit from lower rates. The Government, in particular the Labour Party, has made a great boast of being champions of equality. However, it will come as no shock that the reality of people’s lives involves struggling to get from one week to another. We are far from equality when it comes to dealing with the banks.
The Bill provides an opportunity to rectify a glaring inequality that has trapped more than 300,000 mortgage holders and their families in servitude to banks. It would also protect mortgage holders who have had their mortgages sold onto vulture funds, something through which we are now trying to navigate. We will also take the opportunity to ease the burden on families and grant them some financial space so that they can participate as active citizens in their communities and have some flexibility to protect their domestic circumstances and provide for their children. I fear the latter will not maintain itself because in defence of the European Commission, it has been convenient in terms of giving the Government significant cover. The Government parties now have an exit strategy to walk away from doing the right thing.
How long will the Deputies opposite be content to sit waiting for the cavalry of banking competition to turn up? Will it be in a year, two years or even five years? There is no sign of it. How much damage will have been inflicted on the lives of ordinary people who are supposed to have the expectation that competition will enter the market and resolve the situation? That will not happen. Politics and legislation will resolve the situation. It is easy for the multitudes of landlords in this House, including those on the Fine Gael and Labour Party benches, to be patient because they are benefiting from a boom in rents. Families cannot be patient because they are at the end of the road. They can no longer tolerate the situation, and rightly so because the mortgage market in Ireland has failed.
Intervention is needed. This Bill is needed. It is a measured, moderate Bill which simply brings some equity to the mortgage market. It will improve the lives of more than 300,000 families who deserve to have a break and wake up without being gouged by the banks. I appeal to the Government and to the Minister to support the Bill and to stand up to the Commission. The Government, not the Commission, runs this country. It has the chance to represent the citizenships and its interests. It should stop the banks gouging ordinary people who are struggling to get from week to week, who cannot provide for their children and whose domestic circumstances are a constant struggle. A laissez-faire approach to this will result in only more misery. Nothing will be resolved unless we have political will and action.