I must now deal with a postponed division relating to amendment No. 1 on the motion regarding the re-introduction of mortgage interest relief. Yesterday, on the question, "That the amendment to the motion be agreed to", a division was claimed and in accordance with Standing Order 80(2), that division must be taken now.
Proposal for Re-Introduction of Mortgage Interest Relief: Motion (Resumed) [Private Members]
The following motion was moved by Deputy Pearse Doherty on Tuesday, 25 April 2023:
That Dáil Éireann:
acknowledges the most recent Stability Programme Update 2023, which forecasts a general government surplus in excess of €10 billion this year;
agrees with:
— the Free Legal Advice Centre that "spikes in the cost of living and interest rates threaten an increase in new arrears cases"; and
— the Money Advice and Budgeting Service that "the interest rate hikes serve as a particularly alarming trend during a cost-of-living crisis and are having disastrous effects";
notes that:
— in March the European Central Bank (ECB) increased its main lending rate for the sixth time since July 2022, from 0 per cent to 3.5 per cent;
— the ECB is due to meet again in the next two weeks to consider further increases;
— over 250,000 tracker mortgage borrowers have seen immediate and significant increases in their mortgage repayments;
— more than 43,000 variable rate mortgage borrowers with loans held by non-banks and vulture funds have seen significant increases in their mortgage repayments, with interest rates reaching as high as 8 per cent; and
— a wider cohort of mortgage borrowers, including first-time buyers, face or are likely to face further increased mortgage repayments; and
calls on the Government to:
— introduce targeted and temporary mortgage interest relief to support homeowners facing significant increases in their mortgage costs;
— provide mortgage interest relief exclusive to principal private residences only, equivalent to 30 per cent of increased interest costs relative to June 2022, with a maximum relief to mortgage holders of €1,500 per annum;
— reverse its previous position and mandate the Minister for Finance, Michael McGrath TD, to commit to his previous position on the issue in 2018; and
— work with the Central Bank of Ireland to enhance the supervision of vulture funds in the interests of struggling borrowers.
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"notes that:
— the European Central Bank (ECB) is independent in the formulation of monetary policy for the Eurozone Area;
— the ECB's objective is to maintain price stability and wishes to ensure a timely return of inflation to its 2 per cent medium-term target; and
— since last June, the ECB has increased official interest rates on six occasions by a total of 3.5 percentage points;
recognises that:
— the changed interest rate environment will not have a uniform impact on all borrowers and, depending on particular situations such as the terms of individual contracts, some borrowers will experience a higher increase in interest rates than other borrowers; and
— in addition to the general increase in the cost of living, an increase in interest rates will pose difficulties for many borrowers;
further notes that:
— the reintroduction of mortgage interest relief, even on a selective or tailored basis, is likely to involve significant costs and needs to be considered, not on an ad hoc basis, but in the context of a range of other cost of living measures being provided; and
— recent research by the Economic and Social Research Institute Behavioural Research Unit found that consumers can potentially make substantial savings by choosing better value financial products, including mortgages;
recalls that:
— Budget 2023 was a 'cost of living' budget, focused on addressing inflationary pressures;
— a budget package of €6.9 billion is in place for this year, including over €3 billion in direct measures to address the cost-of-living challenge, such as adjustments to income tax bands and increases in social welfare payments;
— this was complemented by a set of one-off cost of living supports introduced in the final quarter of last year worth over €4 billion, and this built on the cost of living measures announced before Budget 2023 amounting to €3 billion;
— the Government has continued to act to respond to the rising cost of living, and a further package of supports worth €1.3 billion was introduced in February; and
— this brings the total fiscal support made available by Government to assist with the cost of living challenge to some €12 billion, or almost 4.5 per cent of modified national income;
further recognises that:
— while a general government surplus of €10 billion is projected for 2023, this figure includes windfall corporation tax receipts estimated at almost €12 billion this year; and
— if these potentially transient receipts are excluded, there is a significant underlying deficit in the public finances;
acknowledges that:
— Government policy must strike a balance between providing support when appropriate and ensuring the public finances remain on a sustainable trajectory over the medium-term;
— the increase in inflation over the last year has had a significant impact on the cost of living for Irish citizens;
— while the Government has already acted repeatedly and on a significant scale to absorb some of the impact, fiscal policy must remain broadly neutral so as not to add to inflationary pressures;
— borrowing costs, including sovereign borrowing costs, are on a rising trajectory, increasing the importance of prudent fiscal policy; and
— the budgetary process is the best and most appropriate way to consider further action on the cost-of-living challenge, and this issue must be addressed in a strategic, comprehensive and responsible manner;
furthermore, notes that:
— there is a strong consumer protection framework in place for borrowers who may experience repayment difficulty due to rising interest rates or the cost of living more generally;
— all Central Bank of Ireland regulated lenders and credit servicers, both banks and 'non-banks', are required to follow the provisions of the relevant statutory consumer protection codes, including the Consumer Protection Code and the Code of Conduct on Mortgage Arrears;
— in particular, all cases of mortgage repayment difficulty have to be handled positively and sympathetically by a lender or servicer with the objective at all times of assisting the borrower to meet his or her mortgage obligations, and cost of living regulated entities must work with co-operating borrowers to, if possible, put in place a suitable alternative repayment arrangement;
— the Governor of the Central Bank of Ireland has indicated that the Central Bank expects firms to be prepared and to be proactive in supporting their customers to navigate the changing economic environment; and
— there are a number of public initiatives to assist people who are in mortgage or other debt difficulty, such as the Abhaile service, which is made up of the Insolvency Service of Ireland, the Legal Aid Board, the Money Advice and Budgeting Service and the Citizens Information Board, which provides free financial advice and, where appropriate also, legal advice to people experiencing difficulty with their mortgage; and
therefore:
— supports the Central Bank of Ireland as it continues to supervise and engage with regulated firms, to ensure that such firms use all their range of forbearance for borrowers facing repayment difficulty;
— in particular, encourages the Central Bank of Ireland to continue its engagement with 'non-bank' regulated firms to ensure that the suite of products provided to their customers who are experiencing difficulty is in line with the bank's expectations;
— also calls on the Central Bank of Ireland to ensure that all lenders assess all switching applications in a prudent and fair manner regardless of the borrower's current mortgage provider; and
— notes that much progress has been made in recent years in reducing the level of mortgage arrears, including during the Covid-19 period, and calls on mortgage creditors and relevant public bodies to continue their efforts to further tackle existing mortgage arrears cases."
- (Minister for Finance)
Amendment put.
The Dáil divided by electronic means.
Given the seriousness of this issue for so many families throughout the State, I ask under Standing Order 83(3)(b) that the vote be taken by other than electronic means.
Amendment again put:
The Dáil divided: Tá, 66; Níl, 57; Staon, 0.
Tá
- Brophy, Colm.
- Browne, James.
- Bruton, Richard.
- Burke, Colm.
- Butler, Mary.
- Byrne, Thomas.
- Cahill, Jackie.
- Calleary, Dara.
- Cannon, Ciarán.
- Carroll MacNeill, Jennifer.
- Collins, Niall.
- Costello, Patrick.
- Coveney, Simon.
- Cowen, Barry.
- Crowe, Cathal.
- Devlin, Cormac.
- Dillon, Alan.
- Donnelly, Stephen.
- Duffy, Francis Noel.
- Durkan, Bernard J.
- English, Damien.
- Farrell, Alan.
- Feighan, Frankie.
- Flaherty, Joe.
- Flanagan, Charles.
- Fleming, Sean.
- Foley, Norma.
- Griffin, Brendan.
- Haughey, Seán.
- Heydon, Martin.
- Higgins, Emer.
- Humphreys, Heather.
- Kehoe, Paul.
- Lahart, John.
- Leddin, Brian.
- Lowry, Michael.
- Madigan, Josepha.
- Martin, Micheál.
- Matthews, Steven.
- McAuliffe, Paul.
- McConalogue, Charlie.
- McGrath, Michael.
- McHugh, Joe.
- Moynihan, Aindrias.
- Moynihan, Michael.
- Murnane O'Connor, Jennifer.
- Naughton, Hildegarde.
- Noonan, Malcolm.
- O'Brien, Darragh.
- O'Brien, Joe.
- O'Callaghan, Jim.
- O'Connor, James.
- O'Donnell, Kieran.
- O'Dowd, Fergus.
- O'Gorman, Roderic.
- O'Sullivan, Christopher.
- O'Sullivan, Pádraig.
- Ó Cathasaigh, Marc.
- Ó Cuív, Éamon.
- Rabbitte, Anne.
- Richmond, Neale.
- Ring, Michael.
- Ryan, Eamon.
- Smith, Brendan.
- Smyth, Ossian.
- Stanton, David.
Níl
- Andrews, Chris.
- Barry, Mick.
- Boyd Barrett, Richard.
- Brady, John.
- Browne, Martin.
- Buckley, Pat.
- Cairns, Holly.
- Canney, Seán.
- Clarke, Sorca.
- Collins, Joan.
- Collins, Michael.
- Connolly, Catherine.
- Conway-Walsh, Rose.
- Cronin, Réada.
- Crowe, Seán.
- Daly, Pa.
- Doherty, Pearse.
- Donnelly, Paul.
- Ellis, Dessie.
- Farrell, Mairéad.
- Fitzmaurice, Michael.
- Funchion, Kathleen.
- Gannon, Gary.
- Gould, Thomas.
- Guirke, Johnny.
- Healy-Rae, Danny.
- Healy-Rae, Michael.
- Howlin, Brendan.
- Kenny, Gino.
- Kenny, Martin.
- Kerrane, Claire.
- Mac Lochlainn, Pádraig.
- McGrath, Mattie.
- McNamara, Michael.
- Mitchell, Denise.
- Murphy, Catherine.
- Murphy, Paul.
- Nash, Ged.
- Nolan, Carol.
- O'Callaghan, Cian.
- O'Donoghue, Richard.
- O'Reilly, Louise.
- O'Rourke, Darren.
- Ó Broin, Eoin.
- Ó Murchú, Ruairí.
- Ó Ríordáin, Aodhán.
- Ó Snodaigh, Aengus.
- Quinlivan, Maurice.
- Ryan, Patricia.
- Shanahan, Matt.
- Shortall, Róisín.
- Smith, Bríd.
- Smith, Duncan.
- Stanley, Brian.
- Tully, Pauline.
- Ward, Mark.
- Whitmore, Jennifer.
Staon
Tellers: Tá, Deputies Hildegarde Naughton and Cormac Devlin; Níl, Deputies Pádraig Mac Lochlainn and Denise Mitchell.
Amendment declared carried.
Motion, as amended, agreed to.