I welcome the Minister of State.
Nithe i dtosach suíonna - Commencement Matters
Foreign Birth Registration
I, too, welcome the Minister of State. I know how busy he is. His presence here is appreciated. This matter is a simple one. I have provided the details on the applicant as additional information. It has to do with registering of births. This couple were abroad when the child arrived prematurely. The mother is from Australia and the dad is from Ireland but they are living in Ireland. The child was born abroad and they are going through the process of registering the birth with the Department of Foreign Affairs in order that they can go ahead and apply for a passport on behalf of the child.
Were it not for the Australian authorities, this child would still be stateless abroad. The Australian authorities were able to intervene and provide a short-term passport that will expire in August to facilitate the child coming back home to Ireland. This passport runs out in August. What will happen in August? This family wants to travel or at least the freedom to travel. The passport is not just a document that facilitates travel. It is an identification document and it is used for myriad other reasons. In the first or second week of August, the temporary Australian passport expires that was provided to facilitate this child being able come home, having been born prematurely abroad. Unless the Australian authorities are prepared to step up and intervene again, the child then becomes stateless again. It is completely unacceptable.
We all know the challenges in the Passport Office. The staff there are doing their best under difficult circumstances because every box needs to be ticked in order to facilitate a passport. We all get that. However, when it comes to the registering of births, surely to God the Department of Foreign Affairs can do a little bit better than allowing this type of situation go on for months. I have been making representations to the Department of Foreign Affairs for weeks now on this. It just shows the level of frustration that I have to come in here and put this down as a Commencement matter with details supplied to get some answers for these two people who are taxpayers and citizens of this country and are going about their business correctly, to see why in God's name their child cannot be registered and they cannot get a passport.
I thank Senator Conway for raising this issue. On the details of the particular application, I am not aware of it but I hear that the Senator has been in contact. I might touch on that matter in a few moments. The Senator might tell me roughly what month the child was born in and in what country. He may have given me some of that information but when he comes back, he might give me that as well.
On a general note, the Department of Foreign Affairs is responsible for citizenship by descent through the foreign births register under the Irish Nationality and Citizenship Act 1956, as amended. That is in respect of people who may have an entitlement to Irish citizenship and birth registration based on either their parents or grandparents.
The Senator is well aware that people may apply for Irish citizenship through foreign birth registration if one of their grandparents was born in Ireland, or if one of their parents was an Irish citizen at the time of their birth, even if their parent was not born in Ireland. From what the Senator has outlined to me, the case involved definitely fits directly into that category.
Once a person is entered into the foreign births register, he or she is an Irish citizen and entitled to apply for a passport at that point. The passport comes second, but the foreign births register is the key to making everything happen. Foreign birth registration, by its nature, is detailed and complex. It can involve official documentation relating to three generations and issued by several different jurisdictions. That may not be the case with regard to the particular case to which the Senator is referring.
To protect the integrity of the citizenship process, these applications require careful processing in order to validate the identity of the applicants, the documents they have submitted and their entitlement to Irish citizenship. Accordingly, all applicants undergo rigorous and detailed checking by experienced officers in the Passport Office. I stress that in a world league, the Irish passport is in the top handful of passports that are recognised internationally as being the highest quality with regard to security checks before they are issued. This is so much the case that Ireland has two areas where people can get pre-emigration clearance heading into the USA, because they have such confidence in our regime here that they have made that facility available. It is not available in the majority of other countries.
Demand for foreign birth registration services reached an unprecedented level following the UK Brexit referendum in 2016. Prior to that, foreign birth registrations averaged approximately 5,000 to 6,000 per annum. However, post-Brexit referendum demand for citizenship via the foreign birth registration reached peaked levels in 2019 when 32,000 online applications were received. The most recent full yearly figures saw almost 28,000 applications received by the Passport Office in 2022, with current figures indicating that applications will exceed this number again this year. Prior to the Covid-19 pandemic, the application time was normally 18 months. Foreign birth registration was also impacted by Covid-19 restrictions in 2020 and 2021, as well as the unprecedented demand for passports in 2022 after the Covid-19 restrictions were lifted. This service was paused for 15 months across the 2020 and 2021 period, after which the turnaround time was approximately two years. The system came to a full stop for those periods during the Covid-19 pandemic, and we have a major backlog as a result of that.
Since September 2022, a significant number of staff has been allocated to dealing with these issues in the Passport Office. Some 200 extra clerical staff have been taken on, and more than 90 permanent staff to work in areas of the service, including the area of foreign birth registration. I am happy to inform the Senator that generally this redeployment has reduced the normal turnaround period to between six and nine months. If I can get more information, I would be happy to respond in further detail.
I thank the Minister of State for the reply. The child was born on 27 December 2022 in Malaysia, and on returning to Ireland, having got the documentation from Australia, the couple engaged in a process of applying to have the child's birth registered. We are talking about, I would imagine, the end of January, so we are talking about four or five months. The problem is that obviously the child has no passport, and the child is not in a position to apply for a passport, so they cannot travel until such time that they get the birth registered and have that confirmed, and then apply for an Irish passport. That is the date and the country. I thank the Minister of State.
I want to thank Senator Conway for that further information. I will ask the office in the Department of Foreign Affairs to contact the Passport Office directly. I am not promising anything, only that I will follow up on the matter to the best of my ability. Ultimately, the decision has to be made by the relevant deciding officers, and we all know I should not interfere in a particular case. However, I will make strong inquiries as a result of what has been said here today.
Senator Conway has indicated that there is an Australian parent. The child was born in Malaysia, and is now in Ireland, so there are three countries involved, and the delay may not be on the Irish side. It could be on either the Australian or Malaysian sides, and we will ask our people to make direct contact on the case. I understand the child was born prematurely, which had not been expected, and it is an exceptional circumstance. There was a big backlog, the numbers increased, more staff has been allocated, and the numbers now being dealt with have reduced the waiting period from up to two years down to approximately six months. I know for people who are born in the UK, it is easier to deal with, with the common law jurisdiction. It is the extra countries that can add to complications, but we will do everything to make inquiries, and will come back to the Senator directly on that.
Broadband Infrastructure
The Minister of State at the Department of the Environment, Climate and Communications, Deputy Ossian Smyth is very welcome to the House, and I thank him for his time this morning.
I am delighted this matter is being taken, and I want to thank the Acting Chair and the Minister of State, Deputy Smyth for coming in. I want to thank the Minister of State for the work he is doing on the national broadband plan. It is a very ambitious plan, and I know he is very enthusiastic about it. I want to acknowledge that, while I have a difficult situation here, there are broadband connections going on in Roscommon at the moment to several thousand homes and businesses. Several thousand have been connected. I want to be clear on that. This is not a criticism or a suggestion that there is nothing happening. There is stuff happening.
I want to talk about a specific firm, the Hanly Quarries group in Elphin, County Roscommon. I know it very well. It is a producer and supplier of all grades of stone, readymixed concrete, concrete blocks and tarmacadam. At present, it supplies eight county councils with materials, as well as many large construction firms. It has a strong presence in the rural construction market within the midlands and west. With more than 50 years of trading experience, and an annual turnover of €20 million, Hanly Quarries is one of the largest independent employers in the midlands and west. It currently employs 120 full-time employees, and it has a very good track record when it comes to supporting local projects and the community in general.
In recent years, the company has had ongoing issues, particularly with its phone lines going down. This has been due to lightning - our weather has disimproved in that regard, as there is a lot more lightning nowadays than there used to be - but also wear and tear. This year, the company tells me, has been by far the worst in terms of downtime. Since the beginning of the year, its phones have been down for more than 22 business days, and we are just halfway through the year. As a medium for communication and, most importantly, sales, the company's phone lines are its number one source. It is utterly reliant on them, and so far this year the company estimates it has lost €500,000 in turnover due to the issues with landlines, and customers not being able to make contact.
At the moment, the company still has lines down. It has informed me that it has a primary rate interface, PRI system coming into the internal photovoltaic, PV box on site for the exchange. However, maintenance and repair staff from Open Eir have told us that the infrastructure used to service this is antiquated, and parts are no longer being replaced. In fact, they tell the company that they cannot find the parts to replace the existing hardware, new or second-hand. The company has been also told that if the lines go down again, Open Eir will most likely not be able to replace the parts.
As the Minister of State knows, the phone companies are moving to Voice over Internet Protocol, VoIP, which will make PRIs and analog lines redundant. The phone companies are urging us to go this route, but our issue is with broadband speed. The broadband speeds are met, at present, through a radio frequency with Viatel. The best speed that it or any other service provider can provide is 10 MB download and 2 MB upload, which is barely enough to service this business. At present, Hanly Quarries has constant issues with Internet banking when trying to do weekly wages. This is a shocking scenario, where firms are in the middle doing the weekly wages on the system, and then all of a sudden it stops, or is not good enough to deliver.
I do not know what we can do for the firm but it is a huge problem for it. It is a significant employer in our area. It is one of the biggest and it needs the best phone line and best broadband service available. I await the Minister of State's reply. I acknowledge the work he is doing on the broadband situation.
Minister of State at the Department of Environment, Climate and Communications (Deputy Ossian Smyth)
The national broadband plan is the largest capital project in the State. I have the honour of being responsible for delivering it. We are connecting or passing approximately 8,000 homes per month at the moment. Half of all homes, businesses and farms in rural Ireland will have gigabit internet available by next year. The project is moving at speed. I will bring the House up to date about what is happening in County Roscommon and so on.
The State intervention element of the national broadband plan is being delivered by National Broadband Ireland, NBI, under a contract that came into effect in 2020. The contract provides for the roll-out of a high-speed and future-proof broadband network, primarily to rural areas. The intervention area will reach 1.1 million people who live and work in more than 560,000 premises, including almost 100,000 businesses and farms and 679 schools. The minimum speed offered by the national broadband plan is 500 megabits. The Senator stated that the firm in County Roscommon is only able to get 10 megabits. This is 50 times faster. At the moment infrastructure works have been commenced on more than 321,900 premises and main build works have been completed on 175,600. Strategic connection points are a key element of the national broadband plan. They mean broadband is available at various hubs, such as community centres, GAA clubs or schools. At the moment there are 938 strategic connection points and of those 655 are schools. High-speed broadband services have been installed in them. The project is managed by the Department of Rural and Community Development under my colleague, the Minister, Deputy Humphreys. NBI has advised that as of 23 June 2023, broadband had been installed in 655 schools by NBI and of those 441 had already been connected to retail service providers by the Department of Education and are now live.
There are 39,700 premises in County Roscommon, almost exactly half of which, or 19,300, are in the amber area of the broadband map. That means they cannot receive good quality broadband through a commercial service and the State will provide for them. The other half have broadband available through commercial providers. The Government investment in County Roscommon to improve broadband is €76 million. As of 30 June, 7,706 premises in the intervention area have been passed and are available for immediate connection. "Passed" means that fibre runs past the curb of the home. If the occupiers want to connect, it is guaranteed to take a maximum of ten days. That means 40% of homes in rural County Roscommon have high-speed broadband available to them. There are 2,218 live connections on the new fibre network in County Roscommon which means that 29% of people to whom it was offered have taken it up so far. I expect it will go up to approximately 80%. In County Roscommon all nine broadband connection points have been installed and 32 schools in Roscommon have had connections installed to date for educational access.
That outlines the State intervention. There is also commercial intervention. Three companies, namely Eir, SIRO and Virgin Media are bringing gigabit internet across the country and SIRO is providing gigabit internet services to more than 4,000 premises in County Roscommon. SIRO is a joint venture of Vodafone and ESB Networks. Virgin media is providing gigabit internet access to more than 1,000 premises and Eir is providing it to 16,000 premises. Part of the law I brought forward earlier this year, the Communications Regulation and Digital Hub Development Agency (Amendment) Act 2023, requires universal broadband services be provided to everyone. In the same way there was a universal service obligation for land line phones, we are legislating for adequate and affordable internet for everyone. I will decide what the minimum speed is and I will require providers to ensure there are no black spots. At the rate we are going, delivery of access will be complete for rural areas before urban areas.
I thank the Minister of State for his comprehensive reply. I acknowledge that good work is happening in County Roscommon. The provision of €76 million for broadband is a significant development and we are all delighted about the schools. However, the owner of this business and his family have been told by NBI that it will take up to three years for the roll-out to come to their area. It has been rolled out to the national school down the road which is 350m away. It is not feasible for the business to continue unless it gets a broadband service as quickly as possible. It has made a strong case and made it clear that it is prepared to help if need be. The business has been told that the poles have been marked out and are ready to go, which is good news. The business has made it clear - it does a lot of infrastructural work - that it is more than willing on the infrastructural side to put its shoulder to the wheel and help in that regard. I hope we will be able to do something to get this business out of this situation. I know the Minister of State will speak to me about it. We need to look after businesses like this one.
High-speed broadband has become a basic utility, like having water or electricity. I am told by estate agents that it is the number one feature for selling a house in rural Ireland. It is critical to any business. I understand that. This is a seven year roll-out plan. It started in 2020 and will be complete at the end of 2026. I can imagine the disappointment of people whose premises is scheduled to be connected in 2026 but that is the rate at which it is being delivered. It will be delivered on time and within budget. The options for anyone who needs to do something in the meantime are fixed wireless access or low-earth orbit satellite connection. They are the two stop-gap solutions for people waiting to get a connection. If the Senator gives me the contact details of the company, I would be happy to liaise with it directly or have my office work with it to see if something can be done in the meantime.
Pension Provisions
I will raise a number of issues about pensions in An Post. It appears the company is not complying with legislation. The Minister for the Environment, Climate and Communications must investigate to ensure good corporate governance.
More than 3,000 of the current pensioners are ex-civil servants who were transferred to An Post on its vesting day, 1 January 1984. They were given a firm guarantee that the conditions of their pension entitlements would not be less favourable in section 46(4) of the Postal and Telecommunications Services Act, 1983. The rules of the company pension scheme approved by the Minister specifically state that the terms and conditions will not be less favourable than those to which they were entitled by reference to the Civil Service regulation in force on 31 December 1983. Those Civil Service rules were section 29(2) of the Pensions (Increase) Act 1964 and regulations made under the Act, namely SI 381 of 2002. These confirmed that from 1 September 1983, pensions would be increased under the principle of pay and pension parity, i.e. wage and pension increases would be similar. An Post complied with the principle for many years.
After the financial crash the company's pension scheme suffered a funding issue. The company and its unions entered into collective agreement in 2013 to amend the scheme and include a cap of 2% or the consumer price index on pensionable pay. Collective agreements apply only to current staff, not to pensioners. When seeking ministerial approval for these changes, An Post informed the then Department of Communications that the proposed changes would not have any impact on current pensioners or preserved pensions in any way. However, the agreement made with the union in December 2013 states the cap also applies to increases to pensions in payment and to deferred pensions. It appears the Minister was misled by the company. An Post is now re-interpreting the legislative guarantee and capping the pension increase entitlements of these pensioners.
It has no authority to repudiate the legislative guarantee. In January 2004, the Attorney General advised the Department of Finance that nothing can take away from the pension rights enshrined in the 1983 Act. An Post also has statutory obligations derived from EU directives to re-value preserved pensions in line with changes in the consumer price index, subject to a cap of 4%. Since 2008, the Minister for Social Protection has issued regulations under section 3(4) of the Pensions Act 1990 prescribing cumulative increases of 17.8% whereas An Post pensions have increased by only 6.7% in the same period.
The State pension increased by 18.8%. Postal unions do not represent pensioners and the CEO and chairperson of the company refuse to answer pensioners' correspondence. The trampling on the legitimate entitlements of these ex-civil servants is deplorable by a State company choosing what laws it complies with. These pensioners devoted their lives to the service of the State. I ask that the House brings the Minister in as soon as possible to discuss governance and oversight of An Post and the responsibility under section 46(4) of the 1983 Act to ensure it is implemented as intended by the Oireachtas and not as decided on by An Post. That is the situation in An Post. The Minister of State will be aware that pensions are property rights and to interfere with a property right is repugnant to our Constitution.
I am here on behalf of my colleague, the Minister of State, Deputy Chambers, who has delegated authority over postal policy in the Department of the Environment, Climate and Communications. Under section 46 of the Postal and Telecommunications Services Act 1983, the Minister for the Environment, Climate and Communications, with the concurrence of the Minister for Public Expenditure, National Development Plan Delivery and Reform, approves any superannuation schemes submitted by An Post. The operation of the schemes is a matter between the management of An Post, staff representatives and the trustees of the schemes.
The 1983 Act requires that, for civil servants who transferred to An Post on vesting day, that is 1 January 1984, An Post’s pension scheme must provide for not less favourable conditions than those to which the members of staff were entitled immediately before the vesting day. It is a transitional provision which ensures that transferring employees were no worse off on vesting day than they were immediately before the transfer.
The pension entitlements of pre and post vesting members of the An Post superannuation schemes are set out in the scheme rules which were approved at the time by both Ministers. Paragraph 13 of the An Post main superannuation scheme 2012 - pension increases - accurately reflects the pre-1984 discretionary nature of the award of increases to pensions in payment.
An Post has indicated that the trustees are not aware of any basis on which the superannuation entitlements of the pensioners are less favourable under the scheme in a manner that would amount to a breach of section 46 of the 1983 Act. The benefits for those members to whom section 46 of the 1983 Act applies did not include automatic increases. They included discretionary increases.
Section 46 of the 1983 Act sets a minimum level of parity between the An Post scheme and the scheme that applied to staff members of the Department of Posts and Telegraphs as it stood on the day before vesting day. It does not provide that the conditions in the An Post scheme must continue to match any subsequent improvement in pension conditions for the award of pension increases in the Civil Service. It is a transitional provision which was intended to ensure that transferring employees were no worse off than they were immediately before the transfer. Section 46 does not give rise to an entitlement to pension increases other than those granted in accordance with the An Post superannuation scheme rules.
Prior to vesting day, any increases to pensions in payment were discretionary. They were awarded at the discretion of the Minister for Finance. The rules of the scheme accurately reflect the pre-vesting day discretionary nature of pension increases in the public sector. The pension increase rule has remained unaltered since the commencement of the scheme.
The company has advised that the circumstances of An Post, including the nature and governance of its pension arrangements, are different from those which apply to “established civil servants” and the superannuation handbook and guidance notes for the established Civil Service scheme 2006. Pension increases are considered by An Post annually. An assessment is carried out taking into consideration the relevant factors in deciding whether to seek ministerial approval for a pension increase, including, among others the sustainability of the scheme's funding relative to its liabilities.
I realise the Minister of State’s script was written before I made the points I made earlier. I repeat: An Post is repudiating section 46(4) of the Post and Telegraphs Service Act 1983 and it has no legislative authority to reinterpret the intent of the Act. It should be complying with section 29(2) of the Pension (Increase) Act 1964 and regulations made under that Act, namely SI 381 of 2002 that applied to the transfer of civil servants pre-vesting day and should continue to apply to them after vesting day. It has applied the terms of a collective agreement to these ex-civil servants when such agreements can only apply to current employees. The line Minister must investigate these breaches of the law.
In note 24 of the annual accounts, a figure of €1.2 billion appears under pensions as an experienced adjustment without any explanation. This has a material impact on the value of the fund and the profits of the company and needs to be fully investigated.
These are pensioners who have no voice at the table when negotiations take place. There has to be engagement with pensioners. We are finding it right across the public service. I appreciate the Minister of State taking the Commencement matter today.
Senator Craughwell will appreciate this is a complex matter. There are a lot of legal issues here and it is important I put the exact official position on the record. I am sorry if I could not address points he raised in his opening remarks. He raised very detailed and specific points which I will take to the Minister of State, Deputy Chambers, for him to reply directly.
That is very much appreciated.
Mortgage Interest Rates
I thank the Minister of State for stepping in to take this Commencement matter. I raise the mortgage interest rate increases which have been ongoing for the best part of a year. There have been several hikes in mortgage interest rates since last year. Last week AIB announced it was increasing its fixed rate by up to 0.7% and its standard variable rate by up to 0.65%. First-time buyers are already struggling to meet the criteria for mortgage approval and these hikes will make it impossible for many of them to do so. During a cost-of-living crisis mortgage holders on variable interest rates or those whose mortgages are with vulture funds are finding their mortgage repayments soaring to the point where they are paying well beyond their means. Repayments are rising by thousands of euro a year. Some are paying interest rates of up to 8%. All this is while banks profit by paying little or no interest on deposits. The Money Advice and Budgeting Service has said “the interest rate hikes serve as a particularly alarming trend during a cost-of-living crisis and are having disastrous effects” while the Free Legal Advice Centre, FLAC, has warned that spikes in the cost of living and interest rates threaten an increase in new arrears cases. I know, from people contacting me, that those new arrears cases are significantly increasing at the moment.
I will give just one example of what is happening to an average mortgage, from a Limerick perspective. Since last September, it has increased for one particular couple by €360 a month. The average wage in the country this year is €44,000, which breaks down to a gross monthly salary of €3,683. Right now, that family is paying €4,300 more than this time last year, so it has wiped out a month’s salary and a good chunk of the following month’s salary as well, and it is going to get worse because we are expecting further interest-rate rises which will be passed on again to hard-pressed mortgage holders. You could easily have a situation where by the end of this year, people are losing up to two months of their annual salary with the increased charges they have to pay on their mortgages.
Sinn Féin thinks this is entirely unacceptable. My party colleagues in the Dáil proposed a temporary and targeted mortgage interest relief back in May. The proposal sought to absorb 30% of the increased interest costs facing mortgage borrowers with a maximum relief of €1,500, operating for eight months from May this year to the end of 2023. It was a viable and sensible approach to help people caught up in this situation but the Government parties, including the Green Party, voted it down even though the State is expected to run a surplus in excess of €10 billion this year.
I was very disappointed to see Limerick representatives, Deputies Leddin and O’Donnell, vote against the Sinn Féin proposal to help mortgage holders while Deputy Willie O’Dea was not present for the vote. People all over Limerick are contacting their local representatives looking for help and some answers. Why has the Government taken the decision to leave these struggling mortgage holders waiting until October before it decides if it will come up with some kind of relief?
They are struggling now. They have been struggling for months. What answers does the Minister of State have for the woman I mentioned today, and the thousands like her?
At the outset, it is important to point out that the setting of official interest rates throughout the eurozone is a matter for the European Central Bank, ECB. The ECB recently announced a further 0.25% increase in interest rates, bringing its main lending rate to 4%. The Government has no role in setting official interest rates, nor in setting the retail interest rates that lenders may charge on their loans, including mortgages. The rates charged are a commercial matter for individual lenders and these are usually based on a range of factors including, but not limited to, the ECB rates. The most recent Central Bank interest rate statistics shows the weighted average interest rate on new mortgages charged by credit institutions in Ireland was 3.63% in April 2023. In the context of the rates charged by different types of entities, in relation to outstanding mortgages, at the end of March 2023 the average interest rate charged by banks was 3.20%, and by non-bank regulated entities it was 3.79%. In relation to the non-banks, the Central Bank has broken these down further to distinguish between lending non-banks who provide new mortgages, and non-lending non-banks, NLNBs, which service existing loans but do not provide new mortgages. The Central Bank indicated that the weighted average interest rate on variable rate mortgages charged by the former was 3.73%, and 5.36% by the latter. The Central Bank published further data on 8 June 2023 indicating that the dispersal of interest rates by the NLNBs was much greater than that of either the banks or the lending non-banks. This means that the NLNBs had a greater number of mortgages at both higher and lower interest rates, that is, as at end March 2023 about 12% of their mortgages had an interest rate of 1% or lower, whereas another 26% of their mortgages were at an interest rate of over 5%. By contrast, the interest rates on most of the mortgages held by both banks and lending non-banks were between 2% and 5%. The Central Bank indicated that this reflects two main factors, including the huge amount of variable and tracker mortgages held by the NLNBs. At the lower end of the interest rate distribution, the key focus of these entities on non-performing loans revealed a large cohort of accounts on zero interest rates.
Nevertheless, the Government appreciates the additional pressure recent interest rate increases have had on many people. The consumer protection framework seeks to ensure that all Central Bank regulated entities are transparent and fair in all their dealings with borrowers, and that borrowers are protected from the beginning to the end of the mortgage life cycle. The framework applies to all Central Bank regulated entities that provide mortgage or other credit to consumers. Where a loan is sold or assigned to another entity, the relevant borrowers maintain the same regulatory protections that they had when the loan was originally made, including under the various Central Bank statutory codes of conduct such as the Consumer Protection Code and the Code of Conduct on Mortgage Arrears, CCMA. In particular, the CCMA provides specific protections for borrowers in arrears or facing a prospect of arrears on a loan secured on a primary residence. All relevant regulated entities must proactively encourage borrowers to engage with them about financial difficulties that may prevent the borrower from meeting his or her mortgage repayments. Where a borrower is experiencing repayment difficulty, a regulated entity must explore all of the options for an alternative repayment arrangement, ARA, offered by the entity to determine if a more suitable and sustainable repayment option is available based on the borrower’s individual circumstances. If a borrower is not satisfied with the options proposed or if the regulated entity declines to offer an ARA, an appeals mechanism is provided for in the CCMA. In addition, a regulated entity must review an ARA at intervals that are appropriate to the type and duration of the arrangement, including at least 30 calendar days in advance of an ARA coming to an end.
The Central Bank has advised that it expects all regulated entities to take a consumer-focused approach in respect of any decision that affects their customers. In particular, it indicates that the protection of mortgage loan borrowers, including those in arrears, is a key priority, and that it will continue to supervise compliance by all regulated entities with the CCMA, Consumer Protection Code and other relevant financial services legislation. I encourage anyone who is experiencing a repayment difficulty, or who has any other genuine concern in relation to their mortgage, to contact their mortgage creditor to discuss the matter in the first instance. It is imperative that Central Bank regulated entities constructively engage with their borrowers to address any legitimate concern raised and to act fairly in the interest of their customers. That is what they are required to do under the Central Bank consumer protection framework, and it is the minimum standard that Central Bank-regulated firms are expected to comply with.
I have to say that I have rarely had a more depressing response from a Minister. I appreciate it is one that has been handed to the Minister of State by the Minister for Finance. In a situation where tens of thousands of hard-pressed mortgage holders are struggling to pay the interest each month and are being charged between €4,500 and €6,000 more a year, the Minister of State has given no indication whatsoever of any intention of this Government to address the issue. The only advice he has given, after all of those words, is that people should talk to their mortgage creditors. The families I am speaking to tell me they do not go out anymore. They are struggling. That is on top of the electricity bills that have shot up this year and all the other costs they have to pay, including the property tax that delivers no services in Limerick. The Government's answer is to tell people to talk to their mortgage creditors. When is this Government going to wake up and understand how badly hit mortgage holders are, and do something for them? Sinn Féin's proposals would have tackled this issue. I urge the Minister of State, in the minute he has to respond further, to indicate that his Government will do something meaningful for mortgage holders in Ireland today.
I am acutely aware that there have been increases in certain mortgage rates by some lenders. It is important to point out that mortgage interest rates and, in particular, fixed interest rates have fallen over the past number of years. For example, in December 2014 the average level of fixed interest rate for new lending was 4.11%. That compares with 3.54% in April 2023. In April, mortgage rates in Ireland were among the lowest in the eurozone. Recent Central Bank data indicate that a significant portion of new mortgages, or 89%, are now fixed rate mortgages. These fixed rates will protect borrowers in the event of a rise in official and market interest rates, at least for the period that the interest rate is fixed.
I also emphasise that all regulated entities are legally required to follow the statutory Central Bank codes of conduct. Failure to follow the codes can result in the Central Bank using its range of powers, including administrative sanctions, procedures or legal action where appropriate. A consumer has recourse to the Financial Service and Pension Ombudsman, FSPO. If a consumer is not satisfied with how a regulated firm is dealing with him or her in relation to the handling of his or her mortgage, he or she can make a complaint directly to the regulated firm. If the consumer is still not satisfied with the response from the regulated firm, he or she can refer the complaint to the FSPO, which is the independent statutory office provided for in law to adjudicate on complaints a consumer has with a regulated financial services provider.
I thank the Minister of State for his time today. We appreciate that he is very busy.
Cuireadh an Seanad ar fionraí ar 10.07 a.m. agus cuireadh tús leis arís ar 10.30 a.m.
Sitting suspended at 10.07 a.m. and resumed at 10.30 a.m.